U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 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 number 0-19490
EMERALD CAPITAL HOLDINGS, INC.
(Exact name of Issuer as specified in charter)
DELAWARE 22-3096351
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or
organization)
4195 S. Tamiami Trail, #140, Venice, Fl. 34293
(Address of principal executive offices)(zip code)
(941) 484 5995
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
par value $.001,
1991 Warrants.
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the
Exchange Act during the past 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 _____
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B
contained in this form, and no disclosure will be contained, to the best of
registrant's
knowledge, in a definitive proxy or information statements incorporated by
reference in Part III
of this Form 10-QSB or any amendment to this Form 10-QSB. [__X___]
The issuer's aggregate revenues, excluding discontinued operations, for the
quarter ended
March 31, 1999 were $0.
As of March 31, 1999 (I) the aggregate market value of the shares of the
registrant's common
stock held by non-affiliates of the registrant was not available as the
Company was awaiting
listing on the OTC Bulletin Board; (ii) 1,419,533 shares of the Registrant's
common stock were
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
EMERALD CAPITAL HOLDINGS, INC.
BALANCE SHEET
(UNAUDITED)
March 31, 1999
ASSETS
Current Assets
Cash
$ -
Accounts Receivable, net
$ -
Prepaid Expenses and other
$ -
Property, Plant and Equipment, net
$ -
Notes Receivable
$ 16,000
Other Assets
$ -
_________
$ 16,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank Notes Payable
$ 144,506
Notes Payable Stockholders
$ 297,722
Notes Payable other
$ 50,000
Accounts Payable
$ 206,513
Accrued Expenses
$ -
_____________
$ 698,741
Stockholders Equity
Preferred Stock, $.001 par value
authorized 2,000,000 shares,
none outstanding
$ -
Common Stock, $.001 par value,
authorized 100,000,000 shares,
issued and outstanding, 1,419,553
$ 1,418
Additional paid-in-capital
$ 21,291,838
Deficit
$ (21,991,997)
Due from Shareholder
$ -
$ (698,741)
EMERALD CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
March 31,
1999
1998
Sales
$ -
$-
Cost of Goods Sold
$ -
-
Selling, general &
administrative expenses
$ -
- -
Depreciation and Amortization
$ -
Operating (Loss)
$ -
Other (Income) Expenses
Interest and other expenses
$ -
Inerest and other income
$ -
-
Net (Loss) from continuing
operations
$ -
Net (Loss) from discontinued
$ -
operations
-
Loss per Common Share
From continued operations
$ -
From discontinued operations
$ -
Net (loss) per share
$ -
Loss per Common Share
From continued operations
$ -
$ -
Discontinued operations
- -
Weighted Average number of
common shares used in
computation of net (loss)
per share
1,419,553
1,419,553
See accompanying notes to financial statements.
EMERALD CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(UNAUDITED)
Common Stock
Additional
Cumulative
Shares
Amount
Paid-in-Capital
Translation
___________________________________
Adjustment
Balance at December 31, 1997
1,419,553
$ 1,418
$ 21,291,838
$ -
Issuance of Shares for cash
Issuance of Shares in
connection with consulting
$ -
$ -
$ -
$ -
and legal services
Issuance in settlement of debt
Net (Loss)
$ -
$ -
$ -
$ -
Net (Loss)
$ -
$ -
$ -
$ -
Balance at December 31, 1998
1,419,553
$ 1,418
$ 21,291,838
$ -
Issuance of Shares for cash
Issuance of Shares in
connection with consulting
$ -
$ -
$ -
$ -
and legal services
Issuance in settlement of debt
Net (Loss)
$ -
$ -
$ -
$ -
Net (Loss)
$ -
$ -
$ -
$ -
Balance at March 31, 1999
1,419,553
$ 1,418
$ 21,291,838
$ -
See accompanying notes to financial statements.
EMERALD CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(UNAUDITED)
Due from
Deficit
Total
Stockholder
Balance at December 31, 1997
$ (20,000)
$(22,607,171)
$ (1,333,915)
Issuance of Shares in
connection with consulting
-
$ -
$ -
and legal services
Issuance in settlement of debt
Balance at December 31, 1998
$ (20,000)
$(22,607,171)
$ (1,333,915)
Issuance of Shares in
connection with consulting
-
$ -
$ -
and legal services
Issuance in settlement of debt
Net (Loss)
$ -
$ -
$ -
Balance at March 31, 1999
$ (20,000)
$(22,607,171)
$ (1,333,915)
See accompanying notes to financial statements.
