SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended December 31, 1997 Commission File No. 0-17700
SIGMA-7 PRODUCTS, INC.
(Exact name of Registrant as specified in its charter)
COLORADO 84-1095500
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
2501 East 3rd Street
Casper, Wyoming 82609
(Address of Principal Executive Offices) (Zip Code)
(307) 235-0012
(Registrant's Telephone Number, including Area Code)
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 such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing to such filing requirements for at least the past 90 days.
Yes No X
The number of shares outstanding of each of the Registrant's classes of
common equity, as of December 31, 1997 are as follows:
Class of Securities Shares Outstanding
-------------------- ------------------
Common Stock, no par value 758,287,496
INDEX
Page of
Report
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets:
As of December 31, 1997 (Unaudited) and September 30, 1997 ...... 3
Statement of Operations (Unaudited):
For the three months ended December 31, 1997
and Cumulative from inception (October 3, 1988) through December 31,
1997............................................................. 4
Statements of Cash Flows (Unaudited):
For the three months ended December 31, 1997
and Cumulative from inception (October 3, 1988) through December 31,
1997............................................................. 5
Notes to Financial Statements (Unaudited) ....................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation ..... 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .............................. 8
Signatures ....................................................... 8
SIGMA-7 PRODUCTS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
December 31, September 30,
1997 1997
------------ -------------
(Unaudited) (Note)
Current assets:
Cash $ 1,286 $ 581
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,425 $ 8,657
Loan payable-shareholders 15,250 9,750
----------- -------------
Total current liabilities 22,675 18,407
Stockholders' equity:
Preferred stock, no par value,
10,000,000 shares authorized;
none issued and outstanding
Common stock, no par value;
1,000,000,000 shares authorized;
758,287,496 shares issued and
outstanding at December 31, 1997
and September 30, 1997. 430,715 430,715
Contributed capital 12,750 12,750
Deficit accumulated during the
development stage (464,854) (461,291)
------------ ------------
Total stockholders' (deficit) (21,389) (17,826)
------------ ------------
$ 1,286 $ 581
============ ============
Note: Taken from the audited balance sheet at that date.
SIGMA-7 PRODUCTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
October 3, 1988
Three months (Inception)
Ended To
Dec. 31, 1997 Dec. 31, 1997
------------- ---------------
(Unaudited) (Unaudited)
Revenue $ - $ 20,966
Operating expenses:
General and
administration 3,563 506,931
Interest expense - 35,917
Amortization - 250
------------ --------------
3,563 543,098
------------ --------------
Other income - 51,160
Income (loss) before
extraordinary item: (3,563) (470,972)
Extraordinary items:
Gain on conversion of
debt to equity (3,563) 6,118
------------- -------------
Net income (loss) $ (3,563) $ (464,854)
============= ==============
Net loss per share $ * $ *
============= ==============
Weighted average
number of common
shares outstanding 758,287,496 360,257,281
============ =============
* less than $.01 per share
SIGMA-7 PRODUCTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
October 3, 1988
Three Months (Inception)
Ended To
Dec. 31, 1997 Dec. 31, 1997
-------------- ----------------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income (loss) $ (3,563) $ (464,854)
Adjustments to reconcile net income(loss)
to net cash provided by operating
activities:
Amortization - 250
Cash provided (used) due to changes in
assets and liabilities:
Issuance of common stock for services - 42,700
Other income - (51,160)
Accounts payable (1,232) 43,893
Accrued interest and expense - 12,281
------------ -----------
Net cash used by operating activities (4,795) (416,890)
------------ -----------
Cash flows from financing activities:
Net proceeds from issuance of common stock:
For cash - 195,405
For conversion of debt - 211,132
Increase in notes payable 5,500 16,463
Deferred offering costs - (17,324)
Contributed capital - 12,750
Increase in organization costs - (250)
------------ -----------
Net cash provided by financing activities 5,500 418,176
------------ -----------
Net increase in cash and cash equivalent 705 1,286
Cash and cash equivalents, beginning of
period 581 -
------------ -----------
Cash and cash equivalents, end of period $ 1,286 $ 1,286
============= ===========
SIGMA-7 PRODUCTS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 CONDENSED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by SIGMA-7
Products, Inc. (the "Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted as allowed by such rules and regulations, and the
company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the September 30, 1997 audited financial statements
and the accompanying notes thereto. While management believes the
procedures followed in preparing these financial statements are reasonable,
the accuracy of the amounts are in some respects dependent upon the facts
that will exist, and procedures that will be accomplished by the Company
later in the year.
The management of the Company believes that the accompanying unaudited
condensed financial statements contain all adjustments (including normal
recurring adjustment) necessary to present fairly the operations and cash
flows for the periods presented.
Item 2. Management's Discussion and Analysis or Plan of Operation.
BACKGROUND. The Company was incorporated in the State of Colorado under
the name of Seek-2 Ventures, Inc. on October 3, 1988 as a blind pool
corporation for the purpose of obtaining capital to take advantage of
domestic and foreign business opportunities. On April 13, 1989, the Company
completed its initial public offering of 11,460,000 shares of stock raising
the approximate net sum of $93,467.
