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 March 31, 1998
[ ] 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
March 31, 1998.
<PAGE>
CONCORDE STRATEGIES GROUP, INC.
Form 10-QSB Quarterly Report
For Period Ended March 31, 1998
Table of Contents
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Consolidated Balance Sheets at
March 31, 1998 and December 31, 1997 4
Unaudited Consolidated Statement of Operations
For Three Months Ended March 31, 1998 and unaudited 5
Statement of Operations For Three Months Ended
March 31, 1997
Unaudited Consolidated Statement of Cash Flows For
Three Months Ended March 31, 1998 and Unaudited
Statement of Cash Flows For Three Months Ended
March 31, 1997 6
Statement of Stockholders' Equity (Deficit) 7
Notes to Financial Statements 8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II -- OTHER INFORMATION 11
SIGNATURES 11
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited consolidated 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 8). 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 1997. Operating results for
the three months ended March 31, 1998 are not necessarily
indicative of results that may be expected for the year ending
December 31, 1998. 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, 1997 and Form 8-K filed July 2, 1997.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited) Audited
March 31, December 31,
1998 1997
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 134,164 $ 133,606
Accounts receivable 1,378,765 1,374,546
Inventory (as submitted) 1,913,048 1,819,695
Prepaid Expenses $ - $ 13,435
TOTAL CURRENT ASSETS: $ 3,425,977 $ 3,341,282
Fixed assets, net of accumulated
depreciation of $24,454 $ - -
Leasehold improvements net of
accumulated amortization of $1384
net of amortization 58,467 58,852
Security Deposits 40,500 40,500
Deferred Offering Costs 12,000 -
TOTAL ASSETS $ 3,536,944 $ 3,440,634
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) Audited
March 31, December 31,
1998 1997
CURRENT LIABILITIES:
Accounts payable $ 1,407,839 $ 1,487,426
Due to Factor 359,098 361,098
Bank and other loans payable
(current) 72,880 73,130
Corporate income taxes payable 6,625 13,000
Due to Ameristar
Capital Corporation $ 64,383 $ 89,383
TOTAL CURRENT LIABILITIES $ 1,910,825 $ 2,024,037
LONG TERM LIABILITIES:
Bank and other loans $ 236,964 $ 252,414
TOTAL LIABILITIES: $ 2,147,789 $ 2,276,451
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value,
100,000,000 shares authorized.
Series A Convertible, redeemable,
1,000 shares issued and out-
standing.
Series B Convertible,non-dividend
bearing, 765,000 shares issued
and outstanding $ 209,383 $ 130,633
Series B Convertible Preferred
Stock Purchase Warrants issuable $ 150,000 $ -
Common stock, no par value,
500,000,000 shares authorized,
3,300,000 shares issued and
outstanding $ 166,839 $ 166,839
Additional paid-in-capital 977,875 977,875
Retained earnings(Deficit) (114,942) (111,164)
TOTAL STOCKHOLDERS' EQUITY 1,389,155 1,164,183
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,536,944 $ 3,440,634
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS AND
STATEMENT OF OPERATIONS (Unaudited)
For the Three Months Ended
March 31, 1998 March 31, 1997
REVENUES
Sales $ 915,569 $ 0
COST OF GOODS SOLD 691,381 0
GROSS PROFIT: 224,188 $ 0
OPERATING EXPENSES:
Transfer and filing fees 426 $ 495
Insurance 6,626 -
Payroll and payroll taxes 74,312 -
Rent 32,229 -
Utilities and telephone 8,068 209
Commissions 9,833 -
Auto and travel 7,038 -
Entertainment 3,911 -
Bank charges and interest 13,484 -
Advertising 1,400 -
Office Expenses 7,124 694
Repairs and maintenance 1,998 -
Consulting 30,625 13,000
Professional Fees 26,961 3,000
Depreciation and amortization 3,931 -
Printing expenses - -
TOTAL OPERATING EXPENSES 227,966 17,398
NET INCOME(LOSS) BEFORE
PROVISION FOR INCOME TAXES (3,778) (17,398)
ESTIMATED PROVISION FOR
INCOME TAXES - -
