SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
0-26322
Commission File Number
EAGLE CAPITAL INTERNATIONAL, LTD.
Nevada 88-0303769
(State of Incorporation ) (IRS Employer I.D. No.)
1900 Corporate Blvd., 4th Floor, East Tower, Boca Raton, FL 33431
(Address of principal executive offices )
(561) 988-2550
(Issuer's telephone number, including area code)
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 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 X
APPLICABLE ONLY TO CORPORATE ISSUERS
There were 6,635,998 shares of Common Stock, $.01 par value, issued and
outstanding at December 15, 1999.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, LTD.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets - September 30, 1999 (Unaudited) and December 31, 1998
Statement of Operations - Three months and nine months ended September
30, 1999 and 1998 (Unaudited).
Statement of Cash Flows - Nine months ended September 30, 1999 and 1998
(Unaudited).
Notes to Financial Statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, LTD.
PART I - FINANCIAL INFORMATION
Item I. Financial Statements
EAGLE CAPITAL INTERNATIONAL, LTD.
(A Development Stage Company)
BALANCE SHEET
ASSETS
September 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS:
Cash $ 221,100 $ 48
TOTAL CURRENT ASSETS 221,100 48
OTHER ASSETS -
License rights 60,000 -
Equipment deposits 219,100 117,100
Investments in joint ventures 2,539,114 -
Investment in IMSI 2,625,000 -
TOTAL OTHER ASSETS 5,443,214 -
TOTAL ASSETS $ 5,664,314 $ 117,148
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
1999 1998
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 82,911 $ 55,264
Notes payable due joint venture
partners 239,500 -
Notes payable - other 110,510 -
TOTAL CURRENT LIABILITIES 432,921 55,264
SHAREHOLDERS' EQUITY:
Preferred Stock A, $.001 par value
10,000,000 shares authorized,
1,586,400 and 1,586,400 shares
issued and outstanding 1,586 1,586
Preferred Stock B, $.001 par value
1,000,000 shares authorized,
947,053 and 0 shares
issued and outstanding 947 0
Common Stock, $.001 par value
70,000,000 shares authorized
2,642,118 and 1,997,918, issued
and outstanding at September 30,
1999 and December 31, 1998 2,642 1,998
Additional paid in capital 7,255,613 820,768
Deficit accumulated prior to
January 1, 1998 (708,682) (708,682)
Deficit accumulated during
development stage (from
January 1, 1998) (1,320,713) (53,786)
TOTAL STOCKHOLDERS' EQUITY 5,231,393 61,884
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,664,314 $ 117,148
See accompanying notes to financial statements.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From inception
of Development
Three Months Ended Nine Months Ended Stage
September 30, September 30, January 1, 1998 to
1999 1998 1999 1998 September 30, 1999
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES $ - $ - $ 5 $ $ -
GENERAL AND ADMINISTRATIVE
EXPENSES:
Accounting 3,000 - 38,805 44,380
Advertising 12,500 - 25,625 28,950
Auto expense - - 4,586 4,586
Bank charges 488 - 801 1,421
Consulting fees 24,400 39,349 897,040 39,349 902,127
Financing fees - - 106,500 106,500
Interest - - 504 504
Leases - - 24,000 24,000
Legal fees 31,000 - 88,179 94,096
Miscellaneous expense 4,771 - 30,566 36,683
Office expense 4,330 - 8,829 23,161
Rent 3,390 - 8,690 8,690
Taxes and licenses - - 229 800 479
Telephone 2,060 - 8,590 16,222
Travel expense 7,925 - 23,984 28,104
TOTAL EXPENSE $ 93,864 $ 39,349 $1,266,928 $ 40,149 $1,319,913
PROVISION FOR INCOME TAXES - -
NET LOSS $ 93,864 $ 39,349 $1,266,928 $ 40,149
</TABLE>
See accompanying notes to financial statements.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, LTD.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
( Unaudited )
From inception
of Development
Nine Months Ended Stage
September 30, January 1, 1998 to
1999 1998 September 30, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(1,266,928) $ (40,149) $(1,320,713)
Amortization - 1,429 1,429
Stock issued for services 688,400 32,250 588,400
Increase in accrued liabilities 138,157 (1,382) 190,561
Net cash used by operations (440,371) (7,852) (440,323)
