UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
August 16, 1999
For the quarter ended: March 31, 1999
Commission file number: 0-26322
Eagle Capital International, Ltd.
a Nevada corporation
IRS Number 88-0303769
954 East 7145 South Suite B-202
P.O. Box 9354
Midvale, UT 84047
(801) 569-0400
Check whether 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 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 CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
2,181,918 shares
Transitional Small Business Disclosure Format (Check one): Yes ___ No _X_
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Eagle Capital International, Ltd.
(A Development Stage Company)
Balance Sheet
March 31, 1999
(Unaudited)
ASSETS
CURRENT ASSETS
Cash in bank (610)
Prepaid expense 900
--------------------
TOTAL CURRENT ASSETS 290
OTHER ASSETS
Equipment deposits $ 125,100
Investments in Joint Ventures 2,389,114
Investment in IMSI 2,625,000
--------------------
TOTAL ASSETS $ 5,139,504
====================
The accompanying notes are an integral part of these financial statements.
<PAGE>
Eagle Capital International, Ltd.
(A Development Stage Company)
Balance Sheet
March 31, 1999
(Unaudited)
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 103,459
Deposits payable 83,923
Notes payable to Joint Ventures 281,000
--------------------
TOTAL CURRENT LIABILITIES $ 468,382
--------------------
STOCKHOLDERS' EQUITY
Preferred Series A stock, 10,000,000 1,586
shares authorized at $.001 par value; 1,586,400
outstanding Preferred Series B stock, 1,000,000
shares authorized at $ .001, 911
to be issued
Capital stock, $.001 par value, 70,000,000 2,182
shares authorized; 2,181,918 shares outstanding
Capital Stock to be issued 374
Additional paid in capital 6,114,959
Accumulated deficit prior to January 1, 1998 (801,020)
--------------------
Accumulated deficit during the development stage (647,861)
(from January 1, 1998)
--------------------
TOTAL STOCKHOLDERS' EQUITY 4,671,122
liabilities and stockholders' equity $ 5,139,504
====================
The accompanying notes are an integral part of these financial statements.
<PAGE>
Eagle Capital International, Ltd.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
From inception of
Development Stage
on
January 1,
1999 1998 1998
-------------- ------------- ------------
TOTAL REVENUES
-------------- ------------- ------------
GENERAL AND
ADMINISTRATIVE EXPENSES
Accounting $ 7,925 13,500
Advertising 5,460 8,785
Auto expense 4,586 4,586
Bank charges 174 794
Consulting fees 498,640 504,539
Legal fees 31,686 37,603
Miscellaneous 28,889 29,914
Office 7,637 17,063
Rent 700 700
Taxes and licenses 229 476
Telephone and utilities 2,232 9,863
Travel 5,117 19,238
------------- -------------
TOTAL EXPENSES 593,275 647,061
------------- -------------
Income taxes 800 800
Net (loss) $ (593,275) $ (800) $ (647,861)
============== ============== =============
Loss per share $ (0.27) $ (0.00) $ (0.30)
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT)
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
Common Stock Preferred Stock
<S> <C> <C> <C> <C> <C> <C> <C>
Paid-in Accumulated
Amount To be issued Amount To be issued Capital Deficit Total
Balance at
December 31, 1997 $ 4,402 $ 2,500 $699,027 $ (708,682) $(2,753)
Net loss for quarter (800) (800)
------------------------------------------------------------------------------------------------
Balance at
March 31, 1998 $ 4,402 $ 2,500 $699,027 $(709,492) $ (3,553)
------------------------------------------------------------------------------------------------
Balance at
December 31, 1998 $ 1,998 $ 1,586 $913,915 $ (855,615) $ 61,884
------------------------------------------------------------------------------------------------
Issue 244,178 shares
of Preferred B and
12,849 shares of Common
for GW Investment
$ 128 $ 244 $1,284,492 $1,284,864
Issue 98,420 shares of
Preferred B and 5,180
shares of Common for CT
India Investment
52 98 517,850 518,000
Issue 54,387 shares of
Preferred B and 2,863
shares of Common for CT
Mexico Investment
29 54 286,167 286,250
Issue 514,00 shares of
Preferred B and 125,000
shares of Common to purchase
5,000,000 shares of IMSI stock
105 515 2,624,380 2,625,000
Issue 184,000 shares for
services 184 367,816 368,000
Issue 60,200 shares for
services 60 120,340 120,400
Net loss for quarter (593,275) (593,275)
------------------------------------------------------------------------------------------------
Balance at
March 31, 1999 $ 2,182 $ 374 $ 1,586 $ 911 $6,114,960 $(1,448,890) $4,671,123)
================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Eagle Capital International, Ltd.
