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, 1997
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 102,500 as of November 5, 1997.
Transitional Small Business Issuer Disclosure Format: Yes _____ No __X__
Page 1 of 11; Exhibit Index is on Page 9
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, June 30,
1997 1997
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 5,941 $ 444
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 5,117 $ 2,488
-------- --------
TOTAL LIABILITIES 5,117 2,488
-------- --------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
50,000,000 shares authorized 102,500
and 62,500 shares issued and outstanding 103 63
Capital in excess of par value 47,750 37,790
Deficit accumulated during development stage (47,029) (39,897)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 824 (2,044)
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,941 $ 444
======== ========
2
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For The Three From Inception
Months Ended August 13, 1990
September 30, To
1997 1996 September 30, 1997
REVENUE
Interest $ 0 $ 50 $ 2,419
-------- -------- --------
EXPENSES
Office 0 0 2,431
Professional 6,550 915 39,000
Filing and transfer fees 185 150 4,277
Miscellaneous 17 0 431
-------- -------- --------
TOTAL 6,752 1,065 46,139
-------- -------- --------
LOSS BEFORE INCOME TAXES (6,752) (1,015) (43,720)
INCOME TAXES 380 387 3,309
-------- -------- --------
NET LOSS $ (7,132) $ (1,402) $(47,029)
======== ======== ========
LOSS PER SHARE:
Net loss per share $ (.10) $ (.02) $ (83)
======== ======== ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 71,196 62,500 56,732
======== ======== ========
3
<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
1997 1996 September 30, 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,132) $ (1,402) $(47,029)
Increase (decrease) in accrued expenses 2,629 (1,575) 5,117
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (4,503) (2,977) (41,912)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 40 0 103
Paid in capital 9,960 0 62,397
Offering costs 0 0 (14,647)
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,000 0 47,853
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 5,497 (2,977) 5,941
BEGINNING CASH BALANCE 444 10,517 0
-------- -------- --------
ENDING CASH BALANCE $ 5,941 $ 7,540 $ 5,941
======== ======== ========
</TABLE>
4
<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 0 2,500
Net loss from inception to June 30, 1991 0 0 0 (2,163) (2,163)
Public offering of common stock and warrants 50,000 50 49,950 0 50,000
Offering costs 0 0 (14,647) 0 (14,647)
Net loss for the year ended June 30, 1992 0 0 0 (4,977) (4,977)
Net loss for the year ended June 30, 1993 0 0 0 (4,750) (4,750)
Net loss for the year ended June 30, 1994 0 0 0 (5,297) (5,297)
Net loss for the year ended June 30, 1995 0 0 0 (6,165) (6,165)
Net loss for the year ended June 30, 1996 0 0 0 (6,938) (6,938)
-------- -------- -------- -------- --------
Balance, June 30, 1996 62,500 63 37,790 (30,290) 7,563
Net loss for the year ended June 30, 1997 0 0 0 (9,607) (9,607)
-------- -------- -------- -------- --------
Balance, June 30, 1997 62,500 63 37,790 (39,897) (2,044)
Issuance of shares, private placement,
September 11, 1997 40,000 40 9,960 0 10,000
Net loss for the nine months ended September. 30, 1997 0 0 (7,132) (7,132)
-------- -------- -------- -------- --------
Balance, September 30, 1997 (unaudited) 102,500 $103 $ 47,750 $(47,029) $ 824
======== ======== ======== ======== ========
</TABLE>
5
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(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.
ESTIMATES
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles 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 entered into an oral arrangement with the President of the Company,
providing for the use of a portion of her 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, 1997 and 1996 and
for the period August 13, 1990 (commencement of development stage) through
September 30, 1997 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 period ended September 30, 1997:
Income taxes $ 388
INCOME TAXES
As of September 30, 1997, the Company had a $39,397 net operating loss
carryforward available to offset future taxable income through 2006.
6
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
NOTE 2: CAPITAL STOCK
On September 11, 1997 the Company completed a private placement of 40,000 common
shares, par value $.001 for total proceeds of $10,000. These funds were raised
to provide working capital.
7
<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, it may raise additional funds in the next 12 months to make itself more
attractive as an acquisition vehicle, which capital would be used for the
benefit of any company acquired by the registrant.
(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, 1997 and 1996, the Registrant had a net loss
of ($9,607) and ($6,938), respectively, or ($.15) and ($.11) per share. From
inception to September 30, 1997, the Registrant had a net loss of ($47,029), or
($.83) per share. For the three months ended September 30, 1997, the Registrant
had a net loss of ($7,132), or ($.10) per share, compared to a net loss of
($1,402), or ($.02) per share, for the same period in the prior year. Such net
losses are attributable primarily to professional and filing fees associated
with the Registrant's status as a public company and costs of its September 1997
private placement.
8
<PAGE>
Liquidity and Capital Resources.
As of June 30, 1997, the Registrant had assets of $444 (all in cash), total
liabilities of $2,488 and total shareholders' equity of ($2,044). As of
September 30, 1997, the Registrant had cash of $5,941 and no other assets,
liabilities of $5,117 and total shareholders' equity of $824. The increase in
cash and shareholders' equity resulted primarily from the Company's sale of
40,000 shares of Common Stock in September 1997, which generated gross proceeds
of 10,000.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is filed with this report:
Page
----
27 Financial Data Schedule. 11
9
<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 10, 1997
EDG CAPITAL, INC.
By: /s/ Linda Green
-------------------------------
Linda Green, President
and Principal Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from EDG
Capital, Inc. financial statements for the three months ended September 30,
1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,941
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,941
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,941
<CURRENT-LIABILITIES> 5,117
<BONDS> 0
0
0
<COMMON> 103
<OTHER-SE> 721
<TOTAL-LIABILITY-AND-EQUITY> 5,941
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,752
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,752)
<INCOME-TAX> 380
<INCOME-CONTINUING> (7,132)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,132)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> (.10)
</TABLE>
