U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended June 30, 1998
Commission File No. 33-23429-D
NIGHTINGALE, INC.
(Exact name of Small Business Issuer as specified in its charter)
Utah 87-044988-8
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
2232 Eastwood Blvd., Ogden, UT 84403
(Address of principal executive offices)
(801) 479-0742
Registrant's telephone no., including area code:
No Change
Former name, former address, and former fiscal year, if
changed since last report.
Common Stock outstanding at September 10, 1998 - 1,000,000 shares
of $.001 par value Common Stock.
Indicate by check mark whether the Registrant (1) has 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) has been subject to such
filing requirements for the past 90 days. Yes X No .
1
<PAGE>
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
NIGHTINGALE, INC.
For the Quarter ended June 30, 1998.
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
Item 1. Financial Statements;
Balance Sheet--June 30, 1998.......................................3
Statements of Operations--for the three months and six
months ended June 30, 1998 and June 30, 1997.......................4
Statements of Cash Flows--for the six months
ended June 30, 1998 and June 30, 1997............................5-6
Notes to Financial Statements......................................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................8
PART II - OTHER INFORMATION
Page
Item 1. Legal Proceedings 10
Item 2. Changes in the Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Results of Votes of Security Holders 11
Item 5. Other Information 11
Item 6(a).Exhibits 11
Item 6(a).Reports on Form 8-K 11
2
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NIGHTINGALE, INC.
(A Development Stage Company)
Balance Sheet
June 30, 1998
(Unaudited)
- ------------------------------------------------------------------------------
Assets
Current assets:
Restricted cash in escrow $ 216,916
--------------
Total assets $ 216,916
--------------
- -------------------------------------------------------------------------------
Liabilities and Stockholders' Deficit
Current liabilities:
Cash deficit $ 11
Accounts payable and accrued liabilities 691
Advances from related party 165,643
Common stock units subscribed 177,017
--------------
Total current liabilities 343,362
Stockholders' deficit:
Common stock - par value $.001 per share.
Authorized 100,000,000 shares; issued and
outstanding 1,000,000 shares 1,000
Additional paid-in capital 19,600
Deficit accumulated during the development stage (147,046)
--------------
Total stockholders' deficit (126,446)
--------------
Total liabilities and stockholders' deficit $ 216,916
--------------
See accompanying notes to financial statements.
3
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
- ------------------------------------------------------------------------------
Three Months Six Months Cumulative
Ended Ended Amounts
June 30, June 30, From
------------------------------------- Inception
1998 1997 1998 1997
---------------------------------------------------
Revenue - interest $ 2,723 $ 2,573 $ 5,406 $5,038 $ 81,335
Expenses:
General and administrative
expenses 5,492 7,740 15,014 13,240 228,381
---------------------------------------------------
Loss before income taxes (2,769) (5,167) (9,608) (8,202) (147,046)
Income tax expense - - - - -
---------------------------------------------------
Net loss $(2,769) $(5,167) $(9,608) $(8,202) $(147,046)
---------------------------------------------------
Loss per share
$ (.00) $ (.01) $ (.01) $ (.01) $ (.15)
---------------------------------------------------
Weighted average number of
shares outstanding share 1,000,000 1,000,000 1,000,000 1,000,000 977,738
---------------------------------------------------
See accompanying notes to financial statements.
