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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
or
[ ] 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: 0-26070
Moonlight International Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3859185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o M. Walter Levine, 1 River Road, Cos Cob, Connecticut 06807
(Address of principal executive offices) (Zip Code)
(203) 869-8033
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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 [xx] No (1)
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
The number of shares outstanding of each of the registrant's classes of common
stock, as of June 26, 1997 is 10,563,200 shares, all of one class of $.0001 par
value common stock.
(1) The Company filed its Form 10-KSB for calendar year ended December 31,
1996 on June 26, 1997
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TABLE OF CONTENTS
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<CAPTION>
Page No.
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PART I
Item 1. Financial Statements F1-F4
Item 2. Plan of Operation 3-5
PART II
Item 1. Legal Proceedings 6
Item 2. Changes in Securities 6
Item 3. Defaults Upon Senior Securities 6
Item 4. Submission of Matters to a
Vote of Security Holders 6
Item 5. Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
Signatures 7
</TABLE>
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MOONLIGHT INTERNATIONAL CORP.
A Development Stage Company
CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 168,034
Prepaid expenses and sundry current assets 54,430
-----------
Total current assets 222,464
Property and equipment, at cost, less
accumulated depreciation of $21,960 172,614
Licensing agreements, less accumulated
amortization of $524,167 5,025,833
Other assets 89,145
-----------
$ 5,510,056
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 162,943
Due to officers 16,073
Deposit - licensee 100,000
-----------
Total current liabilities 279,016
-----------
Stockholders' equity:
Common stock, par value, $.0001;
authorized - 25,000,000 shares;
issued and outstanding - 10,563,200 shares 1,057
Additional paid-in capital 9,651,622
Accumulated deficit (461,353)
Deficit accumulated during the development stage (3,881,029)
Foreign currency translation adjustment (79,257)
-----------
5,231,040
===========
$ 5,510,056
===========
</TABLE>
See notes to financial statements
F-1
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MOONLIGHT INTERNATIONAL CORP.
A Development Stage Company
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
---- ----
<S> <C> <C>
REVENUES $ -- $ --
------------ -----------
OPERATING EXPENSES:
General and administrative 383,707 216,079
Depreciation and amortization 100,970 93,566
Research and development 279,310 --
------------ -----------
763,987 309,645
------------ -----------
Operating loss (763,987) (309,645)
Interest expense 3,538 35,090
------------ -----------
Net loss $ (767,525) $ (344,735)
============ ===========
Loss per share $ (.08) $ (.04)
============ ===========
Weighted average number of shares outstanding $ 10,057,367 $ 8,206,209
============ ===========
</TABLE>
See notes to financial statements
F-2
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MOONLIGHT INTERNATIONAL CORP.
A Development Stage Company
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (767,525) $ (344,735)
Depreciation and amortization 100,970 93,566
Advances to contractor 300,000 --
Changes in assets and liabilities:
Prepaid expenses (28,950) (3,187)
Accounts payable and accrued expenses (161,607) 61,473
Other assets (48,567) --
----------- -----------
Net cash used in operating activities (605,679) (192,883)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (73,878) (615,405)
Payments to licensor -- (500,000)
----------- -----------
Net cash used in investing activities (73,878) (1,115,405)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans to stockholders and others (428,397) --
Net proceeds from issuance of common stock 1,302,325 1,575,000
----------- -----------
Net cash provided by financing activities 873,928 1,575,000
----------- -----------
Effect of exchange rate changes on cash (49,547) (21,413)
----------- -----------
Net increase in cash 144,824 245,299
Cash - beginning of period 23,210 102,650
----------- -----------
Cash - end of period $ 168,034 $ 347,949
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 1,073 $ --
=========== ===========
Income taxes $ 3,880 $ --
=========== ===========
Non-cash financing activities:
Issuance of common stock to repay long-term debt $ 222,222 $ --
=========== ===========
</TABLE>
See notes to financial statements
F-3
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MOONLIGHT INTERNATIONAL CORP.
A Development Stage Company
MARCH 31, 1997
(Unaudited)
Note 1 BASIS OF PRESENTATION
The accompanying financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair
presentation of the financial position and the results of operations
for the interim periods presented. All such adjustments are of a normal
and recurring nature. The results of operations for any interim period
are not necessarily indicative of a full year.
Certain financial information which is normally included in
the financial statements prepared in accordance with generally accepted
accounting principles, which is not required for interim reporting
purposes, has been condensed or omitted. The accompanying financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's Form
10-KSB for the year ended December 31, 1996.
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PLAN OF OPERATION
Background
As reported in the Company's Form 10-KSB for calendar year ended
December 31, 1996, the Company discontinued all operations as related to its
then commercial offset printing business in late October 1995 and all then
officers and directors resigned. Such Form 10-KSB was not filed until June 1997.
The Company's Plan of Operation for calendar year 1997 continues to
revolve around those activities involving commercial applications of rights
granted to it in accordance with license agreements entered into in November
1995 involving the "Moonlight Balloon".
The Form 10-KSB for December 31, 1996 (as filed in June 1997) contains
to the to the extent practicable, (amongst other matters) substantial
information regarding current activities involving (a) such license agreements,
terms and conditions thereof and mutual rights and obligations thereunder, (b)
the Moonlight Balloon, its qualities, applications and summarized specifications
and (c) certain recent agreements regarding ongoing efforts to commercialize the
Moonlight Balloon, its technology and attributes through (i) an April 1996
license agreement with Golf Lite, Inc. - limited to golf course applications and
(ii) a July 1996 exclusive five year distributorship agreement (for Switzerland
and Liechtenstein) with Carba Holding AG, a major German carbon gas and helium
producer.
