U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: December 31, 2000
Commission File Number: 000-28053
INVESTMENT ASSOCIATES, INC.
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
98-0204280
(IRS Employer Identification No.)
1456 St. Paul Street
Suite 104
Kelowna, British Columbia
(Address of principal executive offices)
V1Y 2E6
(Zip Code)
(250) 868-8177
(Issuer's Telephone Number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of December 31, 2000, was 1,000,000 shares.
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period ended
December 31, 2000 are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
unaudited financial statements and notes thereto included herein. In connection
with, and because it desires to take advantage of, the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the following discussion
and elsewhere in this report and in any other statement made by, or on the
behalf of the Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company. The Company disclaims any obligation to update forward
looking statements.
Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business, in exchange for its securities. As of the date of
this report, management of the Company has had preliminary discussions with
potential merger or acquisition candidates, but there is no definitive agreement
between the Company and any third party relevant thereto. In the event the
Company does enter into an agreement with such a third party, the Board of
Directors does intend to obtain certain assurances of value of the target entity
assets prior to consummating such a transaction, with further assurances that an
audited financial statement would be provided within sixty days after closing of
such a transaction. Closing documents relative thereto will include
representations that the value of the assets conveyed to or otherwise so
transferred will not materially differ from the representations included in such
closing documents, or the transaction will be voidable.
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The Company has no full time employees. The Company's President and
Secretary have agreed to allocate a portion of their time to the activities of
the Company, without compensation. These officers anticipate that the business
plan of the Company can be implemented by their devoting approximately 20 hours
per month to the business affairs of the Company and, consequently, conflicts of
interest may arise with respect to the limited time commitment by such officers.
Because the Company presently has nominal overhead or other material
financial obligations, management of the Company believes that the Company's
short term cash requirements can be satisfied by management injecting whatever
nominal amounts of cash into the Company to cover these incidental expenses.
There are no assurances whatsoever that any additional cash will be made
available to the Company through any means.
Liquidity and Capital Resources
The Company presently has nominal cash or cash equivalents. Because the
Company is not required to pay rent or salaries to any of its officers or
directors, management believes that the Company has sufficient funds to continue
operations through the foreseeable future.
The Company's securities are currently not liquid. There are no market
makers in the Company's securities and it is not anticipated that any market
will develop in the Company's securities until such time as the Company
successfully implements its business plan of engaging in a business opportunity,
either by merger or acquisition of assets. The Company presently has no liquid
financial resources to offer such a candidate and must rely upon an exchange of
its stock to complete such a merger or acquisition.
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 -
On September 18, 2000, the Company held its Annual Meeting of Shareholders.
At the meeting, the Company's Board of Directors were re-elected and the
Company's independent accountants, Cordovano & Harvey, P.C., were appointed to
audit the Company's financial statements for the fiscal year ended September 30,
2000.
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ITEM 5. OTHER INFORMATION - NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
None.
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
Index to Financial Statements
Page
------
Condensed balance sheet, December 31, 2000 (unaudited) ................ 2
Condensed statements of operations for the three months ended
December 31, 2000 and 1999, and from July 18, 1997 (inception)
through December 31, 2000 (unaudited) .............................. 3
Condensed statements of cash flows for the three months ended
December 31, 2000 and 1999, and from July 18, 1997 (inception)
through December 31, 2000 (unaudited) .............................. 4
Notes to condensed financial statements ............................... 5-6
*The accompanying condensed financial statements are not covered by an
Independent Certified Public Accountant's report
1
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEET
December 31, 2000
ASSETS
TOTAL ASSETS $ -
==================
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable ..................................... $ -
Accrued liabilities .................................. $ 1,750
------------------
TOTAL CURRENT LIABILITIES 1,750
------------------
SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value,
25,000,000 shares authorized,
-0- shares issued and
outstanding (See Note D)............................ -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,000,000 shares issued and
outstanding (See Note D)............................ 1,000
Additional paid-in capital .......................... 14,975
Deficit accumulated during the
development stage .................................. (17,725)
