UNITED STATES
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, 2001
MAS ACQUISITION XIX CORP.
(Name of Small Business Issuer in its charter)
Indiana 35-2082971
(State or other jurisdiction) (I.R.S. incorporation or organization
Employer Identification Number)
2963 Gulf to Bay Blvd., Suite 265, Clearwater, Florida 33759
(Address of principal executive offices and zip code)
1710 E. Division Street, Evansville, Indiana 47711
(Former address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(727) 669-7781
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 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 [ ]
As of December 31, 2001, the Registrant has 1,000 shares of common stock
outstanding.
Transitional Small Business Disclosure Format. Yes [ ] No [X]
TABLE OF CONTENTS PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS ........................... 2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND PLAN OF OPERATION ...... 9
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION .............................. 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ............... 9
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
TABLE OF CONTENTS
DECEMBER 31, 2001 AND 2000
PAGE(S)
Accountants' Review Report 1
Financial Statements:
Balance Sheets (Unaudited) 2
Statements of Operations (Unaudited) 3
Statements of Changes in Stockholders' Equity (Unaudited) 4
Statements of Cash Flows (Unaudited) 5
Notes to Financial Statements (Unaudited) 6-8
Shareholders and Board of Directors
MAS Acquisition XIX Corp.
(A Development Stage Corporation)
Clearwater, Florida
We have reviewed the accompanying balance sheet of MAS Acquisition XIX Corp. (A
Development Stage Corporation) as of December 31, 2001 and 2000 and the related
statements of operations, changes in stockholders' equity, and cash flow for the
six months then ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of MAS Acquisition XIX 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 auditing standards generally accepted in the United
States of America, 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 accounting principles generally accepted in the United States of
America.
BAGELL, JOSEPHS & COMPANY, L.L.C.
Bagell, Josephs & Company, L.L.C.
Gibbsboro, New Jersey
February 3, 2002
-1-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEETS (UNAUDITED)
DECEMBER 31, 2001 AND 2000
DECEMBER 31, DECEMBER 31,
2001 2000
------------ ------------
ASSETS
Organization costs, net of accumulated amortization $ -- $ 16
===== =====
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 20,000,000 shares
authorized, none issued or outstanding $ -- $ --
Common stock, $.001 par value, 8,000,000 shares
authorized, 1,000 shares issued and outstanding 111 111
Accumulated deficit (111) (95)
----- -----
TOTAL STOCKHOLDERS' EQUITY $ -- $ 16
===== =====
See accountants' review report and notes to the financial statements.
-2-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000
DECEMBER 31, DECEMBER 31,
2001 2000
------------ ------------
REVENUE $ -- $ --
----- -----
EXPENSES
Amortization -- 5
----- -----
TOTAL EXPENSES -- 5
----- -----
NET LOSS -- (5)
ACCUMULATED DEFICIT- BEGINNING OF PERIOD (111) (90)
----- -----
ACCUMULATED DEFICIT - END OF PERIOD $(111) $ (95)
===== =====
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,000 1,000
===== =====
BASIC AND DILUTED LOSS PER SHARE $ -- $ --
===== =====
See accountants' review report and notes to the financial statements.
-3-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE PERIOD FROM JANUARY 6, 1997 (INCEPTION) THROUGH DECEMBER 31, 2001
COMMON STOCK ACCUMULATED
NO. SHARES AMOUNT DEFICIT TOTAL
---------- ------ ------- -----
Shares issued at inception for organizational costs 8,500,000 $ 90 $ -- $ 90
Shares issued for services at $.001 par value
in January 1997 500 1 -- 1
Shares gifted at $.001 par value in March 1997 7,750 8 -- 8
Net loss for the period -- -- (18) (18)
-----------------------------------------------------------
Balance at June 30, 1997 8,508,250 99 (18) 81
Net loss for the period -- (18) (18)
-----------------------------------------------------------
Balance at June 30, 1998 8,508,250 99 (36) 63
Shares issued for services at $.001 par value --
in September 1998 750 1 -- 1
Shares gifted at $.001 par value in September 1998 10,800 11 -- 11
Net loss for the period -- -- (30) (30)
-----------------------------------------------------------
Balance at June 30, 1999 8,519,800 111 (66) 45
Shares issued for services at $.001 par value in
October 1999 100 -- -- --
Reverse stock split in March 2000 (8,518,900) -- --
Net loss for the year -- -- (24) (24)
-----------------------------------------------------------
Balance at June 30, 2000 1,000 111 (90) 21
Net loss for the period -- -- (21) (21)
-----------------------------------------------------------
Balance at June 30, 2001 1,000 111 (111) --
Net loss for the period -- -- -- --
-----------------------------------------------------------
Balance at December 31, 2001 1,000 $ 111 $ (111) $ --
===========================================================
See accountants' review report and notes to financial statements.