NET (LOSS) $ (3,778) $ (17,398)
NET (LOSS PER SHARE) $ (.001) $ (.01)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,300,000 1,200,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED CASH FLOW STATEMENT AND CASH FLOW STATEMENT
For the Three Months Ended March 31, 1998 and 1997 (Unaudited)
Consolidated Cash Cash Flow
Flow Statement Statement
March 31, 1998 March 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,778) $ (17,398)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Depreciation and amortization 3,931 -
(Increase)in accounts receivable (4,219) -
(Increase)in inventory (93,353) -
Decrease in prepaid expenses 13,435 -
(Decrease)in due to Ameristar
Capital Corporation (25,000) -
Increase in deferred
offering costs (12,000) -
(Decrease)in payables (79,586) 11,390
(Decrease)in corporate income
taxes payable $ (6,375) $ 6,008
Cash Used by Operating Activities $ (206,945) $ -
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in fixed assets (3,547) -
Increase in leasehold improvements - -
Net Cash used in investing
activities (3,547) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
preferred stock and warrants 228,750 -
Paydowns of amounts due to factor (2,000) -
Decrease in Bank and other loans (15,700) -
Net Cash Provided by
Financing Activities $ 211,050 $ -
Net Increase in Cash $ 558 $ 0
CASH, BEGINNING OF THE PERIOD $ 133,606 $ 0
CASH, END OF THE PERIOD $ 134,164 $ 0
The accompanying notes are an integral part of these financial statements.<PAGE>
CONCORDE STRATEGIES GROUP, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Consolidated Statement of Stockholders' Equity
for the Three Months Ended March 31, 1998
Preferred Series B
Stock Non- Convertible
Dividend Preferred
Total
Bearing Stock Common Stock Additional
Stockholders'
Series B Purchase Number of Common Stock Paid-in Deficit
Equity
Convertible Warrants Shares Amount Capital Accumulated
(Deficit)
Balance,
January 1, 1998 $130,633 $ 0 3,300,000 $166,839 $977,875 $(111,164)
$ 1,164,183
315,000 shares
of Series B
Convertible 78,750 -- -- -- --
-- $ 78,750
Preferred Stock
issued for
services,
January 7, 1998
Private Placement
of Series B -- $150,000 -- -- --
-- 150,000
Convertible
Preferred Stock
Purchase Warrants,
for cash (issuable)
Net (loss) for
the Three Months
Ended March 31,
1998 -- -- -- --
-- (3,778) (3,778)
Balance,
March 31, 1998 $209,383 $150,000 3,300,000 $166,839
$977,875 $(114,942) $ 1,389,155
The accompanying notes are an integral part of these financial statements.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 1998
Note 1 - ORGANIZATION AND HISTORY
The Company is a Colorado corporation and the Company had been in the
development stage since its formation on February 12, 1988. The Company was
formed to seek potential business acquisitions and its activities since
inception are primarily related to its initial public offering and merger
activities.
Upon the completion of the acquisition of Concorde Management, Ltd. and its
wholly owned subsidiary, L'Abbigliamento, Ltd., the Company has ceased from
being a development stage company. This acquisition was effective July 1,
1997.
L'Abbigliamento, Ltd. is a New York State corporation which was incorporated
in New York State in March of 1992. L'Abbigliamento, Ltd. commenced
operations in August of 1992 as an importer of fine men's clothing. In
October of 1995 Vista International Ltd., incorporated in the Cayman Islands,
was organized to acquire raw material and to sell finished goods to areas
outside the United States. Effective July 1, 1997 L'Abbigliamento, Ltd. and
Vista International Ltd. were acquired through an exchange of stock by
Concorde Strategies Group, Inc.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, cash on deposit and highly
liquid investments with maturities generally of three months or less to
L'Abbigliamento, Ltd. At March 31, 1998, there were no cash equivalents.
