UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission File No. 33-55254-01
ARROW MANAGEMENT, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 87-0467339
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1800 E. SAHARA, SUITE 107
LAS VEGAS, NEVADA 89104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 485-7775
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. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of November, 1999
$.001 PAR VALUE CLASS A COMMON STOCK 5,580,700 SHARES
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF REPRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and therefore, do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows and stockholders' equity in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the quarter
ended September 30, 1999, are not necessarily indicative of the results that can
be expected for the year ending December 31, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Company had net income of $25,346 for the nine month period ended
September 30, 1999, which includes interest income of $15,842, profit from the
sale of two land parcels of $19,614, and government subsidy of $1,284, less
general and administrative expenses of $11,394; as compared to the nine month
period ended September 30, 1998 net income of $25,355 which includes interest
income of $27,965 and government subsidy of $1,337, less general and
administrative expenses of $3,947.
Liquidity and Capital Resources
Net current assets at September 30, 1999 were $801,285 as compared to
net current assets at December 31, 1998 of $756,333. The increase in net current
assets of $44,952 was due to an increase in cash and notes receivable from the
sale of two parcels of land.
The Company is not now, nor has it at any time, been engaged in any
regular business operations. Its activity has consisted of isolated transactions
in parcels of real estate, most of which have now been sold, and acquisition and
sale of securities, which have now also been sold. The Company presently is not
engaging in any significant or regular ongoing costs of operations or debt. It
can be said that the Company is relatively liquid under these circumstances.
However, in the event a business opportunity should become available and the
Company elects to embark on such, there is no assurance the funds of the Company
would be sufficient for such new endeavor. The Company has made no material
commitments for capital expenditures. Until the Company identifies a particular
business opportunity it wishes to pursue, it intends to continue to monitor its
investments and keep its liquid assets invested at reasonable interest rates.
Management is aware of the worldwide concern that Year 2000 technology
problems may wreak havoc on global economies and that no business, including the
Company, is immune from the potential far-reaching effects of Year 2000
problems. The Year 2000 problem arose because many existing computer programs
use only the last two digits to refer to a year. Therefore, these computer
programs do not properly recognize a year that begins with 20 instead of 19.
If not corrected, many computer applications could fail or create erroneous
results. The extent of the potential impact of the Year 2000 problem is not yet
known, and if not timely corrected, it could affect the global economy.
<PAGE>
Although the Company doesn't own, lease or operate any computers, and
therefore does not in any way rely on computers or computer programs to handle
its own in house accounting and internal affairs, management has determined that
the Company may be adversely affected by third parties with whom it deals if
such parties have not properly assessed and addressed the Year 2000 problem.
Presently, and for the foreseeable future beyond January 1, 2000, the only
operations the Company is involved in are the collection of notes receivable
from third parties and depositing them in the Company's bank accounts.
Management has determined that failure on the part of these third parties,
including the bank, to solve their own Year 2000 issues could interfere with
the smooth collection and handling of the Company's funds with respect to said
notes and monies in the Company's bank accounts.
The Company's state of readiness for the Year 2000 problem is as
follows: Management has obtained written assurances from the Company's bank
that all of its systems are fully Year 2000 compliant.
The Company has not incurred any costs, and has projected no future
costs, in addressing its Year 2000 issues.
The Year 2000 problems pose the following potential risks to the
Company: (1) The Company's money in bank accounts could be tied up for a period
of time and not be readily accessible in the event the bank's computers
malfunction; (2) Debtors making payments to the Company could be unable to make
their payments when due if their monies are tied up for a period of time and not
available to them because of their banks' computer malfunctions; (3) If either
(1) or (2) should occur there is no assurance how long it would take to obtain
access to funds, and as a result the Company could be prevented from taking
advantage of a favorable business opportunity or investment if such should
become available; (4) Any failures of telecommunications companies,
transportation companies, utility companies and other service industries,
brought on by unsolved Year 2000 problems would adversely affect the Company
to the extent it needs such services for its operations (which as mentioned,
is presently minimal, however); and (5) The national and global economies could
become chaotic, ineffective and with financially disastrous affects on all
persons and segments of the economy, including a major economic depression, in
the event that a sufficient number of computer systems fail because of failure
to solve the Year 2000 problem.
The Company has no contingency plans in the event any of the above, or
possibly other problems occur in connection with the Year 2000 problem.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company has no market risk sensitive instruments or market risk
exposures.
