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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended March 31, 1996 Commission File No. 0-25022
CHELSEA ATWATER, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 72-1148906
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
90 MADISON STREET, SUITE 707
DENVER, COLORADO 80206
(Address of Principal Executive Offices) (Zip Code)
(303) 355-3000
(Registrant's Telephone Number, including Area Code)
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 such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing to such filing
requirements for at least the past 90 days.
YES X NO
----- -----
The number of shares outstanding of each of the Registrant's classes of common
equity, as of March 31, 1996 are as follows:
CLASS OF SECURITIES SHARES OUTSTANDING
----------------------------- ------------------
Common Stock, $.001 par value 622,649
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INDEX
PAGE OF
REPORT
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
BALANCE SHEETS:
As of March 31, 1996 (Unaudited) and December 31, 1995 ............................... 3
STATEMENT OF OPERATIONS (UNAUDITED):
For the three months ended March 31, 1996 and 1995
and Cumulative from inception (April 4, 1989) through March 31, 1996 ................. 4
STATEMENTS OF CASH FLOWS (UNAUDITED):
For the three months ended March 31, 1996 and 1995
and Cumulative from inception (April 4, 1989) through March 31, 1996 ................. 5
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) ............................................ 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ............................ 7
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ..................................................... 8
SIGNATURES ........................................................................... 8
2
CHELSEA ATWATER, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
March 31, Dec. 31,
1996 1995
----------- ----------
ASSETS
CURRENT ASSETS
Cash 0 0
----------- ----------
Total Current Assets 0 0
TOTAL ASSETS 0 0
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Due to officer / director 14,180 13,080
----------- ----------
Total Liabilities 14,180 13,080
----------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
5,000,000 shares authorized; none issued 0 0
Common stock, $.001 par value; 50,000,000 622 597
shares authorized, 622,649 shares issued
and outstanding
Additional paid-in capita 22,363 19,923
Deficit accumulated during the (37,165) (33,600)
development stage
Total Stockholders' Equity (14,180) (13,080)
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 0 0
----------- ----------
See accompanying notes to financial statements.
3
CHELSEA ATWATER, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
Cumulative from
For The Three Months Ended, inception
--------------------------- (Apr. 4, 1989)
March 31, March 31, through
--------- --------- March 31,
1996 1995 1996
---- ---- ----
Revenues 0 0 0
--------- --------- ---------
Costs and Expenses:
Offering costs 0 0 18,034
General and administrative 3,565 1,340 19,131
--------- --------- ---------
Total Expenses 3,565 1,340 37,165
--------- --------- ---------
Net Loss Incurred during (3,565) (1,340) (37,165)
Development Stage
Net Loss per common share /1/ (Nil)- (Nil)- (0.06)
--------- --------- ---------
Weighted average shares
outstanding 622,649 597,997 622,649
--------- --------- ---------
/1/ Net loss per share is less than $.01 in each period
presented.
See accompanying notes to financial statements.
4
CHELSEA ATWATER, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Three months ended, Cumulative from
March 31, inception (Apr. 4,
---------- 1989)through
1996 1995 March 31, 1996
----------- ----------- ------------------
Cash flow operating activities
Net loss (3,565) (1,340) (37,165)
Adjustments to reconcile net loss to net 0 0 0
cash used by operating activities:
Common stock issued for 2,465 0 3,945
out-of-pocket expenses
Due to officer / director 1,100 1,340 14,180
Net cash provided by (used In)
operating activities ----------- ----------- ------------------
0 0 (19,040)
Cash flow from investing activities
Net cash provided by investing act 0 0 0
----------- ----------- ------------------
Cash flows from financing activities
Issuance of common stock 0 0 19,040
----------- ----------- ------------------
Net increase (decrease) in cash 0 0 0
----------- ----------- ------------------
Cash and cash equivalents at beg. period 0 0 0
----------- ----------- ------------------
Cash and cash equivalents at end of period 0 0 0
----------- ----------- ------------------
See accompanying notes to financial statements.
5
CHELSEA ATWATER, INC.
(A Development Stage Company)
Notes to Financial Statements (Unaudited)
NOTE 1. Chelsea Atwater, Inc. ("Company") was incorporated in the State of
Nevada on April 4, 1989. The Company was to obtain funding from a
public offering in order to provide a vehicle to acquire or engage in
one or more business opportunities believed by management to have a
potential for profitability. The accompanying unaudited financial
statements of the Company have been prepared on the accrual basis and
in accordance with the instructions to Form 10-QSB and 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 (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. These financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's
annual report on Form 10-KSB for the fiscal year ended December 31,
1995.
