FORM 10-Q SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 33-37514-D
FI-TEK VII, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 84-1148206
_______________________________ __________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3127 Ramshorn Drive, Castle Rock, Colorado 80104
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(303) 660-1710
________________________________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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
___ ___
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.
Shares Outstanding
Class of Securities at April 15 1998
___________________ ___________________
Common Stock, par value $0.00001 per share 29,017,500
Transitional Small Business Disclosure Format
Yes No X
___ ___
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
Accountants' Disclaimer of Opinion ....................... 3
Balance Sheet ............................................ 4
Statements of Loss and Accumulated Deficit ............... 5
Statements of Cash Flows ................................. 6
Notes to Financial Statements ............................ 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............ 8
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K. ....................... 9
Signatures .............................................. 10
<PAGE>
To the Board of Directors and Stockholders
of Fi-Tek VII, Inc.
The accompanying balance sheet of Fi-Tek VII, Inc. (a development stage
company), as of March 31, 1998, and the related statements of loss and
accumulated deficit and cash flows for the period then ended were not audited
by us and, accordingly, we do not express an opinion on them.
Aurora, Colorado
May 11, 1998
COMISKEY & COMPANY
PROFESSIONAL CORPORATION
3
<PAGE>
Fi-Tek VII, Inc.
(A Development Stage Company)
BALANCE SHEET
March 31, 1998
ASSET
CURRENT ASSETS
Cash and cash equivalents $ 15,246
--------
Total current assets 15,246
--------
TOTAL ASSETS $ 15,246
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 75
Accounts payable - related party 167
--------
Total current liabilities 242
STOCKHOLDERS' EQUITY
Preferred stock, $0.00001 par value; 20,000,000
shares authorized; no shares issued and
outstanding -
Common stock, $0.00001 par value; 500,000,000
shares authorized; 29,017,500 shares issued
and outstanding 290
Additional paid-in capital 38,087
Deficit accumulated during the
development stage (23,373)
---------
Total stockholders' equity 15,004
_________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15,246
=========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Fi-Tek VII, Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
<TABLE>
<S> <C> <C> <C> <C> <C>
Period
July 12, Three Three Nine Nine
1990 Months Months Months Months
(Inception) ended ended ended ended
to March March March March March
31, 1998 31, 1998 31, 1997 31, 1998 31, 1997
---------- --------- --------- --------- --------
REVENUES
Investment income $ 12,645 $ 69 $ 112 238 339
EXPENSES
Legal and accounting 23,057 85 440 2,058 2,708
Office expense 4,469 192 170 431 362
Transfer agent 2,680 144 150 441 424
Taxes and licenses 2,162 - 183 - 183
Officer compensation 3,150 - - - -
Amortization 500 - - - -
-------- -------- -------- -------- -------
Total expenses 36,018 421 943 2,930 3,677
-------- -------- -------- -------- -------
NET LOSS (23,373) (352) (831) (2,692) (3,338)
Accumulated deficit
Balance,
beginning of period - (23,021) (19,567) (20,681) (17,060)
-------- -------- -------- -------- --------
Balance,
end of period $ (23,373) $ (23,373) $ (20,398) $ (23,373) $ (20,398)
======== ======== ======== ========= ========
NET LOSS PER SHARE $ (NIL) $ (NIL) $ (NIL) $ (NIL) $ (NIL)
======== ======== ======== ========= ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 26,630,459 29,017,500 29,017,500 29,017,500 29,017,500
========== ========== ========== ========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Fi-Tek VII, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
Period
July 12, Nine Nine
1990 Months Months
(Inception) ended ended
to March March March
31, 1998 31, 1998 31, 1997
---------- ---------- ----------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (19,752) $ (2,692) $ (983)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization 500 - 4
Increase (decrease) in accounts
payable 75 25 3
Increase in accounts
payable - related party 167 (190) (98)
--------- --------- ---------
Net cash provided (used) by
operating activities (19,010) (2,857) (1,074)
CASH FLOWS FROM INVESTING
ACTIVITIES
Increase in organization
costs (500) - -
--------- --------- ---------
Net cash used by
investing activities (500) - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common stock 178,390 - -
Deferred offering costs
paid (46,335) - -
Statutory escrow contribution (93,678) - -
Loans from shareholders 4,000 - -
Repayment of loans from
shareholders (4,000) - -
--------- --------- ---------
Net cash provided
by financing activities 38,377 - -
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 18,867 (2,857) (1,074)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD - 21,724 23,304
--------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 18,867 $ 18,867 $ 22,230
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
[FN]
<PAGE>
Fi-Tek VII, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
1. Management's representation of interim financial information
------------------------------------------------------------
The accompanying financial statements have been prepared by Fi-Tek VII, Inc.
