<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 quarter ended September 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 33-9782-LA
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MICROACCEL, INC.
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(Name of Small Business Issuer in its Charter)
UTAH 87-04444506
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
Suite 210, 580 Hornby Street
Vancouver, British Columbia, Canada V6C 3B6
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (604)-687-6991
N/A
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(Former Name or Former Address, if changed since last Report)
Check whether the 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 Company 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
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not applicable.
(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:
September 30, 2000
Common - 9,923,085 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is
contained in Item 6 of this Report.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Company.
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM FINANCIAL STATEMENTS
September 30, 2000
(UNAUDITED)
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash $3,074,768 $507,281
Accounts and advances receivable 104,747 -
3,179,515 507,281
NOTES RECEIVABLE 1 1
TOTAL ASSETS $3,179,516 $507,282
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 27,771 $148,662
Notes and advances payable - 1,045,075
Total Liabilities 27,771 1,193,737
STOCKHOLDERS' EQUITY
Common Stock: $0.001 par value;
authorized 200,000,000 shares;
9,923,085 shares issued and outstanding
(December 31, 1999 - 9,423,085) 9,923 9,423
Additional paid-in capital 4,396,042 396,542
Deficit accumulated prior to November 29,
1989 (213,710) (213,710)
Deficit accumulated during the development
stage (1,040,510) (878,710)
Total Stockholders' Equity 3,151,745 (686,455)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,179,516 $507,282
</TABLE>
See accompanying Notes to the Interim Financial Statements
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the For the November
Three Months Ended Nine Months Ended 29, 1989
September 30, September 30, Through
September 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
REVENUES
Interest Income $ 29,537 $ - $ 84,233 $ - $ 84,233
GENERAL AND
ADMINISTRATIVE
EXPENSES 69,003 13,062 246,033 29,280 1,124,743
NET LOSS $ (39,466) $ (13,062) $ (161,800) $ (29,280) $(1,040,510)
NET LOSS PER SHARE
Basic and diluted $ 0.00 $ 0.00 $ 0.02 $ 0.00
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 9,923,085 9,423,085 9,875,640 9,423,085
</TABLE>
See accompanying Notes to the Interim Financial Statements
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION
Additional
Common Stock Paid-in
Shares Amount Capital
<S> <C> <C> <C>
Balance, December 31, 1998 9,423,085 $ 9,423 $ 396,542
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 9,423,085 9,423 396,542
Issue of common stock to
public at $8.00 per share 500,000 500 3,999,500
Net loss for the period ended
September 30, 2000 - - -
Balance, September 30, 2000 9,923,085 $ 9,923 $ 4,396,042
<PAGE>
Deficit Deficit
Accumulated Accumulated Total
Prior to During Stockholders'
November Development Equity
29, 1989 Stage
<S> <C> <C> <C>
Balance, December 31, 1998 $(213,710 $ (458,102) $ (265,847)
Net loss for the year ended
December 31, 1999 - (420,608) (420,608)
Balance, December 31, 1999 $(213,710) (878,710) (686,455)
Issue of common stock to
public at $8.00 per share - - 4,000,000
Net loss for the period ended
September 30, 2000 - (161,800) (161,800)
Balance, September 30, 2000 $(213,710) $(1,040,510) $3,151,745
</TABLE>
See accompanying Notes to the Interim Financial Statements
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
[CAPTION]
<TABLE>
From
Inception
Of Development
For the Stage
Nine Months Ended On November 29,
September 30, 1989 through
September 30,
2000 1999 2000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (loss) from operations $(161,800) $(29,280) $ (1,040,510)
Adjustments to reconcile net
(loss) to net
cash provided by
operating activities:
Forgiveness of debt - - 4,759
Stock issued for services - - 1,000
Amortization of discount
on note receivable - - (20,212)
Changes in operating assets
and liabilities:
(Decrease) increase in
accounts payable (120,891) 17,102 27,771
Increase in allowance for
loss notes receivable 21,474 - 473,688
Decrease in accrued
interest payable (32,245) - -
Decrease in advance payable (65,000) - -
Increase in accounts and
advances receivable (104,747) - (104,747)
Increase in accrued interest
note receivable (21,474) - (29,390)
Net Cash Used By
Operating Activities (484,683) (12,178) (687,641)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in notes receivable - - (424,087)
Net Cash Used by
Investing Activities - - (424,087)
CASH FLOWS FROM FINANCING
ACTIVITIES
(Decrease) increase in
notes payable (947,830) 4,395 -
Issuance of common stock 4,000,000 - 4,186,496
Net Cash Provided by
Financing Activities 3,052,170 4,395 4,186,496
Increase(Decrease) in Cash 2,567,487 (7,783) 3,074,768
CASH AT BEGINNING OF PERIOD 507,281 19,088 -
CASH AT END OF PERIOD $3,074,768 $ 11,305 $3,074,768
</TABLE>
See accompanying Notes to the Interim Financial Statements
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENTS OF CASH FLOWS(continued)
(Unaudited)
[CAPTION]
<TABLE>
From
Inception
Of Development
For the Stage
Nine Months Ended On November 29,
September 30, 1989 through
September 30,
2000 1999 2000
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOWS
INFORMATION
Interest paid $ 39,548 $ - $ 39,548
Taxes - - -
NON CASH FINANCING ACTIVITIES
Stock issued for services - - 1,000
</TABLE>
See accompanying Notes to the Interim Financial Statements
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
These unaudited interim financial statements have been prepared in accordance
with the instructions to Form 10-QSB. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such instructions. These unaudited interim financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's annual report on Form 10-KSB for
the year ended December 31, 1999.
