===============================================================================
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 March 31, 1999
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 October 1, 1999 - 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 .
===============================================================================
<PAGE>
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
NIGHTINGALE, INC.
For the Quarter ended March 31, 1999.
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--March 31, 1999......................................3
Statements of Operations--for the three months
ended March 31, 1999 and March 31, 1998............................4
Statements of Cash Flows--for the three months
ended March 31, 1999 and March 31, 1998..........................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 11
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
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Balance Sheet
March 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 1,310
Restricted cash in escrow 224,810
------------
Total current assets $ 226,120
------------
- ------------------------------------------------------------------------
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 1,206
Related party payables 199,437
Common stock units subscribed 177,017
------------
Total current liabilities 368,660
------------
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 (163,140)
------------
Total stockholders' deficit (142,540)
------------
Total liabilities and stockholders' deficiT $ 226,120
=============
See accompanying notes to financial statements.
3
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Operations (Unaudited)
March 31, 1999
- ------------------------------------------------------------------------------
Cumulative
Three Months Ended Amounts
March 31, From
--------------------
1999 1998 Inception
----------------------------------
Revenue - interest $ 2,488 $ 2,683 $ 89,228
Expenses:
General and administrative 6,135 9,522 252,368
expenses
----------------------------------
Loss before income taxes (3,647) (6,839) (163,140)
Income tax expense - - -
----------------------------------
Net loss $ (3,647 $(6,839) $(163,140)
----------------------------------
Loss per share - basic and $ (.00) $ (.00) $ (.17)
diluted
----------------------------------
Weighted average shares -
basic and diluted 1,000,000 1,000,000 977,000
----------------------------------
See accompanying notes to financial statements.
4
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
March 31, 1999
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative
Three months Ended Amounts From
March 31
------------------------
1998 1997 Inception
-----------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (3,647) $ (6,839) $(163,140)
Adjustments to reconcile net loss to
net cash (used in) operating
activities:
Amortization - - 1,350
Increase in accounts payable and
accrued liabilities 74 - 1,206
-----------------------------------
Net cash used in
operating activities (3,573) (6,839) (160,584)
-----------------------------------
Cash flows from investing activities:
Increase in related party payables 7,356 9,309 190,437
Increase in restricted cash in escrow (2,488) (2,683) (224,810)
Increase in notes receivable - related
parties - - (74,282)
Increase in organization costs - - (1,350)
Payments of notes receivable - related
parties - - 74,282
Net cash provided by
(used in) investing 4,868 6,626 (35,723)
activities
-----------------------------------
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)
Net cash provided by
financing activities - - 197,167
-----------------------------------
Net increase in cash 1,295 213 1,310
Cash, beginning of period 15 288 -
-----------------------------------
Cash, end of period $ 1,310 $ 75 $ 1,310
-----------------------------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
Continued
March 31, 1999
- ------------------------------------------------------------------------------
Cumulative
Three months Ended Amounts From
September 30,
------------------------
1998 1997 Inception
-----------------------------------
Supplemental disclosure of cash flow
information:
Interest paid $ - $ - $ -
-----------------------------------
Income taxes paid $ - $ - $ 572
-----------------------------------
See accompanying notes to financial statements.
6
<PAGE>
NIGHTINGALE, INC.
(A Development Stage Company)
Notes to Financial Statements
March 31, 1999
- ------------------------------------------------------------------------------
(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 March 31, 1999 and
the results of operations and cash flows for the three month period
ended March 31, 1999 and 1998, and cumulative amounts since
inception. The results of operations for the three months ended
March 31, 1999 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 March 31, 1999, the Company
had unrestricted cash of $1,310 and restricted cash in the Rule 164-11-1 Escrow
Account of $224,810. As of December 31, 1998, the Company had unrestricted cash
of $15 and escrowed cash of $222,322. The Company's total liabilities amounted
to $368,660 as of March 31, 1999, of which $177,017 was attributed to common
stock Units subscribed. The Company's total liabilities amounted to $361,230 as
of December 31, 1998, 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 March 31, 1999, such
affiliates had loaned $199,437 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 March 31, 1999, the Company had
revenues of $2,488 expenses of $6,135 and a net loss of $3,647. For the three
months ended March 31, 1998, the Company had revenues of $2,683 expenses of
$9,522 and a net loss of $6,839. 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: October 1, 1999 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> 1,310
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 1,310
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 226,120
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 226,120
<CURRENT-LIABILITIES> 368,660
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (163,140)
<TOTAL-LIABILITY-AND-EQUITY> 226,120
<SALES> 0
<TOTAL-REVENUES> 2,488
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,135
<LOSS-PROVISION> (3,647)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
</TABLE>
