U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-29125
FANCARD ACQUISITION CORPORATION
(Exact name of small business issuer as specified in its
charter)
Nevada 87-0644407
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8 East Broadway, Suite 620, Salt Lake City, Utah 84111
(Address of principal executive offices)
801-532-7858
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of June 30, 2000: 500,000 shares
of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
FORM 10-QSB
FANCARD ACQUISITION CORPORATION
INDEX
Page
PART I. Financial Information 3
Review Report of Independent Certified
Public Accountants 4
Unaudited Condensed Balance Sheets - June
30, 2000 and December 31, 1999 5
Unaudited Condensed Statements of
Operations for the Three and Six Months
Ended June 30, 2000 and for the period
from inception on December 23, 1999
through June 30, 2000 6
Unaudited Condensed Statements of Cash
Flows for the Three and Six Months Ended
June 30, 2000 and for the period from
inception on December 23, 1999 through
June 30, 2000 7
Notes to Consolidated Financial
Statements 8
Management's Discussion and Analysis of
Financial Condition or Plan of Operation 11
PART II. Other Information 13
Signatures 14
2
PART I.
Financial Information
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
3
ACCOUNTANTS' REVIEW REPORT
Board of Directors
FANCARD ACQUISITION CORPORATION
Salt Lake City, Utah
We have reviewed the accompanying condensed balance sheet of
Fancard Acquisition Corporation [a development stage company] as
of June 30, 2000 and the related condensed statements of
operations and cash flows for the three and six months ended June
30, 2000 and for the period from inception on December 23, 1999
through June 30, 2000. These financial statements are the
responsibility of the Company's management. All information
included in these financial statements is the representation of
management of Fancard Acquisition Corporation.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. 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 condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that Fancard Acquisition Corporation will continue as a going
concern. As discussed in Note 5 to the financial statements,
Fancard Acquisition Corporation was only recently formed, has
incurred losses since its inception and has not yet been
successful in establishing profitable operations, raising
substantial doubt about its ability to continue as a going
concern. Management's plans in regards to these matters are also
described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
PRITCHETT, SILER & HARDY, P.C.
July 25, 2000
Salt Lake City, Utah
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FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountants' Review Report]
ASSETS
June 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ 415 $ 2,000
___________ ___________
Total Current Assets 415 2,000
___________ ___________
$ 415 $ 2,000
__________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - related party $ - $ 550
___________ ___________
Total Current Liabilities - 550
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
500,000 shares issued and
outstanding 500 500
Capital in excess of par value 1,500 1,500
Deficit accumulated during the
development stage (1,585) (550)
___________ ___________
Total Stockholders' Equity 415 1,450
___________ ___________
$ 415 $ 2,000
__________________________
Note: The balance sheet at December 31, 1999 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
5
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountants' Review Report]
From Inception
For the Three For the Six on December 23,
Months Ended Months Ended 1999 Through
June 30, June 30, June 30,
2000 2000 2000
_________________________________________
REVENUE $ - $ - $ -
EXPENSES:
General and Administrative 150 1,035 1,585
_________________________________________
LOSS BEFORE INCOME TAXES (150) (1,035) (1,585)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
_________________________________________
NET LOSS $ (150) $ (1,035) $ (1,585)
____________________________________________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
____________________________________________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
6
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountants' Review Report]
From Inception
For the Three For the Six on December 23,
Months Ended Months Ended 1999 Through
June 30, June 30, June 30,
2000 2000 2000
____________________________________
Cash Flows From Operating Activities:
Net loss $ (150) $ (1,035) $ (1,585)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes is assets and liabilities:
(Decrease) in accounts payable -
related party - (550) -
____________________________________
Net Cash (Used) by Operating
Activities (150) (1,585) (1,585)
____________________________________
Cash Flows From Investing Activities - - -
____________________________________
Net Cash Provided by Investing
Activities - - -
____________________________________
Cash Flows From Financing Activities:
Proceeds from issuance of common stock - - 2,000
____________________________________
Net Cash Provided by Financing
Activities - - 2,000
___________________________________
Net Increase (Decrease) in Cash (150) (1,585) 415
Cash at Beginning of Period 565 (2,000) -
____________________________________
Cash at End of Period $ 415 $ 415 $ 415
_______________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended June 30, 2000:
None
The accompanying notes are an integral part of these unaudited
condensed financial statements.
7
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Fancard Acquisition Corporation (the Company) was
organized under the laws of the State of Nevada on December 23,
1999. The Company has not commenced planned principal operations
and is considered a development stage company as defined in
Statement of Financial Accounting Standards (SFAS) No. 7. The
Company is seeking potential business ventures. The Company has,
at the present time, not paid any dividends and any dividends
that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the company's December 31, 1999 audited financial
statements. The results of operations for the periods ended June
30, 2000 are not necessarily indicative of the operating results
for the full year.
