SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 0 17304
CNH Holdings Company
(Exact name of small business issuer as specified in its charter)
Nevada 11 2867201
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
17659 Sun Meadow, Dallas, Texas 75252
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (972) 248.4873
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 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 to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of October 16, 2000, there
were approximately 15,611,774 shares outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CNH HOLDINGS COMPANY
BALANCE SHEETS
September 30, March 31,
2000 2000
--------- ---------
ASSETS
Current assets: $ -- $ --
--------- ---------
Total assets -- --
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: $ -- $ --
Stockholders' Equity (Deficit)
Preferred Stock, $.01 par value,
1,000,000 shares authorized,
no shares issued and outstanding
on September 30, 2000, and no
shares issued and outstanding on
March 31, 2000 -- 2,000
Common Stock, $.001 par value,
50,000,000 shares authorized,
15,611,774 shares issued and
outstanding at September 30, 2000
and 14,971,774 shares issued and
outstanding at March 31, 2000 15,610 7,259
Additional paid in capital 193,737 581,495
Deficit (209,347) (761,822)
--------- ---------
-- (171,068)
--------- ---------
Total Liabilities and Stockholders' Equity $ -- 632,974
========= =========
The Auditor's report and accompanying notes
are an integral part of these statements.
<PAGE>
CNH HOLDINGS COMPANY
OPERATING STATEMENTS
Six Months Ended
September 30, September 30,
2000 1999
---- ----
Revenues $ -- $ --
Operational Expenses 79,947 --
Income (loss) from
discontinued operations -- --
Net income (loss) $(79,947) $ --
The accompanying notes are an integral part of these statements.
<PAGE>
CNH HOLDINGS COMPANY
Six Months Ended
September 30, September 30,
2000 1999
-------- ---------
Cash flows from operating activities:
Net (loss) $ 79,947 $ --
Add non-cash items: -- --
Decrease (Increase) in accounts payable (79,947) --
Net cash flows (used) in operating activities -- --
-------- ---------
Cash flows from investing activities:
Issuance of cash for accounts payable 79,947 --
Increase (Decrease) in accounts payable (79,947) --
-------- ---------
Cash flows from financing activities: -- --
-------- ---------
Net increase in cash -- --
Cash at beginning of period -- --
-------- ---------
Cash at end of period $ -- --
======== =========
The accompanying notes are an integral part of these statements.
<PAGE>
CNH HOLDINGS COMPANY
FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. Organization
I.S.B.C. Corp. was incorporated in Delaware on April 15, 1987. On January 29,
1988, I.S.B.C. Corp. completed a public offering of 800,000 units at a price of
$.50 per unit, consisting of one share of common stock and three redeemable
warrants. All unexercised warrants have now expired.
On June 27, 1988, I.S.B.C. Corp. issued 21,000,000 shares of its common stock in
exchange for all of the outstanding shares of Coral Group, Inc. Subsequent to
the exchange of stock, I.S.B.C. Corp. changed its name to Coral Companies, Inc.
Coral Group, Inc. was incorporated on March 12, 1984, and commenced operations
in November 1984. Coral Group, Inc.'s primary business was the marketing of
computer hardware and software, as well as providing consulting services,
installation support, training programs and software maintenance for its
customers. Since the shareholders of Coral Group, Inc. owned approximately 85%
of Coral Companies, Inc., immediately after the exchange, the stock exchanges
was accounted for as a reverse acquisition of Coral Companies, Inc. by Coral
Group, Inc. The Company, subsequent to the acquisition of the Coral Group,
changed its name to CNH Holdings Company and changed its domicile to Nevada.
The Company previously had outstanding a class of preferred stock which was
entitled to one vote per share, was not entitled to receive any dividends that
may have been declared and had a liquidation preference of $.02 per share. The
preferred stock was previously converted to common stock, and the liquidation
preference of $220,000 was reclassified from preferred stockholders' equity to
common stockholders' equity.
On May 30, 1996, the Company effected a reverse one for one thousand capital
share split. Concurrently, the authorized number of common shares was increased
to 10,000,000, $.001 par value per share and 1,000,000 preferred shares, $.01
par value. After the split, there were 400,000 common shares outstanding, which
included shares of the $.001 par value common issued to individuals in exchange
for services rendered during the first quarter of fiscal 1997.
