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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996
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Commission file number 33-34371(HQ)
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The Geneva American Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 36-3683315
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2148 Evans Road, Flossmoor, Illinois 60422
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(Address of principal executive offices)
(Zip Code)
(708) 798-9405
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(Regisrant's Telephone Number, including area code)
N/A
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Former Address from Previous Form 10-Q
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. Yes X No
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1,195,000 Common Shares, $0.01 par value, were issued and outstanding as of
May 10, 1996.
Transitional Small Business Disclosure Format Yes No X
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PART I. FINANCIAL INFORMATION
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THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
MARCH 31, 1996
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ACCOUNTANTS' COMPILATION REPORT
May 13, 1996
To the Shareholders and Directors of
The Geneva American Group, Inc.
We have compiled the accompanying balance sheet for The Geneva American Group,
Inc. (A Development Stage Enterprise) as of March 31, 1996, and the related
statement of operations for the three months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures and the
statement of cash flows required by generally accepted accounting principles.
If the omitted disclosures were included in the financial statements, they might
influence the user's conclusions about the Company's financial position, results
of operations and cash flows. Accordingly, these financial statements are not
designed for those who are not informed about such matters.
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ITEM 1 - FINANCIAL STATEMENTS
THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
(unaudited)
March 31, December 31,
1996 1995
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ASSETS
Current assets:
Cash $ 77,701 $ 81,372
Interest receivable 1,396 1,308
Due from related party 12,000 12,000
-------- --------
Total current assets 91,097 94,680
Organization costs, net - -
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$ 91,097 $ 94,680
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ - $ -
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Total current liabilities - -
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Shareholders' equity:
Common stock, $.01 par value;
5,000,000 shares authorized;
1,205,000 issued and
outstanding 12,050 12,050
Capital in excess of par value 187,971 187,971
Deficit accumulated during
development stage (108,924) (105,341)
-------- --------
91,097 94,680
-------- --------
$ 91,097 $ 94,680
======== ========
See notes to consolidated financial statements.
F - 1
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THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
March 31,
1996 1995
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Interest revenue $ 662 $ 764
Expenses:
General and administrative 2,745 6,041
Amortization - 45
Rent-related party 1,500 1,500
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4,245 7,586
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Net loss $ (3,583) $ (6,822)
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Loss per common share $ (.003) $ (.006)
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See notes to consolidated financial statements.
F - 2
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THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three months ended
March 31
--------------------------------
1996 1995
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Cash flows from operating activities:
Cash paid to suppliers $ (4,245) $ (7,541)
Interest received 574 681
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Net cash used by operating activities (3,671) (6,860)
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Cash flows from investing activities:
Redemption of treasury bill - -
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Net cash used by investing activities - -
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Cash flows from financing activities:
Proceeds from issuance of common stock - -
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Net cash provided by financing
activities - -
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Net increase (decrease) in cash (3,671) (6,860)
Cash at beginning of period 81,372 98,841
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Cash at end of period $ 77,701 $91,981
========= ============
Reconciliation of net loss to cash
used by operating activities:
Net loss $ (3,583) $(6,822)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization - 45
Decrease (increase) in interest receivable (88) (83)
Increase (decrease) in accounts payable - -
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Net cash used by operating activities $ (3,671) $(6,860)
========= ============
See notes to consolidated financial statements.
F - 3
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THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(unaudited)
Deficit
accumulated
Common stock Capital in during
---------------- excess of development
shares amount par value stage
--------- ------- --------- ------------
Balance at December
31, 1995 1,205,000 $12,050 $187,971 $(105,341)
Net loss for the
three months ended
March 31, 1996 - - - (3,583)
--------- ------- --------- ------------
1,205,000 $12,050 $187,971 $(108,924)
========= ======= ======== ==========
See notes to consolidated financial statements.
