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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 March 31, 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 - March 31, 1997 and 4
December 31, 1996
Statements of Operations and Accumulated Deficit -
Three months ended March 31, 1997 and 1996 5
Statements of Stockholders Equity--December 31, 1994
through March 31, 1997 6
Statements of Cash Flows - Three months ended
March 31, 1997 and 1996 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 9
Item 4. Submission of Matters to a Vote of Securities Holders 9
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 March 31, 1997 and 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
March 31, 1997
ASSETS
March 31, December 31,
1997 1996
CURRENT ASSETS (Unaudited) (Unaudited)
<S> <C> <C>
Cash $ 73 $ 154
Total current assets 73 154
------------------ -----------------
TOTAL ASSETS $ 73 $ 154
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 87,003 $ 87,003
Accrued expenses 36,393 34,975
Dividends payable 125,926 114,766
Notes payable 101,377 99,377
------------------ -----------------
Total current liabilities 350,699 336,121
------------------ -----------------
TOTAL LIABILITIES 350,699 336,121
------------------ -----------------
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 (12,417,099) (12,402,440)
------------------ -----------------
Total Stockholders' (Deficit) (350,626) (335,967)
------------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 73 $ 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
March 31,
1997 1996
(Unaudited)
INCOME:
<S> <C> <C>
Revenue $ - $ -
Direct Costs - 1,135
----------------- ----------------
Total Income - 1,135
GROSS PROFIT - 1,135
================== ================
EXPENSES:
General and Administrative 11,228 20,735
------------------ ----------------
Total Expenses 11,228 20,735
================== ================
LOSS FROM OPERATIONS 11,228 (19,600)
OTHER INCOME (EXPENSE):
Interest expense (3,431) (471)
------------------ ----------------
Total Other Income (Expense) (3,431) (471)
NET LOSS BEFORE INCOME TAXES $ (14,659) $ (20,071)
================== ================
Income taxes - -
NET LOSS (14,659) (20,071)
================== ================
Net Loss Per Common Share $ (0.00) $ (0.00)
================== ================
Weighted average common shares outstanding 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 March 31, 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
March 31, 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 (14,659)
Balance
March 31, 1997 91,123,183 $ 91,123 100,000 $ 1,000 11,527,950 $ (12,417,099)
========== ============= ======= ============= ========== ==============
</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
Months Ended
March 31,
1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net loss $ (14,659)
Adjustments to reconcile net loss to net
cash used by operating activities:
Dividends payable 11,160
Changes in operating assets and liabilities:
Increase (decrease) in accrued expenses 1,418
----------------
NET CASH (USED) BY OPERATING ACTIVITIES: (2,081)
CASH FLOWS FROM FINANCING ACTIVITIES: ----------------
Proceeds from long term debt 2,000
----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: 2,000
----------------
NET DECREASE IN CASH: (81)
CASH AT BEGINNING OF PERIOD: 154
CASH AT END OF PERIOD: 73
================
</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 ending March 31, 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.
8
<PAGE>
Item 2. Management's Discussion & Analysis of Financial Condition and Results
of Operations
Results of Operations
Three Months ended 3/31/97 compared to Three Months ended 3/31/96
During each of these periods the mining operations were shut down,
there were no revenues during either period.
General and administrative expenses decreased from $20,735 to $11,228,
46%.
Liquidity and Capital Resources
At March 31, 1997, the Company had total assets of $73, total
liabilities of $350,699 and total stockholders deficit of ($350,626) 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
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
9
<PAGE>
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) This Item is not applicable to the Company.
(b) On March 22, 1997 the Company filed a Form 8-K with the Commission
setting forth the dismissal of the Company's independent
accountants. Management deems the Company an "inactive entity",
and will not engage any new independent accountant at this time.
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 73
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 73
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 73
<CURRENT-LIABILITIES> 350,699
<BONDS> 0
0
446,400
<COMMON> 92,123
<OTHER-SE> (889,149)
<TOTAL-LIABILITY-AND-EQUITY> 73
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,228
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,431
<INCOME-PRETAX> (14,659)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,659)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,659)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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