SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended August 31, 1997 Commission File No. 0-22907
WHITNEY AMERICAN CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 84-1070022
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
12373 E. Cornell Avenue
Aurora, Colorado 80014
(Address of Principal Executive Offices) (Zip Code)
(303) 337-3384
(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (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 such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
at least the past 90 days.
Yes No X
----- -----
The number of shares outstanding of each of the Registrant's classes of common
equity, as of August 31, 1997 are as follows:
Class of Securities Shares Outstanding
------------------- ------------------
Common Stock, $.00001 par value 62,515
<PAGE>
INDEX
Page of
Report
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of August 31, 1997
(Unaudited) and May 31, 1997............................... 3
Statements of Operations (Unaudited)
for the three months ended August 31, 1997 and 1996........ 4
Statements of Cash Flows (Unaudited)
for the three months ended August 31, 1997 and 1996........ 5
Notes to Financial Statements (Unaudited).................. 6
Item 2. Management's Discussion and Analysis or Plan of Operation.. 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................... 9
Signatures................................................. 9
2
<PAGE>
WHITNEY AMERICAN CORPORATION
Balance Sheets
ASSETS
August 31, May 31,
1997 1997
----------- ----------
(Unaudited)
Assets $ -- $ --
=========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Due to officers/stockholders $ 95,354 $ 68,979
Stockholders' deficit:
Preferred stock; $.00001 par value; authorized -
5,000,000 shares; issued - none -- --
Common stock; $.00001 par value; authorized -
50,000,000 shares; issued and outstanding -
62,515 shares 1 1
Additional paid-in capital 23,725 23,725
Accumulated deficit (119,080) (92,705)
----------- ----------
Total stockholders' deficit (95,354) (68,979)
----------- ----------
$ -- $ --
=========== ==========
The accompanying notes are an integral part of the financial statements.
3
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WHITNEY AMERICAN CORPORATION
Statements of Operations (Unaudited)
Three Three
Months Ended Months Ended
August 31, August 31,
1997 1996
------------ ------------
Costs and expenses:
General and administrative, related party $ 26,375 $ 2,000
----------- ----------
Net loss $ (26,375) $ 2,000
=========== ==========
Loss per common share $ (.42) $ (.03)
=========== ==========
Weighted average shares outstanding 62,515 62,515
=========== ==========
The accompanying notes are an integral part of the financial statements.
4
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WHITNEY AMERICAN CORPORATION
Statements of Cash Flows (Unaudited)
Three Three
Months Ended Months Ended
August 31, August 31,
1997 1996
------------ ------------
Cash flows from operating activities:
Net loss $ (26,375) $ (2,000)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization -- --
Increase in amounts due to
officers/stockholders 26,375 2,000
------------ -----------
Net cash used in operating activities -- --
------------ -----------
Cash flows from investing activities:
Organization costs -- --
------------ -----------
Net cash used in investing activities -- --
------------ -----------
Cash flows from financing activities:
Proceeds from sale of common stock -- --
------------ -----------
Net cash provided by financing activities -- --
------------ -----------
Net increase (decrease) in cash -- --
Cash at beginning of period -- --
------------ -----------
Cash at end of period $ -- $ --
============ ===========
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
WHITNEY AMERICAN CORPORATION
Notes to financial Statements (Unaudited)
Note A - Summary of Significant Accounting Policies
Description of Business
The financial statements presented are those of Whitney American Corporation
(the "Company"). The Company was incorporated on June 18, 1987, under the laws
of the State of Delaware. The Company's initial activities were directed towards
the raising of capital. Pursuant to an Agreement and Plan of Reorganization,
Industrial Waste Processing, Inc. a Nevada corporation ("IWP"), was merged into
the Company on October 20, 1988 and subsequently changed its name to Industrial
Waste Processing, Inc. On April 17, 1989, the Company's parental affiliate
Pacific Energy and Mining Company ("PEMC") reacquired all of the significant
assets of the Company and assumed approximately $542,000 of the Company's
outstanding obligations. The Company has been inactive since April 1989, and has
no significant assets. In February 1997, the Company filed with the Delaware
Secretary of State a Certificate of Amended and Restated Certificate of
Incorporation that, among other things, changed the Company's name back to
Whitney American Corporation.
