SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 2002 2000.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD______ to ______
Commission file Number 0-2347
UNIVERSAL LIFE HOLDING CORPORATION
(Exact name of small business issuer as specified in its charter)
Illinois 37-0859747
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3470 Laytonsville Road, Olney, Maryland 20830
(Address of principal executive offices) (Zip Code)
(301) 774-6913
(Issuer's telephone number)
Indicate by 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 corporate issuers) State the number of shares outstanding of
each of the issuer's classes of common equity, as of the latest practical date.
Number of shares of Common Stock outstanding as of August 31, 2001:
Class A Common Stock - 2,354,047
Transitional Small Business Format
(Check one):
Yes...[ ] No...[X]
1
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Financial statements for the quarterly period ended March 31, 2002 are
included as Appendix A hereto.
Item 2. Management's Plan of Operation
CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS
THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO
DIFFER FROM THOSE PROJECTED IN FORWARD LOOKING STATEMENTS
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document and any document
incorporated by reference herein, are advised that this document and documents
incorporated by reference into this document contain both statements of
historical facts and forward looking statements. Forward looking statements are
subject to certain risks and uncertainties, which could cause actual results to
differ materially for those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earning or loss per share, capital
expenditures, dividends, capital structure and other financial items, (ii)
statements of the plans and objectives of Universal Life Holding Corporation
(the "Company") or its management or Board of Directors, including the
introduction of new products, or estimates or predictions of actions by
customers, suppliers, competitors or regulatory authorities, (iii) statements of
future economic performance, and (iv) statements of assumptions underlying other
statements and statements about the Company or its business.
This document and any documents incorporated by reference herein also
identify important factors which could cause actual results to differ materially
from those indicated by forward looking statements. These risks and
uncertainties include price competition, the decisions of customers, the actions
of competitors, the effects of government regulation, possible delays in the
introduction of new products and services, customer acceptance of products and
services, the Company's ability to secure debt and/or equity financing on
reasonable terms, and other factors which are described herein and/or in
documents incorporated by reference herein.
The cautionary statements made pursuant to the Private Litigation
Securities Reform Act of 1995 above and elsewhere by the Company should not be
construed as exhaustive or as any admission regarding the adequacy of
disclosures made by the Company prior to the effective date of such Act. Forward
looking statements are beyond the ability of the Company to control and in many
cases the Company cannot predict what factors would cause results to differ
materially from those indicated by the forward looking statements.
The Company was not, as of March 31, 2002 or as of the date of the
filing of this report, an operating business. For a discussion of the previous
operating businesses of the Company, the reader is referred to the Company's
previously filed Form 10-K for the period ended December 31, 1994 and Form 10-Q
for the period ended September 30, 1995.
On May 25, 1995, the Company adopted a plan of liquidation in order to
provide an accounting presentation consistent with the inactive operating status
of the Company. The Company intends that this plan will remain in effect,
pending completion of its plan to reorganize the Company through a merger or
other acquisition involving a private operating company. The Company is actively
seeking candidates for such a merger or other acquisition. In the meantime, the
Company plans to continue to maintain its corporate formalities and regulatory
compliance with state and federal agencies, with the minimum funding necessary
to do so to be made available from principals and/or shareholders of the Company
or third parties.
2
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no legal proceedings pending against the Company.
Item 2. Changes in Securities and Use of Proceeds
There were no events to report under this item during the quarterly period
ended March 31, 2002.
Item 3. Defaults Upon Senior Securities
There were not defaults upon senior securities during the quarterly period
ended March 31, 2002.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
quarterly period ended March 31, 2002.
Item 5. Other Information
Not applicable.
Item 6. Exhibits
3
APPENDIX A
Unaudited Financial Statements
UNIVERSAL LIFE HOLDING CORPORATION
Statement of Net Assets in Liquidation as of March 31, 2002
Statement of Changes in Net Assets in Liquidation for the Period Then Ended
4
UNIVERSAL LIFE HOLDING CORPORATION
NET ASSETS IN LIQUIDATION
AS OF MARCH 31, 2002
Unaudited
ASSETS
Current Assets
- --------------
Cash and Cash Equivalents $ 0
-----------
Total Current Assets 0
Fixed Assets
- ------------
Fixed Assets, net of depreciation 0
Other Assets
- ------------
Deposits and Other Assets 0
------------
Total Assets $ 0
============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Accounts Payable & Accrued Expenses $ 12,625
Accrued Interest Payable 17,865
Notes Payable to Shareholders 33,000
------------
Total Current Liabilities 63,490
------------
Long Term Liabilities
- ---------------------
Commitments and Contingencies -
Loan Payable to Shareholders 5,000
------------
Total Long Term Liabilities 0
------------
Total Liabilities 68,490
------------
Stockholders' Equity
- --------------------
Common Stock
Class A, stated value $.50 per share;
authorized 6,000,000 shares; issued
3,286,436 shares (including 932,389 shares
in the Treasury) 1,643,218
Class B, stated value $.002 per share;
authorized 6,000,000 shares; issued
1,642,623 shares (including 1,642,623 shares
in the Treasury) 3,285
Less: Treasury Stock -959,146
Retained Deficit -755,847
------------
Total Stockholders' Equity -68,490
------------
Total Liabilities and Stockholders' Equity $ 0
============
See Auditor's Report and Accompanying Notes to Financial Statements
F-2
UNIVERSAL LIFE HOLDING CORPORATION
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
AS OF MARCH 31, 2002
Unaudited
Total
Assets
Net Assets, January 1, 2001 ($ - )
Increase in Loan Payable -
Increase in Accrued Interest -
Increase in Accrued Expenses -
-------------------
Net Assets, March 31, 2002 ($68,490)
===================
See Auditor's Report and Accompanying Notes to Financial Statements
F-3
UNIVERSAL LIFE HOLDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Policies
ORGANIZATION
Universal Life Holding Corporation (The Company) is a profit corporation
organized under the laws of the State of Illinois on August 13, 1964 for the
purpose of residential rental property management as well as other real estate
and investment activities. The Company's business activities have virtually
ceased since 1992 and, as a result, the Company approved a plan of liquidation
on May 25, 1995. Consequently, the Company's financial statements are presented
on a liquidation basis.
