FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM N/A TO
COMMISSION FILE NUMBER : 33-11795
MT. OLYMPUS ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 87-0441351
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
5110 South 800 East
Salt Lake City, Utah 84117
(Address of principal executive offices)
(Zip Code)
(801) 262-2265
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
X NO as to filing YES X NO as to filing
requirement
The number of shares outstanding at June 30, 1997: 4,300,000<PAGE>
Copies of Any Responses To:
Mr. Julian D. Jensen, Esq.
Attorney for Mt. Olympus Enterprises, Inc.
311 South State, Suite 380
Salt Lake City, UT 84111
(801) 531-6600<PAGE>
MT. OLYMPUS ENTERPRISES, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . Exhibit
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 4
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders . .5
Item 5. Other Information 5 .
Item 6. Exhibits 5 .
[Inapplicable Items Have Been Omitted]
<PAGE>
PART I. - Financial Information
Item 1. Financial Statements. [Unaudited]
Financial statements for the quarterly period ended June 30,
1997 are attached hereto and made a part of this Report.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(a) Operations & Liquidity - For the three (3) month
period ending June 30, 1997, on an unaudited basis, the Company had a net
income of Sixteen Thousand Eight Hundred Sixty-nine Dollars ($16,869.00)
compared to net income of One Thousand Eighty-one Dollars ($1,081.00) for
the comparable period in 1996. These net income figures were primarily
attributable to debt forgiveness in both quarters. Management also notes
there are One Hundred Thirty-seven Dollars ($137.00) in current assets with
current liabilities of One Thousand Eight Hundred and Seven Dollars
($1,807.00). As a result, the Company has a deficit in working capital as of
June 30, 1997 of One Thousand Six Hundred Seventy Dollars ($1,670.00).
The company has an accumulated deficit since inception of One Hundred
Thirty-nine Thousand Six Hundred Sixty-six Dollars ($139,666.00). A
substantial portion of the accumulated deficit arose from the expenditure of
the initial capitalization of the Company. The independent auditors for the
Company have indicated a reservation that the Company may qualify as a
going concern.
As more particularly described under the following
subparagraph (c), the Company has secured with a subscription right to
5,000,000 of its shares a third partly loan to Mr. Madsen which was
employed, in substantial part, to retire all liabilities of the Company through
April 15, 1997. Accordingly, the only remaining current liabilities of the
Company for services, principally legal and accounting, rendered to the
Company since April 15, 1997.
During the quarter ended June 30, 1997, the Company has
expended approximately Five Thousand Three Hundred Thirty-seven Dollars
($5,337.00) in its current merger and reorganization related expenses.
As previously set-out in the 1996 Form 10-KSB Annual
Report, the Company has a relationship with Mr. Dennis G. Madsen, as a
promotor and shareholder of the Company, to act as a special agent for the
Company in attempting to find business acquisition, merger or reorganization
opportunities for the Company. This relationship in the presently pending
reorganization exists on a to be issued share basis where Mr. Madsen and
assigns will receive up to Five Hundred Thousand shares (500,000) upon the
successful completion of the Afritel Merger.
Mr. Madsen has been successful in introducing the Company
to various entities seeking to conduct their business through a public
company. As of April 24, 1997, the Company has entered a preliminary
agreement to proceed with a "reverse acquisition" whereby the Company
would merge with a private corporation known as Afritel, Inc. with the
Company as the surviving entity, but adopting the name Afritel and engaging
in Afritel's intended business activities of providing telephone services in
developing African Nations. The Merger cannot be finalized until and unless
Afritel completes a pending private placement offering and the matter is
submitted to shareholder vote.
The Company filed an 8-K Report on May 8, 1997 outlining
the terms of the proposed reorganization and merger with Afritel. These
events are more fully reported in the 8-K filing and under subparagraph (c)
below. The Company has determined not to make any further announcements
related to the transaction until the Merger is completed and ratified by the
shareholders of both companies.
(b) Results of Operations - The Company has been inactive
since the termination of its prior agreement with Medtest Corporation in
approximately June of 1989. Prior to that date, the Company had expended
all of its liquid assets in attempting to maintain the Medtest licensing option
and to supply funding for development of such product. Since that date, the
Company has made various attempts to enter into acquisition or
reorganization agreements with various entities; none of which have been
successful, except as noted herein. The descriptions of those aborted efforts
have been previously reported and are not deemed material to this Reporting
Statement. The Company does not presently have any revenues and has
various outstanding current liabilities, as generally described above, and
primarily incurred for legal and accounting services.