In the opinion of the Company's management, all adjustments considered
necessary for a fair presentation of these unaudited interim financial
statements have been included and all such adjustments are of a normal
recurring nature. Operating results for the nine month period ended
September 30, 2000 are not necessarily indicative of the results that can be
expected for the year ended December 31, 2000.
NOTE 2 GOING CONCERN
These financial statements have been prepared on the basis that the Company
will continue as a going concern. The Company has incurred operating losses
since its incorporation and intends to raise additional equity financing to
finance its operations and any acquisitions. However, there can be no
assurance that such acquisitions will occur, or whether additional funds
required, if any, would be available to the Company when required or on terms
acceptable to the Company. Such limitations could have a material adverse
effect on the Company's business, financial condition or operations and these
financial statements do not include any adjustments that could result
therefrom.
NOTE 3 SETTLEMENT AGREEMENT
On May 1, 2000, MicroAccel, Inc. filed an action in the United States District
Court, Northern District of California against NV Memory Inc. and Donald Stern
relating to the proposed merger of Micro-Accel and NV Memory and the funding
and development of a non-volatile memory chip. NV Memory and Mr. Stern filed
related counterclaims against MicroAccel. In light of the costs and
inconvenience involved in litigation, MicroAccel, NV Memory, and Stern
effective August 23, 2000 agreed to dismiss their respective claims and
counterclaims, so that they may each devote their time and resources to
pursuing the business opportunities available to them. No payments have been
made in connection with this settlement, and there has been no admission of
liability on the part of any of the parties.
NOTE 4 REVERSE SPLIT OF COMMON STOCK
On July 28, 2000 the Board of Directors authorized that the issued and
outstanding common stock of the Company be reverse split on the basis of one
for two, retaining the authorized shares at 200,000,000 and the par value at
$0.001 per share, with fractional shares to be rounded up to the nearest whole
share. The reverse split was effective August 14, 2000.
The stated capital has been decreased and additional paid in capital increased
retroactively for all prior periods presented to reflect the reduced number of
issued and outstanding shares. Basic and diluted net loss per share figures
presented are based on the post-reverse split number of shares, retroactively
<PAGE>
restated. The price per share realized on share issuance has been
proportionally increased to reflect this reverse split.
NOTE 5 2000 STOCK INCENTIVE PLAN
The Company has adopted a 2000 Stock Incentive Plan (the "Plan") to be
administrated by the Board of Directors or a Committee of the Board of
Directors (the "Plan Administrator"). The purpose of the Plan is to provide
incentive stock options as a means to attract and retain key corporate
personnel and consultants. The shares to be offered under the Plan consist of
authorized but unissued common shares of the Company. The aggregate number of
shares subject to options under the Plan at any one time shall not exceed
475,000 shares. The exercise price of the options when granted is set by the
Plan Administrator but in any event shall not be less than 75% of the fair
market value of the shares on the date the option is granted. The term of the
options granted may not extend beyond 10 years, and are subject to earlier
cancellation on termination of employment. The vesting and exercise schedule
for stock options granted is to be determined on an individual basis by the
Plan Administrator. The Plan was adopted in the current year and the initial
incentive options granted June 5, 2000. The options issued to date are as
follows:
Number of
shares
subject to Exercise
option Price per share Expiry Date
325,000 $1.25 June 4, 2003
The number of shares subject to option and the option exercise price have been
adjusted to reflect the reverse split in the period.
The exercise price was determined based on the estimated fair market value of
the shares on granting of the options.