EMERALD CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
March 31
OPERATING ACTIVITIES
1999
1998
Net (Loss)
$ -
$ -
Non-cash adjustments:
Depreciation & Amortization
$ -
$ -
Common stock issued for
services
$ -
$ -
Cash provided (used) by
changes in assets & liabilities
$ (7,488)
- -
$ -
Accounts Receivable
$ -
$ -
Inventories
$ -
$ -
Prepaid Expenses, Refunds,
other
$ 7,488
- -
$ -
Accounts payable &
accrued expenses
$ -
$ -
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
$ -
$ -
INVESTING ACTIVITIES
$ -
Decrease in property &
$ -
equipment
$ -
$ -
Other assets
$ -
$ -
NET CASH PROVIDED (USED)
$ -
BY INVESTING ACTIVITIES
$ -
$ -
$ -
FINANCING ACTIVITIES
$ -
Net increase in short term
$ -
borrowing
$ -
$ -
- -
Proceeds (repayments) long-term
$ -
debt and revolving line-of-credit
$ -
$ -
NET CASH PROVIDED BY FINANCING
ACTIVITIES
$ -
$ -
$ -
NET INCREASE (DECREASE) IN CASH
$ -
CASH EQUIVALENTS
$ -
$ -
CASH AND CASH EQUIVALENTS, beginning
$ -
$ -
$ -
CASH AND CASH EQUIVALENTS,ending
$ -
$ -
See accompanying notes to financial statements.
EMERALD CAPITAL HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDING MARCH 31, 1999
EMERALD CAPITAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
Business:
Emerald Capital Holdings, Inc. (Company or Emerald) is a holding company the
intent of which
is to acquire, manage and develop businesses in a variety of sectors. The
Company has no
operations. The Company is seeking acquisitions. See - "Management's
Discussion and
Analysis of Financial Condition and Results of Operations" and "Subsequent
Events."
Background
The Company has significantly restructured its business and has closed or sold
all unprofitable
operations. See "Certain Transactions" and "Management's Discussion and
Analysis of
Financial Condition and Operations" and "Subsequent Events."
The Company may in the future utilize the SportAde name, beverage concept and
trademark
for an isotonic sports drink from its former beverage subsidiary, SportAde,
Inc. to enter the
beverage business, or to sell, license the name and concept for or otherwise
develop a
beverage business.
On March 29, 1996, the Company effected a one-for-one hundred twenty reverse
stock split,
previously approved by a majority of the Company's Common Stock holders. All
share
information described herein reflects such reverse stock split except as
otherwise noted.
Principles of Consolidation:
The consolidated financial statements include the accounts of Emerald Capital
Holdings, Inc.
include the accounts of Emerald Capital Holdings, Inc.
Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting
principles requires management to make estimates and assumptions that affect
the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the
reporting period. Actual results could differ from those estimates.
Per Share Data:
In 1996, the shareholders of the Company approved a one for one hundred and
twenty
reverse stock split. All share and per share amounts have been retroactively
adjusted.
Net loss per share of common stock is computed based on net loss, and the
weighted average
number of common shares outstanding. Common stock equivalents are
anti-dilutive for all
periods presented and accordingly are not included in the computation.
Cash Equivalents:
The Company considers all highly liquid debt securities with a maturity of
three months or less
when purchased to be cash equivalents for the purposes of the statement of cash
flows.
Inventories:
Inventories, if noted, are stated at the lower of cost (first-in, first-out
method) or market.
Property and Equipment:
Property and equipment is stated at cost, less accumulated depreciation.
Depreciation is
computed using the straight-line method over the useful lives of the assets,
which range from
three to thirty years.
Cost in Excess of Net Assets Acquired:
Cost in excess of net assets acquired is being amortized on a straight-line
basis over period of
ten years. The Company, on an ongoing basis, evaluates the operations using
undiscounted
estimated future cash flows of the acquired businesses and assesses
recoverability of the
recorded amounts of cost in excess of net assets acquired. Provisions for
impairment are
recorded upon the Company's determination that cash flows of the acquired
business will be
insufficient to recover the associated cost in excess of net assets acquired.
