SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996 Commission File No. 0-25022
CHELSEA ATWATER, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 72-1148906
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
90 Madison Street, Suite 707
Denver, Colorado 80206
(Address of Principal Executive Offices) (Zip Code)
(303) 355-3000
(Registrant's Telephone Number, including Area Code)
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 such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing to such filing
requirements for at least the past 90 days.
Yes X No
The number of shares outstanding of each of the Registrant's classes of common
equity, as of June 30, 1996 are as follows:
Class of Securities Shares Outstanding
Common Stock, $.001 par value 622,649
<PAGE>
INDEX
Page of
Report
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets:
As of June 30, 1996 (Unaudited) and December 31, 1995 ................... 3
Statement of Operations (Unaudited):
For the six months ended June 30, 1996 and 1995
and Cumulative from inception (April 4, 1989) through June 30, 1996...... 4
Statements of Cash Flows (Unaudited):
For the six months ended June 30, 1996 and 1995
and Cumulative from inception (April 4, 1989) through June 30, 1996...... 5
Notes to Financial Statements (Unaudited) ............................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation ............ 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ..................................... 8
Signatures ....................................................... 8
<PAGE>
CHELSEA ATWATER, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
June 30, Dec. 31,
1996 1995
ASSETS ------- -------
CURRENT ASSETS
Cash ............................................ 0 0
------- -------
Total Current Assets .......................... 0 0
TOTAL ASSETS ......................................... 0 0
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Due to officer / director ....................... 14,778 13,080
------- -------
Total Liabilities ........................... 14,778 13,080
------- -------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value; 5,000,000 ..... 0 0
shares authorized; none issued
Common stock, $.001 par value; 50,000,000 ....... 622 597
shares authorized, 622,649 shares issued
and outstanding
Additional paid-in capital ...................... 22,363 19,923
Deficit accumulated during the .................. (37,763) (33,600)
development stage
Total Stockholders' Equity ....................... (14,778) (13,080)
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ............................... 0 0
------- -------
See accompanying notes to financial statements.
<PAGE>
CHELSEA ATWATER, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
Cumulative
from
inception
(Apr. 4,
1989)
For The Six Months Ended, through
June 30, June 30, June 30,
1996 1995 1996
------- -------- --------
Revenues ............................. 0 0 0
-------- -------- --------
Costs and Expenses:
Offering costs .................. 0 0 18,034
General and administrative ...... 4,163 8,840 19,729
Total Expenses ..................... 4,163 8,840 37,763
Net Loss Incurred during ............. (4,163) (8,840) (37,763)
Development Stage
-------- -------- --------
Net Loss per common share (1) ........ (Nil)- (Nil)- (0.06)
-------- -------- --------
Weighted average shares .............. 622,649 597,997 622,649
outstanding
-------- -------- --------
(1) Net loss per share is less than $.01 in each period presented.
See accompanying notes to financial statements.
<PAGE>
CHELSEA ATWATER, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Cumulative
from
inception
(Apr. 4,
For The Six 1989)
Months Ended, through
June 30, June 30,
1996 1995 1996
------- ------- -------
Cash flow operating activities
Net loss ................................. (4,163) (8,840) (37,763)
Adjustments to reconcile net loss to ..... 0 0 0
net cash used by operating activities:
Common stock issued for ............. 2,465 0 3,945
out-of-pocket expenses
Due to officer / director ........... 1,698 8,840 14,778
Net cash provided by (used In)
operating activities ................... 0 0 (19,040)
Cash flow from investing activities
Net cash provided by investing act ....... 0 0 0
------- ------- -------
Cash flows from financing activities
Issuance of common stock ................. 0 0 19,040
------- ------- -------
Net increase (decrease) in cash ............... 0 0 0
------- ------- -------
Cash and cash equivalents at beg .............. 0 0 0
period
------- ------- -------
Cash and cash equivalents at end of ........... 0 0 0
period
------- ------- -------
See accompanying notes to financial statements.
<PAGE>
CHELSEA ATWATER, INC.
(A Development Stage Company)
Notes to Financial Statements (Unaudited)
Note 1.
Chelsea Atwater, Inc. ("Company") was incorporated in the State of Nevada on
April 4, 1989. The Company was to obtain funding from a public offering in order
to provide a vehicle to acquire or engage in one or more business opportunities
believed by management to have a potential for profitability. The accompanying
unaudited financial statements of the Company have been prepared on the accrual
basis and in accordance with the instructions to Form 10-QSB and do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. These financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-KSB for the fiscal year ended December 31,
1995.
Note 2.
During the fiscal year ended December 31, 1995, the Company incurred a net
loss of $12,773 and had, as of that date, accumulated a deficit of $33,600. The
Company had no operations during the second quarter covered by these statements
and realized no revenues, although it incurred a loss for the quarter of $598.
Note 3.
Future working capital requirements are dependent on the Company's ability to
attain profitable operations, to restructure its financing arrangements or
capital structure, and to obtain financing or new capital as required. It is not
possible at this time to predict the outcome of future operations, restructuring
efforts, or whether the necessary alternative financing can be arranged.
Note 4.
