U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-30365-C
EMERALD CAPITAL INVESTMENTS, INC.
(Name of Small Business Issuer as specified in its charter)
Delaware 36-3693936
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification No.)
330 East Main Street, Barrington, IL 60010
(Address of principal executive offices)
Registrant's telephone no., including area code: (708) 990-0244
N/A
Former name, former address, and former fiscal year, if changed
since last report.
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 .
Common Stock outstanding at August 20, 1996 - 5,808,698 shares of $.001 par
value Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
[PAGE]
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
EMERALD CAPITAL INVESTMENTS, INC.
For the Quarter ended June 30, 1996.
The following financial statements and schedules of the registrant and
its consolidated subsidiaries are submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
Item 1. Financial Statements:
Balance Sheet--June 30, 1996 3
Statements of Operations--for the three months and
nine months ended June 30, 1996 and June 30, 1995 4
Statements of Cash Flows--for the three months and
nine months ended June 30, 1996 and June 30, 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Page
Item 1. Legal Proceedings 9
Item 2. Changes in the Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Results of Votes of Security Holders 9
Item 5. Other Information 9
Item 6(a). Exhibits 9
Item 6(b). Reports on Form 8-K 9
2
[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Balance Sheet
June 30, 1996
(Unaudited)
Assets
Current assets - cash $ 20,360
======
Liabilities and Stockholders' Equity
Current liabilities - accounts payable $ 2,697
Stockholders' equity: -----
Common stock - $.001 par value.
100,000,000 shares authorized;
5,808,698 shares issued and
outstanding, respectively 5,809
Additional paid-in capital 2,600,656
Retained deficit (2,588,802)
-----------
Total stockholders' equity 17,663
------
Total liabilities and stockholders'
equity $ 20,360
======
See accompanying notes to financial statements.
3
[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Cumulative
Amounts Since
December 29,
1995
(Commencement
Three Months Ended Six Months Ended of the
June 30, June 30, Development
1996 1995 1996 1995 Stage)
----------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Revenue $ - - - - -
Selling, general and administrative 5,296 - 5,672 - 5,672
------ ------ ------ ------ ------
Loss from continuing operations (5,296) - (5,672) - (5,672)
Discontinued operations:
Loss from discontinued operations - (229,467) - (676,786) -
Income on disposal of discontinued
operations - - - - -
Loss from discontinued operations - (229,467) - (676,786) -
----- --------- ------ ---------
Net loss $(5,296) (229,467) (5,672) (676,786) (5,672)
======== ========= ======= ========= =======
Net loss per share continuing
operations $(.00) (.00) (.00) (.00) (.00)
Net loss per share discontinued
operations (.00) (.04) (.00) (.13) (.00)
$(.00) (.04) (.00) (.13) (.00)
======== ======= ====== ====== ======
Weighted average number of shares
outstanding 5,808,698 5,396,426 5,808,698 5,370,656 5,808,698
========= ========= ========= ========= ===========
</TABLE>
See accompanying notes to financial statements.
4
[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
Cumulative
Amounts Since
December 29,
1995
(Commencement
Six Months Ended of the
June 30, Development
1996 1995 Stage)
----------------- -----------
Cash flows from operating activities:
Net loss $ (5,672) (676,786) (5,672)
Adjustment to reconcile net loss
to net cash used in operating
activities:
Loss on discontinued operations - 676,786 -
Decrease in accounts payable (3,968) - (3,968)
------- ------- --------
Net cash used in
operating activities (9,640) - (9,640)
------- ------- --------
Cash flows from investing activities -
Payments on receivable 30,000 - 30,000
Cash flows from financing activities - - - -
------- ------- -------
Net increase in cash 20,360 - 20,360
Cash, beginning of period - - -
------- ------- -------
Cash, end of period $20,360 - 20,360
======== ======= ========
See accompanying notes to financial statements.
5
[PAGE]
EMERALD CAPITAL INVESTMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
(1) The unaudited financial statements include the accounts of Emerald
Capital, Inc., and subsidiary and include all adjustments (consisting
of normal recurring items) which are, in the opinion of management,
necessary to present fairly the financial position as of June 30, 1996
and the results of operations for the three and six months ended June
30, 1996 and 1995, cash flows for the six months ended June 30, 1996
and 1995 and cumulative amounts since inception of the development
stage through June 30, 1996. The results of operations for the three
and six months ended June 30, 1996 are not necessarily indicative of
the results to be expected for the entire year.
(2) Income (loss) per common share is based on the weighted average number
of shares outstanding during the period.