Income Taxes:
The Company accounts for income taxes under the provisions of Statement of
Financial
Accounting Standards No. 109. The statement requires the recognition of
deferred tax assets
and liabilities for the expected future tax consequences of temporary
differences between the
carrying amounts and tax basis of assets and liabilities.
Future Accounting Pronouncements:
In March 1995, the Financial Accounting Standards Board issued Statement No.
121
"Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed
of," the Statement requires, among other things, impairment loss of assets to
be held and
gains for losses from assets that are expected to be disposed of be included as
a component
of income from continuing operations before taxes on income. The Company will
adopt the
Statement as of January 1, 1996 and its implementation is not expected to have
a material
effect.
In October 1995, the Financial Accounting Standards Board issued Statement No.
123
"Accounting for Stock-Based Compensation." The Statement establishes a fair
value method
for accounting for stock-based compensation plans either through recognition or
disclosure.
The Company does not presently intend to adopt the fair value based method, but
instead will,
beginning in 1996, disclose the effects of the calculation required by the
Statement.
Financial Condition and Liquidity
The Company's continued existence is dependent on its ability to acquire, merge
or conclude a
reverse merger, and/or obtain additional financing. Management's plans in
regard to these
matters are described below. The financial statements do not include any
adjustments that
might result from the outcome of this uncertainty.
The Company incurred a loss of $0 and consumed no cash in operating activities
for the
quarter ended March 31, 1999 and had a working capital deficiency of $(682,741)
and a
capital deficit of $(21,991,997) at March 31, 1999.
The Company has no paid employees and no operations.
If the Company cannot conclude an acquisition, merger, reverse merger, or
become relisted on
the OTC Bulletin Board, the Company would consider a corporate reorganization
or liquidation.
Historically, certain affiliates of the Company and others have made and
continue to make
advances to meet the Company's short-term cash needs. At March 31, 1999,
convertible
promissory notes owed to such persons aggregated approximately $300,000.
NOTE C - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
Equipment (net) $0
_____________
Total (net) $0
============
NOTE D - SUBSIDIARIES AND ACQUISITIONS
The Company discontinued all operations as of December 31, 1997, and wrote off
all assets
leasehold improvements. See "Certain Transactions" and Note J.
NOTE F - COMMON AND PREFERRED STOCK
(1) During 1996, 677,667 shares of common stock were issued by the Company in
a private
placement and for conversion of debt. The Company received cash proceeds of
$294,000.
NOTE G - STOCK OPTIONS, WARRANTS AND RIGHTS
Stock Option Plan:
The Company's Stock Option Plan (the "Plan"), as amended, provides for the
grant of up to
528 options to purchase common stock to directors, officers and other key
employees of the
Company. No options have been granted in 1995, 1996, 1997.
Non-Plan Options
No options have been granted in 1995,1996, 1997.
Warrants and Rights:
The Company's 1991 Warrants expired on December 31, 1997. No 1991 Warrants
have been
exercised.
NOTE H - DISCONTINUED AND DIVESTED OPERATIONS
In 1996, the Company discontinued all of its operations as of December 31 1997.
NOTE I - BUSINESS SEGMENTS
Not applicable as the Company has no operations as of March 31, 1999:
NOTE J - COMMITMENTS AND CONTINGENCIES
The Company maintains minimum office facilities without expense. It believes
that its facilities
are suitable for its present operations. If required, the Company believes that
additional space
is available at favorable rental rates.
Legal Proceedings:
None
Consulting and Employment Agreements
None.
NOTE K - INCOME TAXES
At December 31,1997, the Company had net operating loss carry forwards for
income tax
purposes of approximately $18,000,000 which expire substantially from 2005
through 2010.
Deferred income taxes are comprised principally of the following at March 31,
1999:
Net operating loss carry forwards $6,500,000
Deferred tax asset valuation
allowance $(6,500,000)
Net deferred tax asset $ -0-
============
Realization of any portion of the net deferred tax asset, of approximately
$6,500,000 at March
31, 1999, is not considered more likely than not and accordingly, a valuation
allowance has
been provided for such amount. Changes in ownership of greater than 50% which
occurred as
a result of the Company's initial public offering and subsequent stock
issuances resulted in a
substantial annual limitation being imposed upon the future utilization of the
net operating
losses for U.S. tax purposes.
