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 September 30, 1997
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 April 13, 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
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FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
NIGHTINGALE, INC.
For the Quarter ended September 30, 1997.
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--September 30, 1997..................................3
Statements of Operations--for the three months and nine
months ended September 30, 1997 and September 30, 1996.............4
Statements of Cash Flows--for the nine months
ended September 30, 1997 and September 30, 1996..................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
2
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NIGHTINGALE, INC.
(A Development Stage Company)
Balance Sheet
September 30, 1997(Unaudited)
- ------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 371
Restricted cash in escrow 208,791
------------
Total current assets $ 209,162
============
- ------------------------------------------------------------------------
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable and accrued liabilities $ 36,171
Advances from related party 109,879
Common stock units subscribed 177,017
------------
Total current liabilities 323,067
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 (134,505)
------------
Total stockholders' deficit (113,905)
------------
Total liabilities and stockholders' deficit $ 209,162
============
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
3
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NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Operations (Unaudited)
- ------------------------------------------------------------------------------
Three Months Ended Nine Months Ended Cumulative
September 30, September 30, Amounts
-------------------------------------------- From
1997 1996 1997 1996 Inception
-------------------------------------------------------
Revenue - interest $ 2,807 $ 2,443 $ 7,844 $ 7,194 $ 73,210
General and administrative
expenses 6,309 4,389 19,549 11,677 207,715
-------------------------------------------------------
Loss before (3,502) (1,946) (11,705) (4,483) (134,505)
income taxes
Income tax expense - - - - -
-------------------------------------------------------
Net loss $ (3,502) $(1,946) $(11,705) $ (4,483) $(134,505)
=======================================================
Loss per share $ (.004) $ (.002) $ (.012) $ (.004) $ (.138)
=======================================================
Weighted average number of
shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000 976,026
=======================================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
4
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NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
- ------------------------------------------------------------------------------
Cumulative
Nine Months Ended Amounts
September 30, From
------------------------
1997 1996 Inception
-----------------------------------
Cash flows from operating activities:
Net loss $ (11,705) $ (4,483) $ (134,505)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization - 1,350
Increase in accounts payable and
accrued liabilities 35,602 6,025 54,641
-----------------------------------
Net cash provided by (used in)
operating activities 23,897 1,542 (78,514)
-----------------------------------
Cash flows fro investing activities:
Increase in organization costs - (1,350)
Increase in restricted cash in escrow (7,688) (7,194) (208,791)
-----------------------------------
Net cash used in
investing activities (7,688) (7,194) (210,141)
-----------------------------------
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 (decrease) in advances from
related party (16,063) 5,701 91,409
-----------------------------------
Net cash provided by (used in)
financing activities (16,063) 5,701 289,026
-----------------------------------
Net increase (decrease) in cash 146 49 371
Cash, beginning of period 225 340 -
-----------------------------------
Cash, end of period $ 371 $ 389 $ 371
===================================
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
5
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
Continued
- ------------------------------------------------------------------------------
Nine Months Ended Cumulative
September 30, Amounts
------------------------ From
1997 1996 Inception
-----------------------------------
Supplemental disclosure of cash flow
information:
Interest paid $ - $ - $ -
-----------------------------------
Income taxes paid $ - $ - $ -
-----------------------------------
- ------------------------------------------------------------------------------
See accompanying notes to financial statements.
6
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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 September 30, 1997
and the results of operations and changes in financial position for
the three month and nine month periods ended September 30, 1997 and
1996, and cumulative amounts since inception. The results of
operations for the three months and nine months ended September 30,
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 amount invested. A company subject to the Rule is
entitled to use, a
8
<PAGE>
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 September 30, 1997, the
Company had unrestricted cash of $371 and restricted cash in the Rule 164-11-1
Escrow Account of $208,791. As of December 31, 1996, the Company had
unrestricted cash of $225 and escrowed cash of $201,103. The Company's total
liabilities amounted to $323,067 as of September 30, 1997, of which $177,017 was
attributed to common stock Units subscribed. The Company's total liabilities
amounted to $303,528 as of December 31, 1996, 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 September 30, 1997,
such affiliates had loaned $109,879 to the Company which has been used to fund
the Company's legal fees, accounting fees, filing fees, travel expenses and
other administrative costs. As of September 30, 1997, the total amount owed to
affiliates included the $109,879 amount and accrued interest in the amount of
$35,480. 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 September 30, 1997, the Company had
revenues of $2,807 expenses of $6,309 and a net loss of $3,502. For the three
months ended September 30, 1996, the Company had revenues of $2,443 expenses of
$4,389 and a net loss of $1,946. For the nine months ended September 30, 1997,
the Company had revenues of $7,844 expenses of $19,549 and a net loss of
$11,705. For the nine months ended September 30, 1996, the Company had revenues
of $7,194 expenses of $11,677 and a net loss of $4,483. 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: April 20, 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> 209,162
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 209,162
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 209,162
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 209,162
<CURRENT-LIABILITIES> 323,067
<BONDS> 0
0
0
<COMMON> 20,600
<OTHER-SE> (134,505)
<TOTAL-LIABILITY-AND-EQUITY> (113,905)
<SALES> 0
<TOTAL-REVENUES> 2,807
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,309
<LOSS-PROVISION> 0
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<CHANGES> 0
<NET-INCOME> (3,502)
<EPS-PRIMARY> (.004)
<EPS-DILUTED> (.004)
</TABLE>
