SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended June 30, 1998 Commission File No. 33-30476-D
RENEGADE VENTURE (NEV.) CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 84-1108499
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
90 Madison Street, Suite 707
Denver, Colorado 80206
(Address of Principal Executive Offices) (Zip Code)
(303) 355-3000
(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 such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
at least the past 90 days.
Yes _____ No __X__
The number of shares outstanding of each of the Registrant's classes of common
equity, as of June 30, 1998 are as follows:
Class of Securities Shares Outstanding
----------------------------- ------------------
Common Stock, $.001 par value 320,000
<PAGE>
INDEX
Page of
Report
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets:
As of June 30, 1998 (Unaudited) and December 31, 1997......... 3
Statements of Operations (Unaudited):
For the six months ended June 30, 1998
and 1997 and Cumulative from inception
(February 13, 1989) through June 30, 1998..................... 4
Statements of Cash Flows (Unaudited):
For the six months ended June 30, 1998 and 1997
and Cumulative from inception (February 13, 1989)
through June 30, 1998......................................... 5
Notes to Financial Statements (Unaudited)..................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation..... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................. 9
Signatures.................................................... 9
2
<PAGE>
RENEGADE VENTURE (NEV.) CORPORATION
(A Development Stage Company)
Balance Sheets
(Unaudited)
June 30, Dec. 31,
1998 1997
---------- ----------
ASSETS
CURRENT ASSETS
Cash 14,058 17,628
--------- ---------
Total Current Assets 14,058 17,628
--------- ---------
TOTAL ASSETS 14,058 17,628
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 39,804 37,804
--------- ---------
Total Liabilities 39,804 37,804
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued or outstanding - -
Common stock, $.001 par value;
50,000,000 shares authorized,
320,000 shares issued and
outstanding 320 320
Additional paid-in capital 62,805 62,805
Deficit accumulated during the
development stage (88,871) (83,301)
--------- ---------
Total Stockholders' Equity (25,746) (20,176)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 14,058 17,628
========= =========
See accompanying notes to financial statements.
3
<PAGE>
RENEGADE VENTURE (NEV.) CORPORATION
(A Development Stage Company)
Statements of Operations
(Unaudited)
Cumulative from
inception
(Feb. 13, 1989)
For The Six Months Ended, through
June 30 June 30, June 30,
1998 1997 1998
---- ---- ----
Revenues 0 0 0
------- ------- -------
Costs and Expenses:
Legal and accounting services 5,055 2,466 66,253
Stock transfer and promotion 15 365 23,767
Office and postage 500 1,073 5,145
Amortization 0 0 1,760
------- ------- -------
Total Expenses 5,570 3,904 96,925
------- ------- -------
Loss from operations (5,570) (3,904) (96,925)
------- ------- -------
Other Income
Interest income 0 0 8,054
------- ------- -------
Net Loss Incurred during
Development Stage (5,570) (3,904) (88,871)
======= ======= =======
Net Loss per common share ($0.02) ($0.01) ($0.28)
======= ======= =======
Weighted average shares outstanding 320,000 320,000 320,000
======= ======= =======
Dividends declared per common
share - - -
------- ------- -------
See accompanying notes to financial statements.
4
<PAGE>
RENEGADE VENTURE (NEV.) CORPORATION
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Cumulative from
inception
(Feb. 13, 1989)
For The Six Months Ended, through
June 30 June 30, June 30,
1998 1997 1998
---- ---- ----
Cash flow operating activities
Net loss (5,570) (3,904) (88,871)
Adjustments to reconcile net
loss to net cash used by
operating activities: 0 0
Amortization 0 0 1,760
Increase (decrease) in
accounts payable 2,000 0 39,804
------- ------- -------
Net cash provided by (used In)
operating activities (3,570) (3,904) (47,307)
Cash flow from investing activities
Organization costs incurred 0 0 (1,760)
------- ------- -------
Cash flows from financing activities
Net proceeds from issuance of
common stock 0 0 63,125
------- ------- -------
Net increase (decrease) in cash (3,570) (3,904) 14,058
------- ------- -------
Cash and cash equivalents at
beg. period 17,628 27,528 0
------- ------- -------
Cash and cash equivalents at
end of period 14,058 23,624 14,058
======= ======= =======
See accompanying notes to financial statements.
