UNITED STATES
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 Quarter Ended June 30, 1997
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 33-20582
EQUITY AU, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2276137
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
119 Gold Lane, Mena, Arkansas 71953
(Address of principal executive offices, including zip code)
(407) 647-3952
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has: (1) 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) been subject to such
filing requirements for the past 90 days. Yes [X] No[ ]
Number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of August 25, 1997
Class A Common Stock, par value $.001 99,263,000
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Heading Page
PART I. FINANCIAL STATEMENTS
Item 1. Balance Sheets - June 30, 1997 and
December 31, 1996 4
Statements of Operations and Accumulated Deficit
Three months ended June 30, 1997 and 1996, and
Six months ended June 30, 1997 and 1996 5
Statements of Stockholders Equity--December 31, 1994
through June 30, 1997 6
Statements of Cash Flows - Three months ended
March 31, 1997 and the six months ended June 30, 1997 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 10
2
<PAGE>
PART I
Item 1. Financial Statements
The following, unaudited Financial Statements for the three month
periods ended June 30, 1997 and 1996, and for the six month periods ended June
30, 1997 and June 30, 1996 include all adjustments which management believes are
necessary for the financial statements to be presented in conformity with
generally accepted accounting principals.
(THIS SPACE INTENTIONALLY LEFT BLANK)
3
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
BALANCE SHEET
June 30, 1997
ASSETS
June 30, December 31,
1997 1996
---- ----
CURRENT ASSETS (Unaudited) (Unaudited)
<S> <C> <C>
Cash $ 49 $ 154
Total current assets 49 154
------------------ -----------------
TOTAL ASSETS $ 49 $ 154
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 87,003 $ 87,003
Accrued expenses 37,827 34,975
Dividends payable 137,086 114,766
Notes payable 101,377 99,377
------------------ -----------------
Total current liabilities 363,293 336,121
------------------ -----------------
TOTAL LIABILITIES 363,293 336,121
------------------ -----------------
STOCKHOLDERS' (DEFICIT)
Preferred stock, Series A, $1.00 Par Value 148,000 148,000
Preferred stock, Series B, $1.00 Par Value 288,200 288,200
Preferred stock, Series C, $1.00 Par Value 10,200 10,200
Common stock, Class A, $0.001 Par Value 91,123 91,123
Common stock, Class B, $0.001 Par Value 1,000 1,000
Additional paid-in capital 11,527,950 11,527,950
Accumulated deficit (12,429,717) (12,402,440)
------------------ -----------------
Total Stockholders' (Deficit) (363,244) (335,967)
------------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 49 $ 154
================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
Statement of Operations
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1997 1996 1997 1996
(Unaudited)
INCOME:
<S> <C> <C> <C> <C>
Revenue $ - $ - $ - $ -
Direct Costs - - - 1,135
------------------ ------------------- ----------------- -----------------
Total Income - - - 1,135
GROSS PROFIT - - - 1,135
================== =================== ================= =================
EXPENSES:
General and Administrative 11,184 16,723 22,412 37,937
------------------ ------------------- ----------------- -----------------
Total Expenses 11,184 16,723 22,412 37,937
LOSS FROM OPERATIONS (11,184) (16,723) (22,412) (36,802)
================== =================== ================= =================
OTHER INCOME (EXPENSE):
Interest expense (1,434) - (4,865) -
------------------ ------------------- ----------------- -----------------
Total Other Income
(Expense) (1,434) - (4,865) -
NET LOSS BEFORE INCOME
TAXES $ (12,618) $ (16,723) $ (27,277) $ (36,802)
================== =================== ================= =================
Income taxes - - - -
NET LOSS (12,618) (16,723) (27,277) (36,802)
================== ==================== ================== ==================
Net Loss Per Common Share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
================== =================== ================= =================
Weighted average common
shares outstanding 99,183,000 90,283,000 91,123,183 78,175,088
================== =================== ================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from December 31, 1994 to June 30, 1997
PREFERRED STOCK
Preferred Stock - A Preferred Stock - B Preferred Stock - C
Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1994 148,000 $ 148,000 288,200 $ 288,200 10,200 $ 10,200
------- ------------- ------- ------------- ------ -------------
Balance
December 31, 1995 148,000 $ 148,000 288,200 $ 288,200 10,200 $ 10,200
------- ------------- ------- ------------- ------ -------------
Balance
December 31, 1996 148,000 $ 148,000 288,200 $ 288,200 10,200 $ 10,200
------- ------------- ------- ------------- ------ -------------
Balance
June 30, 1997 148,000 $ 148,000 288,200 $ 288,200 10,200 $ 10,200
------- ------------- ------- ------------- ------ -------------
<CAPTION>
COMMON STOCK
Class A Common Class B Common Paid in Accumulated
Shares Amount Shares Amount Capital Deficit
------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1994 61,247,070 $ 61,247 100,000 $ 1,000 11,347,759 $ (11,954,266)
Issuance of common stock:
for cash 27,078,885 27,079 157,221
for services 2,500,000 2,500 23,750
1993 dividend on
Preferred Series A 161,944 162 17,555 (17,717)
1994 dividend on
Preferred Series A 135,284 135 14,665 (14,800)
