SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
To
Commission file number 0-29409
PEPPER CAPITAL, CORP.
(Exact name of registrant as specified in its charter)
Delaware 13-4078912
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
39 Broadway, Suite 2250, New York, NY 10006
(Address of principal executive offices (zip code))
212/425-8200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the last 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
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at March 31, 2000
Common Stock, par value $0.0001 5,000,000
ITEM 1. FINANCIAL STATEMENTS
[insert excel spreadsheet here for Pepper titled "Pepper Capital FS 03-31-00" in
this order: cover then contents.]
PEPPER CAPITAL, CORP
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2000
PEPPER CAPITAL, CORP
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
(See Accountants' Review Report)
CONTENTS
Page(s)
Accountants' Review Report 1
Financial Statements:
Balance Sheet 2
Statement of Income and Retained Earnings 3
Statement of Changes in Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6
Cohen & Kameny CPA's PLLC
Cohen & Kameny CPA's PLLC
3530 Henry Hudson Parkway, Suite B
Riverdale, NY 10463
(718) 548-7200 Fax (718) 796-0184
Eli Cohen, CPA
David Kameny, CPA
- -------------------
Accountants' Review Report
To The Board of Directors
Pepper Capital, Corp.
We have reviewed the accompanying balance sheet of Pepper Capital, Corp. (a
Delaware corporation) as of March 31, 2000 and the related statements of
operations and retained earnings, stockholders' equity and cash flows for the
period from inception (September 8, 1999) to March 31, 2000 in accordance with
standards established by the American Institute of Certified Public Accountants.
All information included in these financial statements is the representation of
the management of Pepper Capital, Corp.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
COHEN & KAMENY CPA'S PLLC
Riverdale, New York
May 4, 2000
PEPPER CAPITAL, CORP.
(A Development Stage Company)
BALANCHE SHEET
AS OF MARCH 31, 2000
(See Accountants' Review Report)
ASSETS
------
CURRENT ASSETS:
Cash $ 686.
TOTAL CURRENT ASSETS: 686.
----
TOTAL ASSETS $ 686.
====
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
$ --
----
TOTAL LIABILITIES: --
----
STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value, 100,000,000 shares authorized
5,000,000 issued and outstanding . 500.
Additional paid in capital 225.
Retained Earnings (39)
----
TOTAL STOCKHOLDERS' EQUITY: 686.
----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 686.
====
The accompanying notes are an integral part of these financial statements.
Page 2
Cohen & Kameny CPA's PLLC
PEPPER CAPITAL, CORP.
(A Development Stage Company)
STATE OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
(See Accountat's Review Report)
NET SALES -
COST OF SALES -
GROSS PROFIT -
-----
OPERATING EXPENSES
Bank charges 39.
(LOSS) FROM OPERATIONS (39).
-----
NET (LOSS) (39).
-----
RETAINED EARNINGS - BEGINNING OF PERIOD -
RETAINED EARNINGS - END OF PERIOD (39).
=====
The accompanying notes are an integral part of these financial statements.
Page 3
Cohen & Kameny CPA's PLLC
PEPPER CAPITAL, CORP.
(A Development Stage Company)
STATE OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
(See Accountat's Review Report)
Additional
Common Paid-in Retained
Stock Capital Earnings
-----------------------------------------------
Balances at inception - September 7, 1999 475. - -
Stock options exercised 25. 225. -
Net income - - -
Balances at December 31, 1999 500. 225. -
-----------------------------------------------
Net (loss) - - (39).
-----------------------------------------------
Balances at March 31, 2000 500. 225. (39).
-----------------------------------------------
The accompanying notes are an integral part of these financial statements.
Page 4
Cohen & Kameny CPA's PLLC
PEPPER CAPITAL, CORP.
(A Development Stage Company)
STATE OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
(See Accountat's Review Report)
CASH FLOWS FROM OPERATING ACTIVITIES:
(39).
Operating expenses
---------
NET CASH (USED) BY OPERATING ACTIVITIES (39).
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
-
---------
NET CASH PROVIDED BY FINANCING ACTIVITIES -
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
725.
Capital contributions
---------
NET CASH PROVIDED BY INVESTING ACTIVITIES 725.
---------
NET INCREASE IN CASH & CASH EQUIVELANTS $ 686.
-
Cash - at beginning of period
CASH & CASH EQUIVALENTS - AT END OF PERIOD $ 686.
=========
The accompanying notes are an integral part of these financial statements.
Page 5
Cohen & Kameny CPA's PLLC
PEPPER CAPITAL CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO MARCH 31, 2000
NOTE 1 - DESCRIPTION OF THE COMPANY'S BUSINESS:
Pepper Capital Corp. (the Company) was incorporated on
September 8, 1999 in the state of Delaware. The Company was
formed in order to seek business opportunities and is
currently a "shell" with no business operations. As of the
date of these financial statements all of the Company's
operations have been organizational in nature and as a result
it must be considered in its developmental stage.
The Company's current business plan is to seek out business
opportunities and to pursue other related activities intended
to enhance shareholder value. The Company will be seeking
opportunities, which will probably be in the form of a merger
with a foreign or domestic private issuer that wishes to
become a reporting issuer. However, the Company will explore
opportunities, which may take the form of a purchase,
exchange of stock, or encompass entities such as a
corporation, joint venture or partnership. This includes
industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical,
communications and others.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's accounting policies are in accordance with
generally accepted accounting principles. Outlined below are
those policies considered significant.