------------------
TOTAL SHAREHOLDERS' EQUITY (1,750)
------------------
$ -
==================
See accompanying notes to condensed financial statements
2
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
July 18, 1997
Three Months Ended (inception)
---------------------------- Through
December 31, December 31, December 31,
2000 1999 2000
------------- ------------- -------------
COSTS AND EXPENSES
Legal fees ..................... $ 770 $ 10,000 $ 11,960
Accounting fees ................ 250 1,948 3,980
Printing ....................... - - -
Licenses and fees .............. - - 535
Stock-based compensation for
organizational costs (Note B) - - 1,000
------------- ------------- -------------
LOSS FROM OPERATIONS (1,020) (11,948) (17,475)
------------- ------------- -------------
INCOME TAX BENEFIT (EXPENSE) (NOTE C)
Current tax benefit ............ 194 2,275 3,327
Deferred tax expense ........... (194) (2,275) (3,327)
------------- ------------- -------------
NET LOSS $ (1,020) $ (11,948) $ (17,475)
============= ============= =============
BASIC AND DILUTED
LOSS PER COMMON SHARE ........ $ * $ (0.01) $ (0.02)
============= ============= =============
BASIC WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING ........... 1,000,000 1,000,000 1,000,000
============= ============= =============
* Less than .01 per share
See accompanying notes to condensed financial statements
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
July 18, 1997
Three Months Ended (inception)
---------------------------- Through
December 31, December 31, December 31,
2000 1999 2000
------------- ------------- -------------
Net cash used in operating
activities ................... $ - $ - $ (14,975)
------------- ------------- -------------
Cash flows from financing activities:
Third party expenses paid by
affiliate on behalf of the
company, recorded as
additional paid-in capital. - - 14,975
------------- ------------- -------------
Net cash provided by financing
activities .................. - - 14,975
------------- ------------- -------------
Net Change in cash - - -
Cash, beginning of period .... - - -
------------- ------------- -------------
Cash, end of period $ - $ - $ -
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Interest ....................... $ - $ - $ -
============= ============ =============
Income taxes ................... $ - $ - $ -
============= ============ =============
Non-cash financing activities:
1,000,000 shares common stock
issued for services .......... $ - $ - $ 1,000
============= ============ ============
See accompanying notes to condensed financial statements
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A: BASIS OF PRESENTATION
The condensed financial statements presented herein have been prepared by the
Company in accordance with the accounting policies in its audited financial
statements for the year ended September 30, 2000 as filed in its form 10-KSB on
January 11, 2001 and should be read in conjunction with the notes thereto. The
Company entered the development stage in accordance with Statement of Financial
Accounting Standard ("SFAS") No. 7 on July 18, 1997 and is a "blank check"
company with the purpose to evaluate, structure and complete a merger with, or
acquisition of, a privately owned corporation.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
NOTE B: RELATED PARTY TRANSACTIONS
The Company maintains a mailing address at an affiliate's address. This address
is Suite 104, 1456 St. Paul Street, Kelowna, B.C., Canada V1Y 2E6. At this time
the Company has no need for an office.
The Company does not maintain a checking account and all expenses incurred by
the Company are paid by an affiliate. For the three months ended December 31,
2000 the Company incurred legal expense of $770 and accounting expense of $250.
The affiliate does not expect to be repaid for the expenses it pays on behalf of
the Company. Accordingly, as the expenses are paid, they are classified as
additional paid-in capital.
NOTE C: INCOME TAXES
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the periods shown on the condensed financial
statements resulting in a deferred tax asset, which was fully allowed for,
therefore the net benefit and expense result in $-0- income taxes.
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INVESTMENT ASSOCIATES, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE D: SHAREHOLDERS' EQUITY
Common Stock
The Company initially authorized 25,000 shares of no par value common stock. On
July 23, 1999 the Board of Directors approved an increase in authorized shares
to 50,000,000 and changed the par value to $.001. On July 20, 1997 the Company
issued 1,000 shares of common stock for services valued at $1.00 per share, or
$1000.
On October 5, 1999 the Company filed amended articles with the state of Nevada
to change the authorized shares of common stock originally approved by the Board
of Directors to 50,000,000, $.001 par and 25,000,000 shares of preferred stock
$.001 par.
Effective October 6, 1999, the shareholders approved a forward split of common
stock of one thousand shares in exchange for each share of common stock
(1,000:1) held. The accompanying financial statements have been retroactively
restated to give effect to the forward stock split for all periods presented.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
INVESTMENT ASSOCIATES, INC.
(Registrant)
Dated: February 13, 2001
By: s/Robert Hemmerling
-----------------------------
Robert Hemmerling,
Secretary/Treasurer
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INVESTMENT ASSOCIATES, INC.
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED DECEMBER 31, 2000
EXHIBITS Page No.
EX-27 Financial Data Schedule ........................................ 13
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