Organization Costs - Organization costs, which reflect amounts
expended to organize the Company, amounted to $550 and were
expensed during the period ended December 31, 1999.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the financial
statements, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to
be cash equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
8
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135 "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others, " and SFAS No. 137, " Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133)," were recently issued. SFAS No. 132, 133,
134, 135, 136, and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
June 30, 2000.
Common Stock - During December 1999, in connection with its
organization, the Company issued 500,000 shares of its previously
authorized, but unissued common stock. The shares were issued
for cash of $2,000 (or $.004 per share).
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss
or tax credit carryforwards. At June 30, 2000, the Company has
available unused operating loss carryforwards of approximately
$1,500, which may be applied against future taxable income and
which expire in 2019 through 2020.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is dependent
, in part upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the
realization of the loss carryforwards the Company has established
a valuation allowance equal to the tax effect of the loss
carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax
assets are approximately $600 and $200 as of June 30, 2000 and
December 31, 1999, respectively, with an offsetting valuation
allowance at each period end of the same amount resulting in a
change in the valuation allowance of approximately $400 for the
six months ended June 30, 2000.
9
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of June 30, 2000, the Company has
not paid any compensation to any officer or director of the
Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his/her office as a mailing address, as needed, at
no expense to the Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company was only recently formed, has incurred
losses since its inception and has not yet been successful in
establishing profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as
a going concern. In this regard, management is proposing to
raise any necessary additional funds not provided by operations
through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share for the periods presented:
From Inception
For the Three For the Six on December 23,
Months Ended Months Ended 1999 Through
June 30, June 30, June 30,
2000 2000 2000
____________________________________
Loss from continuing operations
available to common shareholders
(numerator) $ (150) $ (1,035) $ (1,585)
____________________________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 500,000 500,000 500,000
____________________________________
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
Three Month periods Ended June 30, 2000 and 1999
The Company had no revenue from continuing operations for the
three months ended June 30, 2000.
General and administrative expenses for the three months ended
June 30, 2000, consisted of general corporate administration,
legal and professional expenses, and accounting and auditing
costs. These expenses were $150 for the three months ended June
30, 2000.
As a result of the foregoing factors, the Company realized a net
loss of $150 for the three months ended June 30, 2000.
Period of Inception on December 23, 1999 to the Six Months Ended
June 30, 2000
The Company had no revenue from continuing operations for the
period from inception to the six months ended June 30, 2000.
General and administrative expenses for the six month period
ended June 2000 and for the period from inception to June 30,
1999 consisted of general corporate administration, legal and
professional expenses, and accounting costs. These expenses were
$1,035 for the six months ended June 30, 2000 and $1,585 for the
period from inception to June 30, 1999. The decrease in general
and administrative expenses is attributed to a decrease of $550
in accounts payable.
As a result of the foregoing factors, the Company realized a net
loss of $1,035 for the six months ended June 30, 2000 compared to
a net loss of $1,585 for the period from inception to June 30,
1999.
Liquidity and Capital Resources
At June 30, 2000, the Company had working capital of
approximately $415.
Management believes that the Company has sufficient cash and
short-term investments to meet the anticipated needs of the
Company's operations through at least the next 12 months.
However, there can be no assurances to that effect, as the
Company has no significant revenues and the Company's need for
capital may change dramatically if it acquires an interest in a
business opportunity during that period. The Company's current
operating plan is to (i) handle the administrative and reporting
requirements of a pubic company, and (ii) search for potential
businesses, products, technologies and companies for acquisition.
At present, the Company has no understandings, commitments or
agreements with respect to the acquisition of any business
venture, and there can be no assurance that the Company will
identify a business venture suitable for acquisition I the
future. Further, there can be no assurance that the Company
would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage any business
venture it acquires.
Forward-Looking Statement Notice
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and financial trends that may
affect the Company's future plans of
11
operations, business strategy, operating results, and financial
position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties and that
actual results may differ materially from those included within
the forward-looking statements as a result of various factors.
Such factors are discussed under the headings "Item 1.
Description of Business," and "Item 6. Management's Discussion
and Analysis of Financial Condition and Results of Operations,"
and also include general economic factors and conditions that may
directly or indirectly impact the Company's financial condition
or results of operations.
12
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K.
Reports on Form 8-K: No reports on Form 8-K were filed by the
Company during the quarter ended June 30, 2000.
Exhibits: Included only with the electronic filing of this report
is the Financial Data Schedule for the Six Month Period Ended
June 30, 2000 (Exhibit ref. No. 27).
13
SIGNATURES
In accordance with the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
FANCARD ACQUISITION CORPORATION
Date: August 8, 2000 By: /s/ Cletha A. Walstrand
President, Secretary and Treasurer
14