FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
Commission file number: 33-24536
EXPRESS CAPITAL CONCEPTS, INC.
(Name of Small Business Issuer in its charter)
Delaware 84-1107140
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26 West Dry Creek Circle, Suite 600
Littleton, Colorado 80120
-------------------------
(Address of principal executive offices)
(Zip Code)
(303) 794-9450
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(Issuer's telephone number, including area code)
Indicate by check mark whether the Issuer (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 periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ___ No X
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $.0001 Par Value, 20,000,000 shares as of December 15, 1999.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXPRESS CAPITAL CONCEPTS, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
------
Current Assets:
Cash and cash equivalents $ 336
---------
Total Assets $ 336
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
Current Liabilities:
Accounts payable - trade $ 2,039
Notes payable - stockholders 137,568
Accrued interest - stockholders 54,770
---------
Total Current Liabilities 194,377
---------
Stockholders' Equity (Deficit):
Preferred stock: $.0001 par value, 10,000,000 shares
authorized, none issued or outstanding --
Common stock: $.0001 par value, 500,000,000 shares
authorized, 20,000,000 shares issued and outstanding 2,000
Additional paid in capital 27,618
Accumulated deficit (223,659)
---------
Total Stockholders' Equity (Deficit) (194,041)
---------
Total Liabilities and Stockholders' Equity (Deficit) $ 336
=========
See notes to unaudited condensed
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
EXPRESS CAPITAL CONCEPTS, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ -- $ -- $ -- $ --
Operating expenses 10,259 31,280 25,620 43,956
------------ ------------ ------------ ------------
Loss From Operations (10,259) (31,280) (25,620) (43,956)
------------ ------------ ------------ ------------
Other Income (Expense):
Interest expense - stockholders (4,081) (3,780) (11,289) (7,082)
------------ ------------ ------------ ------------
Total Other Income (Expense) (4,081) (3,780) (11,289) (7,082)
------------ ------------ ------------ ------------
Income (Loss) Before Cumulative
Effect of Change in Accounting
Principle (14,340) (35,060) (36,909) (51,038)
Cumulative effect on prior periods
of expensing organization costs
as incurred -- -- (887) --
------------ ------------ ------------ ------------
Net Income (Loss) $ (14,340) $ (35,060) $ (37,796) $ (51,038)
============ ============ ============ ============
Net Income (Loss) Per Basic and
Diluted Share of Common Stock:
Income (loss) before cumulative effect
of change in accounting principle $ -- $ -- $ -- $ --
Cumulative effect on prior periods of
expensing organization costs as
incurred -- -- -- --
------------ ------------ ------------ ------------
Net Income (Loss) $ -- $ -- $ -- $ --
============ ============ ============ ============
Weighted Average Number of Basic and
Diluted Common Shares Outstanding 20,000,000 20,000,000 20,000,000 20,000,000
Proforma Amounts Assuming Change in
Accounting Principle is Retroactively
Applied:
Net income (loss) $ (14,340) $ (34,998) $ (36,909) $ (50,854)
Net income (loss) per Basic and
Diluted share of common stock $ -- $ -- $ -- $ --
See notes to unaudited condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXPRESS CAPITAL CONCEPTS, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Nine Months Ended September 30,
-------------------------------
1999 1998
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<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) $(37,796) $(51,038)
Adjustments to reconcile net income (loss) to net
cash (used) by operating activities:
Amortization -- 184
Cumulative effect on prior periods of expensing
organization costs as incurred 887 --
Changes in assets and liabilities:
(Decrease) in accounts payable (215) (2,814)
Increase in accrued interest 11,289 7,082
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Net Cash (Used) By Operating Activities (25,835) (46,586)
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Cash Flows From Financing Activities:
Proceeds from stockholder loans 25,750 49,400
-------- --------
Net Cash Provided By Financing Activities 25,750 49,400
-------- --------
Net Increase (Decrease) in Cash and Cash
Equivalents (85) 2,814
Cash and Cash Equivalents at Beginning
of Period 421 325
-------- --------
Cash and Cash Equivalents at End of Period $ 336 $ 3,139
======== ========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ -- $ --
Income taxes -- --
See notes to unaudited condensed
consolidated financial statements.
</TABLE>
<PAGE>
EXPRESS CAPITAL CONCEPTS INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying financial information of the Company is prepared in accordance
with the rules prescribed for filing condensed interim financial statements and,
accordingly, does not include all disclosures that may be necessary for complete
financial statements prepared in accordance with generally accepted accounting
principles. The disclosures presented are sufficient, in management's opinion,
to make the interim information presented not misleading. All adjustments,
consisting of normal recurring adjustments, which are necessary so as to make
the interim information not misleading, have been made. Results of operations
for the nine months ended September 30, 1999 are not necessarily indicative of
results of operations that may be expected for the year ending December 31,
1999. It is recommended that this financial information be read with the
complete financial statements included in the Company's Registration Statement
on Form S-4 previously filed with the Securities and Exchange Commission.
