<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ____________ to _____________
Commission file number: 33-38214-D
RELIANCE RESOURCES INC.
(Exact name of registrant as specified in its charter)
COLORADO 95-4734398
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1621 ALTIVO WAY, LOS ANGELES, CALIFORNIA 90026
(Address of principal executive offices)
(818) 980-0929
(Registrant's telephone number, including area code)
Registrant's Name or 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 twelve 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 __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Date: September 30, 1998 Common Stock, par value $0.001 per share.
Shares outstanding: 2,000,000
Transitional Small Business Disclosure Format (Check one): Yes ____ No X
<PAGE>
RELIANCE RESOURCES INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
Part 1 FINANCIAL INFORMATION Page
Item 1. Financial Statements
Balance Sheets
September 30, 1998
December 31, 1997 5
Statements of Operations
Three Months Ended September 30 1998 and 1997
Nine Months Ended September 30, 1998 and 1997
and for the Period Inception (December 7, 1990) to
September 30, 1998 6
Statements of Changes in Stockholders' Equity (Deficit)
For the Period from Inception (December 7, 1990) to
September 30, 1998 7
Statements of Cash Flow
Nine Months Ended September 30, 1998 and 1997
and for the Period from Inception (December 7, 1990)
to September 30, 1998 9
Notes to Financial Statements 10
Item 2. Plan of Operation 13
Part II. OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Changes in securities
Item 3. Defaults upon senior notes
Item 4. Submission of matters to a vote of security holders
Item 5. Other information
Item 6. Exhibits and reports on Form 8-K
2
<PAGE>
PLAN OF OPERATION
ITEM 2.
During the third quarter of 1998, the Company resumed its efforts to
identify business opportunities consistent with its objectives. However, the
Company's ability to operate is significantly limited and adversely impacted by
the absence of operating funds. Against this background, the Company has been
unsuccessful in identifying established and profitable operating companies which
desire a public listing through a "reverse-merger".
Additionally, within its sphere of operations, the Company competes
with a variety of sources such as investment bankers and venture capitalists
which are capitalized and possess significantly greater management resources.
Therefore the Company's ability to achieve its stated objectives at the current
time are, at best, tenuous. However, Management continues to use all available
resources in its endeavours to successfully complete a business combination.
<PAGE>
OTHER INFORMATION
PART II
Iten 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Proposed change of name to Reliance Resources Inc.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Report on Form 8-K dated September 8, 1998 incorporated herein by
reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
RELIANCE RESOURCES INC.
/s/ Patrick C. Brooks
------------------------------------
Patrick C. Brooks
Director, President and Secretary
Date: October 26, 1998
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
Financial Statements
Balance Sheets --
Assets, Liabilities and Stockholders' Equity..................... 1
Statements of Operations................................................ 2
Statement of Stockholders' Equity....................................... 3
Statements of Cash Flows................................................ 5
Notes to Financial Statements............................................... 6
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
BALANCE SHEETS
ASSETS
------
(Unaudited)
September 30, December 31,
Current Assets: 1998 1997
- --------------- ---- ----
Cash and equivalents 0 0
---------- ----------
Total Assets 0 0
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
- --------------------
Accounts payable and accrued expenses 3,000 20,000
---------- ----------
Stockholders' Equity:
- ---------------------
Preferred stock -- 10,000,000 shares
authorized; issued and outstanding
none @ $0.01 par value -- --
Common stock -- 50,000,000 shares authorized;
issued and outstanding 2,000,000 shares at
September 30, 1998 and 500,000 shares at
December 31, 1997 @ $.001 par value
(Notes 1,2 and 3) 2,000 500
Paid in capital (Note 2) 53,230 34,730
Deficit accumulated during the
development stage (58,230) (55,230)
---------- ----------
Total Stockholders' (Deficit) (3,000) (20,000)
---------- ----------
Total Liabilities and Stockholders' Equity 0 0
========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
1
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, Period from Inception
----------------- ----------------- (December 7, 1990) to
1998 1997 1998 1997 September 30, 1998
---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
Revenue: 0 0 0 0 0
Operating Expenses:
Expenses incurred in connection
with securities registration 0 0 0 0 12,087