(a) Statement of cash flows:
For purposes of the statement of cash flows, the company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash
equivalents.
NOTE 3 - COMMON STOCK:
As part of the Company's initial organization the Company was
authorized to issue 10,000,000 shares of its $ .0001 par
value common stock. Subsequent to its formation the Company
entered into subscription agreement authorizing the issuance
of 4,750,000 shares of it's $ .0001 par value common stock.
The subscription agreement was completed on January 25, 2000
when payment for the shares was received by the Company. On
November 29, 1999 the Company authorized a stock option plan
reserving 1,000,000 shares of it's common stock, and pursuant
to the plan granted stock options to it's officers and
directors in the amount of 250,000 shares exercisable as
defined by the terms of the stock option agreements. As of
March 31, 2000 all of the stock options granted were
exercised.
Page 6.
Cohen & Kameny CPA's PLLC
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") and Rule 12(g) thereof. The Company files with the
Securities and Exchange Commission periodic and episodic reports under Rule
13(a) of the Exchange Act, including quarterly reports on Form 10-QSB and annual
reports Form 10-KSB. As a reporting company under the Exchange Act, the Company
may register additional securities on Form S-8 (provided that it is then in
compliance with the reporting requirements of the Exchange Act) and on Form S-3
(provided that is has during the prior 12 month period timely filed all reports
required under the Exchange Act), and its class of common stock registered under
the Exchange Act may be traded in the United States securities markets provided
that the Company is then in compliance with applicable laws, rules and
regulations, including compliance with its reporting requirements under the
Exchange Act. The Company was formed to engage in a merger with or acquisition
of an unidentified foreign or domestic private company which desires to become a
reporting ("public") company whose securities are qualified for trading in the
United States secondary market. The Company meets the definition of a "blank
check" company contained in Section (7)(b)(3) of the Securities Act of 1933, as
amended. Management believes that there are perceived benefits to being a
reporting company with a class of publicly-traded securities which may be
attractive to foreign and domestic private companies. These benefits are
commonly thought to include: (1) the ability to use registered securities to
make acquisition of assets or businesses; (2) increased visibility in the
financial community; (3) the facilitation of borrowing from financial
institutions; (4) improved trading efficiency; (5) shareholder liquidity; (6)
greater ease in subsequently raising capital; (7) compensation of key employees
through options for stock for which there is a public market; (8) enhanced
corporate image; and, (9) a presence in the United States capital market. A
private company which may be interested in a business combination with the
Company may include (1) a company for which a primary purpose of becoming public
is the use of its securities for the acquisition of assets or businesses; (2) a
company which is unable to find an underwriter of its securities or is unable to
find an underwriter of securities on terms acceptable to it; (3) a company which
wishes to become public with less dilution of its common stock than would occur
normally upon an underwriting; (4) a company which believes that it will be able
obtain investment capital on more favorable terms after it has become public;
(5) a foreign company which may wish an initial entry into the United States
securities market; (6) a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a qualified Employee
Stock Option Plan; and (7) a company seeking one or more of the other benefits
believed to attach to a public company. Management is actively engaged in
seeking a qualified private company as a candidate for a business combination.
The Company is authorized to enter into a definitive agreement with a wide
variety of private businesses without limitation as to their industry or
revenues. It is not possible at this time to predict with which private company,
if any, the Company will enter into a definitive agreement or what will be the
industry, operating history, revenues, future prospects or other characteristics
of that company. As of December 31, 1999, management had not made any final
decision concerning or entered into any agreements for a business combination.
See "SUBSEQUENT EVENTS" below. When any such agreement is reached or other
material fact occurs, the Company will file notice of such agreement or fact
with the Securities and Exchange Commission on Form 8-K. Persons reading
this Form 10-QSB are advised to see if the Company has subsequently filed a Form
8-K. The current shareholders of the Company have agreed not to sell or
otherwise transfer any of their common stock of the Company except in connection
with a business combination. The Company does not intend to trade its securities
in the secondary market until completion of a business combination. It is
anticipated that immediately following such occurrence the Company will cause
its common stock to be listed or admitted to quotation on the NASD OTC Bulletin
Board or, if it then meets the financial and other requirements thereof, on the
Nasdaq SmallCap Market, National Market System or a regional or national
exchange.
SUBSEQUENT EVENTS
Not applicable.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company is
unaware of such proceedings contemplated against it.
ITEM 2. CHANGES 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
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibit 4
-- Certificate of Incorporation filed as an exhibit to the Company's
registration statement on Form 10-SB (File No. 0-29409) filed on
February 9, 2000 which is incorporated herein by reference.
-- By-Laws filed as an exhibit to the Company's registration statement
on Form 10-SB (File No. 0-29409) filed on February 9, 2000 which is
incorporated herein by reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the Company during the
quarter ended March 31, 2000.
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.
PEPPER CAPITAL, CORP.
By: /s/ Mark Elenowitz
-----------------------------
Mark Elenowitz, CEO
Dated: May 11, 2000