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 March 31, 2000
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Commission File Number: 0-26322
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EAGLE CAPITAL INTERNATIONAL, LTD.
---------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada 88-0303769
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(State of Incorporation) (IRS Employer I.D. No.)
1900 Corporate Blvd., 4th Floor, East Tower, Boca Raton, FL 33431
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(Address of principal executive offices )
(561) 988-2550
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(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 7,705,000 shares of Common Stock, $.01 par value,
issued and outstanding at March 31, 2000.
<PAGE>
EAGLE CAPITAL INTERNATIONAL, LTD.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 2000 (Unaudited) and
December 31, 1999
Statement of Operations - Three months and ended
March 30, 2000 and 1999 (Unaudited).
Statement of Cash Flows - Three months and ended
March 31, 2000 and 1999 (Unaudited).
Notes to Financial Statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE> -2-
EAGLE CAPITAL INTERNATIONAL, LTD.
PART I - FINANCIAL INFORMATION
Item I. Financial Statements
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<PAGE> -3-
EAGLE CAPITAL INTERNATIONAL, LTD.
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,277 $ 20,326
---------- ----------
TOTAL CURRENT ASSETS 1,277 20,326
FIXED ASSETS -
Mobile Block Plant #1 500,000 -
Mobile Block Plant #2 130,000 -
Mobile Block Plant #3 200,000 -
Mobile Block Plant #4 225,000 -
Mobile SB Machine 193,000 -
---------- ----------
TOTAL FIXED ASSETS 1,248,000 20,326
OTHER ASSETS -
Equipment Deposits - 300,000
Equipment (surface bonding
machine not placed in
service) - 185,100
Bullhide 201,363 -
Great Wall/China 1,779,518 1,771,018
C.T. India 1,150,800 1,150,800
C.T. Mexico 681,830 681,830
Great Wall JV Investment 450,000 -
I.M.S.I. 5,600,000 5,600,000
License Rights 85,000 90,000
Romania License Rights 10,000 -
---------- ----------
TOTAL OTHER ASSETS 9,958,511 9,778,748
---------- ----------
TOTAL ASSETS $11,207,788 $9,799,074
========== =========
</TABLE>
<PAGE> -4-
EAGLE CAPITAL INTERNATIONAL, LTD.
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 78,008 $ 94,173
Advances from A. D=Amato 815,685 5,860
Commitments payable to
unconsolidated subsidiaries 69,000 149,500
Notes payable - other 475,000 475,000
Short Term Loan 850,000 -
----------- -----------
TOTAL CURRENT LIABILITIES 2,287,693 724,533
SHAREHOLDERS' EQUITY:
Preferred Stock A, $.001
par value, 10,000,000 shares
authorized, 1,586,400 and
1,586,400 shares issued
and outstanding at
March 31, 2000 and
December 31, 1999 967 1,081
Preferred Stock B, $.001
par value, 10,000,000 shares
authorized, 947,053 and -0-
shares issued and outstanding
at March 31, 2000 and
December 31, 1999 827 856
Common Stock, $.001 par value,
70,000,000 shares authorized,
2,642,118 and 1,997,918
issued and outstanding
at March 31, 2000 and
December 31, 1999 7,705 7,103
Retained earnings (3,374,786) -
Additional paid in capital 13,224,796 13,202,755
Deficit accumulated prior to
January 1, 1998 (708,682) (708,682)
Deficit accumulated during
development stage (from
January 1, 1998) (53,786) (3,428,572)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 8,920,094 9,074,541
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $11,207,788 $ 9,799,074
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> -5-
EAGLE CAPITAL INTERNATIONAL, LTD.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
----------- -----------
<S> <C> <C>
TOTAL REVENUES $ - $ -
GENERAL AND ADMINISTRATIVE
EXPENSES:
Accounting - 7,925
Advertising 5,000 5,460
Auto expense - 4,586
Bank charges 488 174
Budget-SW Management 10,000 -
Consulting fees 9,000 498,640
Financing fees 85,000 -
Interest - -
Leases 27,000 -
Legal fees 25,030 31,686
Miscellaneous expense 120 28,889
Office expense - 7,637
Rent 6,508 700
Taxes and licenses - 229
Telephone - 2,232
Travel expense 3,161 5,117
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TOTAL EXPENSES 171,947 593,275
PROVISION FOR INCOME TAXES - -
NET (LOSS) $ (171,947) $ (593,275)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 18,377,249 12,191,918
=========== ===========
NET INCOME (LOSS) PER COMMON
SHARE $ (.01) $ (.05)
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> -6-
EAGLE CAPITAL INTERNATIONAL, LTD.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (176,947) $ (593,275)
Stock issued for services - 488,400
Net in operating assets and
liabilities:
Prepaid expenses - (900)
Accounts payable (16,165) 132,118
----------- ----------
NET CASH USED BY OPERATIONS (193,112) 26,342
----------- ----------
CASH USED BY INVESTING
ACTIVITIES:
Deposits on equipment - (8,000)
Investment in unconsolidated
subsidiary (659,863) -
Investment in license rights (5,000) -
Purchase of property and
equipment (762,900) -
----------- ----------
NET CASH USED IN INVESTING
ACTIVITIES (1,427,763) (8,000)
----------- ----------
CASH USED BY FINANCING
ACTIVITIES:
Payments to notes to joint
venture partners (80,500) (19,000)
Short term loans 1,659,826 -
Cash for sale of stock 22,500 -
----------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 1,601,826 (19,000)
----------- ----------
NET INCREASE (DECREASE) IN CASH (19,049) (658)
CASH AT BEGINNING OF PERIOD 20,326 48
----------- ----------
CASH AT END OF PERIOD $ 1,277 $ (610)
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> -7-
EAGLE CAPITAL INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(March 31, 2000)
NOTE 1 - THE COMPANY
-----------
Eagle Capital International, Ltd. (the "Company") is a
Nevada corporation in the business of the manufacture,
distribution and application of technologically advanced
building products through a series of licensing
agreements with Integrated Masonry Systems International,
Inc. ("IMSI"), a Nevada corporation, and through license
and distribution rights of other technologically advanced
building 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, 1999.
