UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE EXT OF 1934
For the quarterly period ended June 30, 1996.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from April 1, 1996 to June 30, 1996
Commission file number 0-16423.
Citadel Asset Management, Ltd.
(exact name of Registrant as specified in its charter)
Colorado 84-0907969
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
2055 Anglo Drive, Suite 105, Colorado Springs, Colorado
(Address of principal executive offices)
80918
(Zip Code)
(719) 593-9966
(Registrant's telephone number, including area code)
N/A (Former name, former address and former fiscal year, if changed from
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 than 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:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Class of Stock No. of Shares Outstanding Date
Common 732,744 July 19, 1996
CITADEL ASSET MANAGEMENT, LTD.
Form 10-Q
Index
- -------------------------------------------------------------------
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets................................... 3
Statements of Operations......................... 4
Statements of Cash Flows......................... 5
Notes to Financial Statements.................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 6
PART II. OTHER INFORMATION................................. 7
Signatures.................................... 8
2
CITADEL ASSET MANAGEMENT, LTD.
BALANCE SHEET
- -------------------------------------------------------------------
June 30, December 31,
1996 1995
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and equivalents.................. $ 20,962 $ 1,565
Other current assets.................. 3,945 -
------- -------
Total current assets.................. 24,907 1,565
------- -------
FURNITURE AND EQUIPMENT:
Furniture and equipment............... 21,352 21,352
Less accumulated depreciation......... (21,352) (21,352)
------- -------
Furniture and equipment - net......... 0 0
--------- -------
RECEIVABLE FROM AFFILIATES ........... 0 12,500
--------- -------
TOTAL................................. $ 24,907 $ 14,065
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable........................$ 683 $ 262
Payable to stockholder.................. - 7,730
------- -------
Total current liabilities............... 683 7,992
------ -------
STOCKHOLDER'S EQUITY:
Preferred stock, Series A, no par value;
2,000,000 shares authorized, none issued and outstanding at
March 31, 1996, 732,744 shares issued and outstanding
at March 31, 1995
Preferred stock, Series B, no par value; 200,000 shares authorized,
none issued and outstanding............. - -
Preferred stock, Series C, no par value; 500,000 shares authorized,
none issued and outstanding............. - -
Common stock, no par value; 25,000,000 shares authorized,
732,744 issued and outstanding
at March 31, 1996 476,637 476,637
Contributed capital..................... 40,000 40,000
Current Year Gain....................... 18,151 0
Accumulated deficit..................... (510,564) (510,564)
Total stockholders' equity.............. 24,224 6,073
TOTAL...................................$ 24,907 $ 14,065
======== ========
See notes to the financial statements.
3
CITADEL ASSET MANAGEMENT, LTD.
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
1996 1995 1996 1995
--(UNAUDITED)-- --(UNAUDITED)--
Realized Loss from Investments$ 0 $ 0 (836) 0
Publishing Revenue........ 2 17 20 17
--------- ------- ------ -----
Total Revenue.............$ 2 17 (816) 17
---------------- ----- -----
COSTS AND EXPENSES:
Salaries and employee benefits 0 0 0
Office and administrative 2,188 0 2,410 2,353
Depreciation and amortization - 350 - 700
Professional fees......... 7,592 0 7,592 3,178
--------- ------- ------- -------
Total..................... 9,780 350 10,002 6,231
--------- ------ ------- -------
OPERATING LOSS............ (9,778) (333) (10,818) (6,214)
------- -------- -------- -------
OTHER REVENUE (EXPENSE):
Interest income........... 17 0 17 9
Other Income.............. - 63 0 0
Gain on Sale of Asset..... - - 28,952 0
--------- -------- ------ ------
Total..................... 17 63 28,969 0
-------- ------- ------ ------
INCOME/(LOSS) BEFORE
INCOME TAXES.............. (9,761) (270) 18,151 (6,205)
PROVISION BEFORE INCOME TAXES 0 0 0 0
-------- ------- -------- -------
NET INCOME/(LOSS)......... (9,761) (270) 18,151 (6,205)
------ ------- -------- -------
DIVIDENDS ON PREFERRED STOCK 0 0 0 0
-------- ------- -------- -------
NET INCOME/(LOSS)
APPLICABLE TO COMMON STOCK. $(9,761) $ (270) $ 18,151 $(6,205)
====== ===== ========= ========
See notes to the financial statements.
4
CITADEL ASSET MANAGEMENT, LTD.
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30,
1996 1995
---- ----
--(UNAUDITED)--
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................. $18,151 $(6,205)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciated and amortization............... 0 700
(Increase)decrease in current assets....... (3,945) -
Increase (decrease) in accounts payable
and other current liabilities.............. 421 (1,500)
Increase (decrease) in payable to stockholders (7,730) 6,770
--------- -----
Net cash provided (used) by operating activities 6,897 (235)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in and advance to affiliates.... 12,500 -
Additions of furniture and equipment....... 0 -
------ -------
Net cash provided (used) by investing activities 12,500 0
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock................. 0 0
------ ------
Net cash provided by financing activities.. 0 0
------ ------
NET INCREASE/DECREASE IN CASH AND
EQUIVALENTS................................ 19,397 (235)
CASH AND EQUIVALENTS -
BEGINNING OF PERIOD........................ 1,565 1,623
------ ------
CASH AND EQUIVALENTS - END OF PERIOD....... $20,962 $ 1,388
====== ======
See notes to the financial statements.
5
CITADEL ASSET MANAGEMENT, LTD.
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------
1. In the opinion of management, all adjustments necessary to a fair statement
of the results for such periods have been included, all adjustments being of
normal, recurring nature.
2. The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and, therefore, do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles.
3. Earnings per share information is omitted because it is not material to
an understanding of
the financial statements.
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following is Management's discussion and analysis of certain factors which
have affected the Company's financial condition and results of operation.
(1) FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
On September 30, 1987 the Company completed an initial public offering of its
Series A Preferred stock and warrants. The Company received net proceeds from
the offering of $387,929 after registration costs, underwriter's commissions and
expense allowances. The Company has and continues to use these funds for working
capital and has made loans to PCL DiversiFund, Inc. The Company intends to
create specialty funds, acquire management companies advising existing accounts,
and develop new companies.
Cash flow for the six months ended June 30, 1996, increased by $19,397 as
compared to a $235 decrease for the same period in 1995. The increase cash flow
in 1996 is primarily due to a gain on the sale of an asset by the Company.
(2) RESULTS OF OPERATIONS
Three Months Ended June 30, 1996 vs. June 30, 1995
Revenues for the three months ended June 30, 1996 and 1995 were $2 and $17,
respectively. The revenue was the result of the income received from publishing
and mailing an investment newsletter.
6
Total costs and expenses for the quarters ended June 30, 1996 and 1995 were
$9,780 and $350 respectively. The total costs and expenses are primarily a
result of office and administrative fees paid by the Company.
Other revenues for the three months ended June 30, 1996 and 1995 were $17 and
$63, respectively. The change is the result of interest income received by
the Company.
Working capital through the second quarter of 1996 was $24,224 as compared to
($6,427) for the second quarter of 1995 which represents a increase of $30,651.
The increase was a result of a gain from the sale of an asset by the Company
from an affiliate.
PART II. OTHER INFORMATION
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. EXHIBITS AND REPORTS ON FORM 8-K
None
7
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.
Dated: July 19, 1996 CITADEL ASSET MANAGEMENT, LTD.
By: /s/ Philip J. Halseide
------------------------
Philip J. Halseide
Secretary/Treasurer
By: /s/ R. Stanley Pittman
------------------------
R. Stanley Pittman
Principal Financial Officer
8