There will be no known prospect for future revenues, income,
or debt repayment until or unless there is the consummation of the preliminary
reorganization agreement, merger or acquisition as generally described under
subpart (c) below.
Mr. Madsen has assumed debts for the Company of
approximately Forty-four Thousand Three Hundred Eighty-seven Dollars
($44,387.00) to date in 1997 to pay for registration, filing, licensing,
reorganizational and related services. These sums were primarily paid to
professionals, both historic and current, as retained by the Company. The
Company has had no revenues or other source of funds.
No salary or other remuneration has been paid in 1997 to any
officer or director and no compensation is anticipated until or unless the
Company is able to engage in some business pursuit. The Company has no
employees and does not anticipate any employees.
(c) Significant Events - As of May 8, 1997, the Company
filed an 8-K Report during this quarterly period indicating the general terms
and provisions of a preliminary letter of intent for a merger and reorganization
with a privately-held Texas corporation known as Afritel, Inc. It is not the
intent of the Company to set-out in the same detail or particularity the terms
or provisions of that proposed reorganization as outlined and supported by
relevant documents as filed in the 8-K Report. Each shareholder or other
interested party may contact directly the company and obtain a copy of the 8-
K Report as filed. Additionally, copies of the 8-K may be obtained from the
SEC directly through its public document facilities.
In essential terms, and as limited and prescribed by the more
detailed information of the 8-K filing, the Company has entered into a
preliminary letter of intent with Afritel by which the Company would be
merged into Afritel with Mt. Olympus being the surviving entity. It is further
proposed that after completion of the merger, which will require subsequent
shareholder vote and approval, the name of the corporation would be changed
to Afritel and the Company would engage in anticipated wireless telephone
services and equipment sales in various nations of Africa. The proposed
merger would also require a forty-three-to-one (43:1) reverse split of the
Company's presently issued and outstanding shares.
At present, there is pending before the formal submission of
the Plan and Agreement of Reorganization to the shareholders of each
company the completion of a Private Placement Offering by Afritel, which is
a necessary term and condition to go forward with the Reorganization
Agreement. The Company can not make or project a definitive time in which
this Private Placement funding may be completed, if at all, but is optimistic
that the same will be completed and funded within the next sixty (60) days.
Promptly after completion of the Private Placement Offering by Afritel, the
Company intends to formally notice a Proxy Solicitation to its shareholders
to vote upon the proposed specific terms of Reorganization and Merger as
generally outlined above. Each shareholder will be given a subsequent
opportunity to vote for or against the proposed merger after a more complete
disclosure of details. At the time of the proposed Proxy Solicitation, it is
intended that consolidated financial statements will be provided for Afritel and
MOE to provide an accurate financial picture of the proposed company in the
event of the merger and reorganization. At the present time, and until the
completion of the Afritel Private Placement Offering, it is generally believed
that Afritel does not have any substantial assets, income or other business
purpose, and would not significantly alter or change the Mt. Olympus financial
statements attached hereto. No value has been presently prescribed to the
intangible business concepts and plan of Afritel.
Afritel has no present assets or other tangible equipment.
In all events, the Agreement of Reorganization is a preliminary
agreement and cannot be deemed to be vested or final until such time as the
completion of the Private Placement Offering by Afritel and the formal
submission of the Plan and Agreement to a vote and approval of the
respective shareholders. If either the Afritel Private Placement is not
completed, or the shareholders do not approve the final terms and Plan of
Reorganization, then the merger will not occur and MOE will not have any
other present prospects for other business activities.
As noted above, financial data for Afritel is not yet available
and will not be supplied until the Proxy Materials are provided to each
shareholder. Any further questions or inquiries concerning the proposed
Reorganization should be directed to the Company at its address indicated
above; or, questions may be directed to the Company's legal counsel, Mr.
Julian D. Jensen of 311 South State, Suite 380, Salt Lake City, UT 84111, at
(801) 531-6600. Further, direct questions may be directed to Mr. Richard
Furlin, as the Chief Financial Officer for Afritel, at 700 Gemini Street,
Houston, TX 77058; Telephone - (281) 488-3883.
The Company also reports, as part of the reorganization effort
and as set-out in more detail in the 8-K filing, that the Company has secured
a loan transaction wherein Mr. Dennis Madsen, as a principal agent for the
Company for acquisitions, entered into a private loan obligation with a third
party for approximately Sixty Thousand Dollars ($60,000.00). The Company
is not a direct party to such loan, but agreed to the prospective issuance of
Five Million (5,000,000) of its shares to secure such loan upon and in
consideration for receiving the discharge and payment of all of its debts and
obligations, as of approximately April 15, 1997, from the proceeds of this
third party loan.
