U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 33-13674-LA
VERMILLION VENTURES, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 68-0121636
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ ] No [ X ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as May 23, 2000: 116,044 shares of
common stock.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
<PAGE>
FORM 10-QSB
VERMILLION VENTURES, INC.
INDEX
Page
PART I. Financial Information 3
Unaudited Condensed Balance Sheets as
of June 30, 1999 4
Unaudited Condensed Statements of
Operations as of June 30, 1999 5
Unaudited Condensed Statements of Cash
Flows as of June 30, 1999 6
Notes to Unaudited Consolidated
Financial Statements 7
Management's Discussion and Analysis of
Financial Condition or Plan of Operation 11
PART II. Other Information 11
Signatures 12
2
<PAGE>
PART I.
Financial Information
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
3
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
1999 1998
___________ ___________
CURRENT ASSETS:
Cash in bank $ - $ -
___________ ___________
Total Current Assets - -
___________ ___________
$ - $ -
___________ ___________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 2,100 $ 2,100
___________ ___________
Total Current Liabilities 2,100 2,100
___________ ___________
COMMITMENTS AND CONTINGENCIES - -
___________ ___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value, 500,000,000
shares authorized, 116,044 shares issued
and outstanding 116 116
Capital in Excess of Par 19,984 19,984
Retained deficit (since Quasi-
Reorganization in which a deficit of
$703,761, as of January 1, 1996
was eliminated) - -
Deficit accumulated during the development
stage (22,200) (22,200)
___________ ___________
Total Stockholders' (Deficit) (2,100) (2,100)
___________ ___________
$ - $ -
___________ ___________
Note: The balance sheet at December 31, 1998 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
4
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
Cumulative from
the Re-entering of
Development Stage
For the For the on January 1,
Three Months Six Months 1996 through
Ended June 30, Ended June 30, June 30,
__________________________________________
1999 1998 1999 1998 1999
___________________________________________________________
REVENUE:
Sales $ - $ - $ - $ - $ -
___________________________________________________________
Total Revenue - - - - -
___________________________________________________________
EXPENSES:
General and
administrative - - - - 22,200
__________________________________________________________
Total Expenses - - - - 22,200
__________________________________________________________
LOSS FROM OPERATIONS - - - - (22,200)
CURRENT INCOME TAXES - - - - -
DEFERRED INCOME TAX - - - - -
_________________________________________________________
NET LOSS $ - $ - $ - $ - $(22,200)
_________________________________________________________
LOSS PER SHARE $ - $ - $ - $ - $ (.24)
_________________________________________________________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
5
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
Cumulative from
the Re-entering of
Development Stage
For the Six months on January 1,
Ended June 30, 1996 through
_______________________ June 30,
1999 1998 1999
_______________________________________
Cash Flows From Operating Activities:
Net loss $ - $ - $(22,200)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock Issued for services - - 20,000
Expenses paid by capital contributions - - 100
Changes in assets and liabilities:
Increase in accounts payable - - 2,100
_____________________________________
Net Cash (Used) by
Operating Activities - - -
_____________________________________
Cash Flows From Investing Activities:
- - -
_____________________________________
Net Cash (Used) by
Investing Activities - - -
____________________________________
Cash Flows From Financing Activities:
- - -
____________________________________
Net Cash Provided by
Financing Activities - - -
____________________________________
Net Increase in Cash - - -
Cash at Beginning of the Year - - -
____________________________________
Cash at End of the Year $ - $ - $ -
____________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the Six months ended June 30, 1999:
None
For the Six months ended June 30, 1998:
None
The accompanying notes are an integral part of these unaudited
condensed financial statements.
6
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Vermillion Ventures, Inc. (the Company) was
organized under the laws of the State of Nevada on March 23,
1987. The Company was formed to acquire other operating
corporate entities. On March 15, 1988 The Company acquired all
of the outstanding stock of BMC Incorporated (BMC) by issuing
129,000,000 shares of common stock. BMC was unsuccessful in its
satellite bingo operations and was dissolved. During 1996,
Management determined it was in the best interest of the Company
to discontinue its previous operations. The Company is
considered to have re-entered into a new development stage on
January 1,1996. Because the Company discontinued its previous
operations and is seeking new potential business opportunities,
the Company adopted quasi-reorganization accounting procedures to
provide the Company a "fresh-start" for accounting purposes.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 1999 and 1998 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1998 audited financial
statements. The results of operations for the periods ended June
30, 1999 are not necessarily indicative of the operating results
for the full year.
