U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period year ended September 30, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1943 (No Fee Required)
For the transition period from _________________ to
_________________
Commission File number 33-18174-D
SIEMANN EDUCATIONAL SYSTEMS, INC.
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(Name of small business issuer in its charter)
Colorado 84-1067172
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
405 S. Platte River Drive, Suite 3A, Denver, Colorado 80223
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(Address of principal executive offices)
303/733-9673
-------------------------
Issuer's telephone number
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 X No
----- -----
State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date.
3,700,000 shares of common stock were outstanding as of September 30, 1997.
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<PAGE>
PART I
Item 1. Financial Statements
- ------- --------------------
See pages beginning F-1 attached hereto. These unaudited financial
statements include all adjustments which in the opinion of management are
necessary in order to make the financial statements not misleading.
Item 2. Management Discussion and Analysis of Financial Condition
- ------- ---------------------------------------------------------
and Results of Operation.
-------------------------
OPERATION
- ---------
The Company recently acquired Siemann Educational Systems, Inc. (SES),
on August 31, 1997 in a reverse merger as set forth in the August 31, 1997
Form 8-K filed with the Securities and Exchange Commission on September 8,
1997. SES owns and operates the Denver Automotive and Diesel College
(DADC) located at 460 S. Lipan Street, Denver, CO 80223. DADC trains
automotive and diesel mechanics for placement in the automotive and diesel
industry.
LIQUIDITY
- ---------
The Company has adequate liquidity and working capital to fund its
operations on an on going basis.
CAPITAL RESOURCES
- -----------------
The Company has acquired a revolving line of credit from a commercial
bank in the amount of $350,000. As of September 30, 1997, $228,000 of this
line of credit is outstanding. The remainder is sufficient to provide for
the Company's needs.
RESULTS OF OPERATIONS
- ---------------------
The Company's sales increased to $2,397,471 for the nine months ended
September 30, 1997 compared to $2,245,081 for the equivalent period in
1996. The increase of $152,390 is primarily attributable to increased
sales of short-term training provided to automotive dealer staff.
The Company's profits increased to $106,432 for the nine months ended
September 30, 1997 compared to $77,848 for the equivalent period in 1996.
The increase of $28,584 is attributable to higher margins from short-term
training courses.
-2-
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGE IN SECURITIES
On June 4, 1997 the Company issued 2,250,000 shares and 500,000
shares of common stock to Paul T. Siemann and Christian Business
Advisory Services, Inc., respectively, for $.001 per share.
On August 29, 1997 the Company sold 50,000 shares to an unrelated
party for $2.00 per share.
On August 31, 1997 the Company issued 400,000 shares to Paul T.
Siemann in exchange for 100 percent ownership of Siemann
Educational Systems, Inc.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On September 18, 1997 at a duly called Special Shareholders
Meeting, the Company's shareholders voted to amend the Articles
of Incorporation to: change the Company's fiscal year end to
December 31; change the name of the Company to Siemann
Educational Systems, Inc.; change the Company's Registered Agent
to James J. Soran, III; and make minor housekeeping changes to
the Articles.
A quorum was present at the meeting and no dissenting votes were
cast.
-3-
<PAGE>
ITEM 5. OTHER INFORMATION
On June 4, 1997, the Company, entered into an Agreement and Plan
of Reorganization with Siemann Educational Systems, Inc., a
Colorado Corporation ("SES"). The Agreement provided for the
issuance of 400,000 shares of the Company's common stock for 100%
of the common stock of SES. The Agreement contains numerous
representations, warranties and covenants by both parties. The
Company closed this agreement on August 31, 1997.
Concurrent with the closing of the Agreement with SES, Paul T.
Siemann, Joe Chalupa and Barbara Siemann were appointed to the
Company's Board of Directors and the existing directors have
resigned.
The Company also entered into Stock Purchase Agreements with Paul
T. Siemann for the acquisition of 2,250,000 shares of the
Company's common stock and Christian Business Advisory Services,
Inc. for 500,000 shares of the Company's common stock on June 4,
1997. The consideration for these acquisitions was $.001 per
share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. Description
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27 Financial Data Schedule
(b) Reports on Form 8-K:
On September 8, 1997, the Company filed a Report on Form 8-K
under Item 1., "Changes in Control of Registrant," and
Item 5., "Other Events;" on November 12, 1997, the Company
filed a Report on Form 8-K under Item 4., "Changes in
Accountants," and Item 8., "Change in Fiscal Year;" and on
November ___, 1997, the Company filed a Report on Form 8-K
under Item 7., "Financial Statements."
