UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
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Commission File Number: 33-25900
DONNEBROOKE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2228820
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
16910 Dallas Parkway, Suite 100, Dallas TX 75248
(Address of principal executive offices, including zip code)
(972) 248-1922
(Registrant's telephone number, including area code)
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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 NO X
Indicate the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: May 25, 1999: 3,640,372
<PAGE>
DONNEBROOKE CORPORATION
(a development stage enterprise)
Form 10-Q for the Quarter ended March 31, 1999
Table of Contents
Page
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 8
Item 3 - Quantative and Qualitative Disclosures About Market Risk 8
Part II - Other Information
Item 1 - Legal Proceedings 9
Item 2 - Changes in Securities and Use of Proceeds 9
Item 3 - Defaults Upon Senior Securities 9
Item 4 - Submission of Matters to a Vote of Security Holders 9
Item 5 - Other Information 9
Item 6 - Exhibits and Reports on Form 8-K 9
Signatures 10
2
<PAGE>
<TABLE>
<CAPTION>
Part 1 - Item 1
Financial Statements
Donnebrooke Corporation
(a development stage enterprise)
Balance Sheets
March 31, 1999 and December 31, 1998
(Unaudited) (Audited)
March 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Assets $ -- $ --
============ ============
Liabilities
Due to controlling shareholder -- 18,217
------------ ------------
Stockholders' Equity
Common stock - $0.00001 par value 50,000,000
shares authorized. 3,640,372 and 38,072 shares
issued and outstanding, respectively 36 --
Additional paid-in capital 168,577 132,590
Deficit accumulated during
the development stage (168,613) (150,807)
------------ ------------
Total stockholders' equity -- (18,217)
------------ ------------
Total Liabilities and Stockholders' Equity $ -- $ --
============ ============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
<PAGE>
Donnebrooke Corporation
(a development stage enterprise)
Statements of Operations and Comprehensive Income
Three months ended March 31, 1999 and 1998
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1999 1998
--------- ---------
Revenues $ -- $ --
--------- ---------
Expenses
General and administrative expenses 17,806 --
--------- ---------
Net Loss -- --
Other Comprehensive Income -- --
--------- ---------
Comprehensive Loss $ (17,806) $ --
========= =========
Loss per weighted-average share
of common stock outstanding,
computed on net loss - basic and
fully diluted $(0.02) nil
==== ===
Weighted-average number
of shares of common stock
outstanding - basic and fully diluted 718,506 38,072
========= =========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
4
<PAGE>
<TABLE>
<CAPTION>
Donnebrooke Corporation
(a development stage enterprise)
Statements of Cash Flows
Three months ended March 31, 1999 and 1998
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net loss for the period $ (17,806) $ --
Adjustments to reconcile net loss
to net cash provided by operating
activities
Common stock issued for consulting services 17,806 --
------------ --------
Net cash used in operating activities -- --
------------ --------
Cash flows from investing activities -- --
------------ --------
Cash flows from financing activities -- --
------------ --------
Increase (decrease) in cash -- --
Cash at beginning of period -- --
------------ --------
Cash at end of period $ -- $ --
============ ========
Supplemental disclosure of interest and income taxes paid
Interest paid for the period $ -- $ --
============ ========
Income taxes paid (refunded) for the period $ -- $ --
============ ========
Supplemental disclosure of non-cash
investing and financing activities
Amounts due to controlling shareholder
settled with the issuance of common stock $ 18,217 $ --
============ ========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
<PAGE>
Donnebrooke Corporation
(a development stage enterprise)
Notes to Financial Statements
Note 1 - Basis of Presentation
During interim periods, Donnebrooke Corporation (Company) follows the accounting
policies set forth in its Annual Report Pursuant to Section 13 of the Securities
Exchange Act of 1934 on Form 10-K as filed with the U. S. Securities and
Exchange Commission. The December 31, 1998 balance sheet data was derived from
audited financial statements of Donnebrooke Corporation, but does not include
all disclosures required by generally accepted accounting principles. Users of
financial information provided for interim periods should refer to the annual
financial information and footnotes contained in the Annual Report Pursuant to
Section 13 of the Securities Exchange Act of 1934 on Form 10-K when reviewing
the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-Q, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1999.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note 2 - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, certificates of
deposit and other highly-liquid investments with maturities of three months
or less, when purchased, to be cash and cash equivalents.
Cash overdraft positions may occur from time to time due to the timing of
making bank deposits and releasing checks, in accordance with the Company's
cash management policies.
2. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of March 31, 1999 and 1998, the Company
had no outstanding warrants and/or options outstanding.
