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 September 30, 1998
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)
P.O. Box 940037, Maitland, Florida 32794-0037
(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 October 28, 1999
Class A Common Stock, par value $.001 3,344,760
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Heading Page
PART I. FINANCIAL STATEMENTS
Item 1. Balance Sheets - September 30, 1998 and December 31, 1997 4
Statements of Operations and Accumulated Deficit Three
months ended September 30, 1998 and 1997, and
Nine months ended September 30, 1998 and 1997 5
Statements of Stockholders Equity--December 31, 1995
through September 30, 1998 6-7
Statements of Cash Flows - Three months ended September 30,
1998 and the nine months ended September 30, 1998 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
2
<PAGE>
PART I
Item 1. Financial Statements
The following, unaudited Financial Statements for the three month periods
ended September 30, 1998 and 1997, and for the nine month periods ended
September 30, 1998 and September 30, 1997 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
September 30, 1998
ASSETS
September 30, December 31,
1998 1997
---- ----
CURRENT ASSETS (Unaudited) Audited
<S> <C> <C>
Cash $ 0 $ 0
------------------ -----------------
TOTAL ASSETS $ 0 $ 0
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,019 $ 1,019
Accrued expenses 54,695 54,695
Dividends payable 15,000 15,000
Notes payable 64,467 64,467
------------------ -----------------
Total current liabilities 135,181 135,181
------------------ -----------------
TOTAL LIABILITIES 135,181 135,181
------------------ -----------------
STOCKHOLDERS' (DEFICIT)
Preferred stock, Series A, $1.00 Par Value 50,000 50,000
Preferred stock, Series B, $1.00 Par Value 0 0
Preferred stock, Series C, $1.00 Par Value 0 0
Common stock, Class A, $0.001 Par Value 2,413 2,413
Common stock, Class B, $0.001 Par Value 1,000 1,000
Additional paid-in capital 12,1882154 12,188,154
Accumulated deficit (12,367,748) (12,367,748)
------------------ -----------------
Total Stockholders' (Deficit) (135,181) (135,181)
------------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 0 $ 0
================== =================
</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 Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(Audited) (Unaudited) (Audited)
INCOME:
<S> <C> <C> <C> <C>
Revenue $ - $ - $ - $ -
------------------ ------------------- ----------------- -----------------
Total Income - - - -
GROSS PROFIT
EXPENSES:
General and Administrative 0 110,398 0 110,398
------------------ ------------------- ----------------- -----------------
Total Expenses 0 110,398 0 110,398
LOSS FROM OPERATIONS 0 (110,398) 0 (110,398)
================== =================== ================= =================
OTHER INCOME (EXPENSE):
Interest expense 0 (5,106) 0 (5,106)
------------------ ------------------- ----------------- -----------------
Total Other Income
(Expense) 0 (5,106) 0 (5,106)
NET LOSS BEFORE INCOME
TAXES $ 0 $ (115,504) $ 0 $ (115,504)
================== =================== ================= =================
Income taxes - - - -
NET LOSS 0 (115,504) 0 (115,504)
================== ==================== ================== ==================
Net Loss Per Common Share $ (0.00) $ (0.09) $ (0.00) $ (0.09)
================== =================== ================= =================
Weighted average common
shares outstanding 3,344,760 1,296,194 3,344,760 1,296,194
================== =================== ================= =================
</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, 1995 to September 30, 1998
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, 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
December 31, 1997 50,000 $ 50,000 272,200 $ 272,200 - $ -
------- ------------- ------ -------------
Conversion to Class
A common stock (5,000) $ (5,000)
------- -------------
(16,000) $ (16,000)
Canceled shares (98,000) (98,000) (272,200) (272,200) (10,200) (10,200)
------- ------------- ------ ------
Balance
September 30, 1998 50,000 $ 50,000 - $ - - $ -
======= ============= ======= ============= ====== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from December 31, 1995 to September 30, 1998 (Continued)
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, 1995 911,232 $ 911 100,000 $ 1,000 $11,618,162 $ (12,199,416)
---------- ------------- ------- ------------- ----------- --------------
Net loss (203,024)
Balance
December 31, 1996 911,232 $ 911 100,000 $ 1,000 $11,618,169 $ (12,402,440)
---------- ------------- ------- ------------- ----------- --------------
