<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 March 31, 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.
----------------
(Name of Small Business Issuer in its Charter)
UTAH 87-04444506
---- -----------
(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
-------------------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (604)-687-6991
N/A
---
(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:
March 31, 2000
Common - 19,846,170 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
MARCH 31, 2000
(UNAUDITED)
(Prepared by Management)
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash $ 2,885,752 $ 507,281
Accounts receivable 366,382 -
3,252,134 507,281
NOTES RECEIVABLE 1 1
TOTAL ASSETS $ 3,252,135 $ 507,282
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 42,952 $ 148,662
Notes and advances payable - 1,045,075
Total Current Liabilities 42,952 1,193,737
STOCKHOLDERS' EQUITY
Common Stock: $0.001 par value;
authorized 200,000,000 shares;
19,846,170 shares issued and outstanding
(1999 - 18,846,170) 19,846 18,846
Additional paid-in capital 4,386,119 387,119
Deficit accumulated prior to November 29, 1989 (213,710) (213,710)
Deficit accumulated during the development stage (983,072) (878,710)
Total Stockholders' Equity 3,209,183 (686,455)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,252,135 $ 507,282
</TABLE>
(Prepared by Management)
<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 November 29,
Three Months Ended 1989 Through
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
REVENUE
Interest Income $ 23,277 $ - $ 23,277
GENERAL AND ADMINISTRATIVE EXPENSES 127,639 - 1,006,349
NET LOSS $ (104,362) $ - $ (983,072)
BASIC LOSS PER SHARE $0.01 $0.00
WEIGHTED AVERAGE NUMBER OF SHARES 19,556,170 18,846,170
</TABLE>
(Prepared by Management)
<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 Capitol
<S> <C> <C> <C>
Balance, December 31, 1998 18,846,170 18,846 387,119
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 18,846,170 18,846 387,119
Issue of common stock to
public at $4.00 per share 1,000,000 1,000 3,999,000
Net loss for the period ended
March 31, 2000 - - -
Balance, March 31, 2000
(unaudited) 19,846,170 $ 19,846 $ 4,386,119
Deficit Deficit
Accumulated Accumulated Total
Prior to During Stockholders'
November 29, Development Equity
1989 Stage
<S> <C> <C> <C>
Balance, December 31, 1998 - (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 $4.00 per share - - 4,000,000
Net loss for the period ended
March 31, 2000 - (104,362) (104,362)
Balance, March 31, 2000
(unaudited) $ (213,710) $ (983,072) $ 3,209,183
</TABLE>
(Prepared by Management)
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
November 29,
For the 1989 Through
Three Months Ended March 31,
March 31,
2000 1999 2000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss from operations $ (104,362) $ (10,114) $ (983,072)
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:
Increase in accounts payable (105,710) 7,498 42,952
Increase in allowance for loss
- notes receivable 7,158 - 459,372
Increase in accrued interest
payable - - 32,245
Increase in advance payable - - 65,000
(Increase) decrease in accounts
receivable (366,382) - (366,382)
Increase in accrued interest
- note receivable (7,158) - (15,074)
Net Cash Used By Operating
Activities (576,454) (2,616) (779,412)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in notes receivable - - (424,087)
Net Cash Used by Investing
Activities - - (424,087)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable (1,045,075) 1,590 (97,245)
Issuance of common stock 4,000,000 - 4,186,496
Net Cash Provided by Financing
Activities 2,954,925 1,590 4,089,251
Increase(Decrease) in Cash 2,378,471 (1,026) 2,885,752
CASH AT BEGINNING OF PERIOD 507,281 19,088 -
CASH AT END OF PERIOD $ 2,885,752 $ 18,062 $ 2,885,752
</TABLE>
(Prepared by Management)
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
INTERIM STATEMENTS OF CASH FLOWS(continued)
(Unaudited)
<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
November 29,
For the 1989 Through
Three Months Ended March 31,
2000 1999 2000
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOWS INFORMATION:
Interest $ - $ - $ -
Taxes $ - $ - $ -
NON CASH FINANCING ACTIVITIES:
Stock issued for services $ - $ - $ 1,000
</TABLE>
(Prepared by Management)
<PAGE>
MICROACCEL, INC.
(formerly Hortitech, Inc.)
(A Development Stage Enterprise)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
MARCH 31, 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 three month period ended March
31, 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 adjustment that could result
therefrom.
NOTE 3 - INVESTMENT IN NV Memory
The Company entered into an agreement on December 31, 1999 to acquire 100% of
the shares of a corporation owning all of the design, programming, engineering
and rights to a new type of non-volatile computer memory. The Company agreed
to raise a minimum of $2,500,000 in new financing, of which $2,000,000 was to
be expended on development of the prototype for the new technology, and patent
applications. The Company agreed to issue sufficient shares for the
acquisition such that after the above financing and on completion of the
transaction the vendor of the shares of the corporation would own 60% of the
issued shares of MicroAccel, Inc.
The shares issued to complete the acquisition were to be held in escrow to be
released at such time that the prototype is completed and the Company received
opinion letters from two expert authorities as to the viability and
patentability of the technology.
The proposed acquisition contemplated due diligence and the completion of a
definitive agreement, financing and closing by January 31, 2000; that deadline
was later extended.
On March 30, 2000, the Company was notified by the attorneys to the vendors
that the vendors declined to go forward with the Company and negotiations were
terminated.
(Prepared by Management)
<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 March 31, 2000.
