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FORM 10-QSB - Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended November 30, 1997
--------------------------------------
or
[ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange act of 1934.
For the transition period from to
------------------- -------------------
Commission File Number 33-23693
---------------------------------
VANDEN CAPITAL GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1090424
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1775 Sherman Street, Suite 1001, Denver, CO 80203
-------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(303) 689-9111
----------------------------------------------------
(Registrant's telephone number, including area code)
NONE
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
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.
[ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicated by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of November 30, 1997, Registrant had 90,015,200 shares of common stock,
$.0001 Par Value, outstanding.
<PAGE>
INDEX
Page
Number
------
Part I. Financial Information
Item I. Financial Statements
Consolidated Balance Sheets as of May 31,
1997 and November 30, 1997 (Unaudited) 2
Consolidated Statements of Operations,
Three Months Ended November 30, 1996
(Unaudited) and November 30, 1997
(Unaudited) 3
Consolidated Statements of Operations,
Six Months Ended November 30, 1996
(Unaudited) and November 30, 1997
(Unaudited) 4
Consolidated Statements of Changes in Stock-
holders' Equity from May 31, 1997
through November 30, 1997 (Unaudited) 5
Consolidated Statements of Cash Flows,
Three Months Ended November 30, 1996
(Unaudited) and November 30, 1997
(Unaudited) 6
Consolidated Statements of Cash Flows,
Six Months Ended November 30, 1996
(Unaudited) and November 30, 1997
(Unaudited) 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 10
Part II. Other Information 11
1
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
------
August 31 May 31
1997 1997
---------- ---------
<S> <C> <C>
Current Assets:
Cash $ 307,301 $ 383,043
Accrued interest receivable -- 8,665
---------- ---------
Total Current Assets 307,301 391,708
---------- ---------
TOTAL ASSETS $ 307,301 $ 391,708
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 12,643 $ 3,698
---------- ---------
Total Current Liabilities 12,643 3,698
---------- ---------
Stockholders' Equity (Notes 2 and 4):
Preferred Stock, $.0001 per value,
100,000,000 shares authorized,
none issued and outstanding -- --
Common Stock $.0001 par value
300,000,000 shares authorized
90,015,200 shares issued and
outstanding 9,002 9,002
Additional Paid-in Capital 687,469 687,469
Accumulated deficit (401,813) (308,461)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 294,658 388,010
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 307,301 $ 391,708
========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
November 30 November 30
1997 1996
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
Revenue:
Interest income $ 2,936 $ 3,765
--------- ---------
Total Revenue 2,936 3,765
--------- ---------
Expenses:
Legal and accounting 19,414 7,208
Rent 1,500 1,500
Other 896 3,252
--------- ---------
21,810 11,960
--------- ---------
Net (Loss) before other expenses (18,874) (8,195)
Loss on guarantee of note 65,180 --
--------- ---------
Net (Loss) $ (84,054) $ (8,195)
========= =========
Per Share $ nil $ nil
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended
November 30 November 30
1997 1996
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
Revenue:
Interest income $ 6,601 $ 7,640
---------- ----------
Total Revenue 6,601 7,640
---------- ----------
Expenses:
Legal and accounting 29,564 14,999
Rent 3,000 3,000
Other 2,209 6,252
---------- ----------
34,773 24,251
---------- ----------
Net (Loss) before other expenses (28,172) (16,611)
Loss on guarantee of note 65,180 --
---------- ----------
Net (Loss) $ (93,352) $ (16,611)
========== ==========
Per Share $ nil $ nil
========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From May 31, 1997 through November 30, 1997 (Unaudited)
Common Stock Additional Retained
----------------------------- Paid-in Earnings
Shares Amount Capital (Deficit) Total
---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance, May 31, 1997 90,015,200 $ 9,002 $ 687,469 $ (308,461) $ 388,010
Net loss for the six month period ended
November 30, 1997 -- -- -- (93,352) (93,352)
----------- ----------- ----------- ---------- ---------
Balance, November 30, 1997 90,015,200 $ 9,002 $ 687,469 $ (401,813) $ 294,658
=========== =========== =========== ========== =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Three Months Ended
November 30 November 30
1997 1996
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
Cash Flows Operating Activities:
Net (loss) $ (84,054) $ (8,195)
(Increase) decrease in accrued
interest receivable 9,772 (1,106)
Increase (decrease) in accounts
payable 4,026 (1,515)
--------- ---------
Net Cash (Used In) Operating
Activity (70,256) (10,816)
--------- ---------
Cash Flows from Investing Activities -- --
--------- ---------
Cash Flows from Financing Activities -- --
--------- ---------
(Decrease) in Cash (70,256) (10,816)
Cash, Beginning of Period 377,557 405,842
--------- ---------
Cash, End of Period $ 307,301 $ 395,026
========= =========
Interest Paid $ -- $ --
========= =========
Income Taxes Paid $ -- $ --
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
November 30 November 30
1997 1996
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
Cash Flows Operating Activities:
Net (loss) $ (93,352) $ (16,611)
(Increase) decrease in accrued
interest receivable 8,665 (2,212)
Increase in accounts payable 8,945 1,033
--------- ---------
Net Cash (Used In) Operating
Activity (75,742) (17,790)
--------- ---------
Cash Flows from Investing Activities -- --
--------- ---------
Cash Flows from Financing Activities -- --
--------- ---------
(Decrease) in Cash (75,742) (17,790)
Cash, Beginning of Period 383,043 412,816
--------- ---------
Cash, End of Period $ 307,301 $ 395,026
========= =========
Interest Paid $ -- $ --
========= =========
Income Taxes Paid $ -- $ --
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
7
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1997 (Unaudited)
(1) Organization
------------
Vanden Capital Group, Inc. (Capital), was incorporated in
Colorado on June 21, 1988. Capital is in the business of
providing management consulting services.