On December 9, 1997, the Company entered into a reorganization agreement (DRC
Reorganization Agreement) with GNC Corporation, a Nevada corporation (GNC), and
the sole shareholder of GNC, that being DRC, Inc., a Nevada corporation (DRC)
pursuant to which the Company agreed to acquire all of the outstanding
proprietary interest of GNC in a share for share exchange which subsequently
resulted in GNC becoming a wholly owned subsidiary of the Company and DRC
acquiring control of the company through its share ownership. The acquisition
was rescinded due to the failure of GNC and DRC to deliver the required
financial statements.
<PAGE>
On June 18, 1998, the Company acquired Southport Environmental in a share for
share exchange, which resulted in the Company issuing 6,000,000 common shares
and 200,000 preferred shares. Concurrent with the acquisition there was a change
in control and management of the company. This acquisition was subsequently
rescinded on June 27, 2000, by the Federal District Court in Houston, Texas. The
Court formally rescinded the SEDI acquisition, as well as another acquisition
and the formation of a subsidiary, all of which reportedly took place in fiscal
2000. The Court also rescinded all actions of the board and executive officers
of the Company from June 14, 1998, through April 19, 2000, and put the Company
in the position which it occupied at June 14, 1998, as if none of the actions
which had occurred since that time had transpired. As a result, the Company had
no assets and no liabilities at March 31, 2000. The Court also required the
return of 6,711,501 shares of common stock to treasury by affiliates of SEDI,
including 5,020,000 issued in the SEDI acquisition, of which 3,000,000 have
already been returned. The remaining shares have had a stop transfer lodged
against them pursuant to the adjudicated court order.
On March 22, 2000, the holders of the remaining preferred shares outstanding
converted their holdings into 12,000,000 shares of common stock. Concurrently,
the articles of incorporation of the company were amended to increase the number
of authorized common shares to 50,000,000. Effective September 30, 2000, the
person to whom $79,947 in accounts payable was owing, elected to convert that
amount into 640,000 shares of common stock at a price per share of approximately
$.125, which was the market price for the shares on that date.
2. Accounting principles:
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Cash: For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
and money market funds to be cash equivalents.
Loss Per Shares: Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) Earnings per Share. Basic
loss per share is computed by dividing losses available to common shareholders
by the weighted average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would have resulted if
diluted common stock equivalents had been converted to common stock. The net
losses per share calculations reflect the effect of stock dividends and stock
splits.
<PAGE>
Income Taxes: Income taxes provide for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus deferred
taxes related primarily to net operating loss carry forwards and differences
between the basis of various assets for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
Depreciation: Depreciable property, plant and equipment are depreciated over
their estimated useful lives on the straight line method, using lives of three
to seven years. Organization costs are amortized evenly over a period of 60
months.
3. 1999 Stock Option Plan: On January 25, 1999, the Company's board adopted a
stock option plan in which all full time employees of the Company and its
subsidiaries are eligible to participate. The plan is administered by the board,
which may subsequently appoint a committee for this purpose. The plan set aside
up to 1,000,000 shares of common stock to cover options to be granted over the
term of the plan. The plan has a ten year term which commended January 25, 1999.
The company has filed a registration statement under the act to cover the shares
which are issued under the plan. At year end, 732,364 options had been granted
under the plan, all of which had been exercised. The Company subsequently
elected to increase the number of shares available under the plan to satisfy, in
full, the payment of all liabilities owed to its attorney, who constituted the
sole account payable.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Introduction: The following discussion has been prepared assuming the Company
will continue as a going concern; however, the audit report for the financial
statements as of and for the periods ended March 31, 2000, includes a caveat on
this point. In reading the following, one should first consult the audit report,
financial statements and footnotes, while keeping in mind the significant
operating losses generated by the Company on a consolidated basis with its
subsidiaries.
History: CNH Holdings Company, a Nevada corporation (the Company), was
incorporated in Delaware on April 15, 1987, under the name of I.S.B.C. Corp. The
Company subsequently changed its name first to Coral Companies, Inc., and then
to CNH Holdings Company. Domicile was changed to Nevada in 1997. The Company
conducted an initial public and secondary offerings during the 1980s.
