FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission file number 1-12178
InnoVet, Inc.
(Exact name of small business issuer as specified in its charter)
Florida
(State or other jurisdiction of
incorporation or organization)
P. O. Box 145
Winter Park, Florida
(Address of principal executive offices)
59-2699441
(I.R.S. Employer Identification No.)
32790
(Zip Code)
None
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports 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 registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes No __X___
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock, $0.001 Par Value;
18,656,881 shares outstanding as of September 3, 1998.
INDEX
INNOVET, INC.
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited)
Balance Sheets
June 30, 1998 and December 31, 1997 4
Statements of Operations
Six months ended June 30, 1998 and 1997 5
Three months ended June 30, 1998 and 1997 6
Statement of Stockholders' Equity
Six months ended June 30, 1998 7
Statements of Cash Flows
Six months ended June 30, 1998 and 1997 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
INNOVET, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
1998 1997
<S> <C> <C>
Current assets
Cash and cash equivalents $ 15,108 $ 44,500
Total current assets 15,108 44,500
Total assets $ 15,108 $ 44,500
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 13,360 $ 40,670
Loans from stockholder 65,000 65,000
Accrued interest 8,126 4,974
Total current liabilities 86,486 110,644
Stockholders' equity
Common stock, $.001 par value, 100,000,000 shares
authorized; 18,656,881 shares issued at June 30,
1998 and at December 31, 1997 18,657 18,657
Capital in excess of par value 18,856,654 18,856,654
Capital representing stock grants 5,514,990 5,514,990
Accumulated deficit (24,461,679) (24,456,445)
(71,378) (66,144)
Total liabilities and stockholders' equity $ 15,108 $ 44,500
</TABLE>
The accompanying notes are an integral part of these statements.
INNOVET, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
<S> <C> <C>
Revenues
Sales $ - $ -
- -
Costs and expenses
Selling, general and administrative expenses 2,082 46,822
Depreciation expense - 546
Interest expense 3,152 9,321
5,234 56,689
Loss from operations before income taxes (5,234) (56,689)
Provision for income taxes - -
Net loss $ (5,234) $ (56,689)
Net loss per share $ (0.00) $ (0.00)
Weighted average shares 18,656,881 18,656,881
</TABLE>
The accompanying notes are an integral part of these statements.
INNOVET, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1998 1997
<S> <C> <C>
Revenues
Sales $ - $ -
- -
Costs and expenses
Selling, general and administrative expenses 800 27,647
Depreciation expense - 167
Interest expense 1,576 9,076
2,376 36,890
Loss from operations before income taxes (2,376) (36,890)
Provision for income taxes - -
Net loss $ (2,376) $ (36,890)
Net loss per share $ (0.00) $ (0.00)
Weighted average shares 18,656,881 18,656,881
</TABLE>
The accompanying notes are an integral part of these statements.
INNOVET, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Capital in Capital Total
Common Stock Excess of Representing Accumulated Stockholders'
Shares Amount Par Value Stock Grants Deficit Equity
<C> <C> <C> <C> <C> <C>
Balance, January 1, 1998
18,656,881 $ 18,657 $ 18,856,654 $ 5,514,990 $(24,456,445) $ (66,144)
Net loss - - - - (5,234) (5,234)
Balance, June 30, 1998
18,656,881 18,657 18,856,654 5,514,990 (24,461,679) (71,378)
</TABLE>
The accompanying notes are an integral part of these statements.
INNOVET, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,234) $ (56,689)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation expense - 546
Gain on sale of equipment - (400)
Changes in operating assets and liabilities:
(Increase)decrease in prepaid expenses - 747
Increase(decrease) in accounts payable (27,310) -
Increase(decrease) in accrued expenses 3,152 9,321
Net cash used for operating activities (29,392) (46,475)
Cash flows from investing activities:
Sale of property, plant and equipment - 500
Net cash used for investing activities - 500
Cash flows from financing activities:
Proceeds from director/officer/shareholder loans - 50,000
Net cash provided by financing activities - 50,000
Increase (decrease) in cash and cash equivalents (29,392) 4,025
Cash and cash equivalents, beginning of period 44,500 77,159
Cash and cash equivalents, end of period $ 15,108 $ 81,184
Supplemental disclosures of cash flow information
Cash paid during the year:
Interest $ - $ -
</TABLE>
The accompanying notes are an integral part of these statements.