All intercompany accounts and balances have been eliminated from the
consolidated financial statements.
(2) Unaudited Statements
--------------------
The Consolidated balance sheet as of November 30, 1997, the statements
of operations and cash flows for the three month periods ended
November 30, 1996 and November 30, 1997, and the statement of
stockholders' equity for the three month period ended November 30,
1997 have been prepared by the Registrant without audit. In the
opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial
position, results of operations, cash flows and changes in
stockholders' equity at November 30, 1997 and for all periods
presented, have been made.
(3) Income Taxes
------------
No provision for income taxes has been provided since the Company has
a net operating loss carryover.
(4) Loss on Guarantee of Note
-------------------------
On December 21, 1989 the Company signed a pledge agreement
guaranteeing a $90,000 loan from a bank to Buyer's Resource, Inc. The
Company pledged a $100,000 certificate of deposit as security for this
loan. In June of 1992, Buyer's paid down the principal balance of the
loan to $60,000 and the Company obtained a release of $35,000 of the
collateral it had pledged to secure the loan, resulting in the
collateral currently pledged by the Company as security for the loan
to be $65,000. In September of 1997, the certificate of deposit was
used to pay off the loan, resulting in a receivable of $65,180 from
Buyers Resource, Inc. An allowance of $65,180 was recorded in the
financial statements since the collectibility of this receivable is
doubtful.
8
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1997 (Unaudited)
(5) Subsequent Event
----------------
During December 1997, the Company entered into a merger agreement with
Entropin, Inc., a California corporation, which would be acquired by
the Company. The Company's Board of Directors has approved the
contribution of not more than $5,000 cash and one-half of all non-cash
assets of the Company to each of the Company's two wholly-owned
subsidiaries, VCG Holding Corporation and Vanden Ventures I, Ltd. The
Company's Board of Directors also approved the spin-off of these two
subsidiaries to the Company's shareholders prior to the effective date
of the merger. The Company's Board of Directors has also approved the
payment of $35,000 to the Company's executive officers and directors
for past services on the effective date of the merger. The merger would
result in a change in control of the Company.
9
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(1) Material Changes in Financial Condition
---------------------------------------
Management knows of no trends, demands, commitment, events or
circumstances which will result in or which are reasonably likely to
result in the Registrant's liquidity increasing or decreasing in a
material way.
The Registrant has no material commitments for capital expenditures as
of the end of the latest fiscal period. Management knows of no material
trends, favorable or unfavorable, in the Registrant's capital resources
and anticipates no material change in the mix and cost of such
resources.
(2) Material Changes in Results of Operations
-----------------------------------------
The Company has earned revenues of $2,936 during the three month period
ended November 30, 1997, as compared to $3,765 for the three month
period ended November 30, 1996, a decrease of $829. Operating expenses
increased from $11,960 during the three month period ended November 30,
1996 to $21,810 during the three month period ended November 30, 1997,
an increase of $9,850. As described in Note 4 to the financial
statements, a loss related to a loan guarantee in the amount of $65,180
was recorded during the three month period ended November 30, 1997.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibit 27.1 - Financial Data Schedule
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VANDEN CAPITAL GROUP, INC.
/s/ A. Thomas Tenenbaum
Date: January 14, 1998 By________________________________
A. Thomas Tenenbaum, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-QSB FOR THE QUARTER ENDED NOVEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> NOV-30-1997
<CASH> 307,301
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 307,301
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 307,301
<CURRENT-LIABILITIES> 12,643
<BONDS> 0
0
0
<COMMON> 9,002
<OTHER-SE> 285,656
<TOTAL-LIABILITY-AND-EQUITY> 307,301
<SALES> 0
<TOTAL-REVENUES> 6,601
<CGS> 0
<TOTAL-COSTS> 34,773
<OTHER-EXPENSES> 65,180
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (93,352)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (93,352)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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