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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 Page 1 of 12
Sequentially
FORM 10-Q Numbered Document
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File Number
June 30, 1997 33-26531-LA
COMMERCIAL LABOR MANAGEMENT, INC.
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(Exact Name of Registrant as specified in its Charter)
Nevada 88-241079
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(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
208 Mira Mar Avenue, Suite One, Long Beach, California 90703
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(Address of Principal Executive Offices) (Zip Code)
(562) 987-5443
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(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) 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 (ii) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock, as for the latest practicable date.
Common Stock, $.05 par value 12,864,084
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Title of Class Number of Shares Outstanding
at June 30, 1997
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FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
COMMERCIAL LABOR MANAGEMENT, INC.
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COMMERCIAL LABOR MANAGEMENT, INC.
BALANCE SHEET
JUNE 30, 1997
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ASSETS
CURRENT ASSETS $0
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TOTAL CURRENT ASSETS 0
OTHER ASSETS
Tax benefit 202,326
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TOTAL OTHER ASSETS 202,326
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TOTAL ASSETS $202,326
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
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COMMERCIAL LABOR MANAGEMENT, INC.
BALANCE SHEET
JUNE 30, 1997
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $25,875
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LIABILITIES 0
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TOTAL LIABILITIES 25,875
STOCKHOLDERS' EQUITY:
Common stock, $.05 par value, 50,000,000 shares
authorized,12,864,084 issued and outstanding 231,813
Paid-in Capital 572,506
Accumulated deficit (627,868)
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TOTAL STOCKHOLDER'S EQUITY 176,451
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $202,326
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
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COMMERCIAL LABOR MANAGEMENT, INC.
STATEMENT OF INCOME
JUNE 30, 1997
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NET INCOME (LOSS) $0
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Weighted Average Number of
Shares Outstanding 10,811,998
Income (Loss) Per Share
of Common Stock 0.00
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
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COMMERCIAL LABOR MANAGEMENT, INC.
STATEMENT OF CASH FLOW
JUNE 30, 1997
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CASH FLOWS FROM OPERATING ACTIVITIES
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NET CASH FROM OPERATING ACTIVITIES 0
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CASH FLOWS USED IN INVESTING ACTIVITIES
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NET CASH FROM INVESTING ACTIVITIES 0
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CASH FLOWS FROM FINANCING ACTIVITIES
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NET CASH FROM FINANCING ACTIVITY 0
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NET INCREASE (DECREASE) IN CASH 0
CASH AT BEGINNING OF YEAR 0
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CASH AT END OF YEAR $0
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
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COMMERCIAL LABOR MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM DECEMBER 31, 1993 TO JUNE 30, 1997
<TABLE>
<CAPTION>
Common Stock Preferred Stock
----------------------------------------------- Additional Treasury
Number Number Paid-in Stock Accumulated
of Shares Amount of Shares Amount Capital & Adj's Deficit Total
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE-DEC. 31, 1993 800,000 40,000 219,192 (171,685) 105,287 364,479
1994 ACTIVITY
Excercise of warrants 50,000
Two-for-one split on 3/1/94 850,000
Warrants exercised 197,867 11,813 473,340 171,685 656,838
Adjust stock to reflect the 1993
SEMAC debt exchange (395,141)
Sale of operations (619,200) 171,685
Loss for the year ended 12/31/94 (590,767) (590,767)
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BALANCE-DEC. 31, 1994 883,526 $51,813 $864,217 0 ($485,480) $430,550
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1995 ACTIVITY
Three-for-one reverse split 3/20 (589,018)
1995 Net Transactions 8,970,076
Issuance of Preferred Stock 180,000 180,000 180,000
Loss for the year ended 12/31/95 (6,513) (6,513)
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BALANCE - DEC. 31, 1995 9,264,584 $51,813 180,000 $180,000 $864,217 0 ($491,993) $604,037
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1996 ACTIVITY
Loss for the year ended 12/31/96 (135,875) (135,875)
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BALANCE - DEC. 31, 1996 9,264,584 $51,813 180,000 $180,000 $864,217 0 ($627,868) $468,162
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1997 ACTIVITY
Cancellation of land transaction (291,711) (291,711)
General cancellations (2,603,548)
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BALANCE - MARCH 31, 1997 6,661,036 $51,813 180,000 $180,000 $572,506 0 ($627,868) $176,451
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Cancellations (4,425,000)
Issuances/Conversions 10,628,048 $180,000 180,000 $180,000 0
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BALANCE - JUNE 30, 1997 12,864,084 $231,813 0 $0 $572,506 0 ($627,868) $176,451
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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COMMERCIAL LABOR MANAGEMENT
NOTES TO THE FINANCIAL STATEMENT
JUNE 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL:
Commercial Labor Management, Inc. (formerly XL Corp.) is a Nevada
Corporation (the "Company") was organized October 19, 1988.
The Company was originally incorporated in Nevada under the Tokyo Raiders
on October 19, 1988. In 1990, the Company acquired certain rights to a
pizza franchise and changed its name to Club USPN, Inc. In June of 1993,
the Company acquired Sono International, Inc., but those operations were
discontinued and the Shares of Sono were sold to the original
shareholders of Sono. In March of 1995 the Board approved the merger
with Commercial Labor Management which was handled as a reverse merger,
and also approved a name change to Commercial Labor Management. However,
that merger was rescinded and never completed. The Company is currently
seeking other potential mergers or acquisitions.