4
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Cumulative
June 30, Amounts
---------------------- From
1998 1997 Inception
------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (9,608) $ (8,202) $ (147,046)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization - - 1,350
Increase in:
Cash overdraft 11 - 11
Accounts payable and accrued
liabilities - 829 691
-------------------------------------
Net cash provided by (used in)
operating activities (9,597) 7,373 (144,994)
-------------------------------------
Cash flows from investing activities:
Increase in notes receivable - related - - (74,282)
parties
Increase in organization costs - - (1,350)
Payment of notes receivable - related - - 74,282
parties
Increase in restricted cash in escrow (5,406) (5,038) (216,916)
-------------------------------------
Net cash used in
investing activities (5,406) (5,038) (218,266)
-------------------------------------
Cash flows from financing activities:
Proceeds from common stock units subscribed - - 200,000
Proceeds from issuance of stock - - 20,600
Increase in offering costs - - (22,983)
Increase in advances from related party 14,715 12,602 165,643
--------------------------------------
Net cash provided by
financing activities 14,715 12,602 363,260
--------------------------------------
Net increase (decrease) in cash (288) 191 -
Cash, beginning of period 288 225 -
--------------------------------------
Cash, end of period $ - $ 416 $ -
--------------------------------------
</TABLE>
5
<PAGE>
Statement of Cash Flows
(Unaudited)
Continued
- ------------------------------------------------------------------------------
Six Months Ended Cumulative
June 30, Amounts
------------------------ From
1998 1997 Inception
------------------------------------
Supplemental disclosure of cash flow
information:
Interest Paid $ $ - $ -
Interest paid
------------------------------------
Income taxes paid $ $ - $ 572
------------------------------------
6
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company
Notes to Financial Statements
- ------------------------------------------------------------------------------
(1) The unaudited financial statements include the accounts of Nightingale,
Inc. and include all adjustments (consisting of normal recurring items)
which are, in the opinion of management, necessary to present fairly the
financial position as of June 30, 1998 and the results of operations and
changes in financial position for the three month and six month periods
ended June 30, 1998 and 1997, and cumulative amounts since inception. The
results of operations for the three months and six month ended June 30,
1998 and 1997 are not necessarily indicative of the results to be expected
for the entire year.
(2) Loss per common share is based on the weighted average number of shares
outstanding during the period.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company was formed for the purpose of investing in any and all types
of assets, properties and businesses. At the time of its formation, the Company
issued 1,000,000 shares of its Common Stock to its initial shareholders,
together with a 1,000,000 Class "A" Warrants exercisable at $.25 per share and
1,000,000 Class B Warrants exercisable at $.50 per share. On September 28, 1988,
the United States Securities and Exchange Commission granted effectiveness to a
Registration Statement on Form S-18. The Registration Statement was for an
offering of 2,000,000 Units of Common Stock at $.10 per Unit. Each Unit
consisted of one share of Common Stock, one Class "A" Common Stock Purchase
Warrant and one Class "B" Common Stock Purchase Warrant. The offering was a
"blind pool" or "blank check" offering.
The offering was formally closed on October 6, 1989. The offering was
registered for sale in the State of Utah and therefore, the Company was and is
required to comply with Rule 164-11-1 as promulgated by the Utah Securities
Division. Such Rule prohibits the issuance of shares, the secondary trading of
the Company's securities and the expenditure of more than 20 percent of the net
offering proceeds without first giving subscribers a rescission offering in
connection with an acquisition.
Rule 164-11-1 As Promulgated by the Utah Securities Division
The offering was registered for sale in several states including the State
of Utah. Therefore, the offering and the Company was, and is, subject to Rule
164-11-1 as promulgated by the Utah Securities Division. Rule 164-11-1 is
applicable to offerings in which eighty percent (80%) or more of the net
offering proceeds are not specifically allocated. Following the close of
offerings subject to Rule 164-11-1, a company subject to the Rule is required to
maintain a minimum of eighty percent (80%) of the net offering proceeds in an
escrow account until such time as it can specifically allocate the use of
proceeds. At such time as the offering proceeds can be specifically allocated,
the Company must file additional information with the Utah Securities Division
disclosing the use of proceeds and deliver such information to the investors
purchasing shares in this offering.
At the time that the additional documentation concerning the use of
proceeds is filed with the Utah Securities Division, Rule 164-11-1 requires that
investors in the offering be given no less than twenty (20) days to ratify or
rescind his or her investment. Investors who elect to rescind the purchase shall
receive a pro rata refund of all offering proceeds. However, should enough
investors request a refund such that net tangible asset value of the Company
after the refund would be less than $75,000, the Company will offer a pro rata
refund of all unused offering proceeds to investors. Therefore, if sufficient
numbers of investors elect to rescind, it is possible that rescinding investors
will not receive 100% of the
8
<PAGE>
amount invested. A company subject to the Rule is entitled to use, a substantial
portion of the gross offering proceeds for underwriting commissions, offering
expenses and operating cost regardless of investors' rescission rights.
