UNITED STATES
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, 1999
[ ] 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: 0-21566
LS CAPITAL CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 84-1219819
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Rivercourt
17-19 Sir John Rogersons Quay
Dublin 2
Ireland
(3531) 679-0222
(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
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 Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of common stock, $0.01 par value, outstanding as
of September 30, 1999: 28,358,000 shares
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
LS CAPITAL CORPORATION AND SUBSIDIARIES
QUARTER ENDED SEPTEMBER 30, 1999
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
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Item 1. Financial Statements
Condensed consolidated financial statements of LS Capital
Corporation and Subsidiaries:
Balance sheet as of September 30, 1999 3
Statements of income for the three months
ended September 30, 1999 and 1998 4
Statements of cash flows for the three months
ended September 30, 1999 and 1998 5
Notes to financial statements 6
Item 2. Management's Discussion and Analysis 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities 7
Item 6. Exhibits and Reports on Form 8-K. 8
(a) Exhibits
(b) Reports on Form 8-K
SIGNATURE 8
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated Balance Sheet
September 30, 1999
(in thousands)
<TABLE>
ASSETS
<S> <C>
Prepaid accounting fees $ 12
Mining claim 50
Land held for resale 21
---------------
$ 83
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 791
Notes payable to related parties 178
---------------
Total current liabilities 969
Stockholders' equity:
Common stock 217
Additional paid-in capital 27,161
Accumulated deficit (28,265)
---------------
( 886)
---------------
Commitments, contingencies and other matters
$ 83
===============
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated
Statements of Income
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1999 1998
<S> <C> <C>
REVENUES $ 10 $ -
OPERATING EXPENSES
Equity in loss of unconsolidated mining subsidiaries 25
General and administrative 64 161
Depreciation and amortization 1
--------- ---------
64 187
--------- ---------
OPERATING LOSS ( 54) ( 187)
OTHER INCOME AND EXPENSE
Gain on sale of marketable securities 27
----------- ----------
NET INCOME (LOSS) $ ( 54) $ ( 160)
=========== ==========
NET INCOME (LOSS) PER COMMON SHARE $(0.00) $ (0.01)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 21,718 17,598
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated
Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($ 54) ($ 160)
Adjustments:
Depreciation and amortization 1
Stock issued for services 53
Mining equity writedown ( 44)
Changes in:
Receivable from affiliated parties 81
Other current assets ( 2)
Accounts payable ( 4) 40
Due to related parties 5 10
Accrued payroll taxes and other 47
------- ----------
- ( 27)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of JVWeb common stock 27
------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 0 0
CASH AND CASH EQUIVALENTS
Beginning of period 0 0
------- -------
End of period $ 0 $ 0
======= ========
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Three Months Ended September 30, 1999
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. The financial statements contained herein should
be read in conjunction with the audited consolidated financial statements for
the year ended June 30, 1999 included in the Company's Annual Report on Form
10-KSB. Accordingly, footnote disclosure which would substantially duplicate the
disclosure in the audited consolidated financial statements has been omitted.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary for a fair
statement of the results for the unaudited nine months ended September 30, 1999
and 1998. The results of operations for an interim period are not necessarily
indicative of the results to be expected for a full year.
2. The Company acquired a minerals claim in British Columbia, Canada in
exchange for a promissory note for $50,000, due September 30, 2001, and
bearing interest at 8%. This note is convertible at anytime into 2,500,000
shares of Company common stock.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SIGNIFICANT EVENTS
From its inception and until shortly after the start of fiscal 1997,
the Company was involved exclusively in the gaming industry. During fiscal 1997,
the Company adopted a significant change in its corporate direction. It decided
to focus its efforts on developing precious metals mining prospects, with each
project undertaken in a separate corporate subsidiary. The Company organized a
number of wholly-owned or partially-owned precious metals/mining subsidiaries
that held rights in certain mining claims or properties believed to contain
precious metals or in certain mineral extraction technologies. In February 1999,
primarily due to the unavailability of capital to develop the Company's
technologies further, the Company decided to discontinue its mineral activities
and furlough its remaining personnel in the U.S. The Company allowed its mineral
interests to lapse. The Company continues to own a five-acre tract of land in
Tecopa, California, miscellaneous equipment believed to have an aggregate fair
market value of $25,000 and rights in certain technologies believed to have no
meaningful commercial value. The Company intends to dispose of the tract of land
and the remaining equipment as purchasers can be procured. The Company has no
present intentions regarding its technologies.
In the future, the Company intends to explore opportunities to develop
or acquire one or more businesses in other industries. The Company expects to
focus specifically on Internet-related businesses. The Company does not now any
particular prospect under consideration in any meaningful sense. The nature of
the business in which the Company will engage in the future, the terms and
circumstances under which the Company will engage in such business and even
whether or not the Company will engage in a future business, are now uncertain.
MATERIAL CHANGES IN FINANCIAL CONDITION
At September 30, 1999, the Company has a working capital deficiency of
$997,000 compared to a deficit of $1,525,000 at September 30, 1998. The lower
deficiency was primarily due to forgiveness of debt during the period ended June
30, 1999.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Three Months Ended September 30, 1999 and 1998
The Company had incurred a net loss of $1,000 or $.00 a share, as compared to
net loss of $160,000 or $0.01 per share for the comparable period in the prior
year. The change of $159,000 was attributable primarily to the reduction in
operating expenses.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
On or about September 30, 1999, the Company issued to a Canadian
corporation a convertible promissory note (the "Note") in the original principal
amount of $50,000 in exchange for the conveyance to the Company of a mineral
claim. The Note is convertible at any time into 2,500,000 shares of the
Company's common stock. The Note was, and the shares into which the Note are
convertible will be, issued in reliance on the exemption provided for by
Regulation D under the Securities Act of 1933.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed with this Quarterly Report or
are incorporated herein by reference:
Exhibit
Number Description
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LS CAPITAL CORPORATION
(Registrant)
By: /s/ Paul J. Montle
Paul J. Montle
President, Chief Executive Officer
and Chief Financial Officer
Dated: November 15, 1999
<PAGE>
EXHIBITS INDEX
Exhibit
Number Description
27 Financial Data Schedule
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<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM ITEM 1
OF FORM 1O-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000897545
<NAME> LS CAPITAL CORPORATION
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<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
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