INCOME TAX REPORTING:
The Company files a corporate tax return in the U.S.
EARNINGS PER SHARE:
The calculations of earnings per share was determined by dividing the net
income or loss by the computed weighted average number of common shares
outstanding during the applicable period. For 1996 the shares outstanding
are 9,264,584. For 1997 the calculation is as follows: 9,264,584 shares
outstanding for 7 weeks, 6,661,036 was outstanding for 9 weeks, 1,941,528
for 1 week and 12,864,084 for approximately 9 weeks, equals an average of
10,811,998.
INCOME TAXES:
In December 1992 the Financial Accounting Standards Board issued Statement
of Accounting Standards Number 109, "Accounting for Income Taxes"
(FASB 109). Adoption of FASB 109 is required for fiscal years beginning
after December 15, 1992. The Company follows the requirements set forth in
FASB 109.
2. PAID IN CAPITAL:
Paid in capital is made up in part by contributions of office furniture &
equipment, manufacturing equipment, trade receivable, and accounts payable
in exchange for common stock. Common stock was issued to Shareholder's of
record in exchange for these net assets. Also, in the forth quarter of
1994 the Company issued some common stock to individuals to whom money was
owed for professional services rendered, prior to the sale-back of
9/30/94.
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COMMERCIAL LABOR MANAGEMENT
NOTES TO THE FINANCIAL STATEMENT
JUNE 30, 1997
3. CAPITAL STOCK
PREFERRED CONVERTIBLE STOCK
Each share of Series A Convertible Preferred Stock is convertible, at
certain times or on the occurrence of certain events, into shares of
Company Common Stock valued at 70% of the Market Place. The Company
authorized 1,000 shares and there were 180 shares issued and outstanding as
of June 30, 1997.
COMMON STOCK
The authorized capital stock of the company consists of Common Stock.
Authorized shares of stock at September 30, 1995 were 15,000,000 and
increased to 50,000,000 shares in April of 1997 at $.05 par value;
9,264,584 shares were outstanding as of December 31, 1996; and 12,864,084
shares were outstanding as of June 30, 1997.
4. TAX BENEFIT
The Company has a loss carryforward in the amount of $821,659 available to
offset future taxable income. These losses expire as they offset income or
can be carryforward for a maximum of 15 years. The Company believes it will
use the credit before it expires. However, no estimates of future income
are available so the benefit is reflected as a long-term asset.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
BACKGROUND
During the fiscal quarter ended June 30, 1997, management intensified
its work to update its public reports to the Securities and Exchange
Commission and to find an operating business to acquire or with which
to enter into a business combination. There is no assurance that the
Company will be able to make a business acquisition in the future.
RESULTS OF OPERATIONS
The Company did not incur operating expenses or earn revenues during
the fiscal quarter ended June 30, 1997. The Company does not have the
funds to pay any of its accounts payable at this time. Services for
which payment has been made by the issuance of common stock in the
Company have not been recorded as an expense because the Company's
stock is presently deemed to have no value. Accounts payable to the
independent certified public accounting firm will only be paid in cash
if and when cash is available.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a working capital deficit of $25,875 as of June 30,
1997, comprised of accounts payable for accounting and legal services
rendered for the Company. In June 1997, the holders of 180 shares of
the Company's issued and outstanding Series A Convertible Preferred
Stock converted into a total of 6,800,000 shares of the Company's
common stock. The Company issued other shares of its common stock for
services rendered, including a total of 125,000 shares to Edward L.
Torres and 2,000,000 shares to Mark French, the executive officers and
directors of the Company. A total of 2,500,000 outstanding stock
options to purchase common stock of the Company were cancelled due to
the failure of the Company to receive any consideration for their
original grant. Those stock options were never exercised by their
holders. The Company plans to propose a one for 20 reverse split of
its common stock to the shareholders in the near future. In June 1997
the Company conveyed its land to the holder of the first mortgage
encumbering the land in exchange for a complete release from the
mortgage debt. The Company now has no tangible assets and total
liabilities of $25,875. The Company presently has no operating
businesses and no sources of revenue, capital or financing. If the
Company identifies a business to acquire and needs cash to accomplish
the acquisition, then it will have to issue stock or incur borrowings
in order to obtain such funds. There is no assurance that the Company
will be able to obtain additional funding, if required. There is no
assurance that the Company will be able to acquire an operating
business.
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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 MATTER TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: July 15, 1997 By:/s/ Edward L. Torres
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President and Chief Financial Officer
(chief financial officer and accounting
officer and duly authorized officer)
Date: July 15, 1997 By:/s/ Mark French
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Secretary (corporate secretary and duly
authorized officer)
<TABLE> <S> <C>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 202,326
<CURRENT-LIABILITIES> 25,875
<BONDS> 0
0
0
<COMMON> 231,813
<OTHER-SE> (55,362)
<TOTAL-LIABILITY-AND-EQUITY> 202,326
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