As shown in the financial statements, as of August 31, 1997, the Company has
incurred an accumulated deficit of approximately $119,100 and has no cash. The
Company's continuation in existence is dependent on its ability to generate
sufficient cash flow to meet its obligations on a timely basis. Accordingly, the
financial statements do not include any adjustments that might be necessary
should the Company be unable to continue in existence. Subsequent to February
12, 1997, the Company has been exploring sources to obtain additional equity or
debt financing. The Company has also indicated its intention to participate in
one or more as yet unidentified business ventures, which management will select
after reviewing the business opportunities for their profit or growth potential.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that included the enactment date.
Fair Value of Financial Instruments
The fair value of the Company's payable due to officers/stockholders is not
practicable to estimate due to the related party nature of the underlying
transactions and the indefinite payment terms.
Loss Per Common Share
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.
6
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WHITNEY AMERICAN CORPORATION
Notes to financial Statements (Unaudited)
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reporting amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
Unaudited Financial Statements
The accompanying unaudited financial statements of the Company have been
prepared on the accrual basis and in accordance with the instructions to Form
10-QSB and do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's annual report on Form 10-KSB for the
fiscal year ended May 31, 1997.
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements and information relating
to the Company that are based on the beliefs of its management as well as
assumptions made by and information currently available to its management. When
used in this report, the words "anticipate", "believe", "estimate", "expect",
"intend", "plan" and similar expressions, as they relate to the Company or its
management, are intended to identify forward-looking statements. These
statements reflect management's current view of the Company with respect to
future events and are subject to certain risks, uncertainties and assumptions.
Should any of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in this report as anticipated, estimated or expected. The Company's
realization of its business aims will depend in the near future principally on
the successful completion of its acquisition of operations as discussed below.
BUSINESS
Whitney American Corporation, a Delaware corporation (the "Company") has not had
active business operations since April, 1989, other than occasionally searching
for a business or venture to acquire as described below.
The Company has no operations or source of revenues. The Company's business plan
at this time is to acquire assets of or an interest in a small to medium-size
company or venture actively engaged in a business generating revenues or having
immediate prospects of generating revenues and to thereby become operational.
The Company plans to acquire such assets or shares in exchange for the Company's
securities. In order to avoid becoming subject to regulation under the
Investment Company Act of 1940, as amended, the Company does not intend to enter
into any transaction involving the purchase of another corporation's stock
unless the Company can acquire at least a majority interest in that corporation.
The Company has not identified any industry, segment within an industry or type
of business, nor geographic area, in which it will concentrate its efforts, and
any assets or interest acquired may be in any industry or location, anywhere in
the world. The Company will give preference to profitable companies or ventures
with a significant asset base sufficient to support a listing on a national
securities exchange or quotation on the NASDAQ system. Members of the Company's
management, all of whom are devoting part time to the Company's affairs, will
conduct the Company's search for an operating business or venture to acquire.
There is no assurance that the Company will be successful in this endeavor or
that any business, venture or assets acquired will be profitable.
The Company on July 30, 1997 filed a registration statement on Form 8-A with the
SEC (File No. 0-22907) which automatically became effective on September 28,
1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company did not realize any cash from equity financing activities in 1997
and has no line of credit or similar credit facility available to it. However,
8
<PAGE>
the Company currently pays no salaries or rent, has little in the way of general
or administrative overhead expenses, and has and will have no material capital
commitments unless and until it is able to acquire a business or assets. The
Company has little in the way of expenses, therefore, except for legal,
accounting and other expenses related to filing of reports with the Securities
and Exchange Commission. The Company believes that cash advances available from
shareholders will be sufficient to cover its out-of-pocket expenses for at least
the next twelve months.
As of August 31, 1997, the Company has incurred an accumulated deficit of
approximately $119,100 and has no cash or other significant assets. As of August
31, 1997, the Company was indebted to its President, Stephen M. Siedow, for
accounting services and costs advanced in the amount of $69,985, and was
indebted to its Secretary and outside counsel, John D. Brasher Jr., for legal
fees in the amount of $25,369.
RESULTS OF OPERATIONS
During the quarter ended August 31, 1997 (first fiscal quarter of this year),
the Company had no revenues and did not engage in any active business but
incurred a loss of $26,375. Expenses for this period related primarily to
accounting fees, legal fees and other costs incurred with bringing the Company
current in its SEC filings. The Company had no revenues but incurred a loss of
$2,000 for the fiscal quarter ended August 31, 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. NONE.
(b) Reports on Form 8-K. NONE
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
DATED: October 1, 1997
WHITNEY AMERICAN CORPORATION
By /s/ Stephen M. Siedow
----------------------------
Stephen M. Siedow, President
9
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