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 June 30, 2000
___ 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 (775)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 June 30, 2000 was 5,469,667.
Part I - Financial Statements
MARK BAILEY & COMPANY, LTD.
Certified Public Accountants
Management Consultants
Office Address: Mailing Address:
1495 Ridgeview Drive, Ste. 200 Phone : 775/3 32.4200 P.O. Box 6060
Reno, Nevada 89509-6634 Fax: 775/3 32.42 10 Reno, Nevada 89513
August 9, 2000
Board of Directors
Adven, Inc
We have reviewed the accompanying balance sheets of Adven, Inc. as of June
30, 2000, and the related statements of operations, stockholders' equity, and
cash flows for the three and six months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included
in these financial statements is the representation of the management of
Adven, Inc.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.
The Balance sheet for the period ended December 31, 1999, was audited by us,
and we expressed an unqualified opinion on it in our audit report dated
February 10, 2000, but we have not performed any auditing procedures since
that date.
As discussed in Note 1, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements
do not include any adjustments to the financial statements that might be
necessary should the Company be unable to continue as a going concern.
Mark Bailey & Co., Ltd.
Reno, Nevada
ADVEN, INC.
BALANCE SHEETS
June 30, 2000 (unaudited) and December 31, 1999 (audited)
ASSETS
June 30, 2000 December 31, 1999
Current Assets
Cash $ 13,919 $ 209
Prepaid legal fees 922 922
Total current assets 14,841 1,131
Other Assets
Investment 45,172 216,828
Deferred tax asset(Net of valuation allowance of $435,449
and $375,492) - -
Total other assets 45,172 216,828
Fixed Assets
Computer equipment 2,390 -
Accumulated depreciation (191)
Total fixed assets 2,199 -
Total assets $ 62,212 $ 217,959
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 3,225 $ 3,225
Accrued interest 600 -
Advance from shareholder25,000 5,000
Total current
liabilities 28,825 8,225
Commitments and Contingencies
Stockholders' Equity
Common stock, $.0001 par value, 20,000,000 shares
authorized, 5,469,667 shares issued and outstanding
547 547
Additional paid-in-capital
1,377,715 1,377,715
Unrealized loss on securities available for sale
(352,351) (180,695)
Accumulated deficit (992,524) (987,833)
Total stockholders' equity
33,387 209,734
Total liabilities and stockholders' equity
$ 62,212 $ 217,959
The Accompanying Notes are an Integral Part of These Financial Statements.
ADVEN, INC.
STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
For the Six Months and the Three Months Ended June 30, 2000 (unaudited)
Six Months Three Months
Ended Ended
June 30, 2000 June 30, 2000
Revenue
Expenses
General and administrative expenses (825) (743)
Accounting fees (3,075) -
Depreciation expense (191) (191)
Net loss before interest expense and income taxes
(4,091) (934)
Interest expense (600) (600)
Net loss before income taxes and (4,691) (1,534)
Provision for income taxes
Net loss (4,691) (1,534)
Unrealized loss on securities (net of tax of $0 for the
six and three months) (352,351) (171,656)
Comprehensive loss
$ (357,042) $ (173,190)
Earnings (loss) per share
$ (0.0003) $ (0.0009)
The Accompanying Notes are an Integral Part of These Financial Statements.
ADVEN, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS'EQUITY
For the Six Months and the Three Months Ended March 31, 2000 (unaudited)
Additional Retained Other
Common Stock Paid-in Earnings Comprehensive Total
Shares Amount Capital (Deficit) Deficit Equity Equity
Balance at December 31, 1999
5,469,667 $ 547 $ 1,377,715 $ (987,833) $ (180,695) 209,734
Net loss
- - - (3,157) - (3,157)
Balance at March 31, 2000
5,469,667 547 1,377,715 (990,990) (180,695) 206,577
Net loss
- - - (1,534) - (1,534)
Other comprehensive loss
- - - (171,656) - (171,656)
Balance at June 30, 2000
5,469,667 $ 547 $ 1,377,715 $(992,524) $ (352,351) $ 33,387
The Accompanying Notes are an Integral Part of These Financial Statements.
ADVEN, INC.
STATEMENTS OF CASH FLOWS
For the Six Months and the Three Months Ended June 30, 2000 (Unaudited)
Six Months Three Months
Ended Ended
June 30, 2000 June 30, 2000
Cash Flows from Operating Activities
Net loss (4,691) $ (1,534)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation 191 191
Increase in deferred tax asset 435,449 435,449
Increase in valuation allowance (435,449) (435,449)
Increase in accrued interest 600 600
Net cash used in operating activities
(3,900) (743)
Cash Flows from Investing Activities
Purchase of fixed assets (2,390) 0
Net cash used in investing activities
(2,390) 0
Cash Flows from Financing Activities
Proceeds from shareholder advance 20,000 0
Net cash provided by financing activities 20,000 0
Net increase (decrease) in cash and cash
equivalents 13,710 (743)
Cash and cash equivalents at beginning
of period 209 14,662
Cash and cash equivalents at end of period
Supplementary Information
During the six months ended June 30, 2000, no amounts were actually paid
for either interest or income taxes.
ADVEN, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
1. Organization And Significant Accounting Policies
The Company was incorporated in the State of Washington on August 22, 1986,
as a subchapter C corporation for income tax purposes. The Company has no
operations at this time.
