U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] 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 33-21546-D
CONCORDE STRATEGIES GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-1108035
(State or other jurisdiction of (IRS Employer
Identification No.)
incorporation or organization)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of principal executive offices)
(212) 317-0060
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required 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
3,300,000 shares of Common Stock, no par value, outstanding on
November 14, 1997.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
Form 10-QSB Quarterly Report
Table of Contents
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Balance Sheets at September 30, 1997 and
December 31, 1996 4
Unaudited Statements of Operations For Six and Nine
Months Ended September 30, 1997 and September 30, 1996 and
From Inception (February 12, 1988) through September 30, 1997 5
Unaudited Statements of Cash Flows For Nine
Months Ended September 30, 1997 and 1996 and From Inception
(February 12, 1988) to September 30, 1997 6
Statement of Stockholders' Equity 7
Notes to Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II -- OTHER INFORMATION 13
SIGNATURES 13
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited financial statements are presented in
accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB
and item 310 under subpart A of Regulation S-B. In the opinion of
management, all adjustments considered necessary for a fair
presentation have been included. The results of operations for the
period covered by this report include the unaudited results of the
Company's subsidiary (see Note 3) from the effective date of
acquisition, July 1, 1997. The results of operations do not
include any adjustments which may be necessary based on results of
the audit of the Subsidiary's financial statements as of June 30,
1997, which has not been completed as of the date of this report,
and do not include the Subsidiary's results for the comparable
periods in 1996. Operating results for the nine months ended
September 30, 1997 are not necessarily indicative of results that
may be expected for the year ending December 31, 1997. For further
information, refer to the consolidated financial statements and
footnotes, thereto included in the Company's annual report on form
10-KSB for the year ended December 31, 1996 and Form 8-K filed July
2, 1997.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
BALANCE SHEETS
September 30, December 31,
1997 (Unaudited) 1996 (Audited)
ASSETS
CURRENT ASSETS
Cash $ 17,395 $ -
Accounts receivable 1,235,035 -
Inventory 1,048,228 -
Total Current Assets 2,300,658 0
OTHER ASSETS:
Fixed assets less accumulated
depreciation of $18,800 - -
Leasehold improvements less accumulated
amortization of $1000 29,333 -
Security deposits 40,500 -
Loan to subsidiary 10,000 -
TOTAL ASSETS $ 2,380,491 $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 828,172 $ 26,668
Payroll taxes payable 11,879 -
Estimated corporate income
taxes payable 41,000 -
Bank loans 270,588 -
Due to Ameristar Capital Corporation 110,883 78,875
TOTAL CURRENT LIABILITIES 1,262,522 105,543
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value,
100,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, no par value,500,000,000
shares authorized, 1,500,000 and
1,200,000 shares issued and
outstanding as of June 30,1997
and December 31,1996 $ 166,839 $ 136,839
Additional paid-in-capital 977,875 1,875
(Deficit) accumulated during
the development stage (26,745) (244,257)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 1,117,969 (105,543)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,380,491 $ 0
The accompanying notes are an integral part of these financial statements.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three For the Nine For The Period
Months Ended Months Ended February 12, 1988
September 30, September 30, (Inception) Through
1997 1996 1997 1996 September 30, 1997
SALES $ 817,399 - 817,399 - -