NOTE L - SUBSEQUENT EVENTS
(a) In May, 1999, the Company entered into negotiations to convert certain
promissory notes
to common stock. The Company expects to conclude such negotiations by June 1,
1999.
NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist principally of cash, accounts
receivable, accounts
payable and accrued expenses, and notes payable. The carrying amounts of such
financial
instruments as reflected in the consolidated balance sheet approximate their
value as of March
31, 1999. The estimated fair value is not necessarily indicative of the
amounts the Company
would realize in a current market exchange or of future earnings or cash flows.
NOTE N - SUPPLEMENTAL CASH FLOW INFORMATION
The following are supplemental disclosures to the Consolidated Statements of
Cash Flows:
Year ended December 31,
1998 1997
Interest paid for 1998 and 1997 $ 0 $ 0
Non-cash investing and financing activities: 0 0
Common stock issued in
settlement of accounts payable. 0 0
Units issued for forgiveness of debt 0 0
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's consolidated revenues were $0 for the three months ended March
31, 1999.
Prior year revenues were from discontinued operations and are not comparable.
Financial Condition and Liquidity
The Company's continued existence is dependent on its ability to acquire, merge
or conclude a
reverse merger, and/or obtain additional financing. Management's plans in
regard to these
matters are described below. The financial statements do not include any
adjustments that
might result from the outcome of this uncertainty.
The Company incurred a loss of $0 and consumed no cash in operating activities
for the
quarter ended March 31, 1999 and had a working capital deficiency of $(682,741)
and a
capital deficit of $(21,991,997) at March 31, 1999.
The Company has no paid employees and no operations.
If the Company cannot conclude an acquisition, merger, reverse merger, or
become relisted on
the OTC Bulletin Board, the Company would consider a corporate reorganization
or liquidation.
Historically, certain affiliates of the Company and others have made and
continue to make
advances to meet the Company's short-term cash needs. At March 31, 1999,
convertible
promissory notes and expenses owed to such persons aggregated approximately
$300,000.
In March, 1999, $7,488 was repaid.
Inflation
As the Company has no operations presently, there are no inflationary
considerations.
SIGNATURES
In accordance with the Exchange Act, this report has been signed below by the
following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature
Title
Date
/s/ Robert Springer
Chairman
(Acting Principal Executive Officer, Acting Chief Financial
Officer)
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
EMERALD CAPITAL
HOLDINGS, INC.
BY: _
_____________________
Rob
ert Springer
Cha
irman
In accordance with the Exchange Act, this report has been signed below by the
following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature
Title
Date
Robert Springer
Chairman
(Acting Principal Executive Officer, Acting Chief Financial
Officer)
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
3.1 Amended and Restated Certificate of Incorporation of the Company, as
filed with the Secretary of
State of Delaware on August 14, 1991(1)
3.1a Amended Certificate of Incorporation of the Company, as filed with the
Secretary of State of
Delaware on June 7, 1995. (7)
3.1b Certificate of Amendment to Amended and Restated Certificate of
Incorporation, as amended (7)
3.2 Bylaws of the Company(2)
3.3 Certificate of Retirement of Preferred Stock as filed with the
Secretary of State of Delaware(3)
3.4 Amendment to By-Laws of the Company(6)
4.1 Warrant Agreement, dated as of August 13, 1991, among the Company,
American Stock Transfer
& Trust Co. ("American") and Stratton(1)
4.2 First Amendment, dated October 30, 1992, to Warrant Agreement, dated
August 13, 1991, among
the Company, American and Stratton(3)
4.3 Warrant Agreement, dated February 16, 1993, between the Company and
American(5)
4.4 Form of First Amendment to Warrant Agreement to be entered into
between the Company and
American(5)
4.5 Specimen Common Stock Certificate(2)
4.6 Class A Warrant Agreement, dated October 12, 1993, between the Company
and AWH(5)
4.7 Class B Warrant Agreement, dated October 12, 1993, between the Company
and AWH(5)
4.8 Form of Class C Warrant(6)
4.9 Form of Class D Warrant(6)
10.1 Amended and Restated 1990 Stock Option Plan(4)
10.2 Form of Indemnification Agreement with Officers and Directors(3)
10.3 Indemnification Agreement, dated August 17, 1991,
between the Company and Robert Springer(1)
10.4 Form of Confidential Information and Intellectual
Property Rights Agreement(2)
10.5 AccuMed Acquisition Agreement (6)