NOTE 2. During the fiscal year ended December 31, 1995, the Company incurred a
net loss of $12,773 and had, as of that date, accumulated a deficit of
$33,600. The Company had no operations during the first quarter covered
by these statements and realized no revenues, although it incurred a
loss for the quarter of $3,565.
NOTE 3. Future working capital requirements are dependent on the Company's
ability to attain profitable operations, to restructure its financing
arrangements or capital structure, and to obtain financing or new
capital as required. It is not possible at this time to predict the
outcome of future operations, restructuring efforts, or whether the
necessary alternative financing can be arranged.
NOTE 4. In September of 1994, the Company's shareholders approved at a special
meeting an amendment to the Company's certificate of incorporation
which effected a 1-for-10 reverse split of the Company's Common Stock.
This action, which combined every ten Common Shares of the Company into
one share, reduced the number of outstanding shares from 5,980,000 to
597,997 shares (some fractional shares were lost) and reduced the
number of authorized shares from 50,000,000 to 5,000,000. The
shareholders also approved at that meeting a proposal to, immediately
following the reverse split, increase the number of authorized shares
to 50,000,000 and increase the par value to the original $.001 per
share.
NOTE 5. Loss per common share is based on the weighted average number of common
shares outstanding during the period.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Business. Chelsea Atwater, Inc., a Nevada corporation ("Company"), is
in the development stage in accordance with Financial Accounting Standards Board
Standard No. 7. The Company has not been operational, other than occasionally
searching for a business or venture to acquire, as described below, or had
revenues other than interest income since its inception.
The Company's sole business at this point is to seek to acquire assets
of or an interest in a small to medium-size company or venture actively engaged
in a business generating revenues or having immediate prospects of generating
revenues. The Company plans to acquire such assets or shares by exchanging
therefor the Company's securities. In order to avoid becoming subject to
regulation under the Investment Company Act of 1940, as amended, the Company
does not intend to enter into any transaction involving the purchase of another
corporation's stock unless the Company can acquire at least a majority interest
in that corporation. The Company has not identified any industry, segment within
an industry or type of business, nor geographic area, in which it will
concentrate its efforts, and any assets or interest acquired may be in any
industry or location, anywhere in the world. The Company will give preference to
profitable companies or ventures with a significant asset base sufficient to
support a listing on a national securities exchange or quotation on the NASDAQ
system. Members of management (all of whom are devoting part time to the
Company's affairs) plan to search for an operating business or venture which the
Company can acquire, thereby becoming an operating company. There is no
assurance that the Company will be successful in this endeavor. The Company has
no operations or source of revenues. Unless the Company succeeds in acquiring a
company or properties which provide cash flow, the Company's ability to survive
is in doubt.
Financial Condition. During the quarter ended March 31, 1996 (first
quarter of this year), the Company had no revenues and did not have operations.
Expenses for this period were minimal, resulting in a loss of $3,565. The
Company has, since inception, accumulated a deficit (net loss) through the end
of this quarter of $37,165.
Liquidity and Capital Resources. The Company had no cash on hand at the
end of the quarter. The Company had no other cash or other assets, nor any
current plans to raise capital. Whether the Company ultimately becomes a going
concern depends upon its success in finding and acquiring a suitable private
business and the success of that acquired business. At this time, the Company
has no commitment for any capital expenditure and foresees none. Offices are
provided without charge to the Company. However, the Company will incur routine
fees and expenses incident to filing of periodic reports with the Securities and
Exchange Commission, and it will incur fees and expenses in the event it makes
or attempts to make an acquisition. As a practical matter, the Company expects
no significant operating costs other than professional fees payable to attorneys
and accountants.
In regard to a proposed acquisition, the Company anticipates requiring the
target company to deposit with the Company a retainer which the Company can use
to defray such professional fees and costs. In this way, the Company could avoid
the need to raise funds for such expenses or becoming indebted to such
professionals. Moreover, investigation of business ventures for potential
acquisition will involve some costs, at the least postage and long-distance
telephone charges. Management hopes, once a candidate business venture is deemed
to be appealing, to likewise secure a deposit from the business venture to
defray expenses of further investigation, such as air travel and lodging
expenses. An otherwise desirable business venture may, however, decline to post
such a deposit.
The Company has no credit available to it and is unable to borrow money.
Management does not anticipate raising funds through the sale of securities or
otherwise, and it is unlikely that significant funds could be raised in a
securities offering, in any event. This inability to raise funds could
negatively affect the Company's realization of its business purpose.
7
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. NONE.
(b) Reports on Form 8-K. NONE.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
DATED: June 10, 1996
CHELSEA ATWATER, INC.
By /s/ JOHN D. BRASHER, JR.
--------------------------------------------
John D. Brasher Jr., Chief Executive Officer
and Chief Financial Officer
8