CASH USED BY INVESTING
ACTIVITIES:
Deposits on equipment (162,000) - (162,000)
CASH USED BY FINANCING
ACTIVITIES:
Payments to notes to joint
venture partners (210,500) - (210,500)
Loan - 7,852 7,852
Cash for sale of stock 1,033,923 7,852 823,423
Net cash provided by
financing activities 823,423 7,852 823,423
NET INCREASE IN CASH 221,052 - 221,100
CASH AT BEGINNING OF PERIOD 48 - -
CASH AT END OF PERIOD 221,100 - 221,100
See accompanying notes to financial statements.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(September 30, 1999)
NOTE 1 - THE COMPANY
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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation -The accompanying unaudited
consolidated financial statements have been prepared in
accordance with generally accepted accounting principles
for interim financial information and with instructions to
Form 10-QSB and Regulation S-B. Accordingly, they 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 (which include only normal recurring
adjustments) considered necessary for a fair presentation
have been included. For further information, refer to the
consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for
the year ended December 31, 1998.
In order to maintain consistency and comparability between
periods presented, certain amounts have been reclassified
from the previously reported financial statements in order
to conform with the financial statement presentation of
the current period.
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. Based upon current contracts and anticipated
revenues, the company will not be classified as a
development stage company for fiscal 2000.
NOTE 3 - STOCKHOLDERS' EQUITY
Net income (loss) per common share is based on the
weighted average of shares outstanding during the period.
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.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(September 30, 1999)
NOTE 4 - INVESTMENT IN SUBSIDIARIES
On September 30, 1999, the Company renegotiated it's
purchase of Great Wall New Building Systems. Eagle
acquired 100% of the outstanding common stock of Great
Wall New Building Systems for 168,525 shares of it's Class B
preferred stock. The previously issued shares have been
sent in to the transfer agent to be canceled and will be
reflected in the year end filings.
On September 30, 1999, the Company renegotiated it's purchase
of Construction Technologies of India, Inc. (CT India). The
company had previously issued 103,600 shares of its Class B
preferred stock to CT India in exchange for approximately 40%
of CT India's outstanding common stock. The new deal gives
Eagle 70% ownership in CT India for the same amount of Class B
preferred stock.
On September 30, 1999, the Company renegotiated it's purchase
of Construction Technologies of Mexico, Inc. (CT Mexico). The
Company had previously 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. The Company has now agreed to
purchase 90% of the common stock of CT Mexico for 65,000
shares of Eagle Class B preferred stock.
The aforementioned companies will function as subsidiaries of
the Company and the year end accounting will reflect this
fact.
NOTE 5 - PRIVATE PLACEMENT OFFERING
--------------------------
On June 16, 1999, the Company commenced a Private Placement
Offering (the "Offering") of 1,000,000 Shares of the Company's
securities to "accredited investors" under the Securities Act
of 1933, as amended. The purchase price for each share of the
Company's common stock was $1.00. The Offering was completed
in August, 1999, with all the shares being sold.
NOTE 6 - EMPLOYMENT AGREEMENTS
---------------------
The Company has entered into employment agreements with four
(4) key officers, each agreement have a term of two (2) years.
Anthony D'Amato has been retained as Chief Executive Officer
and President.
Ralph Thompson has been hired as corporate Secretary and
Federal Funding Liaison.
Mr. Richard Lahey has been retained as a Board Member and
Corporate Treasurer.
Mr. Andros Savvides has been retained as a Board Member and
V.P. of Engineering Design.
