U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] 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 33-37674-NY
EDG CAPITAL, INC.
(Exact name of small business issuer as specified in its
charter)
New York 11-3023098
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 1563, Rocky Point, New York 11778
(Address of principal executive offices) (Zip Code)
(516) 744-0414
(Issuer's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
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
The aggregate number of shares outstanding of the Issuer's Common Stock, its
sole class of common equity, was 62,500 as of September 30, 1996.
Transitional Small Business Issuer Disclosure Format: Yes __ No X
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, June 30,
1996 1996
------------ --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 7,540 $ 10,517
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 1,379 $ 2,954
-------- --------
TOTAL LIABILITIES 1,379 2,954
-------- --------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
50,000,000 shares authorized
62,500 shares issued and outstanding 63 63
Capital in excess of par value 37,790 37,790
Deficit accumulated during development stage (31,692) (30,290)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 6,161 7,563
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,540 $ 10,517
======== ========
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<PAGE>
EDG CAPITAL , INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three From Inception
Months Ended August 13, 1990
September 30, To
1996 1995 September 30, 1996
---- ---- ------------------
<S> <C> <C> <C>
REVENUE
Interest $ 50 $ 93 $ 2,391
-------- -------- --------
EXPENSES
Professional 915 2,305 24,969
Miscellaneous 0 0 349
Office 0 0 2,431
Filing fees 150 101 3,389
-------- -------- --------
TOTAL 1,065 2,406 31,138
-------- -------- --------
LOSS BEFORE INCOME TAXES (1,015) (2,313) (28,747)
INCOME TAXES 387 421 2,945
-------- -------- --------
NET LOSS $ (1,402) $ (2,734) $(31,692)
======== ======== ========
LOSS PER SHARE:
Net loss per share $ (.02) $ (.04) $(. 59)
======== ======== ========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 62,500 62,500 54,054
======== ======== ========
</TABLE>
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<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three From Inception
Months Ended August 13, 1990
September 30, To
1996 1995 September 30, 1996
---- ---- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,402) $ (2,734) $(31,692)
Increase (decrease) in accrued expenses (1,575) 320 1,379
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (2,977) (2,414) (30,313)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 0 0 63
Paid in capital 0 0 52,437
Offering costs 0 0 (14,647)
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 0 0 37,853
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (2,977) (2,414) 7,540
BEGINNING CASH BALANCE 10,517 16,900 0
-------- -------- --------
ENDING CASH BALANCE $ 7,540 $ 14,486 $ 7,540
======== ======== ========
</TABLE>
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<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital in During Total
Common Stock Excess of Development Stockholders'
Shares Amount Par Value Stage Equity
<S> <C> <C> <C> <C> <C>
Balance, August 13, 1990 (inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of shares to Officer and Directors of the
Company for cash August 13, 1990 12,500 13 2,487 -- 2,500
Net loss from inception to June 30, 1991 -- -- -- (2,163) (2,163)
Public offering of common stock and warrants 50,000 50 49,950 -- 50,000
Offering costs -- -- (14,647) -- (14,647)
Net loss for the year ended June 30, 1992 -- -- -- (4,977) (4,977)
Net loss for the year ended June 30, 1993 -- -- -- (4,750) (4,750)
Net loss for the year ended June 30, 1994 -- -- -- (5,297) (5,297)
------ ------ ------ ------ ------
Balance, June 30, 1994 62,500 63 37,790 (17,187) 20,666
Net loss for the year ended June 30, 1995 -- -- -- (6,165) (6,165)
------ ------ ------ ------ ------
Balance, June 30, 1995 62,500 63 37,790 (23,352) 14,501
Net loss for the year ended June 30, 1996 -- -- -- (6,938) (6,938)
------ ------ ------ ------ ------
Balance, June 30, 1996 62,500 63 37,790 (30,290) 7,563
Net loss for the three months ended September 30, 1996 -- -- -- (1,402) (1,402)
------ ------ ------ ------ ------
Balance, September 30, 1996 (unaudited) 62,500 $ 63 $37,790 $(31,692) $6,161
====== ====== ======= ======== ======
</TABLE>
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<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION BUSINESS ACTIVITY AND DIVIDEND POLICY
The Company was incorporated under the laws of the State of New York on
August 13, 1990. The Company is in the development stage and has not commenced
planned principal operations. The Company is seeking the acquisition of, or
merger with an existing Company. The fiscal year of the corporation is June 30.
