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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
June 30, 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.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4078912
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
39 BROADWAY, SUITE 2250, NEW YORK, NY 10006
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(Address of principal executive offices (zip code))
212/425-8200
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(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 June 30, 2000
Common Stock, par value $0.0001 5,000,000
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ITEM 1. FINANCIAL STATEMENTS
PEPPER CAPITAL, CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JUNE 30, 2000
PEPPER CAPITAL, CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION TO JUNE 30, 2000
CONTENTS
Page
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Accountants' Review Report 1.
Financial Statements:
Balance Sheet 2.
Statement of Income and Accumulated Deficit 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
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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 June 30, 2000 and the related statements of
operations and accumulated deficit, stockholders' equity and cash flows for the
period from inception (September 8, 1999) to June 30, 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
August 8, 2000
PEPPER CAPITAL, CORP.
(A Development Stage Company)
BALANCE SHEET AS OF JUNE 30, 2000
ASSETS
CURRENT ASSETS:
Cash $ 641.
TOTAL CURRENT ASSETS: 641.
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TOTAL ASSETS $ 641.
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
$ --
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TOTAL LIABILITIES: --
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STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value,
10,000,000 shares authorized,
5,000,000 issued and outstanding 500.
Additional paid in capital 225.
Accumulated deficit (84).
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TOTAL STOCKHOLDERS' EQUITY: 641.
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 641.
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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)
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
FOR THE PERIOD FROM INCEPTION TO JUNE 30, 2000
NET SALES $ --
COST OF SALES --
GROSS PROFIT --
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OPERATING EXPENSES 84.
(LOSS) FROM OPERATIONS (84).
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NET (LOSS) (84).
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ACCUMULATED DEFICIT - BEGINNING OF PERIOD --
ACCUMULATED DEFICIT - END OF PERIOD $ (84).
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BASIC NET (LOSS) PER SHARE: $(0.0000168)
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FULLY DILUTED NET (LOSS) PER SHARE: $(0.0000146)
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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)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION TO JUNE 30, 2000
Additional
Common Paid-in Accumulated
Stock Capital Deficit
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Balances at inception - September 8, 1999 -- -- --
Common stock issued 475. -- --
Stock options exercised 25. 225. --
Net (loss) -- -- (84).
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Balances at June 30, 2000 500. 225. (84).
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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)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION TO JUNE 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating expenses (84).
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NET CASH (USED) BY OPERATING ACTIVITIES (84).
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CASH FLOWS FROM INVESTING ACTIVITIES:
--
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NET CASH PROVIDED BY INVESTING ACTIVITIES --
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CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributed upon execution
of stock option agreements 250.
Capital contributed upon completion
of common stock subscription agreements 475.
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NET CASH PROVIDED BY FINANCING ACTIVITIES 725.
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NET INCREASE IN CASH & CASH EQUIVALENTS $ 641.
Cash - at beginning of period --
CASH & CASH EQUIVALENTS - AT END OF PERIOD $ 641.
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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 JUNE 30, 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
June 30, 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 June
12, 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 June 12, 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 June 30, 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
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Mark Elenowitz, CEO
Dated: August 11, 2000