During the quarterly periods ended March 31, 2000, and 1999, the
Company had no business operations, but recorded a net loss of ($104,362)
during the quarterly period ended March 31, 2000, compared with a net loss of
($10,114) during the quarter ended March 31, 1999.
Liquidity.
- ----------
The Company had cash on hand of $2,885,752 at March 31, 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, which is subsequent to the period covered by this
Report, 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.
The Company's complaint stemmed from the failure of Mr. Stern and NV
Memory to perform their obligations under the December 31, 1999 agreement
between the parties as discussed under the heading "Submission of Matters to a
Vote of Security Holders," below. The complaint alleged breach of contract;
breach of the implied duty of good faith and fair dealing; breach of fiduciary
duty; fraud; specific performance; and moneys paid/unjust enrichment. The
Company seeks damages in an amount to be awarded at trial and specific
performance of the December 31, 1999, agreement.
As of the date of this Report, neither Mr. Stern nor NV Memory has
filed any responsive pleading.
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.
On December 31, 1999, the Company entered into an agreement with
Donald Stern, the founder of NV Memory, whereby the Company agreed to acquire
all of the issued and outstanding shares of NV Memory in exchange for a 60%
interest in the Company. This proposed acquisition was disclosed in a Current
Report on Form 8-K, dated February 1, 2000, which was filed with the
Securities and Exchange Commission on February 17, 2000, and in the Company's
Annual Report on Form 10-KSB for the calendar year ended December 31, 1999,
which was filed on April 13, 2000, and each of which is incorporated herein by
reference. See Item 6 of this Report.
In connection with the proposed acquisition of NV Memory, on
February 1, 2000, the holders of 59.2% of the Company's issued and outstanding
common voting stock voted to: (i) approve the change of the Company's name to
"MicroAccel, Inc."; (ii) elect Suzanne L. Wood; Barry D. Russell; Donald S.
Stern; and Robert B. Stern to serve on the Company's Board of Directors for a
term of one year or until his or her successor is elected and qualified; (iii)
adopt the Company's 2000 Stock Option Plan for the grant of incentive and non-
qualified options to purchase up to 950,000 shares of the Company's common
stock to employees and such other persons as the Plan Administrator (which is
currently the Board of Directors) may select; and (iv) permit the Company to
take actions without a meeting of stockholders if one or more consents in
writing, setting forth the action so taken, is signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take the action at a meeting at which all shares
entitled to vote were present and voted.
Articles of Amendment with respect to the Company's name change were
filed with the Division of Corporations and Commercial Code of the Utah
Department of Commerce on February 2, 2000, and the Company's name change to
"MicroAccel, Inc." became effective on that date. The purpose of the name
change was to better reflect the nature of the Company's anticipated business
following its proposed acquisition of NV Memory. Each of these matters was
disclosed in the Company's Current Report on Form 8-K, dated February 1, 2000,
and its Annual Report on Form 10-KSB for the calendar year ended December 31,
2000.
As of the date of this Report, the Company has not granted any
options pursuant to the 2000 Stock Option Plan. A copy of the 2000 Stock
Option Plan, with exhibits, was attached to the Company's recently filed Form
8-K and is incorporated herein by this reference. See Item 6 of this Report.
Item 5. Other Information.
On January 25, 2000, the Company's Board of Directors unanimously
voted to undertake a private placement of up to 1,000,000 "unregistered" and
"restricted" shares of the Company's common stock at a price of $4.00 per
share, pursuant to Rule 506 of Regulation D of the Securities and Exchange
Commission and/or Regulation S thereof. The offering was closed on January
28, 2000, with all 1,000,000 shares being sold to non-"U.S. Persons," as
defined in Rule 902(k) of Regulation S. This fundraising was undertaken as
part of the Company's anticipated acquisition of NV Memory, with the funds to
be used for development of NV Memory's computer memory technology, the payment
of Company debt and working capital. See the Exhibit Index, Item 6 of this
Report.
On February 25, 2000, Donald Stern and Robert Stern, the founders of
NV Memory, resigned from the Company's Board of Directors for the sole purpose
of avoiding any conflict of interest during the negotiation of a definitive
agreement between the parties.
By subsequent letter agreement dated February 16, 2000, the Company
and Donald Stern agreed that the closing of the NV Memory agreement must take
place no later than February 29, 2000. On March 30, 2000, the Company was
notified by the attorneys for the vendors of NV Memory that the vendors
declined to go forward with the Company. As a result, the Company's plan of
operation for the next 12 months is to seek out a suitable merger or
acquisition candidate.
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
Current Report on Form 8-K, dated February 1, 2000, and filed with
the Securities and Exchange Commission on February 17, 2000.
Annual Report on Form 10-KSB for the calendar year ended December
31, 2000, and filed with the Securities and Exchange Commission on
April 13, 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: 5-17-2000 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: 5-17-2000 By /s/ Suzanne L. Wood
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Suzanne L. Wood, President and
Director
Date: 5-17-2000 By /s/ Barry D. Russell
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Barry D. Russell, Director,
Treasurer and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2885752
<SECURITIES> 0
<RECEIVABLES> 366383
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2885752
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3252135
<CURRENT-LIABILITIES> 42952
<BONDS> 0
0
0
<COMMON> 19846
<OTHER-SE> 3189337
<TOTAL-LIABILITY-AND-EQUITY> 3252135
<SALES> 0
<TOTAL-REVENUES> 23277
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 127639
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (104362)
<INCOME-TAX> 0
<INCOME-CONTINUING> (104362)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (104362)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
