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 March 31, 2001
[ ] 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 March 31, 2001: 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
Unaudited Condensed Balance Sheets, March 3
31, 2001 and December 31, 2000
Unaudited Condensed Statements of Operations, 4
for the three-month periods ended March 31,
2001 and 2000 and for the period from inception
on December 23, 1999 through March 31, 2001
Unaudited Condensed Statements of Cash Flows, 5
for the three-month periods ended March 31,
2001 and 2000 and for the period from inception
on December 23, 1999 through March 31, 2001
Notes to Unaudited Condensed Financial 6
Statements
Management's Discussion and Analysis of 9
Financial Condition or Plan of Operation
10
PART II. Other Information
Signatures 10
2
PART I.
Financial Information
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2001 2000
___________ ___________
CURRENT ASSETS:
Cash in bank $ 80 $ 80
___________ ___________
Total Current Assets 80 80
___________ ___________
$ 80 $ 80
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 800 $ 150
Accounts payable - related party 385 235
___________ ___________
Total Current Liabilities 1,185 385
___________ ___________
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 (3,105) (2,305)
___________ ___________
Total Stockholders' Equity (1,105) (305)
___________ ___________
$ 80 $ 80
___________ ___________
Note: The balance sheet at December 31, 2000 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.
3
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the From Inception
Months Ended on December 23,
March 31, 1999 Through
___________________________ March 31,
2001 2000 2001
___________ ___________ ___________
REVENUE $ - $ - $ -
EXPENSES:
General and Administrative 800 885 3,105
___________ ___________ ___________
LOSS BEFORE INCOME TAXES (800) (885) (3,105)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
___________ ___________ ___________
NET LOSS $ (800) $ (885) $ (3,105)
___________ ___________ ___________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.01)
___________ ___________ ___________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
4
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on December 23,
March 31, 1999 Through
March 31,
2001 2000 2001
Cash Flows From Operating Activities:
Net loss $ (800) $ (885) $ (3,105)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes is assets and liabilities:
Increase (decrease) in accounts payable 650 - 800
Increase (decrease) in accounts payable -
related party 150 (550) 385
Net Cash Provided (Used) by Operating
Activities - (1,435) (1,920)
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 in Cash - (1,435) 80
Cash at Beginning of Period 80 2,000 -
Cash at End of Period $ 80 $ 565 $ 80
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 March 31, 2001:
None
For the period ended March 31, 2000:
None
The accompanying notes are an integral part of these unaudited
condensed financial statements.
5
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 March
31, 2001 and 2000 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, 2000 audited financial
statements. The results of operations for the periods ended
March 31, 2001 and 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.
6
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. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", 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)", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued. SFAS No.
136, 137, 138, 139 and 140 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 share 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
March 31, 2001.
Common Stock - The Company has authorized 50,000,000 shares of
common stock with a par value of $.001. 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 March 31, 2001, the Company has
available unused operating loss carryforwards of approximately
$2,700, which may be applied against future taxable income and
which expire in 2019 through 2021.
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 $1,050 and $750 as of March 31, 2001 and
December 31, 2000, respectively, with an offsetting valuation
allowance at each period end of the same amount resulting in a
change in the valuation allowance of approximately $300 for the
three months ended March 31, 2001.
7
FANCARD ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of March 31, 2001, 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.
Accounts Payable - Related Party - As of March 31, 2001, an
officer/shareholder of the Company has paid $150 in expenses on
behalf of the Company and the Company owes $235 for legal
services to an entity which is related to an officer/shareholder
of 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 has incurred losses since its inception and
has not yet been successful in establishing profitable
operations. Further, the Company has current liabilities in
excess of current assets. 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:
For the Three From Inception
Months Ended on December 23,
March 31, 1999 Through
March 31,
2001 2000 2001
Loss from continuing operations
available to common shareholders
(numerator) $ (800) $ (885) $ (3,105)
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 500,000 500,000 500,000
Dilutive loss per share was not presented, as the Company had no
common stock equivalent shares for all periods presented that
would affect the computation of diluted loss per share.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
Three-Month Periods Ended March 31, 2001 and 2000
The Company had no revenue from continuing operations for the
three-month periods ended March 31, 2001 and 2000.
General and administrative expenses for the three-month periods
ended March 31, 2001 and 2000 were $800 and $885, respectively.
These expenses consisted of general corporate administration,
legal and professional expenses, and accounting and auditing
costs.
As a result of the foregoing factors, the Company realized a net
loss of $800 for the three months ended March 31, 2001, as
compared to a net loss of $885 for the three months ended March
31, 2000.
Liquidity and Capital Resources
At March 31, 2001, the Company had $80 in cash, $800 in accounts
payable and $385 in accounts payable to a related party, giving
the Company a working capital deficit of $1,105, as compared to a
working capital deficit of $305 at December 31, 2000. The $385
in accounts payable to a related party consists of $150 in
expenses paid by its officer, and $235 for legal services to a
law firm owned and controlled by the Company's shareholders. The
decrease in working capital is due to incurring general and
administrative expenses without conducting any operations.
Management believes that its current cash needs can be met with
the cash on hand or from loans from its officers and directors
for at least the next twelve 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, during that period, it acquires an interest in a
business opportunity. Should the Company obtain a business
opportunity, it may be necessary to raise additional capital.
This may be accomplished by selling common stock of the Company
or debt financing.
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 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.
9
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K.
None
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: May 8, 2001
By: /S/ Cletha A. Walstrand
Cletha A. Walstrand
President, Secretary and Treasurer