Direct Costs-
Cost of goods sold 503,651 - 503,651 - -
Freight, duty and
packaging 117,573 - 117,573 - -
Total direct costs 621,224 - 621,224 - -
Gross Profit $ 196,175 - 196,175 - -
OPERATING EXPENSES:
Transfer and
Filing Fees 6,107 748 7,872 2,298 14,771
Insurance 12,681 - 12,681 - -
Officer's salary 44,744 - 44,744 - -
Office salary 18,993 - 18,993 - -
Payroll taxes 2,322 - 2,322 - -
Rent 10,500 - 10,500 - 1,875
Utilities and
Telephone 5,550 - 6,244 - 1,326
Commissions 12,700 - 12,700 - -
Travel & Enter. 6,187 - 6,187 - 12,895
Security 404 - 404 - -
Interest 2,916 - 2,916 - -
Advertising 12,856 - 12,856 - -
Office Expenses 1,811 - 2,815 - 2,765
Repairs and Maint. 3,406 - 3,406 - -
Bank and Credit
Card Charges 2,776 - 2,776 - -
Consulting 13,000 30,000 69,000 51,750 187,000
Professional fees 30,425 15,625 33,800 20,650 56,692
Other Expenses 1,169 1,448 1,169 16,423 -
Depreciation and
Amortization 994 - 994 - 750
Bad Debts - - - - 58,947
TOTAL OPERATING
EXPENSES 189,541 47,821 252,379 91,821 337,021
PRETAX (LOSS) INCOME 6,634 (47,821) (56,204) (91,821) (337,021)
OTHER INCOME AND EXPENSES:
Interest income: - - - - 9,228
TOTAL OTHER INCOME
(EXPENSES): - - - - 9,228
NET INCOME (LOSS) $ 6,634 (47,821) (56,204) (91,821) (327,793)
NET INCOME (LOSS)
PER COMMON SHARE $ N/A $ N/A $ N/A $ N/A $ N/A
The accompanying notes are an integral part of these financial statements.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended For the Period February 12,
September 30 1988 (Inception) through
1997 1996 September 30, 1997
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ (56,204) $ (44,000) $ (307,095)
Loan to subsidiary (10,000) - -
(Increase in accounts receivable)(121,757) - -
Decrease in inventory 444,713 - -
(Decrease) in accounts payable (387,126) - -
(Decrease) in rent payable (26,000) - -
(Decrease) payroll taxes payable ( 271) - -
Increase in corporate income
Taxes payable 24,227 - -
Adjustments to reconcile net loss
to net cash used by operating
activities:
Amortization - - 750
Rent provided without charge - - 1,875
Decrease in current assets
other than cash - - 50,000
Increase (decrease) in
current liabilities 60,340 (1,000) 138,381
Net Cash Used in Operations $ (72,078) $ (45,000) $ (116,089)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Loan to Merger Candidate $ - $ - $ (50,000)
(Increase in fixed assets) (1,427) - -
Net Cash Used in
Investing Activities $ (1,427) $ - $ (50,000)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance
of stock $ 30,000 $ 45,000 $ 185,000
Organization costs - - (750)
Offering costs - - (18,161)
Decrease in due from shareholder 19,749 - -
(Decrease) in bank loans (6,730) - -
Net Cash Provided by
Financing Activities $ 43,019 $ 45,000 $ 166,089
Net (Decrease)in Cash $ (30,486) $ 0 $ 166,089
CASH, BEGINNING OF THE PERIOD $ 47,881 $ 0 $ 0
CASH, END OF THE PERIOD $ 17,395 $ 0 $ 0
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)(UNAUDITED)
For the Nine Months Ended September 30, 1997
Common
Stock
Number of
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Deficit
Accumulated
during the
Development
Stage
Total
Stockholders'
Equity
(Deficit)
Balance,
January 1, 1997
1,200,000
136,839
1,875
$(244,257)
$(105,543)
300,000 shares
issued for
services, June
13, 1997
300,000
30,000
-
-
30,000
Shares issued
for acquisition
effective July
1, 1997 (see
Note 3)
To reflect
acquisition
effective July
1, 1997 (see
Note 3)
1,800,000
976,000
301,048
1,277,048
Net (loss) for
the Nine Months
Ended September
30, 1997
--
--
--
(83,536)
(83,536)
Balance,
September 30,
1997
3,300,000
166,839
977,875
$ (26,745)
$1,117,969
The accompanying notes are an integral part of these financial statements.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 - HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company has been in the development stage since its formation
on February 12, 1988. It was originally formed to seek potential
business acquisitions. Its activities since inception are primarily
related to its initial public offering and the merger activities
discussed in Note 4.