It is anticipated that should the Reorganization be completed
with Afritel, Mr. Madsen or assigns will receive Five Hundred Thousand
(500,000) shares of stock of the Company for prior loans and advances, as
well as for deferred compensation for consulting and finding efforts related to
the Reorganization with Afritel. From this 500,000 shares, Mr. Madison will
assign a portion of such stock to fully discharge and pay the debt obligation
owing by Mr. Madsen to the third party. In consideration for this
arrangement Mr. Madsen has relinquished all loans and other obligations
previously owed to him by the Company. The balance of the shares
authorized to be issued (4,500,000) will be issued to the Afritel shareholders
as part of the Reorganization after the reverse split to existing shareholders.
IF THE REORGANIZATION IS NOT COMPLETED THE THIRD PARTY PRIVATE
LEADER WILL
RECEIVE ALL OR MOST OF THE 5,000,000 SHARES TO BE ISSUED PURSUANT TO
THE
SUBSCRIPTION RIGHT, AND WHICH SUBSCRIBED SHARES HAVE BEEN PLEDGED
AS
SECURITY FOR HIS LOAN.
PART II. - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
None during reporting quarter.
Item 5. - Other Information.
Any shareholder not receiving the 1996 Annual Report on
Form 10-KSB subsequent March 31, 1997 10-QSB Report, or wanting a
copy of the May 8, 1997 8-K Report may obtain a copy without charge by
contacting the Company.
Item 6. Exhibits and Reports on Form 8-K.
(a) Unaudited Accounting Schedules - Attached.
(b) The Company filed a Form 8-K during the quarter
reported as of May 8,1997. See above.
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 th
undersigned thereunto duly authorized.
MT. OLYMPUS ENTERPRISES, INC.
Date:8/14/97 By
L. Kent Mackay
President/Director
Date:8/14/97 By
Dave Winters
Secretary/Treasurer
Acting as Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
MT. OLYMPUS ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED BALANCE SHEET
(UNAUDITED)
JUNE 30,
1997
----------
ASSETS
CURRENT ASSETS
Prepaid expenses $ 137
----------
TOTAL CURRENT ASSETS 137
---------
TOTAL ASSETS $ 137
----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 1,807
----------
TOTAL CURRENT LIABILITIES 1,807
----------
STOCKHOLDERS' DEFICIT
Common stock - $.001 par value; 50,000,000
shares authorized; 4,300,000 shares issued
and outstanding 4,300
Additional paid-in capital 133,696
Deficit accumulated during the development stage (139,666)
----------
TOTAL STOCKHOLDERS' DEFICIT (1,670)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 137
==========
See the accompanying notes to condensed financial statements.
MT. OLYMPUS ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For The Cumulative
Period From
January 19, 1987
For the Three Months For the Six Months (Date of
Ended June 30, Ended June 30, Inception) Through
1997 1996 1997 1996 June 30, 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INCOME $ - $ - $ - $ - $ -
OPTION EXPENSES - - - - 55,349
MERGER AND REORGANIZATION
EXPENSES 5,337 1,652 14,553 1,744 67,857
GENERAL AND ADMINISTRATIVE
EXPENSES 96 81 130 132 35,616
INTEREST EXPENSE 264 490 1,054 980 6,714
---------- --------- ---------- --------- ----------
NET LOSS BEFORE
EXTRAORDINARY ITEM (5,697) (2,223) (15,737) (2,856) (165,536)
---------- --------- ---------- --------- ----------
EXTRAORDINARY GAIN FROM
DEBT FORGIVENESS, NET
OF TAX OF $0 22,566 3,304 22,566 3,304 25,870
---------- --------- ---------- --------- ---------
NET INCOME (LOSS) $ 16,869 $ 1,081 $ 6,829 $ 448 $(139,666)
========== ========= ========== ========== =========
NET INCOME (LOSS) PER COMMON
SHARE BEFORE EXTRAORDINARY
ITEM $ - $ - $ - $ - $ (0.05)
---------- --------- ---------- ---------- ---------
EXTRAORDINARY GAIN PER
COMMON SHARE - - - - 0.01
---------- --------- ---------- ---------- ---------
NET INCOME (LOSS) PER
COMMON SHARE $ - $ - $ - $ - $ (0.04)
========== ========= ========== ========== =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 4,300,000 4,300,000 4,300,000 4,300,000 3,418,723
========== ========= ========== ========== =========
<FN>
See the accompanying notes to condensed financial statements.
