U.S. 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 the quarterly period Ended December 31, 1998 Commission File No. 0-22865 VERSAILLES CAPITAL CORPORATION ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Colorado 84-1044910 - ------------------------------ ---------------------------------- (State or other jurisdiction of (IRS Employer Identification Number) Incorporation or Organization) 1200 17th Street, Suite 1000, Denver, Colorado 80202 ----------------------------------------------------------- (Address of Principal Executive Offices including zip code) (303) 595-3300 --------------------------- (Issuer's telephone number) 370 17th Street, Suite 2350, Denver, Colorado 80202 ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Issuer (1) has 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 [ ] There were 1,284,116 shares of the Registrant's $.05 par value Common Stock outstanding as of December 31, 1998. VERSAILLES CAPITAL CORPORATION FORM 10-QSB INDEX ----- Part I. Financial Information Item 1. Financial Statements Page Balance Sheet - December 31, 1998 and March 31, 1998 3 Statement of Operations - Three Months ended ended December 31, 1998 and 1997 4 Statement of Operations - Nine Months ended ended December 31, 1998 and 1997 5 Statement of Cash Flows - Three Months ended December 31, 1998 and 1997 6 Statement of Cash Flows - Nine Months ended December 31, 1998 and 1997 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. Other Information and Signatures 10 Signatures 11 2 VERSAILLES CAPITAL CORPORATION BALANCE SHEETS (Unaudited) ASSETS December 31, March 31, 1998 1998 ------------ --------- Current Assets Cash $ - $ - --------- --------- Total Current Assets - - Total Assets $ - $ - ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 495 $ 11,690 Advances from stockholders - 7,461 --------- --------- Total Current Liabilities 495 19,151 --------- --------- Stockholders' Equity: Preferred Stock, $.10 par value, 50,000,000 shares authorized none issued and outstanding - - Common Stock, $.05 par value, 100,000,000 shares authorized 1,284,116 shares issued and outstanding 64,206 64,206 Additional paid-in capital 469,178 447,691 Accumulated (deficit) (533,879) (531,048) --------- --------- Total Stockholders' Equity 495 (19,151) --------- --------- Total Liabilities and Stockholders' Equity $ - $ - ========= ========= The accompanying notes are an integral part of the financial statements. 3 VERSAILLES CAPITAL CORPORATION STATEMENT OF OPERATIONS (Unaudited) Three months Three months Ended Ended December 31, December 31, 1998 1997 ------------ ------------ Revenues $ - $ - ---------- ---------- Operating Expenses: Professional fees 745 500 Other - 150 ---------- ---------- Total Operating Expenses 745 650 ---------- ---------- Net Income $ (745) $ (650) Per Share $ nil $ nil ========== ========== Weighted Average Number of Shares Outstanding 1,284,116 1,284,116 ========== ========== The accompanying notes are an integral part of the financial statements. 4 VERSAILLES CAPITAL CORPORATION STATEMENT OF OPERATIONS (Unaudited) Nine months Nine months Ended Ended December 31, December 31, 1998 1997 ------------ ------------ Revenues $ - $ - ---------- ---------- Operating Expenses: Professional fees 2,245 3,170 Other 586 6,472 ---------- ---------- Total Operating Expenses 2,831 9,642 ---------- ---------- Net Income $ (2,831) $ (9,642) ---------- ---------- Per Share $ nil $ (.01) ========== ========== Weighted Average Number of Shares Outstanding 1,284,116 1,284,116 ========== ========== The accompanying notes are an integral part of the financial statements. 5 VERSAILLES CAPITAL CORPORATION STATEMENT OF CASH FLOWS (Unaudited) Three months Three months Ended Ended December 31, December 31, 1998 1997 ------------ ------------ Cash Flows Operating Activities: Net (loss) $ (745) $ (650) (Decrease) in accounts payable (8,497) 650 ---------- ---------- Net Cash (Used in) Operating Activities (9,242) - ---------- ---------- Cash Flows from Investing Activities - - ---------- ---------- Cash Flows from Financing Activities: Advances from related party 500 - Additional paid-in capital 8,742 - ---------- ---------- Net Cash Provided by Financing Activities 9,242 - ---------- ---------- Increase in Cash - - Cash, Beginning of Period - - ---------- ---------- Cash, End of Period $ - $ - ========== ========== Interest Paid $ - $ - ========== ========== Income Taxes Paid $ - $ - ========== ========== The accompanying notes are an integral part of the financial statements. 