5
<PAGE>
RENEGADE VENTURE (NEV.) CORPORATION
(A Development Stage Company)
Notes To Financial Statements
June 30, 1998
1. Summary of Significant Accounting Policies
Renegade Venture Corporation (the "Company") was incorporated on February
13, 1989. The Company was formed as a Blank Check Company to obtain funding
from a public offering in order to provide a vehicle to acquire or engage
in business opportunities that management believes have potential for
profitability. Through June 30,1998 the Company had been seeking a viable
prospective opportunity and had not engaged in any other activities.
During 1997, the Company was redomiciled as a Nevada corporation through a
merger with a newly formed Nevada corporation,Renegade Venture (Nev.)
Corporation, a wholly-owned subsidiary of Renegade Venture Corporation.
The financial statements of the Company have been prepared on the accrual
basis. Following is a summary of significant accounting policies.
Development stage - The Company is in the development stage, as defined in
the Statement of Financial Accounting Standards No. 7, as revenues have not
yet been generated from planned operations.
The Company intends to continue its efforts to find a suitable merger
candidate in accordance with its original operating plan.
Cash and cash equivalents - Cash held by trustee, certificates of deposit
and checking accounts are considered cash and cash equivalents for purposes
of the statement of cash flows.
Organization costs - Certain costs incurred to set up the Company were
capitalized and amortized over five years. These costs are fully amortized.
Income taxes - The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109 ("FASB No.109"). Temporary
differences are differences between the tax basis of assets and liabilities
and their reported amounts in the financial statements that will result in
taxable or deductible amounts in future years. The Company's temporary
difference consists of net operating loss carryforwards.
2. Common Stock Transactions
During 1989, the Company completed a public offering. The Company sold
5,000,000 units consisting of 2 shares of $.0001 par value common stock and
one Class A common stock purchase warrant at $.02 per unit. The Class A
warrants entitled the holder to purchase one share of common stock at $.02
per share, and receive one Class B warrant which entitled the holder to
purchase one share of common stock at $.04 per share. In addition, the
underwriter was issued warrants which entitled them to purchase 500,000 of
the public offering units discussed above with an exercise price of $.024
per unit for a flat fee of $50. A total of $100,050 was raised in this
initial public offering, less $37,425 in offering costs. Prior to the
initial public offering, 22,000,000 common shares were issued to the
founder and other insiders for their efforts in setting up the Company.
During 1989, an additional 7,500,000 Class A warrants were issued to
non-affiliated individuals for $500. All warrants, including the Class A
and B and Underwriter warrants, have since expired unexercised.
No additional shares have been issued since this initial public offering
described above.
6
<PAGE>
On April 9, 1994, the majority shareholder and founder of the Company sold
90% of his interest to an unaffiliated group. At that time, the former
officers and directors resigned and control of the company shifted to the
new majority shareholders.
Effective August 9, 1996 the Company's articles of incorporation were
amended, making several changes affecting common stock. A reverse-stock
split was approved, whereby each 100 shares of original common stock were
changed into one share of common stock. This action reduced the number of
outstanding common shares from 3,200,000 to 320,000. What was reported as
"Additional paid-in capital" totalling $59,925, has been reclassified as
common stock on the accompanying balance sheet.
The number of authorized common shares was increased after the reverse
split from 32,000,000 to 50,000,000. Finally, the number of authorized
preferred shares was changed to 5,000,000. No preferred shares have ever
been issued by the Company. Upon part of the 1997 redomiciliation to Nevada
(see below), statutory par value of $.001 for both common and preferred
stock was established.
