U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-30365-C
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EMERALD CAPITAL INVESTMENTS, INC.
(Name of Small Business Issuer as specified in its charter)
Delaware 36-3693936
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
330 East Main Street, Suite 206 Barrington, IL 60010
(Address of principal executive offices)
Registrant's telephone no., including area code: (847) 382-1100
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 X No
.
Common Stock outstanding at November 12, 1998 - 6,608,698 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 September 30, 1998
The following financial statements and schedules of the registrant are
submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
Item 1Financial Statements:
Balance Sheet--September 30, 1998 3
Statements of Cash Flows--for the nine months
ended September 30, 1998 and September 30, 1997 4
Statements of Operations--for three and nine months
ended September 30, 1998 and September 30, 1997 5
Notes to Financial Statements 7
Item 2Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
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
September 30, 1998
(Unaudited)
Assets
Current assets - cash $701
Liabilities and Stockholders' Equity
Current liabilities
Stockholders' equity: $0
Common Stock - $.001 par value.
100,000,000 shares authorized
6,608,698 shares issued and outstanding, respectively 6,609
Additional paid-in capital 2,607,856
Retained deficit (2,613,764)
Total stockholders' equity: 701
Total liabilities and stockholder$701quity: $701
See accompanying Notes to Financial Statements.
3
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Cash Flows
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Nine months Ended
September 30
Cumulative
1998 1997 Amounts
------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss (6,572) (5,074) (30,634)
Decrease in accounts receivable - - 30,000
Decrease in accounts payable (8,000) - (6,665)
------------------------------------------
Net cash used in
operating activities (6,572) (5,074) (7,299)
------------------------------------------
Cash flows from investing activities - - -
Cash flows from financing activities 8,000 - 8,000
------------------------------------------
Net (decrease) increase in cash - (5,074) 701
Cash, beginning of period 7,273 12,737 -
------------------------------------------
Cash, end of period $ 701 $ 7,663 $ 701
==========================================
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Operations
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Nine months Ended
September 30
Cumulative
1998 1997 Amounts
------------------------------------------
<S> <C> <C> <C>
Revenue - -
Selling, general and administrative 6,572 5,074 30,634
-------------------------------------------
Net loss (6,572) (5,074) (30,634)
===========================================
Net loss per share $(.00) $(.00) $(.00)
===========================================
Weighted average number of shares
outstanding 6,608,698 6,608,698 6,608,698
===========================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Operations
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Three months Ended
September 30
Cumulative
1998 1997 Amounts
---------------------------------------------
<S> <C> <C> <C>
Revenue - -
Selling, general and administrative 866 1,386 30,634
---------------------------------------------
Net loss (866) (1,386) (30,634)
=============================================
Net loss per share $(.00) $(.00) $(.00)
=============================================
Weighted average number of shares
outstanding 6,608,698 6,608,698 6,608,698
=============================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Notes for Financial Statements
(1) The unaudited financial statements include the accounts of Emerald
Capital Investments, Inc., 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 September
30, 1998 and the results of operations for the nine months and three
months ended September 30, 1998 and 1997, cash flows for the nine
months ended September 30, 1998 and 1997 and cumulative amounts
since inception of the development stage through September 30, 1998.
The results of operations for the nine months and three months ended
September 30, 1998 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.
7
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company currently has no operations. 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 and the payment and or assumption of liabilities. As a
result of such sale, the Company's total liabilities, on a consolidated basis,
decreased from $1,758,308 to $6,665.
On May 7, 1998, the Company entered into an Agreement and Plan of Merger
to acquire American Polymer Corporation, a Utah Corporation. The Merger was
subject to several conditions including the Company raising additional capital.
In November 1998, the Company and American Polymer Corporation agreed to
terminate the Merger Agreement due to the failure of the Company to raise
additional capital as set forth in the Merger Agreement. The Company is now
seeking other acquisitions and mergers.
Financial Condition
Total assets at September 30, 1998 were $701, all of which was cash. At
September 30, 1998, the Company had no liabilities. 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.
It is likely that the Company will be required to raise additional capital
in order to attract any 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
The Company has generated no revenues since the sale of the WRTI/CTR
operations and assets. The Company will not generate any revenues, if ever,
until and unless it merges with an operating company or raises additional
capital for its own operations. There can be no assurance that either of such
events will happen.
8
<PAGE>
The Company had a net loss of $6,572 for the nine months ended September
30, 1998 compared to $5,074 for the nine months ended September 30, 1997. The
Company had a net loss of $866 for the three months ended September 30, 1998
compared to $1,386 for the three months ended September 30, 1997.
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 a method of potentially becoming a public company more quickly and less
expensively than if such company undertook its own public offering.
The Company has terminated its Merger Agreement with American Polymer
Corporation due to the failure of the Company to obtained additional capital as
required by the Merger Agreement. The Company will now look for additional
merger or acquisition candidates.
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 September 30, 1998.
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: November 12, 1998 EMERALD CAPITAL INVESTMENTS, INC.
By /s/ Frank H. Ross, III
Frank H. Ross, III
President/Principal Executive Officer
By /s/ Douglas P. Morris
Douglas P. Morris
Principal Financial Office
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTS FROM
EMERALD CAPITAL INVESTMENTS, INC.'S FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> 701
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-1-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 701
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 701
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,614,465
<OTHER-SE> 2,613,764
<TOTAL-LIABILITY-AND-EQUITY> 701
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 866
<LOSS-PROVISION> 866
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (866)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