The Company has, at the present time, not paid any dividends and any dividends
that may be paid in the future will depend upon the financial requirements of
the Company and other relevant factors.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates and
assumptions.
GENERAL AND RELATED PARTY
The Company has entered into an oral arrangement with Mr. Edwin Green,
President of the Company, providing for the use of a portion of his home as a
temporary office until such time as the Company needs additional facilities. The
Company does not pay rent for the use of such facilities.
The financial data for the three months ended September 30, 1996 and 1995
and for the period August 13, 1990 (commencement of development stage) through
September 30, 1996 is unaudited, but includes all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results of operations for such periods.
SUPPLEMENTAL CASH FLOW INFORMATION
The following were paid during the three months ended September 30, 1996:
Income taxes $ 404
Interest -0-
INCOME TAXES
As of September 30, 1996, the Company had a $30,290 net operating loss
carryforward available to offset future taxable income through 2005.
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Plan of Operation
The Registrant was formed August 13, 1990 for the purpose of investing in
any and all types of assets, properties and businesses. In connection with the
initial capitalization of the Registrant a total of 12,500 shares of its common
stock were issued to its officers and directors for the aggregate sum of $2,500.
On June 12, 1991, the United States Securities and Exchange Commission granted
effectiveness to a Registration Statement on Form S-18 for an offering of 50,000
Units of Common Stock and Warrants to purchase shares of Common Stock at $1.00
per Unit. The offering was closed in November 1991, and the Warrants included in
the Units have expired.
The Registrant is implementing its plan of operation by seeking to locate a
suitable company which desires to go public through a "reverse acquisition" with
the Registrant. Although no assurance can be given, Registrant believes its cash
on hand will satisfy its cash requirements until it effects such an acquisition.
However, Registrant intends to seek to raise from the sale of shares of its
Common Stock additional funds in the next six months to augment its cash on
hand, which capital could also be used for the benefit of any company it
acquires or with which it merges. There can be no assurance that the Company's
financing efforts will be successful.
(b) Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations.
Since inception the Registrant has not any business operations, and its
activities have been limited to the sale of its securities and the search for a
company to acquire through a "reverse acquisition." The Registrant will not have
any business operations until, if ever, such time as it effects an acquisition.
Accordingly, no revenue has been generated by the Registrant since its
inception.
For the years ended June 30, 1996 and 1995, the Registrant had a net loss
of ($6,938) and ($6,165), respectively, or ($.11) and ($.10) per share. From
inception to September 30, 1996, the Registrant had a net loss of ($31,692), or
($.59) per share. For the three months ended September 30, 1996, the Registrant
had a net loss of ($1,402), or ($.02) per share, compared to a net loss of
($2,734), or ($.04) per share, for the same period in the prior year. Such net
losses are attributable primarily to professional fees associated with the
Registrant's status as a public company.
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<PAGE>
Liquidity and Capital Resources.
As of June 30, 1996, the Registrant had assets of $10,517 (all in cash),
total liabilities of $2,954 and total shareholders' equity of $7,563. As of
September 30, 1996, the Registrant had cash of $7,540 and no other assets,
liabilities of $1,379 and total shareholders' equity of $6,161.
The decrease in cash and shareholders' equity resulted primarily from
professional fees associated with the Registrant's status as a public company.
Registrant intends to seek to raise from the sale of shares of its
Common Stock additional funds in the next six months to augment its cash on
hand, which capital could also be used for the benefit of any company it
acquires or with which it merges. There can be no assurance that the Company's
financing efforts will be successful.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: November 13, 1996 EDG CAPITAL, INC.
By /s/ Edwin D. Green
-------------------------------
Edwin D. Green, President
and Principal Financial Officer
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