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as allowed by such rules
and regulations, and management believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
include all of the adjustments which, in the opinion of management, are
necessary to a fair presentation of financial position and results of
operations. All such adjustments are of a normal and recurring nature.
These financial statements should be read in conjunction with the audited
financial statements at June 30, 1997.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Company completed the initial public offering of its securities in October
of 1992, receiving gross proceeds of $160,390 (including proceeds from the sale
warrants to the underwriter of the offering). Total costs of the offering
amounted to $46,335. The net proceeds of the offering, therefore, amounted to
$114,055. Pursuant to the Colorado Securities Act and based upon actual and
estimated offering costs, $93,678 of that amount was deposited into escrow.
This escrowed amount was refunded, by law, effective as of the date of the
fourth anniversary of the prospectus (April 14, 1996), since the Company failed
to identify a suitable business acquisition during the four year period after
its public offering. At March 31, 1998, the Company had total liquid
capital resources (cash) of $15,246.
Management anticipates that the Company's current liquid capital resources
will be applied in the coming twelve months to three purposes. The first
purpose will be to meet the Company's reporting obligations under the Securities
Exchange Act of 1934, as amended. The second purpose will be to cover general
and administrative expenses. The third purpose will be to cover the expenses
associated with searching for and investigating business opportunities. The
Company anticipates that its current resources will be adequate for those
purposes for at least the coming year.
Except as described in the preceding paragraph, the Company anticipates
that its capital needs will be minimal until it shall have identified a business
opportunity with which to combine. In pursuing a combination transaction, the
Company is likely to incur significant additional expenses. The Company expects
to meet such expenses with its current liquid capital resources, but if the
funds available for use by the Company prove inadequate, the Company will
seek to meet such expenses by seeking to have payment of them deferred until
after the combination shall have been consummated or, in the alternative, by
obtaining loans or other capital contributions from the Company's founding
stockholders.
8
<PAGE>
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity other than the receipt of net proceeds from its public
offering, a minimal amount of inside capitalization funds and distribution of
escrowed funds in April 1996. At March 31, 1998 (quarter end), the
Company had current assets of $15,246 and total assets of $15,246. These
figures compare to $18,199 in current assets and $18,199 in total assets at
March 31, 1997, the total assets for the period ended March 31, 1997 and 1998
consist of 15,246 and $18,199 of unrestricted cash. The decreases in current
and total assets from the quarter ended March 31, 1997 to the comparable period
in 1998 are attributable the Company's operating expenses during the quarter
ended March 31, 1998, which exceeded the Company's receipt of interest
earned on cash balances during the quarter and the distribution of escrowed
funds in April 1996.
The Company continues to carry out its plan of business, identifying and
evaluating acquisition candidates. The Company cannot predict to what extent
its liquidity and capital resources will be diminished prior to the
consummation of a business combination or whether its capital will be further
depleted by the operating losses, if any, of the business entity which the
Company eventually acquires.
Results of Operations
Since completing its public offering and during the fiscal quarter ended
March 31, 1998, the Company has engaged in no significant operations other
than the search for, and identification and evaluation of possible acquisition
candidates. Other than interest income of $69 and $112, respectively no
revenues were received by the Company during the quarters ended March 31,
1998 and 1997. No other revenues, except interest income of $12,645, have been
received by the Company since inception. The Company experienced a net loss
of $352 and $831, respectively, during the quarters ended March 31, 1998
and 1997. This decrease in net loss is attributable primarily to timing
differences in the payment of costs related to the filing of the Company's
Form 10K SB and federal and state tax returns.
For the current fiscal year, the Company anticipates an increased net loss
owing to expenses associated primarily with compliance with reporting
requirements and with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues other than interest income,
and may continue to operate at a loss after completing a business combination,
depending upon the performance of the acquired business.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K
None
9
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant has caused this report to be signed on its behalf by the undersigned
duly authorized person.
Date: May 14, 1998 Fi-Tek VII, Inc.
By: /s/ Ronald J. Miller
Ronald J. Miller
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENTS OF LOSS AND ACCUMULATED DEFICIT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10QSB FOR THE QUARTER
ENDED MARCH 31, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 15,246
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,246
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,246
<CURRENT-LIABILITIES> 242
<BONDS> 0
0
0
<COMMON> 290
<OTHER-SE> 14,714
<TOTAL-LIABILITY-AND-EQUITY> 15,246
<SALES> 0
<TOTAL-REVENUES> 69
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 421
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (352)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (352)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> (.001)
</TABLE>