INNOVET, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE A - BASIS OF PREPARATION
The Balance Sheets at June 30, 1998 and December 31, 1997 and the related
Statements of Operations for the three months and six months ended June 30,
1998 and 1997, Statement of Stockholders' Equity for the six months ended
June 30, 1998 and Statements of Cash Flows for the six months ended June 30,
1998 and 1997, have been prepared in accordance with the instructions for
Form 10-QSB and, therefore, do not include all information and footnotes
necessary for a fair presentation of financial position, result thereto in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1997. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations for the six months ended
June 30, 1998 have been included.
NOTE B - GOING CONCERN
The Company has sustained substantial losses from operations in past years
and has a significant accumulated deficit. The Company has sold off
substantially all of its operating businesses and in 1997 and 1998, the
Company's sole activity was to find a company to merge with or that will
acquire it. The Company believes that its public shell can be made
attractive if it is able to meet its reporting requirements under the
Exchange Act and maintain its OTC Bulletin Board listing with the National
Association of Securities Dealers, Inc.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(a) Results of Operations.
(1) Three months ending June 30. Revenues. The Company had no revenues in
the quarter ended June 30, 1998 and also for the same period in 1997.
Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $26,847 or 97% in 1998 compared to the
second quarter of 1997. The only expense incurred in the second quarter
1998 was $800 for the stock transfer agent.
Depreciation expense. Depreciation expense decreased $167 or 100% as the
remaining assets are fully depreciated.
Interest expense. Interest expense decreased $7,500 in the second quarter
1998 compared to the same quarter last year. The 1997 interest expense of
$9,076 included $7,500 or one-half of the loan fees incurred for the Oakes,
Fitzwilliams and Co. Limited loan to the Company.
(2) Six months ending June 30. Revenues. The Company had no revenues for
the six months ended June 30, 1998 and also for the same period in 1997.
Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $44,740 or 96% in 1998 compared to the
same period in 1997. The main expense incurred in the first six months of
1998 was $2,000 for the stock transfer agent.
Depreciation expense. Depreciation expense decreased $546 or 100% as the
remaining assets are fully depreciated.
Interest expense. Interest expense decreased $6,169 or 66% in 1998 compared
to the same six months last year. The 1997 interest expense of $9,321
included $7,500 or one-half of the loan fees incurred for the Oakes,
Fitzwilliams and Co. Limited loan to the Company.
(b) Liquidity.
At June 30, 1998, the Company had $15,108 in cash and cash equivalents.
This is the balance of the proceeds from the $65,000 loan from stockholder
issued in 1997. The note was due and payable on or before September 30,
1997 with interest at the London InterBank Offered Rate (LIBOR) plus 4%.
Although the principal and interest on the loan has not been repaid,
repayment has not been demanded. The Company has the option to repay the
principal and interest by issuing shares of its common stock to the stockholder
pursuant to Regulation S under the Securities Act at a price of $.0025 per
share.
The Company had no revenues for the six months ended June 30, 1998 or in the
same period last year. The Company currently has no sources of revenue and
minimal cash. It is possible that the public shell may be used by an active
entity seeking public company status; however, it is uncertain if or when
such an event will occur. If such event does not occur within a short period
of time, the Company may liquidate.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K. None
SIGNATURE
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.
InnoVet, Inc.
(Registrant)
/s/SCOTT P. CIELEWICH
Date: September 5, 1998 Scott P. Cielewich,
Executive Vice President and
Chief Financial Officer
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<NAME> INNOVET, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 15,108
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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0
0
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<OTHER-EXPENSES> 2,082
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<INTEREST-EXPENSE> 3,152
<INCOME-PRETAX> (5,234)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,234)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,234)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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