6
<PAGE>
Donnebrooke Corporation
(a development stage enterprise)
Notes to Financial Statements - Continued
Note 3 - Common Stock Transactions
In February 1999, the Company's stockholders approved an amendment to the
Company's Certificate of Incorporation to effect a one (1) for one thousand
(1,000) reverse stock split of the issued and outstanding shares of the
Company's common stock and to reduce the number of authorized shares from one
billion (1,000,000,000) to fifty million (50,000,000). The effect of the reverse
split is reflected in the accompanying financial statements as if the reverse
split had occurred on the first day of the earliest period presented.
In March 1999, the Company filed an Amended and Restated Certificate of
Incorporation with the State of Delaware. This amendment changed the Company's
capital structure to eliminate all references to preferred stock and reduced the
number of common shares authorized from 1,000,000,000 of $0.00001 par value to
50,000,000 shares of $0.00001 par value.
In March 1999, the Company issued an aggregate 3,602,300 shares of common stock,
pursuant to a Form S-8, Registration Statement under The Securities Act of 1933,
to a controlling shareholder and an affiliated individual, who is an officer and
director of the Company, in settlement of expenses paid or accrued on behalf of
the Company for various consulting, reorganization, stock transfer and
electronic document filing services. This transaction was valued at an aggregate
of approximately $36,000, which equaled the respective invoiced amounts paid or
accrued on behalf of the Company by the respective related parties. Of the
aggregate amount, approximately $19,000 was for services paid or accrued on the
Company's behalf by an entity related to the individual who is an officer and
director of the Company.
7
<PAGE>
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Results of Operations
Donnebrooke Corporation (Company) was incorporated on April 19, 1988 as
Alluristics, Inc. under the laws of the State of Delaware. During 1989 and 1990,
the Company attempted to enter the business of owning, operating and managing
various parcels of real estate and to own, operate and manage shared tenant
service operations tailored predominately for the legal profession and related
professionals. The Company was unsuccessful in initiating these operations.
Accordingly, the Company has had no substantial operations or substantial assets
since inception. The current business purpose of the Company is to seek out and
obtain a merger, acquisition or outright sale transaction whereby the Company's
stockholders will benefit. The Company is not engaged in any negotiations and
has not undertaken any steps to initiate the search for a merger or acquisition
candidate.
Due to the lack of sustaining operations from inception, the Company is
considered in the development stage and, as such, has generated no significant
operating revenues and has incurred cumulative operating losses of approximately
$169,000 through the date of this filing.
(2) Liquidity
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The necessary operating funds requirements for the Company are minimal due to
its dormancy. All necessary funds have been provided by management, controlling
shareholders and/or other companies owned or controlled by the controlling
shareholders or members of management. These amounts are accounted for as
contributions of additional paid-in capital, where material and/or identifiable.
(3) Capital requirements
The Company has no known capital requirements as of the date of this filing.
Part I - Item 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Registrant has no items qualifying for this disclosure as of the date of
this filing or during the respective periods presented.
8
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
In March 1999, pursuant to a Form S-8, "Agreements for Consulting Services",
the Company issued an aggregate 3,602,300 shares of common stock to an
individual who is an officer and director of the Company and an affiliated
entity in payment of amounts for various consulting services.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
On February 16, 1999, the Company held a Special Meeting of Shareholders.
This meeting was to approve (a) two (2) directors to serve until the next
Annual Meeting of Shareholders, (b) approve an amendment to the Company's
Certificate of Incorporation to effect a One (1) for One Thousand (1,000)
reverse stock split of the issued and outstanding shares of the Company's
common stock and (c) to reduce the number of authorized shares from One
Billion (1,000,000,000) to Fifty Million (50,000,000).
The Company did not solicit proxies from its shareholders, and shareholders
were not requested to send proxies to the Company, as the Controlling
Shareholder holding approximately 19.692,803 shares of the then issued and
outstanding total of approximately 37,333,000 shares issued and outstanding
were present and voted in approval of the three proposals.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
(Remainder of this page left blank intentionally)
9
<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.
DONNEBROOKE CORPORATION
May 25 , 1999 /s/ Kevin B. Halter, Jr.
-------- ------------------------------------------
Kevin B. Halter, Jr.
President, Chief Executive Officer,
Principal Financial Officer and Director
10
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<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000843494
<NAME> Donnebrooke Corporation
<MULTIPLIER> 1
<CURRENCY> US Dollars
<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> 0
<SECURITIES> 0
<RECEIVABLES> 0
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<BONDS> 0
0
0
<COMMON> 36
<OTHER-SE> (36)
<TOTAL-LIABILITY-AND-EQUITY> 0
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<CGS> 0
<TOTAL-COSTS> 17806
<OTHER-EXPENSES> 0
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<INCOME-PRETAX> 0
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<INCOME-CONTINUING> (17806)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17806)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