Accounting Method
The Company records income and expenses on the accrual method.
Organization Costs
Costs incurred in organizing the Company were amortized over a
sixty-month period.
Deferred Offering Costs
Costs associated with the Company's initial public offering have
been charged to the proceeds of the offering.
Note 2 - CAPITALIZATION
On March 7, 1989, the Company closed its initial public offering
realizing proceeds of $81,839, net of $18,161 in offering expenses.
After the completion of the public offering, there were 3,000,000
shares of the Company's common stock outstanding, along with
2,000,000 Class "A" common stock purchase warrants, and 2,000,000
Class "B" common stock purchase warrants. All of these warrants,
Class A and Class B, which had originally been extended to January,
15, 1992, have since expired and none remain issued and
outstanding.
In April of 1996, the Company undertook a private placement of its
securities pursuant to the provisions of Rule 504 under Regulation
D under the Securities Act of 1933, as amended, whereby it issued
9,000,000 shares of its Common Stock in exchange for the
satisfaction of $45,000 in debts owed by the Registrant. Also in
April 1996, Company effected a 1-for-10 reverse split of its common
stock as the result of which the Company had, following the
aforesaid private offering, 1,200,000 shares issued and
outstanding. This reverse split was effected in anticipation of
management's renewed efforts to find a suitable business
opportunity for the Company.
In June, 1997 the Company issued 300,000 shares of common stock to
certain parties who had performed services on behalf of the
Company. The shares were issued in consideration for the
cancellation of payments owed by the Company at the agreed upon
rate of $.10 per share and were sold through a Private Placement
pursuant to the exemption provided by Rule 504 of Regulation D
under the Securities Act of 1933, as amended.
Subsequent to the period covered by this report, on October 24,
1997, the Company completed a Private Placement Offering of 450,000
non dividend bearing, no par value, Series B Convertible Preferred
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 2 - CONTINUED
Shares. All of the shares were sold by the Company and no
Placement Agent was involved in this Offering. The shares were
sold at a purchase price of $.3125 per share and the Company
realized proceeds of $130,633 from the Offering, net of offering
expenses in the amount of $9,992. The shares were sold through a
Private Placement pursuant to the exemption provided by Rule 504 of
Regulation D under the Securities Act of 1933, as amended. Each
Preferred Share is convertible into one and one quarter (1.25)
shares of the Company's Common Stock, no par value, at the election
of the Preferred Shareholder at any time after thirteen months from
the date of issuance thereof and for a period of four years
therafter.
Note 3 - MERGER ACTIVITIES
On March 8, 1989, the Company submitted a letter of intent to merge
with Nite-Lite USA, Ltd., a Delaware corporation, in which the
Company would acquire 100% of the issued and outstanding common
stock of Nite-Lite, Limited, for 17,000,000 restricted shares of
the Company's stock.
On April 4, 1989, the Company issued a $50,000 bridge loan at 12%,
due October 4, 1989, to Nite-Lite, Limited. The bridge loan was
unsecured.
The Company changed its name from Unified Industries, Inc. to Nite-Lite USA,
Ltd., in anticipation of a successful merger. However, on
September 6, 1989, Nite-Lite, Limited, informed the Company of its
intention to terminate the merger negotiations.
On March 12, 1991, a judgment was received from the District Court
of Denver for $50,000 (bridge loan) plus accrued interest of $8,947
as of March 31, 1991, and $9,727.15 for attorney fees and court
costs. Management has written off the bridge loan and interest as
of June 30, 1991, as these monies have not been collectible.
Pursuant to the Agreement and Plan of Reorganization entered into
with Concorde Management, Ltd. (formerly, Concorde Strategies
Group,Ltd.) on September 23, 1996, and in anticipation of receiving
audited financial statements the Company has completed the
acquisition of Concorde Management, Ltd. and its wholly owned
subsidiary, L'Abbigliamento, Ltd. The Agreement and Plan of
Reorganization was filed as an Exhibit to Form 8-K dated November
15, 1996.
