UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
- --------------------------------------------------------------------------------
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ---------- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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
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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)
- --------------------------------------------------------------------------------
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: October 22, 1999: 11,821,116
----------
<PAGE>
DONNEBROOKE CORPORATION
(a development stage enterprise)
Form 10-Q for the Quarter ended September 30, 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 9
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 9
Part II - Other Information
Item 1 - Legal Proceedings 11
Item 2 - Changes in Securities and Use of Proceeds 11
Item 3 - Defaults Upon Senior Securities 11
Item 4 - Submission of Matters to a Vote of Security Holders 11
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 11
2
<PAGE>
<TABLE>
<CAPTION>
Part 1 - Item 1
Financial Statements
Donnebrooke Corporation
(a development stage enterprise)
Balance Sheets
(Unaudited) (Audited)
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
Assets
Cash on hand and in bank $ 3,552 $ --
============= =============
Liabilities
Accounts payable $ 200 $ --
Due to controlling shareholder -- 18,217
------------- -------------
Total liabilities 200 18,217
------------- -------------
Commitments and contingencies
Stockholders' Equity
Common stock - $0.00001 par value
50,000,000 shares authorized. 11,821,116
and 114,216 shares issued and outstanding,
respectively 118 1
Additional paid-in capital 178,495 132,589
Deficit accumulated during the development stage (175,261) (150,807)
------------- -------------
Total stockholders' equity 3,352 (18,217)
------------- -------------
Total Liabilities and Stockholders' Equity $ 3,552 $ --
============= =============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
<PAGE>
<TABLE>
<CAPTION>
Donnebrooke Corporation
(a development stage enterprise)
Statements of Operations
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
------------- ------------- ------------- -------------
Expenses
General and administrative expenses 24,454 -- 24,454 --
------------- ------------- ------------- -------------
Net Loss (24,454) -- (24,454) --
Other comprehensive income -- -- -- --
------------- ------------- ------------- -------------
Net Loss $ (24,454) $ -- $ (24,454) $ --
============= ============= ============= =============
Loss per weighted-average
share of common stock
outstanding computed on
net loss - basic and fully diluted nil nil nil nil
=== === === ===
Weighted-average number
of common stock shares
outstanding 11,821,116 112,000 8,337,954 112,000
============= ============= ============= =============
</TABLE>
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
(Unaudited) (Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net loss for the period $ (24,454) $ --
Adjustments to reconcile net loss
to net cash provided by operating
activities
Common stock issued for consulting services 17,806 --
Increase in accounts payable 200 --
------------- -------------
Net cash used in operating activities (6,448) --
------------- -------------
Cash flows from investing activities -- --
------------- -------------
Cash flows from financing activities
Proceeds from sale of common stock 10,000 --
------------- -------------
Net cash provided from financing activities 10,000 --
------------- -------------
Increase in cash 3,552 --
Cash at beginning of period -- --
------------- -------------
Cash at end of period $ 3,552 $ --
============= =============
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ --
============= =============
Income taxes paid (refunded) $ -- $ --
============= =============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
<PAGE>
Donnebrooke Corporation
Notes to Financial Statements
NOTE A - Organization and Description of Business
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
$175,000. Accordingly, 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.
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 the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
6
<PAGE>
Donnebrooke Corporation
Notes to Financial Statements - Continued
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including certificates
of deposit and other highly-liquid investments with maturities of three
months or less, when purchased, to be cash and cash equivalents.
2. Organization costs
------------------
Organization costs were amortized using the straight-line basis.
3. Income taxes
------------
The Company files its own separate federal income tax return and uses the
asset and liability method of accounting for income taxes. Due to a
September 30, 1998 change in control involving in excess of 50.0% of the
outstanding common stock of the Company, the Company has no net operating
loss carryforwards available to offset financial statement or tax return
taxable income in future periods.
4. 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 September 30, 1999 and 1998, the
Company has no outstanding warrants and options issued and outstanding.
NOTE C - 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.
7
<PAGE>
Donnebrooke Corporation
Notes to Financial Statements
NOTE C - Common Stock Transactions - continued
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.
On June 30, 1999, the Company sold 300,000 shares of restricted, unregistered
common stock to an unrelated third party for $10,000 cash.
On July 31, 1999, the Company effected a three for 1 (3 for 1) forward stock
split on all of the then issued and outstanding shares of common stock. The
effect of this action is reflected in the accompanying financial statements as
if the split had occurred on the first day of the earliest period presented.
(Remainder of this page left blank intentionally)
8
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) 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
$175,000 through the date of this filing.
(3) Liquidity
On June 30, 1999, the Company sold 300,000 shares of restricted, unregistered
common stock to an unrelated third party for $10,000 cash. Management believes
that these funds will provide the necessary liquidity to support the Company's
operations for the foreseeable future. Prior to this date, the Company was 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,
when and if necessary, to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
9
<PAGE>
The necessary operating funds requirements for the Company are minimal due to
its dormancy. All necessary funds, through September 30, 1999, 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.
(4) Capital requirements
The Company has no known capital requirements as of the date of this filing.
(5) Year 2000 Considerations
The Year 2000 (Y2K) date change is believed to affect virtually all computers
and organizations. The Company has undertaken a comprehensive review of its
information systems, including personal computers, software and peripheral
devices, and its general communications systems.
The Company has no direct electronic links with any customer or supplier. The
Company has completed its detailed review and the Company believes, as of the
date of this filing, that it will not negatively impacted or be required to
participate in the modification or replacement, if any, of significant portions
of computer hardware or software utilized by the Company's controlling
shareholder which is utilized on the Company's behalf. The Company's controlling
shareholder is of the opinion that any such modifications or replacements, if
any, to its computer hardware and/or software are, or will be, readily
available.
The Company has no known direct Y2K exposures and anticipates that any costs
associated with the Y2K date change compliance will not have a material effect
on its financial position or its results of operations.
There can be no assurance until January 1, 2000, however, that all of the
Company's systems, and the systems of its suppliers, shippers, customers or
other external business partners will function adequately.
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.
(Remainder of this page left blank intentionally)
10
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
On June 30, 1999, the Company sold 300,000 shares of restricted, unregistered
common stock to an unrelated third party for $10,000 cash.
On July 31, 1999, the Company effected a three for 1 (3 for 1) forward stock
split on all of the then issued and outstanding shares of common stock.
Item 3 - Defaults on 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
None
- --------------------------------------------------------------------------------
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
October 18, 1999 /s/ Kevin B. Halter, Jr.
---- -------------------------------------------
Kevin B. Halter, Jr.
President, Chief Executive Officer,
Chief Financial Officer and Director
11
<TABLE> <S> <C>
<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> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 3552
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3552
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3552
<CURRENT-LIABILITIES> 200
<BONDS> 0
0
0
<COMMON> 118
<OTHER-SE> 3234
<TOTAL-LIABILITY-AND-EQUITY> 3552
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 24454
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (24454)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24454)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24454)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