<PAGE>
<TABLE>
<CAPTION>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
9/30/99 12/31/98
Unaudited Audited
------------- ---------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash in bank $ 731,165 $ 682,740
Current portion of note receivable 37,428 40,901
Accrued interest receivable 32,110 32,110
------------------ ---------------
TOTAL CURRENT ASSETS 800,703 755,751
OTHER ASSETS
Real estate 15,000 30,000
Note receivable - related party 1,000,000 1,000,000
Long-term portion of contracts receivable 324,894 329,500
Deferred income taxes 9,000 9,000
------------------ ---------------
TOTAL OTHER ASSETS 1,348,894 1,368,500
------------------ ---------------
$ 2,149,597 $ 2,124,251
================== ===============
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accrued expenses payable $ (582) $ (582)
------------------ ---------------
TOTAL CURRENT LIABILITIES (582) (582)
Minority interest in subsidiary 196,000 196,000
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 50,000,000 shares
Issued and outstanding - 5,580,700 shares 5,581 5,581
Additional paid-in capital 2,375,667 2,375,667
Deficit accumulated during development stage (427,069) (452,415)
------------------ ---------------
TOTAL STOCKHOLDERS' EQUITY 1,954,179 1,928,833
------------------ ---------------
$ 2,149,597 $ 2,124,251
================== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
1/14/88
(Date of
Three months ended Nine months ended inception) to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99
-------------- ------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 39,000 $ 0 $ 39,000 $ 0 $ 613,896
Cost of sales 19,386 0 19,386 0 509,210
-------------- ------------- ------------- -------------- ------------
GROSS PROFIT 19,614 0 19,614 0 104,686
Loss from impairment of land value 0 0 0 0 1,955,000
General and administrative expenses 1,504 1,278 11,394 3,947 244,328
-------------- ------------- ------------- -------------- ------------
OPERATING (LOSS) 18,110 (1,278) 8,220 (3,947) (2,094,642)
Other Income
Sale of securities 0 0 0 0 1,443,680
Interest income 4,885 7,544 15,842 27,965 168,319
Consulting 0 0 0 0 5,000
Government subsidy 0 686 1,284 1,337 41,574
-------------- ------------- ------------- -------------- ------------
TOTAL OTHER INCOME 4,885 8,230 17,126 29,302 1,658,573
-------------- ------------- ------------- -------------- ------------
NET (LOSS) BEFORE
INCOME TAXES 22,995 6,952 25,346 25,355 (436,069)
Provision for income taxes 0 0 0 0 9,000
-------------- ------------- ------------- -------------- ------------
NET (LOSS) $ 22,995 $ 6,952 $ 25,346 $ 25,355 $ (427,069)
============== ============= ============= ============== ============
Net (loss) per weighted
average common shares $ .00 $ .00 $ .00 $ .00
============== ============= ============= ==============
Weighted average number of
common shares used to compute
net (loss) 5,580,700 5,580,700 5,580,700 5,580,700
============== ============= ============= ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
Deficit
Accumulated
Common Stock Additional During
Par Value $0.001 Paid -in Development
Shares Amount Capital Stage
---------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance, 1/14/88
(Date of inception) 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.002 per share, 1/14/88 1,000,000 1,000 1,000
Acquisition of subsidiary(1) 5,250,700 5,251 (3,251) (1,970)
Net loss for period (1,970)
---------- -------------- ------------- -------------
Balance at 12/31/88 6,250,700 6,251 (2,251) (3,920)
Net loss for year (20)
---------- -------------- ------------- -------------
Balance at 12/31/89 6,250,700 6,251 (2,251) (3,940)
Net loss for year (20)
---------- -------------- ------------- -------------
Balance at 12/31/90 6,250,700 6,251 (2,251) (3,970)
Assets acquired by subsidiary 4,420,000
Minority interest adjustment (12,000)
Net loss for year (20)
---------- -------------- ------------- -------------
Balance at 12/31/91 6,250,700 6,251 4,405,749 (3,980)
Debentures cancelled (2,000,000)
Assets acquired by subsidiary 1,600,000
Minority interest adjustment (8,000)
Net loss for year (891)
---------- -------------- ------------- -------------
Balance at 12/31/92 6,250,700 6,251 3,998,749 (4,871)
Minority interest adjustment (2,000)
Net loss for year (16,763)
---------- -------------- ------------- -------------
Balance at 12/31/93 6,250,700 6,251 3,995,749 (21,634)
Net loss for year (41,004)
---------- -------------- ------------- -------------
Balance at 12/31/94 6,250,700 6,251 3,995,749 (62,638)