Organization Costs
Costs incurred in organizing the Company are being amortized over a sixty-month
period.
Deferred Offering Costs
Costs associated with the Company's private offerings have been charged to
the proceeds of the offering. If the offerings are unsuccessful, the costs
will be charged to operations.
Sales and expenses
Sales and expenses are recorded using the accrual basis of accounting.
Inventory shipped on consignment is recorded as a sale when it is sold by the
customer.
Inventory
Inventory is stated at the lower of first-in first-out; cost or market and is
based upon physical counts taken by management at December 31, 1997.
Fixed assets and accumulated depreciation
Fixed assets consist of a computer system and are stated at cost less
accumulated depreciation which is provided for by charges to operations over
the estimated useful lives of the assets. The assets are depreciated over
five years utilizing Internal Revenue Code Section 179 expense deduction of
$17,500 annually with the remaining basis, when applicable, being depreciated
using an accelerated cost revenue method.
Leasehold improvements and accumulated amortization
Leasehold improvements are stated at cost less accumulated amortization which
is provided for by charges to operations over 31.5 years using a straight
line method.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Note 3 - AGING OF ACCOUNTS RECEIVABLE AND PAYABLE
The percentage aging of trade accounts receivable and accounts payable at
March 31, 1998 is as follows:
Accounts Receivable Accounts Payable
Current 25% 100%
30-60 days 25%
over 60 days 50%
100%
Note 4 - INVENTORY
Estimated inventory at March 31, 1998 was as follows:
Raw material (fabric) $ 803,480
Finished goods 612,175
Consignment 497,393
Total $1,913,048
Effective October 1, 1997, L'Abbigliamento, Ltd. entered into consignment
sales arrangement with two mass merchandisers of men's clothing. During the
first quarter of 1998, L'Abbigliamento, Ltd. added two additional consignment
customers. Management believes that this newly instituted marketing strategy
will improve sales, profit margins and collection cycles.
Note 5 - FACTORING OF ACCOUNTS RECEIVABLE
The subsidiary has entered into a non-recourse agreement with an independent
factor. The balances advanced by the factor bear a one-time fee of 5% of the
invoice and is secured by post dated checks issued by the customer.
<PAGE>
Note 6 - BANK LOAN
At March 31, 1998, the subsidiary had outstanding debt in the amount of
$309,844 ($72,880 - current) with interest related thereto at 2% - 7% over
the prime rate. These obligations mature over the next five years with a
remaining balloon payment of $40,000 due at that time. The bank loan is
secured by inventory and accounts receivable.
Note 7 - CAPITALIZATION
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
Registrant. 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.
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.
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 thereafter.
On January 7, 1998, the Company issued 315,000 shares of Series B Convertible
Preferred shares to certain parties who had performed services on behalf of
the Company, including two companies which are principally owned by two
Directors of the Company. The shares were issued by the Company in
consideration for the cancellation of debt owed by the Company at the agreed
upon rate of $.25 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.
In 1998, the Company commenced a private placement of 750,000 Series B
Convertible Preferred Stock Purchase Warrants at a purchase price of $1.00
per Warrant. The Company will realize proceeds of $138,000 from the Offering
net of offering expenses of $12,000, if the minimum number of 150,000
Warrants are sold. The Company will realize proceeds of $738,000 from the
Offering, net of offering expenses in the amount of $12,000, if the maximum
number of Warrants are sold. Each warrant entitles the holder thereof to
purchase one Series B Convertible Preferred Share at a price of $3.00 per
share during the period commencing thirteen months after the date of the
issuance thereof and continuing thirty (30) months thereafter. The warrants
are redeemable by the Company at any time after thirteen months after their
issuance and prior to their expiration at a price of $0.05 per warrant, upon
30 days prior written notice, provided that the closing sale price of the
shares as reported on the NASD Electronic Bulletin Board shall have been at
least $4.80 (160% of the exercise price of the warrants) on each of the 20
consecutive trading days ending on the tenth day prior to the day on which
the notice of redemption is given. As of March 31, 1998, the company has
sold 150,000 warrants.
