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: March 31, 2000
[ ] 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
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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
March 31, 2000: 34,293,000 shares
Transitional Small Business Disclosure Format (check one): Yes No X ------ ----
<PAGE>
LS CAPITAL CORPORATION AND SUBSIDIARIES
QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
<S> <C>
Condensed consolidated financial statements of
LS Capital Corporation and Subsidiaries:
Balance sheet as of March 31, 2000 3
Statements of income for the three and nine months
ended March 31, 2000 and 1999 4
Statements of cash flows for the nine months
ended March 31, 2000 and 1999 5
Notes to condensed consolidated financial statements 6
Item 2. Management's Discussion and Analysis 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K. 8
(a) Exhibits
(b) Reports on Form 8-K
SIGNATURE 9
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
LS Capital Corporation
Balance Sheet
As of March 31, 2000
(in Thousands)
ASSETS
Cash $ 0
Mining claim 50
Loan receivable 22
Prepaid professional 3
--------
Total Assets $ 75
========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 537
Accrued officer salary 162
Accrued expenses 143
Cash advances by shareholders 174
--------
Total Liabilities 1,016
--------
Preferred stock, $0.01 par, 10,000,000 shares
Authorized, 0 shares issued and outstanding
Common stock, $0.01 par, 50,000,000 shares
authorized, 34,293,031 shares issued and
outstanding 343
Paid-in capital 27,253
Retained Earnings (28,537)
--------
Total Stockholders' Equity ( 941)
--------
Total Liabilities & Stockholders' Equity $ 75
========
<PAGE>
<TABLE>
<CAPTION>
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2000 2000 1999 1999
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
REVENUES $ 0 $ 0 $ 0 $ 0
EXPENSES
General & administrative 191 327 6 357
Equity in loss of mining
subsidiaries 74 167
-------- ----- ----- --------
191 327 80 524
----- ----- ----- -----
Operating (Loss) (191) (327) ( 80) (524)
Gain on sale of marketable
securities 23 102
Other income 4
-------- ------- ------- -----
NET LOSS $(191) $(327) $( 57) $(418)
===== ===== ===== =====
NET LOSS PER COMMON SHARE $(.01) $(.01) $(.00) $(.02)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 33,218,031 28,253,587 17,598,000 18,398,000
</TABLE>
<PAGE>
LS Capital Corporation
Statements of Cash Flows
For the Nine Months Ended March 31, 2000 and 1999
(in Thousands)
<TABLE>
<CAPTION>
9 Months 9 Months
Ended Ended
March 31, March 31,
2000 1999
--------- --------
CASH FLOWS FROM OPERATIONS
<S> <C> <C>
Net deficit $(327) $(418)
Adjustments to reconcile net
deficit to cash provided
from operating activities
Mining equity writedown 168
Gain on sale of securities (102)
Common stock issued for
services 249 122
Changes in:
Accounts receivable 267
Net changes in:
Accrued expenses 68
Accounts payable ( 21) (145)
----- -----
NET CASH USED BY OPERATING
ACTIVITIES ( 31) (108)
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Gain on sale of marketable securities 108
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from shareholders 1
Issuance of common stock 30
-----
NET CASH PROVIDED BY FINANCING
ACTIVITIES 31
-----
NET INCREASE (DECREASE) IN CASH 0 0
CASH BEGINNING 0 1
----- -----
CASH ENDING $ 0 $ 1
===== =====
</TABLE>
<PAGE>
LS Capital Corporation
NOTES TO FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of LS Capital
Corporation, a Texas corporation ("Company"), have been prepared in accordance
with generally accepted accounting principles and the rules of the Securities
and Exchange Commission ("SEC"), and should be read in conjunction with the
audited financial statements and notes thereto contained in the Company's latest
Annual Report filed with the SEC on From 10-KSB. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of financial position and the results of operations for the
interim periods presented have been reflected herein. The results of operations
for interim periods are not necessarily indicative of the results to be expected
for the full year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements for the
most recent fiscal year, 1999, as reported in Form 10-KSB, have been omitted.
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 March 31, 2000, the Company has a working capital deficiency of
$991,000 compared to a deficit of $1,437,000 at March 31, 1999. 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 March 31, 2000 and 1999
The Company incurred a net loss of $191,000 or $.01 a share, in the 2000 quarter
as compared to net loss of $327,000 or $0.01 per share for the comparable period
in the prior year. The change of $136,000 was attributable primarily to the
reduction in operating expenses.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On December 14, 1994, the Company filed a lawsuit in Harris County, Texas
against Full House Resorts, Inc. ("Full House"), Allen E. Paulson, Donaldson,
Lufkin & Jenrette Securities Corporation and My Dang to enforce the terms of a
preliminary agreement executed on September 8, 1994 between the Company and Full
House to jointly acquire and relocate a casino to the Company's site in Biloxi,
Mississippi. With the agreement of the Company, this litigation was continued in
the District Court of Harrison County, Mississippi under case no. A2402950142.
Shortly before a summary judgment hearing scheduled in March 1996, the Company's
counsel withdrew from the case without the substitution of new counsel. The
Company was unable to procure new counsel in time, and the presiding judge
granted the defendants' motions for summary judgment. On appeal, the Mississippi
Court of Appeals affirmed the summary judgment against the Company as to all of
its claims against My Dang, Allen B. Paulson and Donaldson, Lufkin & Jenrette
Securities Corporation and its claims of common law fraud against Full House.
However, this Court of Appeals reversed the summary judgment against the Company
for its claims of breach of contract and breach of fiduciary duties asserted
against Full House and remanded these claims to the lower court for a trial on
the merits. On April 4, 2000, while the Company was procuring new counsel to
continue this proceeding, the trial court entered an order dismissing the
Company's claims with prejudice, due to want of prosecution. On that same day,
the Circuit Court of Harrison County, Mississippi entered an order granting the
Company's Motion for Substitution of Counsel, appointing new counsel for the
Company. On April 13, 2000, the Company's new counsel filed a Notice of Appeal
regarding the lower court's dismissal order. Although the Company's new counsel
plans on vigorously pursuing the Company's claims for damages against Full
House, the ultimate outcome of this proceeding can not now be determined.
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: May 19, 2000
<PAGE>
EXHIBITS INDEX
Exhibit
Number Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM iTEM 1
OF fORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000897545
<NAME> LS CAPITAL CORPORATION
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 22
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25
<PP&E> 50
<DEPRECIATION> 0
<TOTAL-ASSETS> 75
<CURRENT-LIABILITIES> 1016
<BONDS> 0
0
0
<COMMON> 343
<OTHER-SE> (1284)
<TOTAL-LIABILITY-AND-EQUITY> 75
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 191
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (191)
<INCOME-TAX> 0
<INCOME-CONTINUING> (191)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (191)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