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 8].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
7
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - QUASI-REORGANIZATION
Subsequent to December 31, 1999 the shareholders of the Company
approved to adopted quasi-reorganization accounting procedures.
Quasi-reorganization accounting allowed the Company to eliminate
its previous retained (deficit) of $701,761 against additional
paid-in capital. Therefore, the adoption of quasi-reorganization
accounting procedures gave the Company a "fresh start" for
accounting purposes. The Company is also considered as re-
entering a new development stage on January 1, 1996, as it
discontinued all of its previous bingo operations. These
financial statements have been restated to reflect the change.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires the liability approach for the
effect of income taxes.
The Company has available at June 30, 1999, unused operating loss
carryforwards of approximately $22,200, which may be applied
against future taxable income and which expire in various years
through 2019. If certain substantial changes in the Company's
ownership should occur, there could be an annual limitation on
the amount of net operating loss carryforward which can be
utilized. The amount of and ultimate realization of the benefits
from the operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards (approximately $7,500) at June 30, 1999
and, therefore, no deferred tax asset has been recognized for the
loss carryforwards. The change in the valuation allowance is
equal to the tax effect of the current period's net loss
(approximately $0 for the six months ended June 30, 1999).
NOTE 4 - COMMON STOCK
On April 29, 1997 the company issued 66,667 shares of its
previously authorized but unissued common stock for services
rendered valued at $20,000 (or $.30 per share). The stock
issuance resulted in a change of control of the Company.
8
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During the periods presented, the
Company did not pay any compensation to its officers and
directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his office as a mailing address, as needed, at no
expense to the Company.
NOTE 6 - COMMENTS AND CONTINGENCIES
Management believes that the Company is not liable for any
existing liabilities related to its former discontinued
operations. The Company is not currently named nor is it aware
of any such claims or suits against the Company. No amounts have
been reflected or accrued in these financial statements for any
contingent liability.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has no on-going operations and has incurred
losses since its inception. Further, the Company has no working
capital to pay its expenses. These factors raise substantial
doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through
loans or through sales of its common stock or through a possible
business combination with another company. There is no assurance
that the Company will be successful in raising this additional
capital or achieving profitable operations. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
9
<PAGE>
VERMILLION VENTURES, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the three months ended June 30, 1999 and 1999 and for the period
from the re-entering of development stage on January 1, 1996
through June 30, 1999:
Cumulative from
the Re-entering of
For the Three For the Six Development Stage
Months Ended Six Months Ended on January 1,
June 30, June 30, 1996 through
_________________________________ June 30,
1999 1998 1999 1998 1999
___________________________________________________
Loss from continuing
operations available
to common stockholders
(numerator) $ - $ - $ - $ - $(22,200)
_________________________________________________
Weighted average number
of common shares
outstanding used in
earnings per share
during the period
(denominator) 116,044 116,044 116,044 116,044 90,757
___________________________________________________
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
The Company has -0- in cash and $2,100 in current
liabilities in the form of accounts payable. The Company did not
generate any revenue during the quarterly period ended June 30,
1999. The Company has no material commitments for capital
expenditures for the next twelve months.
The Company believes that its current cash needs can be met
with the cash on hand and loans from officers and directors for
at least the next twelve months. However, should the Company
obtain a business opportunity, it may be necessary to raise
additional capital. This may be accomplished by loans from the
principals of the Company, debt financing, equity financing or a
combination of financing options.
PART II.
OTHER INFORMATION
Exhibits and Reports on Form 8-K:
Reports on Form 8-K: None
Exhibits: Included only with the electronic filing of this
report is the Financial Data Schedule for the three month period
ended June 30, 1999 (Exhibit ref. No. 27).
11
<PAGE>
SIGNATURES
In accordance with the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
VERMILLION VENTURES, INC.
Date: 5/26/00 By: /s/ John Lambert
President and Director
Date: 5/26/00 By: /s/ Kip Eardley
Secretary/Treasurer and Director
12
<PAGE>
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<ARTICLE> 5
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 2,100
<BONDS> 0
0
0
<COMMON> 116
<OTHER-SE> (2,216)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
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</TABLE>