Note 8 - MERGER ACTIVITIES
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.
Note 9 - PROVISION FOR TAXES ON INCOME
The estimated provision for income taxes are based on the statutory federal
and state income tax rates.
Note 10 - LEASES AND OTHER COMMITMENTS
The parent company leases its premises from Ameristar, an affiliated company,
for the following annual rent expenses.
(eleven months) November 1, 1997 thru September 30, 1998 $41,173
October 1, 1998 thru September 30, 1999 46,152
October 1, 1999 thru September 30, 2000 47,424
October 1, 2000 thru September 30, 2001 48,732
Total Rent Commitment $183,481
The subsidiary leases it premises from a company whose owner is related to a
shareholder of Concorde Strategies Group, Inc. at an annual rent of $84,000,
for each of the next five years with annual adjustment for real estate taxes.
The subsidiary has an employment agreement with its key executive officer for
five years at base compensation, of $200,000 per year. The contract also
provides for additional incentives based upon performance standards and
annual adjustments to the base for changes in the consumer price index.
<PAGE>
Note 11 - RELATED PARTY TRANSACTIONS
The Company has received advances of monies for its operating expenses from
an affiliated company, Ameristar Group Incorporated. That company
("Ameristar") also serves as a consultant to Concorde. Concorde Strategies
Group, Inc. is leasing office space from Ameristar on a monthly rental,
commencing on November 1, 1997 for a term of three years and eleven (11)
months. (see note 10)
The Company has incurred consulting fees of $109,000 to its President, and
$45,000 to "Ameristar" (an affiliate corporation) since the beginning of 1996.
The Company has 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 7. - Capitalization)
On January 7, 1998, the Company issued 222,000 shares of Series B Convertible
Preferred Stock to two related privately owned companies in consideration of
$.25 per share for consulting services performed on behalf of the Company.
(see Note 7 - Capitalization).
As discussed in note 10, the subsidiary leases it facilities from a company
whose owner is related to a shareholder of Concorde Strategies Group, Inc.
Rent paid under this lease is believed by management to be at arm's length
rates. Additionally, L'Abbigliamento, Ltd. received advances from its
parent, Concorde Strategies Group, Inc. which bear interest at market rate.
Note 12 - CONSOLIDATION OF FINANCIAL INFORMATION
The consolidated financial statements of the Company for the period ended
March 31, 1998 include the results of the acquisition of Concorde Management,
Ltd. and its wholly owned subsidiary, L'Abbigliamento, Ltd. only from the
date of acquisition on July 1, 1997. The financial statements for the period
ended March 31, 1997 include the results of operations for the parent company
only.
All material intercompany accounts and transactions have been eliminated.
<PAGE>
ITEM 2: Management's Discussion and Analysis of Financial Conditions and
Results of Operations:
Results of Operations
The results of operations for the Company's subsidiary have been included in
the consolidated results of the Company for the three month period ended
March 31, 1998. These results do not include the subsidiary's results of
operations for the comparable periods in 1997. The effective date of the
acquisition was July 1, 1997.
Sales were $915,569 for the three month period ended March 31, 1998, all of
which resulted from the Company's acquisition of its operating subsidiary,
L'Abbigliamento, Ltd., which was completed effective July 1, 1997. The
Company did not have any revenue in the comparable period for 1997. After
cost of revenues of $691,381 gross profit realized was $224,188 for the
period ended March 31, 1998. All of the gross profit resulted from
operations of the Company's subsidiary, and the Company did not have any
gross profit in the comparable period for 1997 which was prior to the
acquisition of the Subsidiary. Gross profit as a percentage of sales
increased from 22.3 percent for the six month period ended December 31, 1997
to 24.5 percent for the three month period ended March 31, 1998.