Entry into and payment by the Company of consideration for the two
November 1995 License Agreements upon which the Company's business operations
are currently based, was facilitated in great part, by the fact that the Company
is a "public" company whose shares of common stock are listed on the Electronic
Over-the-Counter Bulletin Board thereby creating a "value" for the Company
securities which might not otherwise exist. In this manner the Company was able
to issue an aggregate of 5,100,000 shares of its common stock with an assigned
valuation of $2,550,000 thereby reducing its necessary cash consideration outlay
to $3,000,000 (which $3,000,000 has been paid in full).
Consolidated Balance Sheet
Total Assets of the Company at period ended March 31, 1997 were
$5,510,056 with current assets amounting to $222,464 and with a substantial
portion of such total assets being attributable to certain License agreements
valued at $5,025,833 after net of accumulated amortization of $524,167.
Total Current Liabilities of the Company at period ended March 31, 1997
were $279,016 all of which were short term liabilities.
Working capital at March 31, 1997 was $(56,552) being attributable to
cash of $168,034 and prepaid expenses and sundry current assets of $54,430 less
accounts payable and accrued liabilities of $162,943, due to officers of
$16,073, and a deposit to the licensee of $100,000.
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The functional currency of Moonlight SA (the Company's wholly owned
Swiss subsidiary) is Swiss Francs. Gains and losses resulting from foreign
currency transactions which are included in operations have been insignificant
for all periods reported. However, the effects of exchange rate fluctuations on
translating foreign currency assets and liabilities and results of operations
from functional currency to Unites States dollars has been significant. The
cumulative foreign currency translation adjustment (loss) to stockholders'
equity at March 31, 1997 was $(79,257).
Consolidated Statements of Operations for the three months ended March 31, 1997
and March 31, 1996
The Company did not have any revenues for either comparative quarters.
Operating expenses for the quarter ended March 31, 1997 amounted to $763,987 as
compared to $309,645 for the quarter ended March 31, 1996 - an increase of
$454,342 while net losses (after taking into account interest expense during the
comparative quarters) amounted to $767,525 for the quarter ended March 31, 1997
as compared to $344,735 for the quarter ended March 31, 1996. The aforesaid
operating expense increase of $454,342 is primarily attributable to the fact
that the Company incurred research and development operating expenses of
$279,310 during the quarter ended March 31, 1997 while not having incurred any
research and development expenses during the comparative quarter ended March 31,
1996. The secondary reason for the increase in operating expenses may be
attributable to the fact that general and administrative expenses increased by
$167,628.
Cash Requirements and Liquidity
The Company has been able to satisfy its cash requirements and raise
the necessary capital in order to finance its proposed growth through the sale
and issuance of 2,032,200 shares of its common stock for an aggregate gross cash
consideration of $6,092,306 (said sales having taken place during calendar year
ended December 31, 1996). The shares of Company common stock referred to herein
were sold in accordance with certain terms and conditions contained in Off-Shore
Securities Subscription Agreements and, accordingly, were sold outside the U.S.,
not as a registered public offering but rather in reliance upon Regulation S of
the General Rules and Regulations under the Securities Act of 1933.
To further satisfy its aforesaid cash requirements, during the first
quarter of 1997 the Company issued an additional 775,000 shares for an aggregate
gross cash consideration of $1,531,250. The Company also issued an additional
176,000 shares in order to convert existing Company debt of Sfr 300,000
(approximately $222,000) into equity. The transactions referred to herein were
similarly conducted in accordance with Reg S and reported in Forms 8-K dated
January 23, 1997 and February 19, 1997.
The Company sustained a significant loss during the year ended December
31, 1996 of close to $3,000,000 and as at such date its current liabilities
exceeded its current assets by $520,330. Additionally, the Company sustained a
further loss during the quarter ended March 31, 1997 of close to $768,000 and
(as heretofore indicated) as at such date its current liabilities exceeded its
current
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assets by $56,552. As indicated in the Company's Form 10-KSB for calendar year
ended December 31, 1996, its auditor cited certain of these factors as creating
an uncertainty as to the Company's ability to continue to operate as a going
concern. If and when the need for additional funds arises, management
anticipates (although no assurance can be given) that the Company will be able
to finance and meet such requirements through such income as may be derived from
commercial utilization of its license agreements. However, if sufficient
revenues, if any, are not generated and if an unforeseen need arises management
contemplates being able to satisfy same through debt and/or equity financing or
through an as yet undetermined, if necessary, combination of debt and/or equity
financing and/or bank loans.
Management does not currently anticipate any further expenditures of
significant sums for product research and development nor does it currently
expect (a) to purchase or sell any plant or significant equipment or (b) to
significantly increase or change the number of its current employees.
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<PAGE> 10
PART II
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Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a
Vote of Security Holders - None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K as follows:
Form 8-K with date of report January 23, 1997 - filed February
7, 1997 Form 8-K with date of report February 19, 1997 - filed
March 3, 1997
</TABLE>
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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.
MOONLIGHT INTERNATIONAL CORP.
/Werner Heim/
By
Werner Heim, President
Dated: June 26, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 168,034
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 222,464
<PP&E> 194,574
<DEPRECIATION> 21,960
<TOTAL-ASSETS> 5,510,056
<CURRENT-LIABILITIES> 279,016
<BONDS> 0
0
0
<COMMON> 9,652,679
<OTHER-SE> (4,421,639)
<TOTAL-LIABILITY-AND-EQUITY> 5,510,056
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 763,987
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,538
<INCOME-PRETAX> (767,525)
<INCOME-TAX> 0
<INCOME-CONTINUING> (767,525)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (767,525)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