<PAGE>
SEDI and NORM: On June 15, 1998, the Company entered into a reorganization
agreement (SEDI Reorganization Agreement) with Southport Environmental and
Development, Inc. (SEDI), and the shareholders of SEDI pursuant to which the
Company acquired all of the outstanding proprietary interest of SEDI and,
through SEDI, 1/3rd of the outstanding proprietary interest of NORM Services,
Group, Inc. (NORM), in a share for share exchange which resulted in SEDI
becoming a wholly owned subsidiary of the Company, NORM becoming a minority
owned subsidiary of SEDI and the shareholders of SEDI acquiring control of the
Company through their share ownership. The Company issued 6,000,000 common
shares and 200,000 shares of preferred stock in this phase of the acquisiton.
The majority of these shares were issued to Messrs. Larry V. Tate and Gerald W.
Pybas. On August 7, 1998, the Company, through SEDI, acquired the remaining
outstanding interest of NORM which was not then owned in a tax free
reorganization, issuing 450,000 shares of common stock in exchange. NORM, on
this date, had previously acquired all of the assets and liabilities of NSG
Rentals, a Texas general partnership, in exchange for common stock of NORM which
were concurrently exchanged for common shares of the Company.
On January 13, 2000, the Company reported the sale of SEDI, to Messrs. Larry V.
Tate and Gerald W. Pybas. Messrs. Tate and Pybas , at that time, returned
3,000,000 shares of common stock and 184,000 shares of preferred stock to
treasury. Subsequently, disagreements arose and litigation was initiated. On
April 19, 2000, the SEDI Reorganization Agreement was rescinded by agreement
between the parties. This agreement was made a formal order of the court (Texas
Formal Court Order), as discussed below. The rescission resulted in the return
of all shares of SEDI to Messrs. Tate and Pybas which the Company owned or
claimed an ownership interest in effective the date of the original acquisition
of SEDI. The rescission acted to return the Company to the same position it
occupied on June 14, 1998, as if the acquisition of SEDI and NORM had never
occurred and no acts of the board and executive officers governing the Company
had transpired subsequent to June 14, 1998.
Telenergy: During the final quarter of calendar 1999, the board then governing
the Company organized a wholly-owned subsidiary, Telenergy Communications, Inc.
(Telenergy). On April 19, 2000, the formation of Telenergy by the Company was
rescinded under the Texas Formal Court Order. This rescission resulted in the
transfer of all shares of Telenergy to a third party effective the date of
formation. The rescission acted to return the Company to the same position it
occupied on June 14, 1998, as if the formation of Telenergy had never occurred
and no acts of the board and executive officers governing the Company had
transpired subsequent to June 14, 1998.
<PAGE>
Rancho Santa Fe Contract: On December 15, 1999, the Company entered into an
agreement with Rancho Santa Fe Capital Partners to assist in raising capital for
Telenergy. No capital was raised and the agreement was subsequently rescinded on
April 19, 2000, under the provisions of the Texas Formal Court Order.
TCA Transaction: On December 24, 1999, the Company reportedly secured a $500,000
bridge loan from Texas Capital Advisors, Inc. (TCA) The loan agreement was
subsequently rescinded by the Texas Formal Court Order on April 19, 2000, and
all 4,000,000 of the shares of common stock issued to TCA in obtaining the loan
were ordered by the court to be returned to treasury.
Bolton Energy: In January, 2000, the Company purchased Bolton Energy Services,
Inc. (Bolton Energy), for $100,000 in cash and 390,000 shares of common stock.
This acquisition was subsequently rescinded under the provisions of the Texas
Formal Court Order on April 19, 2000, and all 390,000 of the foregoing shares of
common stock were ordered to be returned to treasury.
Change in Control: Under the terms and conditions of the SEDI Reorganization
Agreement, the Company issued, in part, 200,000 preferred shares to the
shareholders of SEDI, including Messrs. Larry V. Tate and Gerald W. Pybas.
Messrs. Tate and Pybas, as discussed above, previously returned 186,000
preferred shares to treasury. An additional 2,000 shares of preferred stock were
returned to treasury subsequent to January 13, 2000, leaving 12,000 shares of
preferred stock outstanding at March 22, 2000.