Trade and media credits cancelled (320,000) (320) (1,446,432)
Minority interest adjustment 19,000
Net loss for year (1,970,141)
---------- -------------- ------------- -------------
Balances at 12/31/95 5,930,700 5,931 2,568,317 (2,022,779)
Reissuance of erroneously cancelled
shares during 1995 110,000 110 (110)
Cancellation of previously issued
shares related to acquisition of
subsidiary (460,000) (460) 460
Minority interest adjustment (54,000)
Net income for year 11,826
---------- -------------- ------------- -------------
Balance at 12/31/96 5,580,700 5,581 2,514,667 (2,010,953)
Minority interest adjustment (134,000)
Net income for year 1,492,918
---------- -------------- ------------- -------------
Balance at 12/31/97 5,580,700 5,581 2,380,667 (518,035)
Minority interest adjustment (5,000)
Net income for year 65,620
---------- -------------- ------------- -------------
Balances at 12/31/98 5,580,700 5,581 2,375,667 (452,415)
Net income for period 25,346
---------- -------------- ------------- -------------
Balances at 9/30/99 5,580,700 $ 5,581 $ 2,375,667 $ (427,069)
========== ============== ============= =============
(1) Acquisition actually occurred on September 30, 1993, but is reflected
earlier under the pooling-of-interests method of accounting.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARROW MANAGEMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
1/14/88
(Date of
Three months ended Nine months ended inception) to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) $ 22,995 $ 6,952 $ 25,346 $ 25,355 $ (427,069)
Adjustments to reconcile net income
(loss) to cash provided (required)
by operating activities:
Amortization 0 0 0 0 100
Accrued interest 0 0 0 0 (32,110)
Cost of land sold 15,000 0 15,000 0 485,000
Cost of securities sold 0 0 0 0 100,000
Non-cash income 0 0 0 0 (5,000)
Itex Trade Dollars used 0 0 0 0 8,248
Loss from impairment of land value 0 0 0 0 1,955,000
Deferred income taxes 0 0 0 0 (9,000)
Changes in operating assets and liabilities:
Contracts receivable 6,774 494 8,079 3,442 (362,322)
Accrued expenses 0 0 0 0 (582)
----------- ----------- ----------- ----------- -----------
NET CASH PROVIDED (REQUIRED)
BY OPERATING ACTIVITIES 44,769 7,446 48,425 28,797 1,712,265
INVESTING ACTIVITIES
Purchase of real estate 0 0 0 0 (105,000)
Loan to related party 0 0 0 0 (1,000,000)
Organization costs 0 0 0 0 (100)
----------- ----------- ----------- ----------- -----------
NET CASH (USED) BY
INVESTING ACTIVITIES 0 0 0 0 (1,105,100)
FINANCING ACTIVITIES
Proceeds from sale of common stock(1) 0 0 0 0 124,000
Loans 0 0 0 0 10,417
Repayments 0 0 0 0 (10,417)
----------- ----------- ----------- ----------- -----------
NET CASH PROVIDED (REQUIRED)
BY FINANCING ACTIVITIES 0 0 0 0 124,000
----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 44,769 7,446 48,425 28,797 731,165
Cash and cash equivalents
at beginning of period 686,396 674,058 682,740 652,707 0
----------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 731,165 $ 681,504 $ 731,165 $ 681,504 $ 731,165
=========== =========== =========== =========== ===========
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 0 $ 0 $ 0 $ 0 $ 676
=========== =========== =========== =========== ===========
</TABLE>
SUPPLEMENTAL INVESTING ACTIVITY DISCLOSURE
In December, 1996, the Company cancelled 460,000 shares of its common stock.
(1) Stock of subsidiary was $122,000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARROW MANAGEMENT, INC.
Dated: November 8, 1999 s\Krista Nielson
-------------------------------------------------
Krista Nielson, President CEO and Director
Dated: November 8, 1999 s\Sasha Belliston
-------------------------------------------------
Sasha Belliston, Secretary/Treasurer and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from ARROW
MANAGEMENT, INC. September 30, 1999 financial statements and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000860401
<NAME> ARROW MANAGEMENT, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 731,165
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 800,703
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,149,597
<CURRENT-LIABILITIES> (582)
<BONDS> 0
0
0
<COMMON> 5,581
<OTHER-SE> 1,948,598
<TOTAL-LIABILITY-AND-EQUITY> 2,149,597
<SALES> 39,000
<TOTAL-REVENUES> 56,126
<CGS> 19,386
<TOTAL-COSTS> 19,386
<OTHER-EXPENSES> 8,220
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,346
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,346
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