During 1996, the Company's shareholders approved the 1994 Compensatory
Stock Option Plan. The plan provides for options to purchase up to
2,000,000 shares of common stock, after the reverse-stock split discussed
above. The options give the right to purchase common stock at "fair market
value" as determined by the Board of Directors at the date of issuance for
a period of up to five years.
During 1996, the Company's shareholders approved the 1994 Employee Stock
Compensation Plan. This plan allows for up to 1,000,000 shares of common
stock, after the reverse- stock split discussed above, to be issued to key
employees, officers, directors and certain other persons affiliated with
the Company as compensation. As part of the 1997 redomiciliation to Nevada
(see below), the 1994 plans described above were adopted and renamed the
1997 Compensatory Stock Option Plan and the 1997 Employee Stock
Compensation Plan by the Nevada corporation. As of June 30, 1998, no stock
options under the 1997 Compensatory Stock Option plan, nor have any common
shares of stock under the Employee Stock Compensatory Plan been issued.
During 1997, the company redomiciled to the state of Nevada by merging with
a newly formed Nevada corporation, Renegade Venture (Nev.) Corporation.
Each share of the 320,000 post-reverse split shares of Renegade Venture
Corporation was converted into one fully paid, non-assessable share of the
Nevada corporation.
3. Income Taxes
Effective January 1, 1993, the Company adopted FASB No. 109, "Accounting
For Income Taxes". Under the provisions of FASB No. 109, the Company
elected not to restate prior years and determined that the cumulative
effect of this accounting change was immaterial. Additionally, adopting
this change did not have a material effect on the operating results for the
year ended December 31, 1993.
The difference between the tax basis of assets and liabilities gives rise
to a net deferred tax asset of approximately $18,500 consisting of the tax
effects of net operating loss carryforwards. As of June 30, 1998, a
valuation allowance equal to the net deferred tax asset recognized has been
recorded, as it was determined that the deferred tax asset may never be
realized.
At June 30, 1998, the Company has a net operating loss carryforward of
approximately $88,871 which expires between the years ended December 31,
2005 and 2013.
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
BACKGROUND. Renegade Venture Corporation was incorporated in the state of
Colorado on February 13, 1989. On September 22, 1997, it was redomiciled to the
state of Nevada by merging into its wholly owned subsidiary Renegade Venture
(Nev.) Corporation ("Company"), a Nevada corporation, which now is the name of
the Company. The merger effected a 1:1 stock exchange, where the 320,000
outstanding shares of common stock, no par value, of Renegade Venture
Corporation were exchanged for 320,000 shares of common stock, $.001 par value,
of the Company.
The Company is in the development stage in accordance with Financial
Accounting Standards Board Standard No. 7. The Company has not been operational,
other than occasionally searching for a business or venture to acquire, as
described below, or had revenues other than interest income since its inception.
On May 4, 1990, the Company completed a small public offering of its
securities made pursuant to a registration statement of Form S-18, selling
5,000,000 of 7,500,000 units offered, at the price of $.02 per unit. In this
offering the Company realized net proceeds of $61,476 on gross proceeds of
$100,000 raised in the offering. Each unit sold consisted of TWO shares of
common stock of the Company, $.0001 par value, and ONE Class A Common Stock
Purchase Warrant, exercisable until December 7, 1991, at a price of $.02 to
purchase one share of common stock and one Class B Common Stock Purchase
Warrant. All of the Class A and Class B warrants expired without having been
exercised.
FORWARD LOOKING STATEMENTS. This report contains certain forward-looking
statements and information relating to the Company that are based on the beliefs
of its management as well as assumptions made by and information currently
available to its management. When used in this report, the words "anticipate",
"believe", "estimate", "expect", "intend", "plan" and similar expressions, as
they relate to the Company or its management, are intended to identify
forward-looking statements. These statements reflect management's current view
of the company with respect to future events and are subject to certain risks,
uncertainties and assumptions. Should any of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this report as anticipated,
estimated or expected. The Company's realization of its business aims will
depend in the near future principally on the successful acquisition of
operations or origination of a business as discussed below.