Net loss (212,633)
Balance
December 31, 1995 91,123,183 $ 91,123 100,000 $ 1,000 11,527,950 $ (12,199,416)
---------- ------------- ------- ------------- ---------- --------------
Net loss (203,024)
Balance
December 31, 1996 91,123,183 $ 91,123 100,000 $ 1,000 11,527,950 $ (12,402,440)
---------- ------------- ------- ------------- ---------- --------------
Net loss (27,277)
Balance
June 30, 1997 91,123,183 $ 91,123 100,000 $ 1,000 11,527,950 $ (12,429,717)
========== ============= ======= ============= ========== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
STATEMENT OF CASH FLOWS
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
1997 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (12,618) $ (27,277)
Adjustments to reconcile net loss to net
cash used by operating activities:
Dividends payable 11,160 22,320
Changes in operating assets and liabilities:
Increase (decrease) in accrued expenses 1,434 2,852
---------------- ----------------
NET CASH (USED) BY OPERATING ACTIVITIES: (24) (2,105)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt - 2,000
---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: - 2,000
---------------- ----------------
NET DECREASE IN CASH: (24) (105)
CASH AT BEGINNING OF PERIOD: 73 154
---------------- ----------------
CASH AT END OF PERIOD: $ 49 $ 49
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
EQUITY AU, INC.
Notes to Condensed Financial Statements
(Unaudited)
NOTE 1 - INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) necessary
to present fairly the financial position, results of operations
and cash flows as of the dates and for the period presented herein
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
pursuant to the Securities and Exchange Commission rules and
regulations. It is suggested that these condensed consolidated
financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
December 31, 1996 Annual Report on Form 10-KSB. The results of
operations for the three months and six ending June 30, 1997, are
not necessarily indicative of the operating results that may
result for the year ending December 31, 1997. The accounting
policies followed by the Company are set forth in Note 1 to the
Company's financial statements in its December 31, 1996 Annual
Report on Form 10-KSB.
NOTE 2 - SUBSEQUENT EVENTS
On June 6, 1997, the Company issued 8,900,000 restricted shares to
General Enterprises and Trading Company (Isle of Man) Ltd. for the
promise to loan the Company $100,000 and to pledge to the Company
a Capital Asset Certificate for $5,000,000. These shares have not
been recorded in the financial statements because no consideration
has been received by the Company.
8
<PAGE>
Item 2. Management's Discussion & Analysis of Financial Condition and Results
of Operations
Results of Operations
Three Months ended 6/30/97 compared to Three Months ended 6/30/96
During each of these periods the mining operations were shut down,
there were no revenues during either period.
General and administrative expenses decreased from $16,723 to $11,184,
33%.
Six Months ended 6/30/97 compared to Six Months ended 6/30/96
During each of these periods the mining operations were shut
down, there were no revenues during either period.
General and administrative expenses decreased from $37,937 to $22,412,
41%.
Liquidity and Capital Resources
At June 30, 1997, the Company had total assets of $49, total
liabilities of $363,293 and total stockholders deficit of ($363,244) compared
with total assets of $154, total liabilities of $336,121 and total stockholders
deficit of $(335,967) at March 31,1996. There has been no significant change in
account balances due to the shut down of operations during these periods. There
were also no new borrowings or fundings of any kind. Management is uncertain of
when mining operations will continue and can give no assurances that operations
will continue during the current fiscal year. On June 6, 1997 the Company issued
8,900,000 restricted shares to General Enterprises and Trading Company (Isle of
Man) Ltd. for the promise to loan the Company $100,000 and to pledge to the
Company a Capital Asset Certificate for $5,000,000 which would be used to secure
additional borrowings. The Company has not received the $100,000, or the pledge
of the asset certificate. This issuance of stock has not been reflected in the
Company's accounting records because the consideration for the Company's shares
has not been received. Per the terms of the agreement the 8,900,000 shares will
be returned to the Company if the loan proceeds are not received.
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
9
<PAGE>
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
(a) This Item is not applicable to the Company.
(b) No Report on Form 8-K was filed by the Company during the three
month period ended June 30, 1997.
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.
EQUITY AU, INC.
(Registrant)
BY: /s/ James Arch
-----------------------
JAMES ARCH, President
Dated: September 22, 1997
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 49
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 49
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 49
<CURRENT-LIABILITIES> 363,293
<BONDS> 0
0
446,400
<COMMON> 92,123
<OTHER-SE> (901,767)
<TOTAL-LIABILITY-AND-EQUITY> 49
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,184
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,434
<INCOME-PRETAX> (12,618)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,618)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,618)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