LIQUIDATION BASIS ACCOUNTING
The liquidation basis of accounting presents assets at amounts expected to be
realized in liquidation and liabilities at amounts expected to be paid to
creditors. This basis of accounting is considered to be generally accepted
accounting principles for companies in liquidation or for which liquidation
appears imminent. The Company does not intend to declare or pay any liquidating
dividends. Tax law requires gains from liquidation to be taxed on distribution.
The Company did not have any such gains in 2001.
REVENUE RECOGNITION
In 2001 the Company had no formal business operations.
ADVERTISING EXPENSE
The Company recognizes advertising expenses in accordance with Statement of
Position ("SOP") 93-7 "Reporting on Advertising Costs." As such, the Company
expenses the costs of producing advertisements at the time production occurs,
and expenses the cost of communicating advertising in the period in which the
advertising space or airtime is used.
The Company does not have any advertising costs in 2001.
PROPERTY AND EQUIPMENT
Property and equipment is stated at a liquidated fair market value expected to
be realized in liquidation. No depreciation is recognized under liquidation
basis accounting. Costs for routine repairs and maintenance are expensed as
incurred and gains and losses on the disposal of assets are recognized in the
period such disposals occur. The Company did not own any property or equipment
in 2001.
F-4
UNIVERSAL LIFE HOLDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
INCOME TAXES
The Company files its tax return with the Internal Revenue Service as a C
Corporation. Deferred income taxes are recognized by applying statutory tax
rates to future years' differences between the tax bases and financial reporting
amounts of assets and liabilities. Loss carryforwards, if any, expire fifteen
years following the tax year end in which they occur. Due to the plan of
liquidation no recognition of tax asset benefits has been recorded. Should the
company engage in any activities that result in the earnings of taxable
revenues, tax loss carryforwards of $1,377,823 from 2001 and prior years will be
utilized if still available.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management make estimates and assumptions
that affect the reported amounts of assets and liabilities in liquidation and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets in liquidation
during the respective reporting period. Actual results could vary from these
estimates and assumptions.
CONCENTRATIONS OF RISK
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents. The Company
maintains its cash and cash equivalents in bank deposit accounts, the balances
of which, at times, may exceed federally insured limits. The Company did not
have any cash or cash equivalents on March 31, 2002. The Company's reliance
on its shareholders to finance the administrative and legal costs necessary to
maintain the Company's status with the Securities and Exchange Commission
represent a concentration of risk should the shareholders be unable to provide
or create the funding necessary.
EARNINGS PER SHARE
As per Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 128 (SFAS 128), Earnings Per Share, standards for computing and
presenting earnings per share (EPS) applies to publicly held common stock or
potential common stock. It requires dual presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures. Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. For the year ended
F-5
UNIVERSAL LIFE HOLDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
EARNINGS PER SHARE cont'd
March 31, 2002 the number of shares considered to be outstanding is computed
as actual number of shares of the Company outstanding during that period. The
average number of shares outstanding for the full period being reported upon has
been computed including other appropriate adjustments made to deal with changes
in numbers of shares issued during the period. Diluted EPS were not computed as
the Company's capital structure is not complex, having no dilutive instruments
outstanding as of the date of the financial statements.
2. Officers' Compensation
The Company's day to day activities are managed by a certain
officer/shareholder, who contributed his time on the Company's behalf without
compensation in either cash or stock. No value for these services has been
determined or recorded on the accompanying financial statements
3. Notes Payable
On March 15, April 15 and May 15, 1998 the Company borrowed from three different
unrelated third parties in order to finance legal and professional fees
incurred. The notes are in default and listed as current liabilities along with
accrued interest. The notes are as follows:
3/15/98 $14,000 with an interest rate of 9%
4/15/98 $ 9,000 with an interest rate of 10%
5/15/98 $10,000 with an interest rate of 10%
All these Notes Payable were acquired during 2001 by Frederic Richardson,
Officer and Director of the Company.
4. Loans Payable
A related party loaned the Company $5,000 towards administrative costs and
professional fees required to update the required government filings in order to
reinstate the corporation and achieve compliance with the Securities and
Exchange Commission, the Internal Revenue Service and any state and local
jurisdictions.
5. Contingencies
The Company's corporate counsel has confirmed that as of the date of the
financial statements, the Company is not involved in any lawsuits nor is there
any pending litigation.
6. Subsequent Events
Management of the Company is currently seeking a private corporation for a
possible reverse merger acquisition. As of the date of these financial
statements, no suitable corporation has been found. Management, however,
continues in its efforts to bring the Company current with regard to its
Securities and Exchange Commission filings.
F-6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the date indicated.
Date: April 20, 2002 By: /s/ Frederic S. Richardson
--------------------------
Frederic Richardson, President
and Director
(Principal Financial and
Accounting Officer)
Date: April 20, 2002 By: /s/ Max Apple
-------------
Max Apple
Secretary and Director