Consolidated operating expenses for the three month period ended March 31,
1998 were $227,966, which includes the Subsidiary's total of $160,346 and the
parent Company's total of $67,620. The parent Company's operating expenses
increased $50,222 from 1997 primarily due to commencement of rent payments of
$3,743 per month, increased professional fees for accounting services related
to the acquisition of the subsidiary, increased consulting services and
increased office expenses. The Subsidiary's operating expenses were 17.5 per
cent of sales for the period reported compared to 16.8 percent of sales for
the six month period ended December 31, 1997.
The net loss for the three month period ended March 31, 1998 was $3,778
compared to a net loss of $17,398 for the comparable period ended March 31,
1997, a decrease of $13,620. All of the decrease in net loss during this
period resulted from operation of the subsidiary.
The total cash and cash equivalents at March 31, 1998 totalled $134,164. Of
that amount the Subsidiary's total was $62,067, and the parent company's
total was $72,097.
Accounts receivable at March 31, 1998 totalled $1,378,765, all of which is
owed to the Subsidiary. Of that total, 25 per cent is current, 25 per cent is
30-60 days old, and 50 per cent is over 60 days old. This pattern is
characteristic of the subsidiary's industry and customer base.
Inventory at March 31, 1998 totalled $1,913,048, which was all maintained by
the Subsidiary. Of that total, approximately $803,480 represented raw
material (fabric) for production.
Accounts payable at March 31, 1998 totalled $1,390,214, all of which is
current. Of that amount, the Subsidiary's accounts payable total was
$1,312,803, and the parent company's total was $77,411. The Subsidiary's
accounts payable total consists mostly of raw material purchases and cost of
finished goods, consistent with the Subsidiary's Cost of Goods Sold and
Operating Expense percentages of sales. The parent Company's accounts
payable represents its normal business overhead expenses.
The amount of $359,098 due to a factor and the long term bank loans in the
amount of $236,964 represent borrowings by the Subsidiary, as a result of the
need to carry customer accounts receivable and to purchase fabric inventory
in advance of the selling season.
The Company is continuing to look for suitable acquisition candidates. As of
the date of this Report, no additional acquisition candidates have been
found, and there is no assurance that any additional candidates will be
found.
Liquidity and Capital Resources
At March 31, 1998, the Company and its subsidiary had cash totalling
$134,164, 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.
As of the date of this Report, in a Private Placement Offering, the Company
has sold 341,500 Series B Convertible Preferred Stock Purchase Warrants and
received proceeds of $329,500, net of offering costs of $12,000. See Note 7
to Financial Statements.
General Risk Factors Affecting the Company and its Subsidiary
Various factors could cause the actual results of the Company to differ
materially from those indicated by forward-looking statements made from time
to time in news releases, reports, proxy statements, registration statements
and other written communications (including the preceding sections of this
document), as well as oral statements made from time to time by
representatives of the Company. Except for historical information, matters
discussed in such oral and written communications are forward-looking
statements that involve risks and uncertainties, including, but not limited
to, economic and business conditions in the United States and abroad; the
level of demand for apparel products and success of planned marketing
programs; the intensity of competition and the pricing pressures that may
result; changes in labor and import and export regulations; the ability of
the Subsidiary to timely and effectively manage inventory levels and
sourcing; the ability to finance capital expenditures; and currency
fluctuation.
<PAGE>
OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable.
Item 2. Change in Securities
Item 2(c). On January 7, 1998, the Company completed a Private Placement
Offering of 315,000 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 $.25 per share, with
payment being made through cancellation of debts owed by the
Company. The shares were sold 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 thereafter.
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. None.
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.
CONCORDE STRATEGIES GROUP, INC.
By: /s/ Robert Gordon
Robert Gordon
President