6 VERSAILLES CAPITAL CORPORATION STATEMENT OF CASH FLOWS (Unaudited) Nine months Nine months Ended Ended December 31, December 31, 1998 1997 ------------ ------------ Cash Flows Operating Activities: Net (loss) $ (2,831) $ (9,642) Increase (decrease) in accounts payable (11,195) 4,181 Increase in advances from stockholders - 5,461 ---------- ---------- Net Cash (Used in) Operating Activities (14,026) - ---------- ---------- Cash Flows from Investing Activities - - ---------- ---------- Cash Flows from Financing Activities: Advances from related party 5,284 - Additional paid-in capital 8,742 - ---------- ---------- Net Cash Provided by Financing Activities 14,026 - ---------- ---------- Increase in Cash - - ---------- ---------- Cash, Beginning of Period - - ---------- ---------- Cash, End of Period $ - $ - ========== ========== Interest Paid $ - $ - ========== ========== Income Taxes Paid $ - $ - ========== ========== The accompanying notes are an integral part of the financial statements. 7 VERSAILLES CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS December 31, 1998 (Unaudited) (1) Condensed Financial Statements The financial statements included herein have been prepared by Versailles Capital Corporation without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and Versailles Capital Corporation believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the March 31, 1998 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respect's dependent upon the facts that will exist, and procedures that will be accomplished by Versailles Capital Corporation later in the year. The management of Versailles Capital Corporation believes that the accompanying unaudited condensed financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the periods presented. 2) Subsequent Event Subsequent to December 31, 1998, certain shareholders entered into a private negotiation with LMU & Company, Inc. whereby LMU & Company, Inc. purchased 53% of the voting shares of common stock. This transaction resulted in a change in control of the Company as more fully disclosed in Form 8-K filed on January 12, 1999. 8 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Versailles Capital Corporation (the "Company") was organized as a Colorado corporation on December 31, 1986, in order to evaluate, structure and complete a merger with, or acquisition of, prospects consisting of private companies, partnerships of sole proprietorships. The Company may seek to acquire a controlling interest in such entities in contemplation of later completing an acquisition. The Company is not limited to any operation or geographic area in seeking out opportunities. Management has not identified any particular business or industry within which the Company will seek an acquisition or merger. The Company has not conducted, nor have others made available to it, market research supporting the viability of the Company's proposed operations. The Company generated no revenues during the quarter ended December 31, 1998, and management does not anticipate any revenues until following the conclusion of a merger or acquisition, if any, as contemplated by the Company's business plan. The Company's capital is limited. The Company anticipates operational costs will be limited until such time as significant evaluation work is undertaken regarding prospective mergers or acquisitions. At December 31, 1998, the Company had no material commitments for capital expenditures. YEAR 2000 COMPLIANCE The Company is aware of the issues associated with the programming code in existing computer systems as the year 2000 approaches. The Company has assessed these issues as they relate to the Company, and since the Company currently has no operating business and does not use any components, and since it has no customers or suppliers, it does not believe that there are any material year 2000 issues to disclose in this Report. 9 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 (a) The following exhibits have been filed with this report: Exhibit 27 - Financial Data Schedule 10 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. VERSAILLES CAPITAL CORPORATION Date: February 10, 1999 By:/s/ L. Michael Underwood L. Michael Underwood, President 11 EXHIBIT INDEX EXHIBIT METHOD OF FILING - ------- ----------------------------- 27. Financial Data Schedule Filed herewith electronically