The acquisition, effective as of July 1, 1997, was completed
through a tax-free exchange of securities by the Company's issuance
of 1,800,000 shares of its common stock in exchange for all of the
issued and outstanding common shares of Concorde Management, Ltd.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 4 - RELATED PARTY TRANSACTIONS
The Company has received advances of monies for its operating
expenses from a related company, Ameristar Group Incorporated. The
company ("Ameristar") also serves as a consultant to Concorde.
During 1996 and 1997, Concorde utilized the offices of "Ameristar"
on a rent-free basis.
The Company has incurred consulting fees of $82,000 to its
President, $45,000 to "Ameristar" (an affiliate corporation), and
$30,000 to a 5% stockholder of the Company since the beginning of
1996.
The Company has also issued 200,000 shares of common stock to two
related privately owned companies in consideration of $.10 per
share for consulting services performed on behalf of the Company.
(See Note 2. - Capitalization)
Note 5 - NAME CHANGED
The corporate name has been changed from Nite-Lite USA, Ltd. to
Concorde Strategies Group, Inc. (a Colorado corporation) effective
October 30, 1996.
Note 6 - CONSOLIDATION OF FINANCIAL INFORMATION
The consolidated unaudited financial statements of the company
include the accounts of Concorde Strategies Group, Inc. and its
wholly owned subsidiary from July 1, 1997, the effective date of
its acquisition, through the period covered by this report. The
results of operations do not include any adjustments which may be
necessary based on results of the audit of the subsidiary's
financial statements as of June 30, 1997, which has not been
completed as of the date of this report, and do not include the
subsidiary's results for the comparable periods in 1996. The
development stage totals for the period February 12, 1988
(inception) through September 30, 1997 include unconsolidated
totals for Concorde Strategies Group, Inc. only, and do not include
totals for its subsidiary acquired effective July 1, 1997.
<PAGE>
ITEM 2: Management's Discussion and Analysis of Financial
Conditions and Results of Operations:
Results of Operations:
Until fiscal 1992, Registrant had generated only interest income
since its inception. Commencing in fiscal 1992, Registrant's
available cash was reduced to a level where it ceased to generate
any interest revenues at all. Following the write-off of the
judgement obtained against Nite-Lite, Limited, a Delaware
corporation, Registrant had no realistic expectation of any future
revenues, including interest income since its cash position was
depleted to a balance of $-0- as of March 31, 1997.
In April, 1996, the Company undertook a private placement of its
securities pursuant to the provisions of Rule 504 under Regulation
D under the Securities Act of 1933, as amended, whereby it issued
9,000,000 shares of its Common Stock in exchange for the
satisfaction of $45,000 in debts owed by the Company. Also in April
1996, the Company effected a 1-for-10 reverse split of its common
stock as the result of which the Company had, following the
aforesaid private offering, 1,200,000 shares issued and
outstanding. This reverse split was effected in anticipation of
management's renewed efforts to find a suitable business
opportunity for the Company.
The results of operations for the period covered by this report
include the unaudited results of the Company's subsidiary which was
acquired effective July 1, 1997. These results do not include any
adjustments which may be necessary based on results of the audit of
the subsidiary's financial statements as of June 30, 1997, which
has not been completed as of the date of this report, and do not
include the subsidiary's results for the comparable periods in
1996.
Sales were $817,399 for the three and six month periods ended
September 30, 1997, all of which resulted from the Company's
acquisition which was completed effective July 1, 1997. The
Company did not have any revenue in the comparable periods for
1996. Gross profit was $196,175 for the three and six month
periods ended September 30, 1997. All of the gross profit resulted
from operations of the Company's acquisition, and the Company did
not have any gross profit in the comparable periods for 1996.
Total operating expenses for the three month period ended September
30, 1997 were $189,541 compared to $47,821 for the comparable
period in 1996, an increase of $141,720. All of the increase in
operating expenses during this period resulted from operations of
the Company's subsidiary.