Stock issued in Exchange
for preferred B stock at
$6.25 per Share 800 1 - - 4,999 -
Fractional shares issued 315 - - - 1 -
Stock issued for
notes payable 257,500 258 - - 51,242 -
Stock issued for
wages payable at 1,029,500 1,030 - - 100,970 -
$0.10 per share
Stock issued for
Services at $0.06
Per share 20,000 20 - - 1,180 -
Stock issued in exchange
For preferred B stock
At $6.88 per share 1,599 2 - - 10,998 -
Contributed Capital on
Cancellation of shares (8,402) (9) - - 388,802 -
Net loss - - - - - (115,504)
---------- ------------- ------- ------------- ----------- --------------
Balance
December 31, 1997 2,412,544 2,413 100,000 1,000 12,188,154 (12,376,748)
Net loss - - - - - -
---------- ------------- ------- ------------- ----------- --------------
Balance
September 30, 1998 2,412,544 $ 2,413 100,000 $ 1,000 $12,188,154 $ (12,376,748)
========== ============= ======= ============= =========== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
EQUITY AU, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1998 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ 0 $ 0
Adjustments to reconcile net loss to net cash
used by operating activities:
Dividends payable 0 0
Accrued interest converted to stock 0 0
Stock issued for services 0
Changes in operating assets and liabilities:
Increase (decrease) in accrued expenses 0 0
---------------- ----------------
NET CASH (USED) BY OPERATING ACTIVITIES: 0 0
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt 0 0
---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: 0 0
---------------- ----------------
NET DECREASE IN CASH: 0 0
CASH AT BEGINNING OF PERIOD: 0 0
---------------- ----------------
CASH AT END OF PERIOD: $ 0 $ 0
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<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, 1997 Annual Report on Form 10-KSB. The results of
operations for the three months and nine ending September 30,
1998, are not necessarily indicative of the operating results that
may result for the year ending December 31, 1998. The accounting
policies followed by the Company are set forth in Note 1 to the
Company's financial statements in its December 31, 1997 Annual
Report on Form 10-KSB.
Note 2 - EXPLANATION FOR DIFFERENCES OF FINANCIAL INFORMATION FROM PREVIOUS
2 QUARTER FILINGS
The financial figures on the Balance Sheet, Income Statement,
Statement of Stockholder's Equity and Statement of Cash Flows
reflect an official audit conducted for the year of 1997. The
audit was performed by Jones, Jensen & Company of Salt Lake City,
Utah.
9
<PAGE>
Item 2. Management's Discussion & Analysis of Financial Condition and Results of
Operations
Three Months ended 9/30/98 compared to Three Months ended 9/30/97
During each of these periods the mining operations were shut down,
there were no revenues during either period. There weren't any General and
administrative expenses.
Nine Months ended 9/30/97 compared to Nine Months ended 9/30/96
During each of these periods the mining operations were shut down,
there were no revenues during either period.
General and administrative expenses decreased to $0 as the company
shutdown operations.
Liquidity and Capital Resources
At September 30, 1998, the Company had no assets, total liabilities of
$135,181 and total stockholders deficit of ($135,181) compared with no assets,
total liabilities of $306,020 and total stockholders deficit of $(306,020) at
March 31, 1997. There has been no significant change in account balances due to
the shut down of operations during these periods. Management is uncertain of
when mining operations will continue and can give no assurances that operations
will continue during the current fiscal year. For the present time the Chairman
of the Company is funding the cash requirements of the Company. There is no
assurance as to how long the Chairman will fund the Company. The Company is now
looking for an acquisition or merger candidate. Management can give no
assurances as to when, or if, a candidate will be identified.
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 89,000 shares will be returned
to the Company if the loan proceeds are not received.
10
<PAGE>
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
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 September 30, 1998.
11
<PAGE>
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: November 2, 1999
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 135,181
<BONDS> 0
0
50,000
<COMMON> 12,188,154
<OTHER-SE> (12,376,748)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.00)
<EPS-DILUTED> 0
</TABLE>