</FN>
MT. OLYMPUS ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
For The Cumulative
Period From
January 19, 1987
(Date of
For The Six Months Inception)
Ended June 30, Through
1997 1996 June 30, 1997
--------- -------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net gain (loss) $ 6,829 $ 448 $(139,666)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization - - 5,164
Extraordinary gain from debt forgiveness (22,566) (3,304) (25,870)
Expenses paid by stockholder 16,709 1,252 30,364
Expenses paid from deposit with
legal counsel 6,900 - 10,000
Increase in prepaid expenses (137) - (137)
Increase in accrued interest payable 1,053 980 9,213
Increase (decrease) in accounts payable (8,788) 624 39,964
--------- -------- ----------
NET CASH USED BY OPERATING ACTIVITIES - - (70,968)
--------- -------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for organization costs - - (5,164)
--------- -------- ----------
NET CASH USED IN INVESTING ACTIVITIES - - (5,164)
--------- -------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to
related party - - 37,000
Repayment of note from related party - - (25,000)
Proceeds from issuance of common stock,
net of offering costs - - 64,132
--------- -------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 76,132
--------- -------- ----------
NET DECREASE IN CASH $ - $ - $ -
========= ======== ==========
<FN>
See the accompanying notes to condensed financial statements.
</FN>
MT. OLYMPUS ENTERPRISES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been
prepared by the Company, and are not audited. All adjustments
necessary for fair presentation have been included, and consist
only of normal recurring adjustments except as disclosed herein.
These financial statements are condensed and, therefore, do not
include all disclosures normally required by generally accepted
accounting principles. These statements should be read in
conjunction with the Company's annual financial statements
included in the Company's Annual Report on Form 10-KSB. The
financial position and results of operations presented in the
accompanying financial statements are not necessarily indicative
of the results to be generated for the remainder of 1997.
NOTE 2--PRELIMINARY LETTER OF INTENT FOR REORGANIZATION
On April 24, 1997, the Company entered into a preliminary letter
of intent for reorganization with a privately held Texas
corporation known as Afritel Telecommunications, Inc. (Afritel).
As part of the reorganization, the Company agreed to complete a
1-for-43 reverse stock split of the presently issued and
outstanding 4,300,000 common shares, resulting in 100,000 shares
being outstanding upon consummation of the reorganization. The
Company would then issue a controlling interest of 4,500,000
shares (post-split) to Afritel shareholders in exchange for all
of Afritel's outstanding stock and 500,000 shares (post-split),
as a fee to a shareholder acting as an agent for the Company in
this transaction. The Company would then change its name to
Afritel, elect a new Board of Directors, and attempt to develop a
telecommunications system in Zaire and/or other developing
African nations. The reorganization is contingent upon Afritel
obtaining $500,000 through a private placement offering. None of
the transactions contemplated in the reorganization with Afritel
have been reflected in the accompanying condensed financial
statements.
NOTE 3--CAPITAL CONTRIBUTION THROUGH DEBT ASSUMPTION
In June 1997, as part of the preliminary letter of intent for
reorganization entered into with Afritel, a shareholder assumed
all outstanding liabilities of the Company except for accounting
fees, legal fees, and taxes incurred for the six months ended
June 30, 1997. The liabilities assumed by the shareholder total
$44,387 and constitute an additional capital contribution by the
shareholder. The shareholder personally borrowed $60,000 in
private financing and intends to use a portion of the borrowed
funds to satisfy the assumed debts. As collateral for the
assumption of the debt, the Company authorized 5,000,000 shares
(pre-split) which may be issued to the shareholder for services
rendered if the reorganization does not take place. If the
reorganization is completed, the shareholder will receive 500,000
(post-split) common shares for services rendered.
As presented in the interim financial statements at March 31,
1997, the shares to be issued to the shareholder were reported to
be for the repayment of the obligations assumed by the
shareholder. However, upon further review, the issuance of the
shares will be for services rendered.
NOTE 4--EXTRAORDINARY GAIN FROM DEBT FORGIVENESS
In June 1997, the Company negotiated reductions in the amounts
owed to creditors. As a result, the creditors forgave a total of
$22,566 in liabilities. As required by generally accepted
accounting principles, the gain from the debt forgiveness has
been recognized as an extraordinary gain in the accompanying
statements of operations for the three and six months ended June
30, 1997.
</TABLE>