-4-
<PAGE>
CHARTWELL CABLE FUND, INC. AND SUBSIDIARY
BALANCE SHEETS
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
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ASSETS
- ------
CURRENT ASSETS
Cash $ 131,952 $ 124,379
Accounts receivable - -
Less allowance for doubtful
accounts of $89,156 in 1996
and $139,426 in 1997 1,256,373 1,146,727
Note receivable - -
Stockholder secured 149,477 80,000
Note receivable - other 200,000 -
Inventory 23,238 35,264
---------- ----------
Total Current Assets 1,761,040 1,386,370
PROPERTY AND EQUIPMENT, net 324,398 425,643
ACCOUNTS AND NOTES RECEIVABLE, net 839,948 303,022
OTHER ASSETS, net 76,556 97,382
3,001,942 2,212,417
========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
- -----------------------------------
CURRENT LIABILITIES
Accounts payable $ 115,202 $ 165,730
Student refunds payable 9,560 11,997
Student credit balances 39,065 -
Accrued liabilities & taxes 115,676 75,583
Deferred tuition income 1,199,563 1,245,739
Current maturities of
long-term debt & taxes 302,680 161,212
---------- ----------
Total Current Liabilities 1,781,746 1,660 261
LONG-TERM DEBT, net of current
maturities 255,056 117,661
NOTE PAYABLE TO STOCKHOLDER 385,302 -
ACCRUED RENT PAYABLE 142,683 -
STOCKHOLDERS' EQUITY
Common stock 370,000 40,000
Additional paid-in capital 53,197 648,377
Accumulated earnings (deficit) 13,953 (233,874)
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Total Stockholders' Equity 437,150 434,496
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$3,001,942 $2,212,417
========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F1
<PAGE>
CHARTWELL CABLE FUND, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------- ---------------------
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue
- -------
Earned tuition $ 815,610 $ 652,859 $2,133,954 $2,096,219
College supply & other 116,912 30,732 264,017 97,427
Contributed materials - 25,718 - 51,435
---------- ---------- ---------- ----------
Total Revenues $ 932,522 $ 709,309 $2,397,471 $2,245,081
Costs and Expenses
- ------------------
Course materials - - - -
Supplies & instruction costs 306,167 194,795 837,435 736,799
Selling & promotion 151,952 115,802 425,612 431,419
General & administrative 153,306 189,009 449,094 542,833
Occupancy expense 85,938 95,776 222,465 252,550
Depreciation & amortization 46,648 14,424 136,594 100,967
Interest expense 33,964 5,313 52,897 12,149
Bad debt expense 109,126 49,943 166,942 90,511
---------- ---------- ---------- ----------
Total expenses 887,101 665,062 2,291,039 2,167,23
---------- ---------- ---------- ----------
Net Income $ 45,419 $ 44,247 $ 106,432 $ 77,848
========== ========== ========== ==========
Earnings per share $ .01 $ .11 $ .06 $ .20
========== ========== ========== ==========
Weighted average shares
outstanding 3,335,870 400,000 1,651,282 400,000
========== ========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F2
<PAGE>
SIEMANN EDUCATIONAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED)
1997 1996
--------- ---------
Cash flows from operating activities:
Net income $ 106,432 $ 77,848
Cash provided (used) by
operating activities:
Depreciation and amortization 136,594 100,967
Contributed materials 25,718 51,435
Change in operating assets and
liabilities:
Accounts receivable and
notes receivable (1,176,576) (315,934)
Prepaid expenses and other (4,926) (34,996)
Accounts payable (2,261) 45,835
Student refunds payable and
credit balances (94,699) (45,201)
Accrued liabilities 6,741 (25,938)
Rent payable 142,683 -
Deferred tuition income 481,564 262,039
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NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (378,730) 116,055
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (11,493) (17,582)
---------- ----------
NET CASH (USED) BY
INVESTING ACTIVITIES (11,493) (17,582)
---------- ----------
(Continued on next page)
See notes to financial statements.
F3
<PAGE>
SIEMANN EDUCATIONAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED)
1997 1996
--------- ---------
Cash flows from financing activities:
Increase in debt $ 330,364 $ 31,809
Decrease in debt (6,405) -
Cash received in merger 102,750 -
Distributions to stockholder (216,520) (12,326)
---------- ----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES 210,189 19,483
---------- ----------
NET INCREASE (DECREASE)
IN CASH $ (180,034) $ 117,956
CASH, beginning of period 311,986 6,423
---------- ----------
CASH, end of period $ 131,952 $ 124,379
---------- ----------
See notes to financial statements.
F4
<PAGE>
SIEMANN EDUCATIONAL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
1. BASIS OF PRESENTATION AND ORGANIZATION
--------------------------------------
The balance sheet as of September 30, 1997, the statements of operations
and the statements of cash flows for the nine months ended September 30,
1997 and 1996, have been prepared by the Company. In the opinion of
management, all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position, results of operations
and changes in cash flows at September 30, 1997, and for all periods
presented 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 recommended that these
financial statements be read in conjunction with the financial statements
and notes thereto included in the Company's November 20, 1997 Form 8-K
report. The results of operations for the nine months ending September 30,
1997 and 1996 are not necessarily indicative of the operating results for
the full year.
F5
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
SIEMANN EDUCATIONAL SYSTEMS, INC.
(Registrant)
By: /s/ PAUL T. SIEMANN
------------------------------------
Paul T. Siemann, President and CEO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 131,952
<SECURITIES> 0
<RECEIVABLES> 2,505,747
<ALLOWANCES> (134,926)
<INVENTORY> 29,794
<CURRENT-ASSETS> 1,761,040
<PP&E> 913,542
<DEPRECIATION> (589,144)
<TOTAL-ASSETS> 3,001,942
<CURRENT-LIABILITIES> 1,781,746
<BONDS> 783,046
0
0
<COMMON> 370,000
<OTHER-SE> 67,150
<TOTAL-LIABILITY-AND-EQUITY> 3,001,042
<SALES> 2,397,471
<TOTAL-REVENUES> 2,397,471
<CGS> 837,435
<TOTAL-COSTS> 2,071,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 166,942
<INTEREST-EXPENSE> 52,897
<INCOME-PRETAX> 106,432
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,432
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