(A development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<S> <C> <C> <C>
From inception of
Development Stage
on
January 1,
1999 1998 1998
Cash Flows from Operating Activities:
Net Loss $ (593,275) $ (52,211) $ (647,061)
Amortization 1,429
Stock issued for services 488,400 4,317 488,400
Increase in deposits (900) (900)
Increase in accrued liabilities 132,118 38,310 184,522
New cash provided (used) by operations 26,342 (9,584) 26,390
Cash used by investing activities:
Deposits on equipment (8,000) (8,000)
Cash used by financing activities:
Payments on notes to JV partners (19,000) (19,000)
Net decrease in cash (658) (9,584) (610)
Cash at beginning of year 48 11,713
Cash at end of year $ (610) $ 2,129 $ (610)
=================== =================== ===================
Supplemental Information:
Issued 244,200 shares of Common Stock
for services $ 488,400 $ 488,400
Issued 20,892 shares of Common Stock and
396,931 shares of Preferred B Stock in
exchange for JV partner investments 2,089,114 2,089,114
Incurred obligation for additional investment
in JV partners 300,000 300,000
Issued Common Stock for the purchase of
the net assets of IMSI Cap Fund, Inc. 118,423
=================== =================== ===================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Eagle Capital International, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
Note 1 - Organization, operations and summary of significant accounting
policies:
Organization:
Eagle Capital International, Ltd. (the Company) (formerly IAC, Inc.) is a Nevada
corporation involved in the manufacturing, worldwide marketing and distribution
of block building system products.
Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Organizational Costs:
The Company has adopted statement of Position (SOP) No. 98-5, Reporting on the
Costs of Start-up Activities. In accordance with SOP
No. 98-5, the Company has expensed all organizational costs.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company considers investments
with an original maturity of less than three months to be cash equivalents.
Accounting Method:
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year-end.
Development Stage Company Reclassification:
Effective January 1, 1998, the Company was reclassified as a development stage
company, which was a retroactive reclassification based upon termination of a
management contract entered into by the Company while it was still IAC, Inc.
Therefore, 1998 Forms 10-QSB did not disclose cumulative revenues, expenses and
cash flows from inception. 1999 cumulative revenues, expenses and cash flows as
reported in these financials have been accumulated from the reclassification
date of January 1, 1998.
<PAGE>
Eagle Capital International, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
NOTE 2 - STOCKHOLDERS' EQUITY
On January 5, 1999 the Company amended its articles of incorporation as approved
by the shareholders, and thereby increased the number of authorized shares of
common stock to 70,000,000 and the amount of authorized preferred stock of all
present and future classes was increased to 20,000,000 shares.
Class A Preferred - The Company authorized 10,000,000 shares of Class A
preferred stock (Class A), which may be converted at the holders' option into
2.5 shares of common stock for each share of Class A. Class A also has
cumulative dividend and liquidation preferential rights over all other classes
of stock, with dividend rights equal to 20% of net income commencing with the
year ending December 31, 1998.
Class B Preferred - The Company has authorized 10,000,000 shares of Class B
preferred stock (Class B) which may be converted at the holders' option into 10
shares of common stock for each share of Class B held. Class B does not have
preferential cumulative dividend or liquidation rights.
