U.S. 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, 1997
Commission File No. 33-55254-39
PERIPHERAL CONNECTIONS, INC.
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 87-0485315
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3303 DON MILLS ROAD, SUITE 2603 NORTH YORK, ONTARIO, CANADA M2J 4T6 (Address of
principal executive offices)
Issuer's telephone number, including area code (416) 490-8500
Check whether the issuer: (1) has 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
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 4,050,000 shares of $.001 par value
class A common stock outstanding as of September 30, 1997
Transitional Small Business Disclosure Format (check one): Yes No X
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<PAGE>
PERIPHERAL CONNECTIONS, INC.
FORM 10-QSB FOR QUARTER ENDED
September 30, 1997
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1 Financial Statements
Balance Sheets as of
September 30, 1997 and December 31, 1996 4
Statements of Operations for the
three and nine month periods ended
September 30, 1997 and 1996 5
Statements of Cash Flows for the
nine month periods ended
September 30, 1997 and 1996. 6
Item 2 Management's Discussion and Analysis
and Plan of Operations 7
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 8
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Item 2 Changes in Securities 8
------
Item 3 Defaults Upon Senior Securities 8
------
Item 4 Submission of Matters to a Vote of
------
Security Holders 8
Item 5 Other Information 8
------
Item 6 Exhibits and Reports on Form 8-K 8
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2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
In the opinion of the management of Peripheral Connections, Inc. (the
Company) the accompanying unaudited financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the financial position as of September 30, 1997 and December 31, 1996, the
results of operations for the nine month periods ended September 1997 and
September 30, 1996, and the cash flows for the nine month periods ended
September 30, 1997 and September 30, 1996.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Company's latest annual report on Form 10-KSB.
3
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PERIPHERAL CONNECTIONS, INC.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
September 30, Dec. 31,
1997 1996
(Unaudited) (Audited)
----------------- -----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 18,261 $ 163,476
Loan Receivable 165,296 27,860
Accrued Interest 6,121 225
----------------- -----------------
Total Current Assets 189,678 191,561
----------------- -----------------
TOTAL ASSETS $ 189,678 $ 191,561
================= =================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts Payable and
Interest Payable $ 4,852 $ 3,333
----------------- -----------------
Total Current Liabilities 4,852 3,333
Convertible Debenture 0 200,000
----------------- -----------------
Total Liabilities 4,852 203,333
STOCKHOLDERS' EQUITY
Common Stock $0.001 par value
Authorized - 25,000,000 shares
Issued and outstanding 4,050,000 shares
(1,000,000 at 1996) 4,050 1,000
Additional paid-in capital 301,950 0
Deficit accumulated during the development stage (121,174) (12,772)
----------------- -----------------
Total Stockholders' Equity 184,826 (11,772)
----------------- -----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 189,678 $ 191,561
================= =================
</TABLE>
4
<PAGE>
PERIPHERAL CONNECTIONS, INC.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 0 $ 0 $ 0 $ 0
Expenses
Consulting fees 75,000 0 75,000 0
Administration 6,652 0 17,205 0
Net Interest Expense 11,526 0 16,197 0
------------- -------------- ------------- -------------
93,178 0 108,402 0
Net Loss for Period (93,178) 0 (108,402) 0
Deficit - beginning of Period (27,996) 0 (12,772) 0
------------- -------------- ------------- -------------
Deficit - end of Period (121,174) 0 (121,174) 0
Net Loss per Share (.09) 0 (.11) 0
Average shares outstanding used to
calculate net loss per share 1,033,889 1,000,000 1,011,172 1,000,000
</TABLE>
5
<PAGE>
PERIPHERAL CONNECTIONS, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the
Nine Months Ended
September 30,
1997 1996
----------------- -----------------
<S> <C> <C>
Cash flows from Operating Activities $ (108,402) $ 0
Adjustments to reconcile net loss to cash used by operating activities:
Stock issued for expenses 105,000 0
Changes in assets and liabilities 1,519 0
----------------- -----------------
Net cash used by operating activities (1,883) 0
Investing Activities
Loans to related party and accrued interest (143,332) 0
----------------- -----------------
Net cash used by investing activities (143,332) 0
----------------- -----------------
Decrease in cash (145,215) 0
Cash - beginning of period 163,476 0
----------------- -----------------
Cash - end of period $ 18,261 $ 0
================= =================
</TABLE>
SUPPLEMENTAL FINANCING ACTIVITIES:
During the quarter ended September 30, 1997, the Company issued 2,300,000 shares
of its restricted common stock to retire $200,000 of debt and $30,000 of accrued
interest. The Company issued 750,000 shares of S-8 stock for $75,000 of services
performed by consultants, including $25,000 of services by the Company's
President. The stock was valued at $.10 per share based on the services
received.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION.
The Company has no operational history and has yet to engage in
business of any kind. All risks inherent in a new and inexperienced enterprise
are inherent in the Company's business. On July 2, 1996, the Company raised
$200,000 through the issuance of a 12.5 percent debenture which was convertible
into $0.001 par value Class A common shares at the rate of 10 cents per share.
The debenture was subsequently refinanced with a debenture having substantially
similar terms and an interest rate of 10 percent. With the proceeds of this
$200,000 financing the Company plans to construct a new search-engine for
financial products now being presented on the Internet. The Company plans to
assemble the personnel and infrastructure to create the requisite Web software,
which, in its opinion, when operational, can attract such potential advertisers
in the financial world such as brokers, money mangers, financial planners,
publishers and banking institutions. This debenture was subsequently converted
by its holder into 2,300,000 shares of the Company's restricted common stock
pursuant to the terms of the debenture.
The discussions below highlight certain of the more material changes in
results of operations and changes in financial condition for the fiscal nine
month period ended September 30, 1997 and 1996. The Company continues to focus
its energies on the creation of Web software.
Results of Operations.
During the first three quarters of fiscal 1997 the Company incurred
expenses related to consulting, legal and accounting assistance, interest
expense and share registration. Administrative expenses on both a cash and
accrued basis are being kept to a minimum level to preserve assets for software
development.
Financial Condition.
There were no significant changes to the net financial condition of the
Company in the nine month period ended September 30, 1997. Cash decreased by
$145,215 mainly as a result of administration expense and a loan to a related
party. The Company continues to believe it has the support of its major
stockholders and that financing is available to meet all requirements.
During the quarter ended September 30 1997, the Company issued 750,000
shares of S-8 Common Stock to three consultants for services valued at $75,000.
The Company also issued 2,300,000 shares of restricted common stock to retire a
convertible debenture of $200,000 and pay interest expense of $30,000. The
entity receiving the 2,300,000 shares is controlled by the Company's
Secretary/Chief Financial Officer. The entity is now the Company's largest
shareholder, owning about 57% of the Company's outstanding stock.
7
<PAGE>
PART II
Other Information
Item 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: None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports: None
8
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PERIPHERAL CONNECTIONS, INC.
Dated: November 4, 1997 /s/ Melvyn Moscoe
---------------------
Melvyn Moscoe, Director, Chief
Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from the financial
statements of Peripheral Connections, Inc. as of
and for the nine months ended September 30, 1997
and is qualified in its entirety by reference to
such financial statement.
</LEGEND>
<CIK> 0000894557
<NAME> Peripheral Connections, Inc.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 18,261
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 189,678
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 189,678
<CURRENT-LIABILITIES> 4,852
<BONDS> 0
0
0
<COMMON> 4,050
<OTHER-SE> 180,776
<TOTAL-LIABILITY-AND-EQUITY> 184,826
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 92,205
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,197
<INCOME-PRETAX> (108,402)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108,402)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
