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: December 31, 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
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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 December 31, 1999: 31,508,000 shares
Transitional Small Business Disclosure Format (check one): Yes No X
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<PAGE>
LS CAPITAL CORPORATION AND SUBSIDIARIES
QUARTER ENDED DECEMBER 31, 1999
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 December 31, 1999 3
Statements of income for the six months
ended December 31, 1999 and 1998 4
Statements of income for the three months
ended December 31, 1999 and 1998 5
Statements of cash flows for the six months
ended December 31, 1999 and 1998 6
Notes to condensed consolidated financial statements 7
Item 2. Management's Discussion and Analysis 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 9
(a) Exhibits
(b) Reports on Form 8-K
SIGNATURE 9
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated Balance Sheet
December 31, 1999
(in thousands)
ASSETS
<TABLE>
<S> <C>
Mining claim $ 50
Land held for resale 21
Prepaid accounting fees 4
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$ 75
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 783
Notes payable to related parties 174
---
Total current liabilities 957
Stockholders' equity:
Common stock 315
Additional paid-in capital 27,142
Accumulated deficit (28,339)
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( 882)
--------
Commitments, contingencies and other matters
$ 75
==========
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated
Statements of Income
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended
December 31
1999 1998
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<S> <C> <C>
REVENUES $ 8 $ -
OPERATING EXPENSES
Equity in loss of unconsolidated mining subsidiaries 93
General and administrative 136 350
Depreciation and amortization 1
--------- -------
136 444
OPERATING LOSS ( 128) ( 444)
OTHER INCOME AND EXPENSE
Gain on sale of marketable securities 79
Other 4
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NET INCOME (LOSS) $ ( 128) $ ( 361)
=========== ==========
NET INCOME (LOSS) PER COMMON SHARE $(0.00) $ (0.01)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 26,433 17,598
</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
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<S> <C> <C>
REVENUES $ - $ -
OPERATING EXPENSES
Equity in loss of unconsolidated mining subsidiaries - 69
General and administrative 63 186
Depreciation and amortization - 2
--------- -------
63 257
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OPERATING LOSS ( 63) ( 257)
OTHER INCOME AND EXPENSE
Gain on sale of marketable securities 52
Other 4
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NET INCOME (LOSS) $ ( 63) $ ( 201)
=========== ==========
NET INCOME (LOSS) PER COMMON SHARE $ (0.00) $ (0.01)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 30,425 17,598
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Unaudited Condensed Consolidated
Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
December 31
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss ($128) ($ 361)
Adjustments:
Depreciation and amortization 1
Stock issued for services 168 122
Changes in:
Accounts receivable 109
Accounts payable and accrued expenses ( 41) 50
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( 1) ( 79)
CASH FLOWS FROM INVESTING ACTIVITIES
Gain on sale of marketable securities 80
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INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ( 1) 1
CASH AND CASH EQUIVALENTS
Beginning of period 1 0
--------- --------
End of period $ 0 $ 1
======== ========
</TABLE>
See accompanying notes
<PAGE>
LS Capital Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Three Months Ended December 31, 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 six months ended December 31, 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 from a
stockholder 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 December 31, 1999, the Company has a working capital deficiency of
$957,000 compared to a deficit of $1,473,000 at December 31, 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 December 31, 1999 and 1998
The Company had incurred a net loss of $63,000 or $.00 a share, in the 1999
quarter as compared to net loss of $201,000 or $0.01 per share for the
comparable period in the prior year. The change of $138,000 was attributable
primarily to the reduction in operating expenses.
PART II. OTHER INFORMATION
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: February 22, 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 DECEMBER 31, 1999 AND IS QUALIFIED
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> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 21
<DEPRECIATION> 0
<TOTAL-ASSETS> 75
<CURRENT-LIABILITIES> 957
<BONDS> 0
0
0
<COMMON> 315
<OTHER-SE> (1197)
<TOTAL-LIABILITY-AND-EQUITY> 75
<SALES> 8
<TOTAL-REVENUES> 8
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 136
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (128)
<INCOME-TAX> 0
<INCOME-CONTINUING> (128)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (128)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