NOTE 3 - INVESTMENT IN JOINT VENTURES
On January 15, 1999, the company issued 257,027 shares of its Class B preferred
stock to Great Wall New Building Systems, Inc. (Great Wall) in exchange for 64%
of the Great Wall's outstanding common stock. Great Wall is an entity that has
conducted the development of the IMSI block system in the Peoples' Republic of
China. Prior to the Company's purchase of Great Wall's common stock, Great Wall
had raised approximately $425,000 from private investors. This acquisition will
be accounted for as a purchase at fair market values and the operations will be
consolidated when the acquisition is complete. Although agreement in principle
for this purchase was reached on January 15, 1999, the Company did not have
effective financial control of Great Wall because the final acquisition terms
had not been completed yet.
On January 19,1999, the Company issued 103,6000 shares of its Class B preferred
stock to Construction Technologies of India, Inc. (CT India) in exchange for
approximately 40% of CT India's outstanding common stock. In addition, the
Company agreed to purchase an additional 600,000 shares from CT India at $0.25
per share for a total purchase price of $150,000. This acquisition will be
accounted for as a purchase at fair market values and the operations will be
consolidated when the acquisition is complete. Although agreement in principal
for this purchase was reached on January 19, 1999, the Company did not have
effective financial control of CT India because the final acquisition terms had
not been completed yet.
On January 19, 1999, the Company issued 57,250 shares of its Class B preferred
stock to Construction Technologies of Mexico, Inc. (CT Mexico) in exchange for
approximately 50% of CT Mexico's outstanding common stock. In addition, the
Company agreed to purchase an additional 600,000 shares from CT Mexico at $0.25
per share for a total purchase price of $150,000. This acquisition will be
accounted for as a purchase at their fair market values and the operations will
be consolidated when the acquisition is complete. Although agreement in
principle for this purchase was reached on January 19, 1999, the Company did not
have effective financial control of CT Mexico because the final acquisition
terms had not been completed yet.
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion relates to the unaudited Financial Statements
for the three month periods ended March 31, 1999 and 1998, which are included in
Item 1 above.
Basis of Presentation and Plan of Operations
The financial statements as of March 31, 1999 have been prepared on the
going concern basis. Eagle Capital International, LTD., has reported significant
losses from its reorganization effective January 1, 1998, however the Company
has formulated an aggressive business plan to manufacture, market and distribute
construction and building methods in major global markets. The company is
implementing its agenda by pursuing the following two strategies: creating and
expanding residential, commercial and industrial construction markets in
strategic locations throughout the world and by providing related capital
production equipment and components for lease or purchase to joint venture
partners and affiliated licensees as needed.
Liquidity
The Company obtained additional capital funding in the second quarter of 1999
through the issuance of additional common stock.
Discussion of Quarterly Results
The Company has entered into negotiations for stock ownership and partnership
agreements for patented and trademarked surface bonding products and related
production plants, and expects to finalize these agreements in the current year.
The Company has purchased stock in three joint venture partnerships (China,
India, and Mexico) to market, sell and distribute building products. The Company
expects revenues from these ventures in the current year.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
NA.
Item 2. Changes in Securities.
See Note 2 of the Financial Statements.
Item 3. Defaults Upon Senior Securities.
NA.
Item 4. Submission of Matters to a Vote of Security Holders.
NA.
Item 5. Other Information.
During the period ended March 31, 1999, the Company was unable to meet
its commitments to its JV Partner in South Africa and subsequently forfeited its
position in that venture.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
NA
b. Reports on Form 8-K.
No reports have been filed on Form 8-K during this quarter.
/S/ Anthony D'Amato, President
August 16, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE MARCH 31, 1999
FINANCIAL STATEMENTS OF EAGLE CAPITAL INTERNATIONAL,LTD. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000947431
<NAME> Eagle Capital International, Ltd.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<CASH> (610)
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 290
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,139,504
<CURRENT-LIABILITIES> 468,382
<BONDS> 0
0
2,497
<COMMON> 2,182
<OTHER-SE> 5,313,939
<TOTAL-LIABILITY-AND-EQUITY> 5,139,504
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 593,275
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (593,275)
<EPS-BASIC> (.27)
<EPS-DILUTED> (.09)
</TABLE>