In September of 1994, the Company's shareholders approved at a special meeting
an amendment to the Company's certificate of incorporation which effected a
1-for-10 reverse split of the Company's Common Stock. This action, which
combined every ten Common Shares of the Company into one share, reduced the
number of outstanding shares from 5,980,000 to 597,997 shares (some fractional
shares were lost) and reduced the number of authorized shares from 50,000,000 to
5,000,000. The shareholders also approved at that meeting a proposal to,
immediately following the reverse split, increase the number of authorized
shares to 50,000,000 and increase the par value to the original $.001 per share.
Subsequent to quarter ended June 30, 1996, the Company effected a 5-for-1
forward split of the Company's common stock, $.001 par value per share, which
had the effect of changing each share of common stock existing immediately prior
to the split into five (5) shares of the Company's common stock following the
split. The forward split increased the number of the Company's authorized common
shares from 50,000,000 to 250,000,000 and increased the number of issued and
outstanding common shares (as of July 12, 1996) from 847,656 to 4,308,280. The
authorized preferred shares of the Company, the terms and preferences of which
have not been designated by the board of directors, were not affected by the
forward split.
On July 12, 1996, the Company entered into and consummated an Asset Purchase
Agreement ("Purchase Agreement") with Casino Casino PLC, a company organized in
the Island of Nevis (British West Indies) under Section 4(6) of the Nevis
Business Corporation Ordinance 1984, as amended ("Casino PLC"). Pursuant to the
Purchase Agreement, Casino PLC assigned to the Company certain rights which
Casino PLC held under an Option to Purchase and a Management Agreement, both
dated June 26, 1996, between Casino PLC and E.V.A. LIMITED, a limited liability
company organized in St. Vincent and the Genadines (British West Indies) under
the provisions of the Companies Act, Chapter 219.
Note 5.
Loss per common share is based on the weighted average number of common shares
outstanding during the period.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Business. Chelsea Atwater, Inc., a Nevada corporation ("Company"), is in
the development stage in accordance with Financial Accounting Standards Board
Standard No. 7. The Company has not been operational, other than occasionally
searching for a business or venture to acquire, as described below, or had
revenues other than interest income since its inception.
The Company's sole business at this point is to seek to acquire assets of
or an interest in a small to medium-size company or venture actively engaged in
a business generating revenues or having immediate prospects of generating
revenues. The Company plans to acquire such assets or shares by exchanging
therefor the Company's securities. In order to avoid becoming subject to
regulation under the Investment Company Act of 1940, as amended, the Company
does not intend to enter into any transaction involving the purchase of another
corporation's stock unless the Company can acquire at least a majority interest
in that corporation. The Company has not identified any industry, segment within
an industry or type of business, nor geographic area, in which it will
concentrate its efforts, and any assets or interest acquired may be in any
industry or location, anywhere in the world. The Company will give preference to
profitable companies or ventures with a significant asset base sufficient to
support a listing on a national securities exchange or quotation on the NASDAQ
system. Members of management (all of whom are devoting part time to the
Company's affairs) plan to search for an operating business or venture which the
Company can acquire, thereby becoming an operating company. There is no
assurance that the Company will be successful in this endeavor. The Company has
no operations or source of revenues. Unless the Company succeeds in acquiring a
company or properties which provide cash flow, the Company's ability to survive
is in doubt.
Financial Condition. During the quarter ended June 30, 1996 (second quarter
of this year), the Company had no revenues and did not have operations. Expenses
for this period were minimal, resulting in a loss of $598. The Company has,
since inception, accumulated a deficit (net loss) through the end of this
quarter of $37,763.
Liquidity and Capital Resources. The Company had no cash on hand at the end
of the quarter. The Company had no other cash or other assets, nor any current
plans to raise capital. Whether the Company ultimately becomes a going concern
depends upon its success in finding and acquiring a suitable private business
and the success of that acquired business. At this time, the Company has no
commitment for any capital expenditure and foresees none. Offices are provided
without charge to the Company. However, the Company will incur routine fees and
expenses incident to filing of periodic reports with the Securities and Exchange
Commission, and it will incur fees and expenses in the event it makes or
attempts to make an acquisition. As a practical matter, the Company expects no
significant operating costs other than professional fees payable to attorneys
and accountants.
In regard to a proposed acquisition, the Company anticipates requiring the
target company to deposit with the Company a retainer which the Company can use
to defray such professional fees and costs. In this way, the Company could avoid
the need to raise funds for such expenses or becoming indebted to such
professionals. Moreover, investigation of business ventures for potential
acquisition will involve some costs, at the least postage and long-distance
telephone charges. Management hopes, once a candidate business venture is deemed
to be appealing, to likewise secure a deposit from the business venture to
defray expenses of further investigation, such as air travel and lodging
expenses. An otherwise desirable business venture may, however, decline to post
such a deposit.
The Company has no credit available to it and is unable to borrow money.
Management does not anticipate raising funds through the sale of securities or
otherwise, and it is unlikely that significant funds could be raised in a
securities offering, in any event. This inability to raise funds could
negatively affect the Company's realization of its business purpose.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. NONE.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report on Form 10-QSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: August 15, 1996
CHELSEA ATWATER, INC.
By: /s/ John D. Brasher Jr.
------------------------
John D. Brasher Jr.,
Chief Executive Officer
and Chief Financial Officer
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