Per Share Information
As of December 31, 1997, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share," which specifies the method of
computation, presentation and disclosure for earnings per share. SFAS No. 128
requires the presentation of two earnings per share amounts, basic and diluted.
Basic earnings per share is calculated using the average number of common shares
outstanding. Diluted earnings per share is computed on the basis of the average
number of common shares outstanding plus the dilutive effect of outstanding
stock options using the "treasury stock" method.
The basic and diluted earnings per share are the same because the Company did
not have any outstanding stock options during the periods presented.
Proposed Merger
The Company has entered into an Agreement and Plan of Merger and Reorganization
(the "Agreement") with Greystone Technology, Inc. ("Greystone"). Under the terms
of the Agreement the Company will issue shares of its common stock in exchange
for all of the issued and outstanding stock of Greystone on a share for share
basis. Immediately after the exchange it is anticipated that the ownership of
the Company will be approximately 97% by existing Greystone stockholders and
approximately 3% by existing Express stockholders. Prior to the closing the
Company plans to effect a reverse stock split reducing its issued and
outstanding common shares to approximately 480,000. In addition, the Company
plans to amend and restate its Certificate of Incorporation reducing its
authorized common stock and preferred stock to 30,000,000 shares and 3,000,000
shares, respectively. The par value of the Company's common stock and preferred
stock will be increased from $.0001 per share to $.001 per share.
In connection with the Company's proposed merger with Greystone, a
Registration Statement on Form S-4 was filed with the Securities and Exchange
Commission ("SEC"). The Registration Statement was declared effective by the SEC
on November 12, 1999. The merger with Greystone is expected to be completed by
the end of 1999.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
In reviewing the following discussion, reference is made to Express Capital
Concepts, Inc.'s (the "Company") financial statements included elsewhere herein.
Since January 1, 1995, the Company has not had any operating revenues.
The Company's operating expenses and its other income (expense) have varied
significantly during its fiscal years ending December 31, 1996, 1997 and 1998
and for the nine months ended September 30, 1999 and 1998. These variations
occurred primarily because the Company's ongoing efforts to find a business
combination involved different activities during the different periods. During
1995, the Company entered into a letter of intent for a business combination,
and incurred $14,736 of related expenses. When that letter of intent was
terminated during 1996, the Company was reimbursed for its 1995 expenses and was
issued stock of the other party to the proposed business combination. The stock
was recorded as 1996 other income at $33,962, its value when received.
The Company transferred the stock to its President and one of its
stockholders in 1997. At the time of transfer the stock had appreciated by
$139,619, and the appreciation was recorded as other income. The transfers
satisfied $16,981 of debt owed to each of the recipients and compensated each of
them in the amount of $69,809.50. The $139,619 total compensation was an
operating expense in 1997.
During 1997 and 1998, and for the nine months ended September 30, 1999, the
Company incurred expenses in connection with the proposed merger with GreyStone
Technology, Incorporated ("Greystone") in the amounts of $16,893, $48,681 and
$14,750, respectively. These expenses were recorded as operating expenses.
The Company has entered into an Agreement and Plan of Merger and
Reorganization (the "Agreement") with Greystone. Under the terms of the
Agreement the Company will issue shares of its common stock in exchange for all
of the issued and outstanding stock of Greystone on a share for share basis.
Immediately after the exchange it is anticipated that the ownership of the
Company will be approximately 97% by existing Greystone stockholders and
approximately 3% by existing Express stockholders. Prior to the closing the
Company plans to effect a reverse stock split reducing its issued and
outstanding common shares to approximately 480,000. In addition, the Company
plans to amend and restate its Certificate of Incorporation reducing its
authorized common stock and preferred stock to 30,000,000 shares and 3,000,000
shares, respectively. The par value of the Company's common stock and preferred
stock will be increased from $.0001 per share to $.001 per share.
In connection with the Company's proposed merger with Greystone a
Registration Statement on Form S-4 was filed with the Securities and Exchange
Commission ("SEC"). The Registration Statement was declared effective by the SEC
on November 12, 1999. The merger with Greystone is expected to be completed by
the end of 1999.
The Company does not have sufficient funds, assuming that a business
combination is not consummated, to operate. The Company has funded its
activities primarily by borrowing from its two largest shareholders. This debt
shall be forgiven in connection with the foregoing merger.
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings
None.
ITEM 2. Changes in securities
None.
<PAGE>
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
Reports on Form 8-K: During the three months covered by this report, the
Company filed no reports on form 8-K.
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 thereto duly authorized.
Date: December 20, 1999 Express Capital Concepts, Inc.
------------------------------
(Registrant)
/s/ Earnest Mathis, Jr.
-----------------------
Earnest Mathis, Jr.
President
Chief Financial Officer
(Principal Accounting Officer),
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 336
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 336
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 336
<CURRENT-LIABILITIES> 194,377
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> (196,041)
<TOTAL-LIABILITY-AND-EQUITY> 336
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 25,620
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,289
<INCOME-PRETAX> (36,909)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (887)
<NET-INCOME> (37,796)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