The reported transfer of SEDI to Messrs. Tate and Pybas on January 13, 2000,
triggered the voting and conversion provisions applicable to the remaining
outstanding shares of preferred stock. The holders of these shares on March 22,
2000, appointed a new board of directors and executive officers to govern the
Company. Subsequently, the holders of these shares converted into common stock.
Each preferred share was converted into 1,000 common shares; thus, 12,000,000
common shares were issued, leaving no preferred shares outstanding.
SEDI and TCA Suits: On April 5, 2000, the Company filed suit in District Court,
City and County of Denver, State of Colorado (Case No.: 00 CV 1690) as
plaintiff. The suit was filed against Messrs. Larry V. Tate and Gerald W. Pybas
and SEDI. The complaint was filed against these defendants principally for the
purpose of (1) formally rescinding the acquisition of SEDI on June 15, 1998 and
(2) recovering all shares of stock issued to Messrs. Tate and Pybas.
On April 7, 2000, the Company filed suit in Federal District Court for the State
of Colorado (Case No.: 00 S 720) as plaintiff. The suit was filed against
Messrs. Larry Tate, Gerald Pybas, Scott Paulson and Robert Baker and TCA. The
complaint was filed against these defendants principally for the purpose of
formally rescinding their actions from approximately June 14, 1998, through
March 22, 2000, and recovering all securities and other consideration which they
had received from the Company.
<PAGE>
Subsequently,TCA, on behalf of itself and purportedly on behalf of the Company,
filed a complaint with the United States District Court for the Southern
District of Texas against Messrs. Pierce and Stidham. (Case No. H 00 1218). TCA
received a temporary restraining order against Messrs. Pierce and Stidham, and a
preliminary injunction hearing was schedule for April 19, 2000. At that hearing,
the various parties to the above suits, among others, reached an agreement which
was made a formal order of the court (Texas Federal Court Order).
The Texas Federal Court Order formally rescinded the SEDI, NORM and Bolton
Energy acquisitions and the formation of Telenergy. SEDI was transferred back to
Messrs. Tate and Pybas as a result of the rescision. NORM, Bolton Energy and
Telenergy were transferred to TCA and Messrs. Paulson and Baker. The Texas
Federal Court Order also rescinded all actions of the board and executive
officers of the Company from June 14, 1998, through April 19, 2000, and put the
Company in the position which it occupied at June 14, 1998, as if none of the
actions which had occurred since that time had transpired.
The Texas Federal Court Order also required the return of 4,301,501 shares of
common stock to treasury by TCA, Mr. Baker and their affiliates and 390,000
shares by the shareholders of Bolton Energy. The order further required Messrs.
Tate and Pybas to return 2,020,000 shares of common stock to treasury.
Results of Operations: The Company had no revenues, operating or otherwise, from
1991 through the fiscal year ended March 31, 2000, nor through the current
period, as a result of the recission discussed above under Item 1.
Correspondingly, all expenses during these periods were administrative in nature
and immaterial in amount.
Liquidity and Capital Resources: The Company had no liquidity sources from
fiscal 1990 through the fiscal year ended March 31, 2000, nor through the
current period, other than the extension of credit from officers, directors and
creditors.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Litigation
No material legal proceedings to which the Company (or any officer or director
of the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to management's knowledge) is a party or to
which the property of the Company is subject is pending and no such material
proceeding is known by management of the Company to be contemplated.
Item 2. Change in Securities
This item is not applicable to the Company for the period covered by this
report.
Item 3. Defaults Upon Senior Securities
This item is not applicable to the Company for the period covered by this
report.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period covered by this
report; thus, this item is not applicable.
Item 5. Other Information
There is no additional information which the Company is electing to report under
this item at this time.
Item 6. Exhibits and Reports on Form 8-K
This item is not applicable to the Company for the period covered by this
report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this 17th day of October,
2000.
CNH Holdings Company (Registrant)
By: /s/ Paul M. Lionti
----------------------
Paul M. Lionti, Chief Executive Officer
By: /s/ Paul M. Lionti
----------------------
Paul M. Lionti, Chief Financial
and Accounting Officer
and Treasurer