BUSINESS OF THE COMPANY. The Company's business is to either acquire a
small to medium-size business (or its assets) actively engaged in a business
generating revenues or having immediate prospects of generating revenues, or to
originate a business. Due to its current lack of cash, the Company intends to
acquire a business by issuing shares of the Company's stock in a merger or stock
exchange. Originating a business, on the other hand, would require sufficient
cash to launch the business, and the origination of a business may involve
starting a business from scratch or may take another form such as a joint
venture, partnership or other association with other individuals or companies.
In order to avoid becoming subject to regulation under the Investment Company
Act of 1940, as amended, the Company does not intend to enter into any
transaction involving the purchase of another corporation's stock unless the
Company can acquire at least a majority interest in that corporation.
The Company has not identified any industry, segment within an industry or
type of business, nor geographic area, in which it will concentrate its efforts,
and any assets or interest acquired or business originated may be in any
industry or location, anywhere in the world. In regard to acquisitions, the
Company will give preference to profitable companies or ventures with a
significant asset base sufficient to support a listing on a national securities
exchange or quotation on the NASDAQ Small Cap Market. There is no assurance that
the Company will be successful in acquiring or originating any business. The
Company has no operations or source of revenues and has no assets other than a
nominal amount of cash.
RESULTS OF OPERATIONS. During the fiscal quarter ended June 30, 1998 (the
second quarter of the year), the Company incurred a net loss of $2,340 as
compared to a net loss of $751 for the quarter ended June 30, 1997. Expenses for
the second quarter related primarily to accounting fees, legal fees and other
costs incurred in regard to the Company's SEC filings.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES. The Company had $14,058 cash on hand at
the end of the second quarter. The Company has, since inception, accumulated a
deficit (net loss) of $88,871. The Company had no other liquid assets, nor any
current plans to raise capital. Whether the Company ultimately becomes a going
concern depends upon its success in finding and acquiring a suitable private
business and the success of that acquired business. At this time, the Company
has no commitment for any capital expenditure and foresees none. Offices are
provided without charge to the Company. However, the Company will incur routine
fees and expenses incident to filing of periodic reports with the Securities and
Exchange Commission, and it will incur fees and expenses in the event it makes
or attempts to make an acquisition. As a practical matter, the Company expects
no significant operating costs other than professional fees payable to attorneys
and accountants.
In regard to a proposed acquisition, the Company anticipates requiring the
target company to deposit with the Company a retainer which the Company can use
to defray such professional fees and costs. In this way, the Company could avoid
the need to raise funds for such expenses or becoming indebted to such
professionals. Moreover, investigation of business ventures for potential
acquisition will involve some costs, at the least postage and long-distance
telephone charges. Management hopes, once a candidate business venture is deemed
to be appealing, to likewise secure a deposit from the business venture to
defray expenses of further investigation, such as air travel and lodging
expenses. An otherwise desirable business venture may, however, decline to post
such a deposit.
The Company has no credit available to it and is unable to borrow money.
Management does not anticipate raising funds through the sale of securities or
otherwise, and it is unlikely that significant funds could be raised in a
securities offering, in any event. This inability to raise funds could
negatively affect the Company's realization of its business purpose.
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBITS. Exhibit 27 - Financial Data Schedule.
(b) REPORTS ON FORM 8-K. None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report on Form 10-QSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: August 10, 1998
RENEGADE VENTURE (NEV.) CORPORATION
By /s/ Randy J. Sasaki
----------------------------------------
Randy J. Sasaki, Chief Executive Officer
and Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from form 10-QSB
for this period ended June 30, 1998 and is qualified in its entirety by
reference to such form 10-QSB.
</LEGEND>
<CIK> 0000854171
<NAME> Renegade Venture Corporation
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