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related
interpretations in accounting for its employee stock options. Under APB 25,
when the exercise price of employee stock options is equal to the estimated
market price of the underlying stock on the date of the grant, no compensation
expense is recorded. The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123).
Pro forma information regarding net income (loss) per share is required by
SFAS 123, and has been determined as if the Company has accounted for its
employee stock options using the fair value method. The fair value of these
options was estimated at the date of grant using the Black- Scholes option
pricing model with the following weighted average assumptions: risk-free
interest rate of 5.0%; dividend yield of 0%; volatility factor of 97% and a
weighted-average life of three years.
The Black-Scholes valuation model was developed for use in estimating the fair
value of traded options which are fully transferable and freely traded. In
addition, option valuation models require the input of highly subjective
assumptions including the expected stock price volatility. Because the
Company's employee stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.
<PAGE>
For purposes of pro forma disclosures, the estimated fair value of the options
have been charged to operations in the three month period ended June 30, 2000.
The Company's pro forma net loss for the nine months ended September 30, 2000
is as follows:
Pro forma net loss $(376,300)
Pro forma net loss per share $ (0.04)
Pro forma results of operations under SFAS 123 may be materially different
from actual amounts reported.
The weighted-average fair value of options granted during the period was $0.66
per underlying share.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
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The Company has not engaged in any material operations or had any
revenues from operations during the last two calendar years. The Company's
plan of operation for the next 12 months is to continue to seek the
acquisition of assets, properties or businesses that may benefit the Company
and its stockholders. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as the sole
consideration for any such acquisition.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business ventures. Such funds may be advanced by management or stockholders as
loans to the Company. Because the Company has not identified any such
ventures as of the date of this Report, it is impossible to predict the amount
of any such loans or advances. However, any such loans or advances should not
exceed $25,000 and will be on terms no less favorable to the Company than
would be available from a commercial lender in an arm's length transaction.
As of the date of this Report, the Company is not involved in any negotiations
respecting any such ventures.
Results of Operations.
----------------------
Other than maintaining its good corporate standing in the State of
Utah, seeking the acquisition of assets, properties or businesses that may
benefit the Company and its stockholders, the Company has had no material
business operations during the two most recent calendar years or the three
months ended September 30, 2000.
During the quarterly periods ended September 30, 2000, and 1999, the
Company had no business operations, but recorded a net loss of ($39,466)
during the quarterly period ended September 30, 2000, compared with a net loss
of ($13,062) during the quarter ended September 30, 1999.
Liquidity.
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The Company had cash on hand of $3,074,768 at September 30, 2000.
Management believes that this will be sufficient to meet its anticipated
expenses during the next 12 months.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On May 1, 2000, the Company filed a complaint against Donald Stern
and NV Memory, Inc., a California corporation, in the U. S. District Court for
the Northern District of California. The case was designated Case No. C-00
20481, and was discussed under the caption "Legal Proceedings" of the
Company's Quarterly Report on Form 10-QSB for the quarterly period ended March
31, 2000, which was filed with the Securities and Exchange Commission on May
18, 2000, and which is incorporated herein by reference. See Item 6 of this
Report.
The defendants filed defenses against the action and counterclaimed
for rescission of a letter of intent and damages on the basis of breach of
contract, breach of implied duty of good faith and fair dealing, breach of
fiduciary duty, fraud, fraudulent inducement and interference with economic
relationship.
Effective August 23, 2000, the parties agreed to dismiss their
claims and counterclaims, with no payments being made in connection therewith
and with no admission of liability by any party.
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 July 28, 2000, the Company's Board of Directors unanimously
resolved to effect a reverse split of the Company's issued and outstanding
common stock in the ratio of one for two, retaining the authorized shares at
200,000,000 and the par value at one mill ($0.001) per share, with fractional
shares to be rounded up to the nearest whole share and with appropriate
adjustments being made in the additional paid in capital and stated capital
accounts of the Company. The reverse split was effective as of the close of
business on Monday, August 14, 2000.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
DOCUMENTS INCORPORATED BY REFERENCE
Quarterly Report on Form 10-QSB for the quarterly period ended
March 31, 2000, and filed with the Securities and Exchange
Commission on May 18, 2000.
<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.
MICROACCEL, INC.
Date: 11-16-2000 By /s/ Suzanne L. Wood
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Suzanne L. Wood, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
MICROACCEL, INC.
Date: 11-16-2000 By /s/ Suzanne L. Wood
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Suzanne L. Wood, President and
Director
Date: 11-16-2000 By /s/ Barry D. Russell
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Barry D. Russell, Director,
Treasurer and Secretary
