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 December 31, 1999
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.)
23 Great Rock Drive, Wading River,NY 11792
(Address of principal executive offices) Zip Code)
(516) 929-4011
(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 182,500 as of February 10, 2000.
Transitional Small Business Issuer Disclosure Format: Yes [_] No [X]
Page 1 of 10; Exhibit Index is on Page 9
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31 June 30,
1999 1999
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 3,626 $ 9,338
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accrued expenses $ 3,154 2,880
-------- --------
TOTAL LIABILITIES 3,154 2,880
-------- --------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
50,000,000 shares authorized 182,500
shares issued and outstanding 183 183
Capital in excess of par value 67,670 67,670
Deficit accumulated during development stage (67,381) (61,395)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 472 6,458
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,626 $ 9,338
======== ========
2
<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
Issuance of shares, private placement, March 2, 1998 40,000 40 9,960 0 10,000
Net loss for the year ended June 30, 1998 0 0 0 (13,332) (13,332)
-------- -------- -------- -------- --------
Balance, June 30, 1998 142,500 143 57,710 (53,229) 4,624
Issuance of shares, private placement, June 11, 1999 40,000 40 9,960 0 10,000
Net loss for the year ended June 30, 1999 0 0 (8,166) (8,166)
-------- -------- -------- -------- --------
Balance, June 30, 1999 182,500 183 67,670 (61,395) 6,458
Net loss for the six months ended December 31,
1999 (unaudited) 0 0 0 (5,986) (5,986)
-------- -------- -------- -------- --------
Balance, December 31, 1999 (unaudited) 182,500 $ 183 $ 67,670 $(67,381) $ 472
======== ======== ======== ======== ========
</TABLE>
3
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For The Six From Inception
Months Ended August 13, 1990
December 31 To
1999 1998 December 31, 1999
REVENUE
Interest $ 0 $ 0 $ 2,419
--------- --------- ---------
EXPENSES
Miscellaneous 0 0 431
Office 0 0 2,431
Travel 1,015 0 1,015
Professional 3,931 2,630 54,049
Filing and transfer fees 1,110 879 8,255
--------- --------- ---------
TOTAL 6,056 3,509 66,181
--------- --------- ---------
LOSS BEFORE INCOME TAXES (6,056) (3,509) (63,762)
INCOME TAXES (70) 380 3,619
--------- --------- ---------
NET LOSS $ (5,986) $ (3,889) $ (67,381)
========= ========= =========
LOSS PER SHARE:
Net loss per share $ (.03) $ (.03) $ (.87)
========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 182,500 142,500 77,635
========= ========= =========
4
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For The Three
Months Ended
December 31
1999 1998
REVENUE
Interest $ 0 $ 0
--------- ---------
EXPENSES
Professional 3,251 876
Filing and transfer fees 654 694
--------- ---------
TOTAL 3,905 1,570
--------- ---------
LOSS BEFORE INCOME TAXES (3,905) (1,570)
INCOME TAXES 0 0
--------- ---------
NET LOSS $( 3,905) $ (1,570)
========= =========
LOSS PER SHARE:
Net loss per share $ (.02) $ (.01)
========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 182,500 142,500
========= =========
5
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Six From Inception
Months Ended August 13, 1990
December 31 To
1999 1998 December 31, 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,986) $ (3,889) $(67,381)
Increase (decrease) in accrued expenses 274 (2,393) 3,154
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (5,712) (6,282) (64,227)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 0 0 183
Paid in capital 0 0 82,317
Offering costs 0 0 (14,647)
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 0 0 67,853
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (5,712) (6,282) 3,626
BEGINNING CASH BALANCE 9,338 8,291 0
-------- -------- --------
ENDING CASH BALANCE $ 3,626 $ 2,009 $ 3,626
======== ======== ========
</TABLE>
6
<PAGE>
EDG CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(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.
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 six and three months ended December 31, 1999 and 1998
and for the period August 13, 1990 (commencement of development stage) through
December 31, 1999 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.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Income taxes
As of December 31, 1999, the Company had a $61,395 net operating loss
carryforward available to offset future taxable income through 2007.
NOTE 2: CAPITAL STOCK
On September 11, 1997, March 2, 1998 and June 11, 1999 the Company completed
private placements, each for 40,000 common shares, par value $.001. The total
proceeds of each private placement was $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 had 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, 1999 and 1998, the Registrant had a net loss
of $(8,166) and $(13,332), respectively, or $(.06) and $(.12) per share. From
inception to December 31, 1999, the Registrant had a net loss of $(67,381), or
$(.87) per share. For the six months ended December 31, 1999, the Registrant had
a net loss (unaudited) of $(5,986), or $(.03) per share, compared to a net loss
(unaudited) of $(3,889), or $(.03) per share, for the same period in the prior
year. Such net losses are attributable primarily to professional and other fees
associated with the Registrant's status as a reporting public company.
8
<PAGE>
Liquidity and Capital Resources.
As of June 30, 1999, the Registrant had assets of $9,338 (all in cash),
total liabilities of $2,880 and total shareholders' equity of $6,458. As of
December 31, 1999, the Registrant had (unaudited) cash of $3,626 and no other
assets, liabilities of $3,154 and total shareholders' equity of $472. The
Company may seek to raise additional capital in order to implement its plan of
operations. There can be no assurance that any such offering will be successful.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is filed with this report: Page
----
27 Financial Data Schedule. 10
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: February 10, 2000 EDG CAPITAL, INC.
By: /s/ Linda Green
--------------------------------
Linda Green, President
and Principal Financial
Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from EDG Capital,
Inc. financial statements for the six months ended December 31, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,626
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,626
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,626
<CURRENT-LIABILITIES> 3,154
<BONDS> 0
0
0
<COMMON> 183
<OTHER-SE> 289
<TOTAL-LIABILITY-AND-EQUITY> 3,626
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,056)
<INCOME-TAX> (70)
<INCOME-CONTINUING> (5,986)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,986)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