Officer and director fees 0 230 0 0 230
Amortization of organization costs 0 0 0 0 5,000
Rent 1,500 0 1,500 0 1,500
Professional fees 0 0 0 0 5,028
Travel expenses 0 0 0 0 1,324
Transfer agent fees 0 0 0 0 1,449
Accounting fees 500 500 1,500 1,000 21,500
Other expenses 0 0 0 0 10,112
----------- ----------- ----------- ----------- -----------
Total operating expenses 2,000 500 3,000 1,000 58,230
----------- ----------- ----------- ----------- -----------
Net (loss) (2,000) (500) (3,000) (1,000) (58,230)
=========== =========== =========== =========== ===========
Weighted number of shares outstanding 500,000 270,000 2,000,000 2,000,000 2,000,000
=========== =========== =========== =========== ===========
Net (loss) per share nil nil nil nil nil
=== === === === ===
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM INCEPTION (DECEMBER 7, 1990) TO SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Common Shares Deficit Total
----------------------- Paid In Accumulated During Stockholders'
Shares Amount Capital Development Stage Equity
------ ------ ------- ----------------- ------
<S> <C> <C> <C> <C> <C>
December 7, 1990
Issuance of 270,000
units (consisting of
one share of common
stock and one warrant)
for $0.0185185 cash
per unit 270,000 270 4,730 0 5,000
Net loss 0 0 0 (12,368) (12,368)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1990 270,000 270 4,730 (12,368) (7,368)
Net loss, year ended
December 31, 1991 0 0 0 (5,877) (5,877)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1991 270,000 270 4,730 (18,245) (13,245)
Net loss, year ended
December 31, 1992 0 0 0 (9,391) (9,391)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1992 270,000 270 4,730 (27,636) (22,636)
Paid in Capital (note 2) 0 0 30,000 0 30,000
Net loss, year ended
December 31, 1993 0 0 0 (5,846) (5,846)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1993 270,000 270 34,730 (33,482) 1,518
Net loss, year ended
December 31, 1994 0 0 0 (6,600) (6,600)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1994 270,000 270 34,730 (40,082) (5,082)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)
FOR THE PERIOD FROM INCEPTION (DECEMBER 7,1990) TO SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Common Shares Deficit Total
----------------------- Paid In Accumulated During Stockholders'
Shares Amount Capital Development Stage Equity
------ ------ ------- ----------------- ------
<S> <C> <C> <C> <C> <C>
Balance, December 31,
1994 270,000 270 34,730 (40,082) (5,082)
Net loss, year ended
December 31, 1995 0 0 0 (4,418) (4,418)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1995 270,000 270 34,730 (44,500) (9,500)
Net loss, year ended
December 31, 1996 0 0 0 (3,500) (3,500)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1996 270,000 270 34,730 (48,000) (13,000)
Stock issued for officer
and director fees 230,000 230 0 0 230
Net loss, year ended
December 31, 1997 0 0 0 (7,230) (7,230)
---------- ---------- ---------- ---------- ----------
Balance, December 31,
1997 500,000 500 34,730 (55,230) (20,000)
Shares issued to officer for
cancellation of debt
(Note 3) 1,500,000 1,500 18,500 0 20,000
Net loss, nine months ended
September 30, 1998 0 0 0 (3,000) (3,000)
---------- ---------- ---------- ---------- ----------
Balance, September 30,
1998 2,000,000 2,000 53,230 (58,230) (3,000)
========== ========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<PAGE>
RELIANCE RESOURCES INC.
(formerly Pursuit Venture Corporation)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended Period from Inception
September 30, (December 7, 1990) to
1998 1997 September 30, 1998
---- ---- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) (2,000) (1,000) (58,230)
Adjustments to reconcile net (loss) to net
cash (used) by operating activities
Amortization of organization expenses 0 0 5,000
Increase (decrease) in accounts payable
and accrued expenses 2,000 1,000 3,000
---------- ---------- ----------
NET CASH (USED) BY
OPERATING ACTIVITIES 0 0 (50,230)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Organization costs 0 0 (5,000)
---------- ---------- ----------
CASH PROVIDED FROM
INVESTING ACTIVITIES 0 0 (5,000)
---------- ---------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 0 0 5,000
Common stock issued for services 0 0 230
Common stock issued for cancellation
of accrued expenses (Note 3) 0 0 20,000
Paid in capital from shareholders (Note 2) 0 0 30,000
Borrowings of long-term debt,
related party (Note 2) 0 0 0
---------- ---------- ----------
NET CASH PROVIDED FROM
FINANCING ACTIVITIES 0 0 55,230
NET INCREASE (DECREASE) IN CASH 0 0 0
CASH BALANCE, BEGINNING OF PERIOD 0 0 0
---------- ---------- ----------
CASH BALANCE, END OF PERIOD 0 0 0
========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<PAGE>
RELIANCE RESOURCES INC.
(FORMERLY PURSUIT VENTURE CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
This summary of significant accounting policies of Reliance Resources
Inc., is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements.