These financial statements have been prepared assuming that the Company will
continue as a going concern. The Company has sustained recurring losses over
the past years and currently has no source of operating income. The Company's
cash flow and existing credit are insufficient to fund the Company's cash
flow needs based on the expenses expected to be incurred during the next year.
The President of the Company intends to advance funds as necessary to fund
the cash flow needs of the Company.
The preparation of financial statements for the three-month and six-month
periods ended June 30, 2000, have been prepared by the Company without audit
by the Company's independent auditors. In the opinion of the Company's
management, all adjustments necessary to present fairly the financial
position, results of operations, and cash flows of the Company as of June 30,
2000, and for the periods then ended have been made. Those adjustments
consist only of normal and recurring adjustments. The balance sheet of the
Company as of December 31, 1999 was derived from the audited financial
statements of the Company as of that date.
The preparation of the financial statements in conformity with generally
accepted accounting standards requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents. The Company has no cash equivalents as of June 30, 2000.
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.
Capitalization
The Company has authorized 20,000,000 shares of common stock, and has 400,000
shares of common stock issued and outstanding.
Earnings per share
Basic earnings per share for each period is computed by dividing net loss by
the weighted average number of shares of common stock outstanding during the
period.
2. Investment
FASB No. 115 "Accounting for Certain Investments in Debt and Equity
Securities,"requires that all applicable equity securities be classified as
either trading or available for sale. The Company classified the investment
in Parks America!, Inc. as available for sale at December 3 1, 1999. FASB No.
115 also requires that all available for sale securities be reported at fair
value, with any unrealized losses included as a part of comprehensive income
and as a separate component of stockholders' equity until the losses are
realized (net of the effect of income taxes). The fair market value and the
unrealized loss of the Parks America!, Inc. investment at June 30, 2000, was
$45,172 and $352,351, respectively.
3. 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 two products, the
first a plant growing medium that aids the use of hydroponics, and the second
an oil absorbent urethane foam. The Company's rights to these products extend
only to Australia and New Zealand.
During 1998, Adven, Inc. became aware that a company located in the Isle of
Man claimed that it owns the patent on one of the products and that DIS
International, Inc. has no rights to the product at all. The claimant is
suing DIS International, Inc. in Canada. The lawsuit is still ongoing as of
June 30, 2000.
In June 1999, the Company filed suit against DIS International, Inc., to void
its supply and licensed manufacturing agreement with DIS International, Inc.,
and to obtain a refund of all monies paid as well as Adven common stock issued
to DIS International, Inc. Currently, this lawsuit is pending.
4. Provision for Income Taxes
The Company recognizes deferred tax liabilities and benefits for the expected
future tax impact of transactions that have been accounted for differently
for book and tax purposes.
Deferred tax benefits and liabilities are calculated using enacted tax rates
in effect for the year in which the differences are expected to reverse. A
valuation allowance has been provided to reduce the asset to the amount of
tax benefit management believes it will more likely than not realize. As time
passes, management will be able to better assess the amount of tax benefit it
will realize from using the carryforward.
Deferred tax benefits and liabilities are calculated using enacted tax rates
in effect for the year in which the differences are expected to reverse. The
following is a schedule of the composition of the provision for income taxes:
June 30, 2000
Deferred noncurrent tax asset 435,449
Valuation allowance (435,449)
Total provision for income taxes $---0-
Deferred federal income taxes consist of future tax benefits and liabilities
attributed to:
June 30, 2000
Loss carry forward $ 315,650
Loss on available for sale securities 119,799
Valuation allowance (435,449)
Net deferred income tax -0-
The net change in the valuation account at June 30, 2000 was $(59,957).
The following net operating loss carryforwards as of June 30, 2000, will
expire if not applied by the dates scheduled below:
Year ending December 31 Net Operating Loss
2002 $ 9,914
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
2012 8,794
2014 827,050
2015 4,691
5. Related Party Transactions
During 1999, the President of Adven, Inc. paid a $5,000 legal retainer on
behalf of the Company and during the six months ended June 30, 2000, he
advanced the Company an additional $20,000. Both advances are due on demand
and carry an interest rate of 10.0%.
6. Fair Value Of Financial Instruments
Financial Accounting Standards Board ("FASB") 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.
The carrying amounts reported in the balance sheets for cash and prepaid
expenses approximate fair value at June 30, 2000.
The carrying amount and the estimated fair value of the investment in Parks
America!, Inc. at June 30, 2000, was $45,172. The estimated fair value of
this investment is based on the quoted market price.
The carrying amounts reported in the balance sheets for both the accounts
payable and the shareholder advance at June 30, 2000, approximate fair values
because the maturities are less than one year in duration.
7. 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 Company
issued an aggregate of 533,000 shares to another foreign entity as payment of
a finder's 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 by Regulation S.
Part II - Other Information
Item 1. Legal Proceedings.
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 two products, the
first a plant growing medium that aids the use of hydroponics, and the second
an oil absorbent urethane foam. The Company's rights to these products extend
only to Australia and New Zealand.
During 1998, Adven, Inc. became aware that a company located in the Isle of
Man claimed that it owns the patent on one of the products and that DIS
International, Inc. has no rights to the product at all. The claimant is
suing DIS International, Inc. in Canada. The lawsuit is still ongoing as of
June 30, 2000.
In June 1999, the Company filed suit against DIS International, Inc., to void
its supply and licensed manufacturing agreement with DIS International, Inc.,
and to obtain a refund of all monies paid as well as Adven common stock issued
to DIS International, Inc. Currently, this lawsuit is pending.
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.
SIGNATURES
August 15, 2000
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