Total operating expenses for the nine month period ended September
30, 1997 were $252,379 compared to $91,821 for the comparable
period in 1996, an increase of $160,588. All of the increase in
operating expenses during this period resulted from operations of
the Company's subsidiary.
Net income for the three month period ended September 30, 1997 was
$6,634 compared to a net loss of $47,821 for the comparable period
ended September 30, 1996, an increase of $54,455 in net income.
All of the increase in net income during this period resulted from
operations of the Company's subsidiary
The net loss for the nine month period September 30, 1997 was
$56,204 compared to a net loss of $91,821 for the comparable period
ended September 30, 1996, a decrease of $35,617. All of the
decrease in net loss during this period resulted from operations of
the Company's subsidiary.
Liquidity and Capital Resources:
At the end of the period covered by this report, the Company and
its subsidiary had cash totalling $17,395, which is not adequate
for working capital requirements, There is no assurance that the
Company will be able to raise the amount of capital needed to meet
its working capital needs.
Subsequent to the period covered by this report, the Company
completed a Private Placement Offering, with net proceeds totalling
$130,633 (refer to Item 2 (c). The Company will need to raise
additional capital to continue funding operations.
Also subsequent to the period covered by this report, on November
5, 1997, the Company loaned its subsidiary, L'Abbigliamento, Ltd.,
the sum of $25,000 for working capital purposes, on the basis of a
Promissory Note, with interest at the rate of 12 percent per annum.
Change in Control:
By formal Agreement dated as of September 23, 1996, the Company
agreed to acquire 100% of the capital stock of Concorde Management,
Ltd. (formerly Concorde Strategies Group, Ltd. "CML"), a Delaware
corporation formed in February 1996. CML plans to engage in the
business of acquiring, financing and assisting in the development
of smaller private companies engaged in diverse industries.
Although still considered to be in its development stage, CML has
entered into and completed an agreement to acquire 100 per cent of
the outstanding capital stock of L'Abbigliamento, Ltd. Based in
Lawrence, New York, L'Abbigliamento, Ltd. is an importer and
wholesale distributor of men's clothing manufactured in Italy,
including suits, sports coats, slacks and overcoats. Effective
July 1, 1997, the Company completed its acquisition of CML and its
wholly owned subsidiary, L'Abbigliamento, Ltd. Reference is made
to the Form 8-K Report filed on July 2, 1997.
<PAGE>
OTHER INFORMATION
Item 1. Legal Procedures. Not applicable.
Item 2. Change in Securities. There has been a change in
control of the Company during the period covered by this report,
as disclosed in the Form 8-K report filed on July 2, 1997.
Item 2(c). Subsequent to the period overed by this report, on
October 24, 1997, the Company completed a Private Placement
Offering of 450,000 non dividend bearing, no par value, Series B
Convertible Preferred Shares. All of the shares were sold by the
Company and no Placement Agent was involved in this Offering. The
shares were sold at a purchase price of $.3125 per share and the
Company realized proceeds of $130,633 from the Offering, net of
offering expenses in the amount of $9,992. The shares were sold
through a Private Placement pursuant to the exemption provided by
Rule 504 of Regulation D under the Securities Act of 1933, as
amended. Each Preferred Share is convertible into one and one
quarter (1.25) shares of the Company's Common Stock, no par value,
at the election of the Preferred Shareholder at any time after
thirteen months from the date of issuance thereof and for a period
of four years therafter.
Item 3. Defaults Upon Senior Securities. Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. Exhibits and Reports of Form 8-K. Form 8-K was filed on
July 2, 1997 re: acquisition which was completed, effective July 1,
1997; Letter of Intent for proposed private placement offering,
which was withdrawn in August, 1997; filing of certified financial
statements related to acquisition.
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed in its behalf by the undersigned,
thereunto duly authorized on November 14, 1997.
CONCORDE STRATEGIES GROUP, INC.
By: /s/ Gera Laun
Gera Laun
Secretary