Rule 164-11-1 also prohibits the issuance of securities, the delivery of
stock certificates or the secondary trading of the Company's stock until the
offering proceeds have been released to the Company subsequent to the rescission
offering.
The Company will also be required to file a post-effective amendment to
its Registration Statement on file with the Securities and Exchange Commission
setting forth current information before soliciting shareholders regarding
rights to rescission.
A total of 2,000,000 Units of the Company's securities were subscribed for
and gross offering proceeds were $200,000. Net offering proceeds for purposes of
Rule 11.1 were $175,000. Pursuant to Rule 164-11-1, 80% of the net offering
proceeds, or $140,000 was deposited into a Rule 11.1 Escrow Account. The
escrowed amount may not be used by the Company until such time as Rule 164-11-1
is complied with.
Liquidity and Capital Resources. Presently, the Company's assets consist
solely of a minimal amount of cash from its initial capitalization and from the
sale of stock in its public offering. As of June 30, 1998, the Company had
unrestricted cash of $0 and restricted cash in the Rule 164-11-1 Escrow Account
of $216,916. As of December 31, 1997, the Company had unrestricted cash of $288
and escrowed cash of $211,510. The Company's total liabilities amounted to
$343,362 as of June 30, 1998, of which $177,017 was attributed to common stock
Units subscribed. The Company's total liabilities amounted to $328,636 as of
December 31, 1997, of which $177,017 was attributed to common stock units
subscribed. The Company presently has no other resources. The Company is
presently seeking potential acquisitions of private companies, technologies, or
product distribution rights. Management believes that any acquisition will be
made by issuing shares of the Company's authorized but unissued common stock.
The Company's liquidity, capital resources, and financial statements will be
significantly different subsequent to the consummation of any acquisition. The
Company's operating expenses have been covered by advances from affiliates in
recent months. However, there can be no assurance that the Company's affiliates
will continue to fund operating costs in the future.
The Company has been required to borrow funds from its affiliates in order
to fund its general and administrative costs. As of June 30, 1998, such
affiliates had loaned $165,643 to the Company which has been used to fund the
Company's legal fees, accounting fees, filing fees, travel expenses and other
administrative costs. The Company must continue to borrow funds in order to fund
its costs of operations until such time, if ever, it effects a merger or
acquisition transaction. There can be no assurance that the Company will be able
to borrow additional funds from such affiliates or from any other persons. If
the Company is not able to borrow additional funds as needed, it will not be
able to fund its costs of operations.
9
<PAGE>
Results of Operations. The Company has not commenced any operations except
for the preliminary investigation of potential acquisitions. The Company's
assets, consisting primarily of cash, is on deposit in various interest bearing
and non-interest bearing accounts pending the consummation of any acquisition.
For the three months ended June 30, 1998, the Company had revenues of $2,723
expenses of $5,492 and a net loss of $2,769. For the three months ended June 30,
1997, the Company had revenues of $2,573 expenses of $7,740 and a net loss of
$5,167. For the six months ended June 30, 1998, the Company had revenues of
$5,406 expenses of $15,014 and a net loss of $9,608. For the six months ended
June 30, 1997, the Company had revenues of $5,038 expenses of $13,240 and a net
loss of $8,202. The Company will likely not have any revenues except for
interest unless and until it is able to close an acquisition or merger
transaction.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the officers and
directors, neither the Company nor any of its officers and
directors are party to any legal proceeding or litigation.
The officers and directors know of no such litigation being
threatened or contemplated.
Item 2. Changes in the Rights of the Company's Security Holders. None.
Item 3. Defaults by the Company on its Senior Securities. None.
Item 4. Submission of Matters to Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6(a). Exhibits. None.
Item 6(b). Reports on Form 8-K. None.
10
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the Company has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: September 10, 1998 NIGHTINGALE, INC.
By /s/ William Grilz
-----------------------------------
William Grilz
President
Principal Financial Officer
Principal Executive Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
NIGHTINGALE, INC.'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> (11)
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> (11)
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 216,916
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 216,916
<CURRENT-LIABILITIES> 343,362
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (147,046)
<TOTAL-LIABILITY-AND-EQUITY> 216,916
<SALES> 0
<TOTAL-REVENUES> 2,723
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,492
<LOSS-PROVISION> (2,769)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