(a) Organization and Business Activities:
The Company was incorporated on December 7, 1990 under the laws of
the State of Delaware as Pursuit Ventures Corporation. Under a
Plan and Agreement of Merger, effective August 21, 1998 the
Company merged with a Colorado Corporation also named Pursuit
Ventures Corporation which became the surviving Company.
The Company filed for a name change with the Colorado Secretary of
State to Reliance Resources Inc., which became effective September
8, 1998.
The Company's principal purpose is to seek out business
opportunities, including acquisitions, that the Board of
Directors, in its discretion, believes to be a potential for long
term growth.
Upon incorporation, the Company issued 270,000 shares of its
common stock and 270,000 warrants to Fountain Colony Holding
Corporation (formerly known as Argyle Funding, Incorporated)
hereinafter "Fountain" as its sole stockholder. Upon issuance of
the shares, Fountain contributed $5,000 to the capital of the
Company and advanced funds of $30,000 to the Company (see note 2).
Fountain created the Company for the express purpose of
distributing its "units" to the shareholders of Fountain in order
to create a publicly-owned company to acquire a privately-held
business which, in the opinion of management, has the potential
for growth and profit. Each "unit" consists of one share of common
stock, $0.001 par value, and one warrant to purchase an additional
share of common stock of the Company at an exercise price of $10
per share. During 1992, Fountain distributed 257,844 "units" (and
cash of $1,216 in lieu of units in certain instances) to the
stockholders of Fountain based on their respective pro-rata
ownership of Fountain. The warrants were never exercised and
expired November 30, 1992.
The Company is currently in the development stage. The Company has
not as yet commenced any operations or identified any potential
acquisition opportunities. There is no assurance that the Company
will be able to acquire a satisfactory business on terms favorable
to the Company or profitably operate any business so acquired.
6
<PAGE>
RELIANCE RESOURCES INC.
(FORMERLY PURSUIT VENTURE CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
------------------------------------------
(b) Organization costs:
Organization costs consist of accounting and legal fees and are
being amortized over a 60-month period.
(c) Fiscal Year:
The Company operates on a calendar year basis.
(d) Basis of Operation:
The Company prepares its financial statements and federal income
taxes on the accrual basis of accounting.
Note 2 NOTE DUE TO RELATED PARTY
-------------------------
The Company had an unsecured note payable to Fountain in the amount of
$30,000. The note accrued interest at 10% per annum. In 1993 the
shareholders of Fountain elected to cancel the note and all accrued
interest and provide the funds to the Company as additional paid-in
capital. The Company reversed all accrued interest payable to Fountain
as an offset to expenses in 1993.
Note 3 CAPITAL STRUCTURE
-----------------
The Company's Articles of Incorporation authorized two classes of
stock; preferred and common. Preferred stock authorized; 10,000,000
shares at a par value of $.01. There are no issued and outstanding
preferred shares. The terms, conditions, preferences and provisions of
the preferred stock have not, as of this date, been established, but
rather will be established by the Company's Board of Directors.
The Company has 50,000,000 shares of common stock authorized at a par
value of $.001. There are 2,000,000 shares issued and outstanding.
During 1997 the Company issued 230,000 shares of common stock to its
sole officer and director for services provided to the Company his
sole capacity as the Company's board member, President, Chief
Financial Officer and Secretary.
In June 1998 the Company issued 1,500,000 shares of common stock in
exchange for the accrued fees due of $20,000 at December 31, 1997 to
the sole officer and director of the Company. These fees have been
reflected as paid-in capital to the Company.
7
<PAGE>
RELIANCE RESOURCES INC.
(FORMERLY PURSUIT VENTURE CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 4 INCOME TAXES
------------
At December 31, 1997, the Company has a federal operating loss
carryforward of $55,230 for financial accounting and federal income
tax purposes. Utilization of the net operating loss in any taxable
year during the carryforward period may be subject to an annual
limitation due to the ownership change limitations imposed by the tax
law.
The net operating losses will expire at various dates commencing in
the year 2005 through 2012.
The deferred tax asset consists of the future benefit of net operating
loss carryforwards. A valuation allowance limits the recognition of
the benefit of deferred tax assets until realization is reasonable
assured by future profitability.
The following is a summary of deferred taxes:
Deferred asset $ 8,000
Valuation allowance (8,000)
--------
0
========
Note 5 OPTIONS & WARRANTS
------------------
The Company has not adopted a stock option plan. There are no warrants
issued or outstanding.
Note 6 COMMITMENTS
-----------
The Company has been provided minimal office space at a rate of $500
per month on a month to month basis.
8
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 3000
<BONDS> 0
0
0
<COMMON> 2000
<OTHER-SE> (5000)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