NOTE 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The Company has an agreement with Drake Alexander &
Associates, Inc. wherein Drake Alexander arranged for a
$1,000,000 line of credit in conjunction with Fleming
Manufacturing Company, Inc. The line of credit will be used by
the Company to purchase mobile block plants necessary to
fulfill the Company's contractual obligations in China ,India
and Mexico. Anthony D'Amato, Chairman and Chief Executive
Officer of the Company is Vice President and Treasurer of
Drake Alexander & Associates, Inc.
<PAGE>
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 September 30, 1999 and 1998.
Plan of Operations
The Registrant is presently a development stage company conducting
minimal business operations. The company has become current in its reporting
obligations under the Securities Exchange Act of 1934 through the preparation
and filing of quarterly and annual reports on Form 10-QSB and 10-KSB,
respectively. Since the Company has become current in its reporting obligations
and operations are commencing relative to the Joint Ventures in which the
Company is involved in China and India, it plans to remove the development stage
classification at fiscal year end.
The financial statements as of September 30, 1999 have been prepared on the
going concern basis. Value of new contracts secured was $25 million for the
third quarter of 1999 versus $0 for the same period in 1998. For the third
quarter, quarter-to-quarter comparisons show an increase in the net loss of
54,515 from a loss of 39,349 in 1998 to a loss of 93,864 in 1999. Year to date,
the net loss increased from 40,148 in 1998 to 1,266,928 in 1999. These losses
are based upon one time purchases of equipment and interests in the three
subsidiaries. Eagle anticipates revenues to begin from India in the first
quarter and to have significant revenue in the second quarter from contracts
already signed in both India and China and business opportunities we are ready
to exploit in Mexico. Based upon current projections, Eagle anticipates turning
a profit in the 3rd Quarter of 2000.
The Company knows of no unusual or infrequent events or transactions, nor
significant economic changes that could materially affect the amount of its
reported income from continuing operations for the period ending September 30,
1999.
Year 2000
Management has compiled a list of both internally and externally supplied
information systems that utilize imbedded date codes which could
experience operational difficulties in the year 2000. The Company uses third
party applications or suppliers for all high level systems and reporting. These
systems will be tested and if necessary replaced. Management is testing new
systems for which it is responsible. The Company is planning complete internal
computer system replacement, which is totally year 2000 compliant. It is the
Company's objective to be in year 2000 compliance by the end of September 1999;
however, no assurance can be given that such objective will be met.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On July 21, 1999, the Company was named as a defendant in a
derivative action filed on behalf of the shareholders of IMSI,
Inc. The Company was one of multiple defendants named in the
suit filed in the Third Judicial District Court for Salt Lake
City, Utah.
Representatives of Eagle and IMSI have executed a binding
letter agreement intended to resolve all disputes between
Eagle, IMSI, and certain directors of IMSI, which are the
subject of litigation now pending in Utah State Court. A
formal settlement agreement is currently being drafted which
will be signed by these parties and presented to the IMSI
Board, the Eagle Board, and to the Utah State Court for
approval. The parties anticipate time that the
Settlement Agreement will be approved by the IMSI
Board, the Eagle Board, and the Utah State Court. The
key terms of the License Agreements have been agreed upon by
the parties, and the parties are in the process of drafting
the final agreements. The parties anticipate that the
license agreements will be finalized and executed within
thirty days.
Item 2. CHANGE IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
Item 5. OTHER INFORMATION
On November 11, 1999, the Company appointed Andre S. Savvides
a Director.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required to be filed for the
period covered by this Report.
(b) On August 24, 1999, the Company filed a Current
Report on Form 8-K.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EAGLE CAPITAL INTERNATIONAL, INC.
By:_/s/ Anthony D'Amato
Anthony D'Amato, President
Dated: January 31, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE SEPTEMBER 30,
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-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 221,100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 221,100
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,664,314
<CURRENT-LIABILITIES> 432,921
<BONDS> 0
0
2,533
<COMMON> 2,642
<OTHER-SE> 5,231,393
<TOTAL-LIABILITY-AND-EQUITY> 5,664,314
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 93,864
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (93,864)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.01)
</TABLE>