F - 4
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THE GENEVA AMERICAN GROUP, INC.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - UNAUDITED FINANCIAL STATEMENTS:
Information as of March 31, 1996 and for each of the three months ended March
31, 1996 and 1995 is unaudited. The information in the unaudited financial
statements reflects all adjustments of a normal and recurring nature which are,
in the opinion of management, necessary to a fair presentation of the financial
statements. These financial statements are prepared in accordance with the
requirements of Form 10-Q and consequently may not include all the disclosures
normally required by generally accepted accounting principles or those normally
made in the annual Form 10-K filing. Any required information omitted is either
insignificant or is not applicable.
NOTE 2 - LOSS PER SHARE:
Loss per share is based on the weighted average shares outstanding of 1,205,000
for the three months ended March 31, 1996 and 1,190,000 for the three months
ended March 31, 1995.
NOTE 3 - SUBSEQUENT EVENT:
During April 1996, the Company signed a letter of intent to issue Company stock
to acquire a company which manufactures and distributes pianos, piano rolls and
piano automation products. The transaction is subject to various conditions and
the execution of a definitive agreement.
F - 5
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Since the Company was formed in January 1990, the efforts of the Company
have been directed towards its Registration Statement under the Securities Act
of 1933 on Form S-18. On March 25, 1991, the Company completed its public
offering after selling 20,500 Units, with each Unit consisting of 10 shares of
common stock and 10 warrants exercisable for the purchase of one share of common
stock at $2.00 each. The proceeds from the offering totalled $205,000.
The loss for the three months ended March 31, 1996 totalled $3,583, while
the loss for the three months ended March 31, 1995 totalled $6,822,
respectively. These losses reflect the cost of the Company's efforts to locate a
business opportunity. These efforts result primarily in office costs, travel,
legal and accounting costs.
The Company has determined not to form additional subsidiary companies for
distribution to shareholders, but rather intends to either seek a business for
purpose of merger or acquisition or it may privately raise additional funds
which would be employed for merger, acquisition, financing, joint venture or
other transactions with larger, more seasoned businesses.
During April 1996, the Company entered into a letter of intent to issue
Company stock to acquire a company which distributes pianos, piano rolls, and
piano automation products. The transaction is subject to various conditions and
the execution of definitive agreement.
The Company is currently discussing the possibility of a capital infusion
into the Company by an affiliate, but that affiliate has currently made no
commitments. The Company currently has no other business activity or sources of
capital or revenue.
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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 MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 5. OTHER INFORMATION.
In April, 1996, the Company entered into a letter of intent with QRS Music
Rolls, Inc. ("QRS"), a New York corporation. Under the terms of the letter of
intent the Company and QRS express their intention to consummate a
reorganization in which QRS and a wholly owned subsidiary of the Company will
merge and the shareholders of QRS will become the owners of 85% of the issued
and outstanding shares of the Company. The transaction will be structured as a
tax-free organization under the provisions of Section 368(a) of the INTERNAL
REVENUE CODE OF 1986. The letter of intent is nonbinding and completion of the
transaction subject to negotiation and execution of a definitive agreement in
completion of satisfactory due diligence.
QRS has offices in Pennsylvania, New York and Naples, Florida. Its
business includes manufacturing pianos under the trademark Story & Clark, and
production of music rolls for music roll player pianos. In addition, QRS
manufactures for installation in its own pianos, installation in other
manufacturers' pianos and consumer purchase, electronic devices which operate
pianos from computer disks, video tapes and CDs. QRS products are sold under
the trademark Pianomation and other marks. The Company believes that QRS is a
technological leader in the piano automation industry.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
None.
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In accordance with the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIGNATURES
THE GENEVA AMERICAN GROUP, INC.
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Date President
Charles E. Campbell
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Date Principal Financial Officer
Charles E. Campbell
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 77,701
<SECURITIES> 0
<RECEIVABLES> 1,396
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 91,097
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 91,097
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 12,050
<OTHER-SE> 187,971
<TOTAL-LIABILITY-AND-EQUITY> 91,097
<SALES> 0
<TOTAL-REVENUES> 662
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<TOTAL-COSTS> 4,245
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,593)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,583)
<EPS-PRIMARY> (.003)
<EPS-DILUTED> 0
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