On April 19, 1989, the Company amended its Articles of Incorporation
changing the Company's name to Sigma-7 Products, Inc. Subsequently, on
January 25, 1992 the Company changed its name to Global Development Group,
Inc. and back again to Sigma-7 Products, Inc. on May 25, 1995.
During the period between April 19, 1989 and approximately March 1, 1991,
the Company engaged in the manufacture of electronic self-protection devices
commonly referred to as "stun-guns". During 1991 the Company determined that
pursuing the stun gun manufacturing business would require substantially more
funds than it could reasonably expect to raise in the near future, Further,
various economic, governmental and regulatory agencies brought focus on the
industry in such a manner that it did not appear to be in the Company's best
interest to pursue this endeavor. During late February and early March 1991,
the Company ceased to operate that business due to a lack of working capital
and extended debt.
Subsequent to January 1, 1991, the Company engaged in a financial
restructuring to eliminate as much debt as possible and to make the Company
attractive for acquisition and/or merger with qualified individuals and
companies with existing operations.
FORWARD LOOKING STATEMENTS. This report contains certain forward-looking
statements and information relating to the Company that are based on the
beliefs of its management as well as assumptions made by and information
currently available to its management. When used in this report, the words
"anticipate", "believe", "estimate", "expect", "intend", "plan" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. These statements reflect management's
current view of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions. Should any of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this report as
anticipated, estimated or expected. The Company's realization of its business
aims will depend in the near future principally on the successful completion
of its acquisition of operations as discussed below.
BUSINESS OF THE COMPANY. The Company's sole business at this point is to
seek to acquire assets of or an interest in a small to medium-size company or
venture actively engaged in a business generating revenues or having
immediate prospects of generating revenues. The Company plans to acquire such
assets or shares by exchanging therefor the Company's securities. In order to
avoid becoming subject to regulation under the Investment Company Act of
1940, as amended, the Company does not intend to enter into any transaction
involving the purchase of another corporation's stock unless the Company can
acquire at least a majority interest in that corporation. The Company has not
identified any industry, segment within an industry or type of business, nor
geographic area, in which it will concentrate its efforts, and any assets or
interest acquired may be in any industry or location, anywhere in the world.
The Company will give preference to profitable companies or ventures with a
significant asset base sufficient to support a listing on a national
securities exchange or quotation on the NASDAQ system. Members of management
(all of whom are devoting part time to the Company's affairs) plan to search
for an operating business or venture which the Company can acquire, thereby
becoming an operating company. There is no assurance that the Company will be
successful in this endeavor. The Company has no operations or source of
revenues. Unless the Company succeeds in acquiring a company or properties
which provide cash flow, the Company's ability to survive is in doubt.
RESULTS OF OPERATIONS. During the fiscal quarter ended December 31, 1997
(the first quarter of the current fiscal year), the Company incurred a net
loss of $3,563 as compared to a net loss of -0- for the quarter ended December
31, 1996. Expenses for the first quarter related primarily to accounting
fees, legal fees and other costs incurred in regard to the Company's SEC
filings.
LIQUIDITY AND CAPITAL RESOURCES. The Company had $1,286 cash on hand at the
end of the fiscal quarter. The Company has, since inception, accumulated a
deficit (net loss) of $464,854. The Company had no other cash or other
liquid assets, nor any current plans to raise capital. Whether the Company
ultimately becomes a going concern depends upon its success in finding and
acquiring a suitable private business and the success of that acquired
business. At this time, the Company has no commitment for any capital
expenditure and foresees none. Offices are provided without charge to the
Company. However, the Company will incur routine fees and expenses incident
to filing of periodic reports with the Securities and Exchange Commission,
and it will incur fees and expenses in the event it makes or attempts to make
an acquisition. As a practical matter, the Company expects no significant
operating costs other than professional fees payable to attorneys and
accountants.
In regard to a proposed acquisition, the Company anticipates requiring the
target company to deposit with the Company a retainer which the Company can
use to defray such professional fees and costs. In this way, the Company
could avoid the need to raise funds for such expenses or becoming indebted to
such professionals. Moreover, investigation of business ventures for potential
acquisition will involve some costs, at the least postage and long-distance
telephone charges. Management hopes, once a candidate business venture is
deemed to be appealing, to likewise secure a deposit from the business
venture to defray expenses of further investigation, such as air travel and
lodging expenses. An otherwise desirable business venture may, however,
decline to post such a deposit.
The Company has no credit available to it and is unable to borrow money.
Management does not anticipate raising funds through the sale of securities
or otherwise, and it is unlikely that significant funds could be raised in a
securities offering, in any event. This inability to raise funds could
negatively affect the Company's realization of its business purpose.
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBITS. Exhibit 27 - Financial Data Schedule.
(b) REPORTS ON FORM 8-K. NONE.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report on Form 10-QSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: February 10, 1998
SIGMA-7 PRODUCTS, INC.
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-QSB FOR THE PERIOD ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
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