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.
<PAGE> -8-
EAGLE CAPITAL INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(March 31, 2000)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
---------------------------------------------------
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, 2000, the Company was reclassified as a going
concern.
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.
NOTE 4 - PRIVATE PLACEMENT OFFERING
--------------------------
In March of 2000, the Company commenced a Private
Placement Offering (the "Offering") for an $850,000.00
convertible note to "accredited investors" under the
Securities Act of 1933, as amended. The conversion
price for each share of the Company's common stock was
$1.00. The Offering was completed on March 13, 2000.
<PAGE> -9-
EAGLE CAPITAL INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(March 31, 2000)
NOTE 5 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The Company's President and Chief Executive Officer,
Anthony D'Amato, has made certain short term loans to the
Company from time to time during the period ending March
31, 2000 totaling $815,686.
<PAGE> -10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements including
the notes thereto.
Financial Condition
At March 31, 2000, the Company had total assets of
$11,207,788, as compared to total assets of $5,139,504 at March 31,
1999; current liabilities and total liabilities of $2,287,693, as
compared to current liabilities and total liabilities of $468,382
at March 31, 1999; and a net worth of $8,920,095, as compared to a
net worth of $4,671,122 in the same quarter of 1999. The principal
reason for the increases in both total assets and net worth was due
to the issuance of the Company's Preferred B securities in exchange
for the Company's interests in IMSI, CTI, CTM, GWNBS and the
purchase of certain fixed assets used in the companies operations.
The Preferred B securities issued in connection with these
acquisitions was recorded at a value of $10 per share ($1 value of
common stock, conversion rate of 10:1).
Liquidity and Capital Resources
As of March 31, 2000, the Company's cash totaled $1,277 as
compared to $(610) at March 31, 1999. Net cash used in operations
was $(171,947) compared to $(593,275) used for operations in the
same quarter of 1999. The decrease in cash used in operations is
primarily due to less money being spent on consulting fees. The
ability of the Company to generate cash flow in excess of its
operating requirements depends in the short term on the performance
of its India, China and Mexico subsidiaries. Management believes
based upon current results that the company will be able to fund
its operations entirely from revenue by the third quarter of 2000.
The Company may require additional financing to fund existing
operations until sufficient revenues are generated. The Company
anticipates raising capital from the sale of its securities during
the second quarter of 2000; however, in the interim for the months
of April, May and June, 2000, certain directors and officers of the
Company will advance funds sufficient to meet operational expenses.
The timing and amount of the Company's additional financing needs
will depend, inter alia, upon the revenues generated by the
Company. It is anticipated that product development expenditures
will be significantly increased during the third quarter of 2000,
but it is also anticipated that such expenditures will be paid from
then existing revenues.
The Company has no present additional commitment that is
likely to result in its liquidity increasing or decreasing in any
significant way. In addition, the Company knows of no trend,
<PAGE> -11-
additional demand, event or uncertainty that will result in, or
that are reasonably likely to result in the Company's liquidity
increasing or decreasing in any material way.
Results of Operations
Sales for the period ending March 31, 2000 were $0 compared
with sales of $0 in the same quarter of 1999. Based upon current
contracts, the Company expects sales of $25 million for fiscal
2000. The Company experienced a net loss of $176,947 for the
period ending March 31, 2000 compared to a net loss of $593,786 in
for the same quarter of 1999. The decrease in net loss is primarily
due to the decrease in consulting fees paid.
FORWARD LOOKING STATEMENTS
Statements made in this Management's Discussion and Analysis
and elsewhere int his Annual Report that state the Company's or
management's intentions, hopes, beliefs, expectations or
predictions of the future contain forward looking statements. Such
forward looking statements include, without limitation, statements
regarding the Company's planned capital expenditure requirements,
cash and working capital requirements, the Company's expectations
regarding the adequacy of current financing arrangements, product
demand and market growth, other statements regarding future plans
and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical facts. It
should be noted that the Company's actual results could differ
materially from those contained in such forward looking statements
mentioned above due to adverse changes in any number of factors
that affect the Company's business including, without limitation,
risks associated with investing in and the marketing of IMSI's Wall
System, risks concerning the protection of IMSI's patents, reliance
upon distributors, regulatory risks, risks of expansion, product
liability and other risks described herein.
<PAGE> -12-
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. On March 3, 2000 the
parties signed a binding settlement agreement to resolve
the matter.
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
On April 25, 2000, proxies were submitted by a majority
of the shareholders of Eagle Capital International, Ltd.
approving a change of the Company name to Eagle Building
Technologies, Ltd. It is anticipated that the name change
will take effect in the third quarter of 2000.
Item 5. OTHER INFORMATION
One May 26, 2000, Mr. Richard Lahey resigned as a
Director and Treasurer of the company. Mr. Lahey left to
pursue other business ventures and still works closely
with the Company and remains a large shareholder.
On June 2, 2000, the Company appointed Donald Pollock as
a Director and Corporate Treasurer.
On June 2, 2000, the Company appointed Robert Kornahrens
as 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 February 29, 2000 the Company filed form 8-K
announcing it's purchase of 44% of the outstanding
stock of Bullhide Corporation.
<PAGE> -13-
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, LTD.
June 8, 2000 By:/S/Anthony D'Amato
--------------------------
Anthony D'Amato, President
<PAGE> -14-