-4-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000
DECEMBER 31, DECEMBER 31,
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ -- $ (5)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Amortization -- 5
----- -----
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES -- --
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES: -- --
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES: -- --
----- -----
NET CHANGE IN CASH AND CASH EQUIVALENTS -- --
CASH - BEGINNING OF PERIOD -- --
----- -----
CASH - END OF PERIOD $ -- $ --
===== =====
See accountants' review report and notes to the financial statements.
-5-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 2001 AND 2000
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on January 6, 1997, in the State of Indiana. The
Company is in the development stage and its intent is to locate suitable
business ventures to acquire. The Company has had no significant business
activity to date and has chosen June 30 as a year-end.
On March 3, 2000, the Company exchanged 8,250,000 shares of its stock for
1,500,000 shares of Pinnacle Business Management, Inc., a Nevada corporation.
The result is that the Company was acquired by Pinnacle Business Management,
Inc. After this exchange, a reverse stock split occurred leaving Pinnacle
Business Management, Inc. as the sole shareholder of the Company.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents.
Intangible Assets
The cost of intangible assets is amortized using the straight-line method over
the estimated useful economic life (five years for organization costs). They are
stated at cost less accumulated amortization. The Company reviews for the
impairment of long-lived assets and certain identifiable intangibles whenever
events or changes in circumstances indicate that the carrying value of the asset
may not be recoverable. An impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its eventual
disposition is less than its carrying amount. No such impairment losses have
been identified in the periods presented.
Net Loss per Share
Basic loss per share is computed by dividing the net loss for the period by the
weighted average number of common shares outstanding for the period.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. These estimates and
assumptions affect the reported amount of assets and liabilities, the disclosure
of contingent assets and liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that were used.
-6-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONT.)
INCOME TAXES
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial reporting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classifications of the assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or non-current depending on the periods in
which the temporary differences are expected to reverse.
NOTE 2- STOCKHOLDERS' EQUITY
At inception, the Company issued 8,500,000 shares of its $.001 par value common
stock to an officer as reimbursement of organization costs paid by the officer.
Fair value used for this transaction of $90 is based upon the actual cost of
incorporation.
During January, 1997 the Company issued 500 shares of its $.001 par value common
stock to directors as compensation valued at $1.
During March, 1997 the Company issued 7,750 shares of its common stock to
foreign citizens as a gift with an aggregate fair value of $8.
During September, 1998 the Company issued 750 shares of its $.001 par value
common stock to directors as compensation valued at $1.
During September, 1998 the Company issued 10,800 shares of its common stock to
foreign citizens as a gift with an aggregate fair value of $11.
During October, 1999 the Company issued 100 shares of its common stock to one
individual with an aggregate fair value of $0.
On March 3, 2000 the Company entered into an exchange agreement and was acquired
by Pinnacle Business Management, Inc., a reporting entity on the pink sheets
(PCBM). Subsequent to entering into the exchange agreement, the Company declared
a reverse stock split, effectively reducing the outstanding shares to 1,000.
-7-
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 3- LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2001 and 2000, the Company had no cash or capital reserves.
NOTE 4 - INCOME TAXES
There is no provision for income taxes at December 31, 2001 or 2000. The Company
has a small net operating loss which expires thru 2013.
-8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion is based on an analysis of the financial statements for
the six months ended December 31, 2001. A comparison is made to the
corresponding financial period of the prior year. The Company became a reporting
entity in August 1999, and had limited operation in 1999. Pinnacle Business
Management, Inc., acquired the Company on March 3, 2000. The Company's audited
June 30, 2001 financial statements are included in the company's Form 10-KSB,
filed September 28, 2001.
PAST AND FUTURE FINANCIAL CONDITION
The Company is in the development stage. It has had no significant business
activity since inception. The Company's purpose is to seek, investigate, and if
such investigation warrants, acquire an interest in business opportunities
presented to it by persons or entities who seek the perceived advantages of an
Exchange Act registered corporation. The Company has no assets or liabilities as
of December 31, 2001.
RESULTS OF OPERATIONS
The Company had no revenues or expenses for the six months ended December 31,
2001.
LIQUIDITY
The Company has no capital with which to acquire a business opportunity.
Management does not foresee, however, the Company incurring any significant
expenses during the next twelve months. Management expects to incur small loans
to provide the money necessary for operational expenses.
The owners of the business opportunities may, however, incur significant legal
and accounting costs in connection with acquisition of a publicly registered
company, including the costs of preparing Forms 8-K, 10-K or 10-KSB, agreements
and related reports and documents.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The Company remains inactive. There have been no other corporate changes for the
period ended December 31, 2001.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b). There were no Forms 8-K filed, and none were required to be filed, for the
period ended December 31, 2001.
-9-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MAS ACQUISITION XIX CORP.
Date: February 13, 2002
By: /s/ Jeffrey G. Turino
------------------------------------------
Jeffrey G. Turino, Chief Executive Officer
/S/ Michael B. Hall
------------------------------------------
Michael B. Hall, President and Director