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 quarter ended December 31, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-24374
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LUCAS EDUCATIONAL SYSTEMS, INC.
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(Name of Small Business Issuer in its Charter)
DELAWARE 62-1690722
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
P. O. Box 789
Templeton, California 93465
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (805) 434-3982
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 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
(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:
December 31, 1998
Common - 12,348,619 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is
contained in Item 6 of this Report.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required
to be filed with this 10-QSB Quarterly Report were prepared by management and
commence on the following page, together with related Notes. In the opinion
of management, these Consolidated Financial Statements fairly present the
financial condition of the Company.
<PAGE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC.
Balance sheet
December 31, 1998 (unaudited) and March 31, 1998 (audited)
<CAPTION>
December 31, March 31,
1998 1998
<S> <C> <C>
ASSETS
Current Assets
Cash in Bank $ 1,118 $ 37,191
Inventory 5,610 5,610
Prepaid Expenses 3,000 3,000
Organization costs - -
TOTAL CURRENT ASSETS 9,728 45,801
Property and Equipment
Leasehold Improvements 11,070 11,070
Furniture and Fixtures 1,931 1,931
Computer Equipment 17,009 17,009
Automobiles 37,382 37,382
Video Master Tapes 1,577 1,577
Video Set-up Fee 12,000 12,000
Accumulated Depreciation (19,591) (5,750)
TOTAL PROPERTY AND EQUIPMENT 61,378 75,219
TOTAL ASSETS 71,106 121,020
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable 23,714 46,036
Accrued Payroll Taxes - 6,460
Accrued Salaries 33,000 3,403
TOTAL CURRENT LIABILITIES 72,314 55,899
Stockholders' Equity
Preferred stock $.001 par;
1,000,000 shares authorized,
none issued or outstanding
Common Stock, $.001 par;
20,000,000 shares authorized,
12,348,619 and 11,243,619
issued and outstanding 12,349 11,244
Paid in capital 872,669 405,146
Stock Subscription Receivable - (25)
Retained Earnings Deficit (886,226) (351,244)
TOTAL STOCKHOLDERS' EQUITY (1,208) 65,121
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 71,106 121,020
</TABLE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC.
Statement of Operations
<CAPTION>
For the nine From inception
months ended December 5, 1996 to
September 30, March 31,
1998 1998
<S> <C> <C>
Revenues $ - $ -
Expenses
Depreciation and amortization 13,841 5,750
General and Administrative 521,141 345,494
TOTAL EXPENSES 534,982 351,244
LOSS FOR THE PERIOD (534,982) (351,244)
LOSS PER SHARE (.045) (.035)
WEIGHTED AVERAGE SHARES
OUTSTANDING 11,796,119 9,971,810
</TABLE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<CAPTION>
For the nine From inception
months ended December 5, 1996 to
September 30, March 31,
1998 1998
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss (534,982) (351,244)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Amortization and Depreciation 13,841 5,750
Common Stock Issued for Services 269,153 116,225
Common Stock Issued for Debt 75,000 200,000
Changes in Operating Assets and
Liabilities:
Increase (Decrease) in Inventory - (5,610)
Increase (Decrease) in Accounts
Payable (22,322) 46,036
Increase (Decrease) in Payroll
and Taxes Payable 23,137 9,863
Increase (Decrease) in Loan Payable 15,600 -
Net Cash Provided (Used) by Operating
Activities (160,573) 21,020
Cash Flows from Investing Activities:
Increase in Prepaid Expenses (3,000) (3,000)
Increase in Fixed Assets - (80,969)
Net Cash Provided (Used) by Investing
Activities (3,000) (83,969)
Cash Flows from Financing Activities:
Sale of Common Stock 127,500 100,140
Net Cash Provided (Used) by Financing
Activities 127,500 100,140
Net Increase (Decrease) in cash (36,073) 37,191
Cash at Beginning of Period 37,191 -
Cash at End of Period 1,118 37,191
</TABLE>
Note to financial statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal, recurring nature.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
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The Company has not engaged in any material operations or
had any revenues from operations during the quarter ended December 31, 1998.
The Company completed a reorganization whereby it acquired all of the
outstanding voting securities of Lucas Educational Systems, Inc., a Nevada
corporation ("Lucas Nevada"), reported in a Form 8-K Current Report dated
November 11, 1997, which has been previously filed with the Securities and
Exchange Commission and which is incorporated herein by reference.
The Company plans in the next twelve months to promote the Company's
product through direct or indirect marketing channels.
The Company will need $500,000 for operations for the next twelve months,
and these funds will need to be raised through debt or equity financing.
Results of Operations.
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At December 31, 1998, the Company had $71,106 in assets and current
liabilities of $72,314. There were no revenues in the nine months ended
December 31, 1998, and losses from operations during this period were
($534,982).
Liquidity
- ---------
The Company received $7,500 in equity funding during the quarter ended
December 31, 1998, by selling 15,000 "unregistered" and "restricted" shares
of the Company's $0.001 par value common stock, at a purchase price of $0.50
per share.
The Company received $220,000 in equity funding subsequent to the quarter
ended December 31, 1998, by selling 440,000 "unregistered" and "restricted"
shares of the Company's $0.001 par value common stock, at a purchase price of
$0.50 per share.
"Year 2000"
- -----------
The Company's management has determined that Year 2000 issues will
not materially affect them, because the major activities of the Company are
not dependent on computers that may be subject to Year 2000 issues. With the
exception that the Company does propose to sell their products through the
Internet, which management believes to be Year 2000 compliant.
The Company can give no assurance that third parties with whom it does
business (e.g., banks and utilities) will ensure Year 2000 compliance in a
timely manner or that, if they do not, their computer systems will not have an
adverse effect on the Company. However, the Company does not believe that
Year 2000 compliance issues of such third parties will result in a material
adverse effect on its financial condition or results of operations.
For the foregoing reasons, the Company has determined that the potential
consequences of the Year 2000 would not have a present material effect on its
business, results of operations or financial condition.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders
during the period covered by this Report.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
Exhibit
(a) Exhibits. Number
Annual Report on Form 10-KSB for the year **
ended March 31, 1998, filed August 21, 1998
(b) Reports on Form 8-K.
SEC Form 8-K, dated November 11, 1997, **
regarding the Plan with Lucas Nevada
** These documents and related exhibits have been previously filed with
the Securities and Exchange Commission and by this reference are incorporated
herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
LUCAS EDUCATIONAL SYSTEMS, INC.
Date: 2/18/99 By:/s/Jerry R. Lucas
Jerry R. Lucas
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated:
LUCAS EDUCATIONAL SYSTEMS, INC.
Date: 2/18/99 By:/s/Jerry R. Lucas
Jerry R. Lucas
President and Director
Date: 2/18/99 By:/s/Cheryl W. Lucas
Cheryl W. Lucas
Treasurer and Director
Date: 2/18/99 By:/s/David Nelson
David Nelson
Secretary and CFO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
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<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1998
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