6
[PAGE]
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Prior to December 29, 1995, the Company had been involved in the
business of recycling used tires and designing, manufacturing and marketing
shredding equipment. The Company's tire recycling and shredding equipment
operations were unsuccessful and the Company generated significant losses
during 1994 and 1995. During 1995 the Company funded its operations with
loans from a commercial bank from management and other individuals. By
November 1995, the Board of Directors had concluded that the Company did not
have the capital, or the ability to obtain capital necessary to continue its
current operations. The Company's Board of Directors initiated efforts to
sell the Company's WRTI and CTR operations. The Company was able to interest
one of its directors and several other individuals in purchasing WRTI and CTR.
Effective December 29, 1995, the Company sold all of its shares of
WRTI and CTR for $30,000. As a result of such sale, the Company's total
liabilities, on a consolidated basis, decreased from $1,758,308 to $6,665.
The Company currently has no active business operations and is seeking
investments in other business entities.
The financial statements attached hereto exclude WRTI and CTR for both
1996 and 1995 inasmuch as they are discontinued operations.
As a result of the matters described above, the Company's historical
financial statements and this Management's Discussion and Analysis are not
necessarily reflective of the Company's future operations or financial
condition.
Financial Condition
Total assets at June 30, 1996 were $20,360, all of which was cash.
This reflects the sale of WRTI and CTR on December 29, 1995. On June 30,
1995, the Company's total assets on a consolidated basis which included the
assets of WRTI and CTR, was $1,246,103. On June 30, 1996, the Company and
liabilities of $2,697. All of its previously liabilities, which had been
reflected on its consolidated financial statements, were paid by or assumed by
the Buyers of WRTI and CTR. Accordingly, at June 30, 1996, the Company's only
assets consisted of $20,360 in cash. The Company intends to use such cash to
pay for various filing fees and professional fees relating to its reporting
obligations and to fund the costs which may arise from seeking new business
opportunities.
7
[PAGE]
It is likely that the Company will be required to raise additional
capital in order to attract and potential acquisition partner but there can be
no assurance that the Company will be able to raise any additional capital. It
is also likely that any future acquisition will be made through the issuance
of shares of the Company's common stock which will result in the dilution of
the percentage ownership of the current shareholders.
Results of Operations
As stated above, the Company sold WRTI and CTR on December 29, 1995
and has treated them as discontinued operations. Therefore, the revenues of
WRTI and CTR have been excluded from the Statement of Operations which is
included in the financial statements attached hereto. Therefore, excluding the
operations of WRTI and CTR, the Company had no revenues during 1996 or 1995.
The Company's total loss for the three months and six months ended
June 30, 1996 was $5,296.
It is unlikely that the Company will be able to generate any revenues
unless and until it acquires an operating company, of which there can be no
assurance.
Plan of Operation
Commencing in the fourth quarter of 1995, the Company's Plan of
Operation was essentially the plan to sell its WRTI and CTR operation.
Effective December 29, 1995 these operations were sold. The Company's current
plan of operation is to acquire another operating company. It is likely that
any acquisition will be a "reverse merger" acquisition whereby the Company
acquires a larger company by issuing shares of the Company's common stock to
the shareholders of the larger company. Although the Company would be the
surviving or parent company from a corporate law standpoint, the shareholders
of the larger company would be the controlling shareholders of the Company and
the larger company would be treated as the survivor or parent company from an
accounting point of view. It can be expected that any company which may
desire to be acquired by the Company will do so as method of potentially
becoming a public company more quickly and less expensively than if such
company undertook its own public offering. The Company has not identified any
potential acquisition target and there can be no assurance that it will be
able to acquire any other company. Furthermore, even if the Company is able
to acquire another company, there can be no assurance that the Company will
ever operate at a profit.
8
[PAGE]
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the Company's
management, the Company is not a party to any legal proceeding
or litigation.
Item 2. Changes in the Rights of the Company's Security Holders. None.
Item 3. Defaults by the Company on its Senior Securities. None.
Item 4. Submission of Matters to Vote of Security Holders. No matter
was submitted to a vote of the Company's security holders for
the quarter ended June 30, 1996.
Item 5. Other Information.
Item 6(a). Exhibits. None.
Item 6(b). Reports on Form 8-K. None filed.
9
[PAGE]
SIGNATURE
In accordance with the requirements of the Exchange Act, the Company has
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: August 20, 1996 EMERALD CAPITAL INVESTMENTS, INC.
By /s/ Frank H. Ross, III
--------------------------------
Frank H. Ross, III
President/Principal Executive Officer
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 20,360
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,360
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,360
<CURRENT-LIABILITIES> 2,697
<BONDS> 0
<COMMON> 17,663
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,360
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,296
<LOSS-PROVISION> 5,296
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,296)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
