UNITED STATES
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 Quarter 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 0-25853
QUAZON CORP.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0570975
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
135 West 900 South, Salt Lake City, Utah 84101
(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 278-2805
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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding as of June 30, 2000
Common Stock, $.001 par value 3,991,180
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . 3
Balance Sheets -- June 30, 2000. . . . . . . . . . . . . 4
Statements of Operations -- three and six
months ended June 30, 2000 . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity (Deficit) . . . . . . 6
Statements of Cash Flows -- three and six
months ended June 30, 2000 . . . . . . . . . . . . . . 8
Notes to Consolidated Financial Statements . . . . . . . 9
Item 2. Management's Discussion and Analysis or
Plan of Operations . . . . . . . . . . . . . . . . . . 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 14
Item 2. Changes In Securities and Use of Proceeds. . . . . . . . 14
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of
Securities Holders . . . . . . . . . . . . . . . . . . 15
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 15
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 16
PART I
Item 1. Financial Statements
The following unaudited Financial Statements for the period
ended June 30, 2000, have been prepared by the Company.
QUAZON CORP.
FINANCIAL STATEMENTS
June 30, 2000 and December 31, 1999
QUAZON, CORP.
(A Development Stage Company)
Balance Sheets
ASSETS
June 30, December 31,
2000 1999
(Unaudited)
CURRENT ASSETS
Cash $ 5,889 $ 2,474
Total Current Assets 5,889 2,474
TOTAL ASSETS $ 5,889 $ 2,474
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 200 $ 500
Notes payable - related party (Note 2) 8,000 -
Total Current Liabilities 8,200 500
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized: 100,000,000 common shares
at $0.001 par value: 3,991,180 shares issued and
outstanding 3,991 3,991
Capital in excess of par value 1,847,740 1,872,740
Accumulated deficit prior to January 1, 1994 (1,826,092) (1,826,092)
Deficit accumulated during the development stage (52,950) (48,665)
Total Stockholders' Equity (Deficit) (2,111) 1,974
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 5,889 $ 2,474
QUAZON, CORP.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From the
Beginning of
Development
Stage on
For the For the January 1,
Three Months Ended Six Months Ended 1994 Through
June 30, June 30, June 30,
2000 1999 2000 1999 2000
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and
administrative 852 - 4,085 7,987 52,111
Interest expense 200 375 200 750 839
Total Expenses 1,052 375 4,285 8,737 52,950
NET LOSS $ (1,052) $ (375) $ (4,285) $ (8,737) $(52,950)
BASIC LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,991,180 3,991,180 3,991,180 3,991,180
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1993 5,530 $ 6 $ 1,826,086 $ (1,826,092)
Net loss for the year ended
December 31, 1994 - - - -
Balance, December 31, 1994 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1996 - - - -
Balance, December 31, 1996 5,530 6 1,826,086 (1,826,092)
November 7, 1997, issuance of
common stock at $0.01 per
share for cash 466,667 467 4,533 -
November 12, 1997, issuance of
common stock at $0.01 per share
for cash 499,999 499 7,451 -
Fractional shares issued in reverse
stock split 18,984 19 (19) -
Contributed capital - - 936 -
Net loss for the year ended
December 31, 1997 - - - (16,286)
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
Contributed capital - - 1,753 -
October 31, 1998, issuance of
common stock at $0.003 per
share for services 1,500,000 1,500 3,500 -
October 31, 1998, issuance of
common stock at $0.003 per
share for cash 1,500,000 1,500 3,500 -
Net loss for the year ended
December 31, 1998 - - - (17,292)
Balance, December 31,1998 3,991,180 3,991 1,847,740 (1,859,670)
Contributed capital - - 25,000 -
Net loss for the year ended
December 31, 1999 - - - (15,087)
Balance, December 31, 1999 3,991,180 3,991 1,872,740 (1,874,757)
Net loss for the six months
ended June 30, 2000 (unaudited) - - - (4,285)
Balance, June 30, 1999
(unaudited) 3,991,180 $ 3,991 $ 1,847,740 $ (1,879,042)
QUAZON, CORP.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From the
Beginning of
Development
Stage on
For the For the January 1,
Three Months Ended Six Months Ended 1994 Through
June 30, June 30, June 30,
2000 1999 2000 1999 2000
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (1,052) $ (375) $ (4,285) $ (8,737) $ (52,950)
Adjustments to reconcile net
loss to net cash provided
(used) by operating activities:
Stock issued for services - - - - 5,000
Changes in operating asset and
liability accounts:
Increase (decrease) in
accounts payable (2,588) 206 (300) 1,854 200
Net Cash (Used) by Operating
Activities (3,640) (169) (4,585) (6,883) (47,750)
CASH FLOWS FROM INVESTING
ACTIVITIES: - - - - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Contributed capital - - - - 26,809
Proceeds from notes payable -
related party - - 8,000 5,000 18,000
Payments made on notes payable - - - - (10,000)
Issuance of common stock
for cash - - - - 18,830
Net Cash Provided by
Financing Activities - - 8,000 5,000 53,639
NET INCREASE (DECREASE) IN CASH (3,640) (169) 3,415 (1,883) 5,889
CASH AT BEGINNING OF PERIOD 9,529 1,170 2,474 2,884 -
CASH AT END OF PERIOD $ 5,889 $ 1,001 $ 5,889 $ 1,001 $ 5,889
Cash Payments For:
Income taxes $ - $ - $ - $ - $ -
Interest $ - $ - $ - $ - $ -
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Quazon, Corp. (the Company) was originally incorporated on
June 26, 1981, as a Utah Corporation under the name of The
Fence Post, Inc.
On March 24, 1986, the Company changed its name to Dynamic
Video, Inc. On September 6, 1988, the name was changed to
Loki Holding Corporation.
On September 11, 1990, the name was changed to Interactive
Development Applications, Inc. and completed a reverse
acquisition of several Belgium corporations, which was
revoked in 1997.
On November 7, 1997, the name was changed to Quazon, Corp.,
a Utah corporation. On November 19, 1997, Quazon, Corp. of
Utah merged with Quazon, Corp., a Nevada corporation,
leaving the Nevada corporation as the surviving company.
Currently the Company is seeking new business opportunities
believed to hold a potential profit or to merge with an
existing company.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a
December 31 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock
are based on the weighted average number of shares issued
and outstanding at the date of the financial statements.
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net Loss (Numerator) $ (1,052) $ (375) $ (4,285) $ (8,737)
Weighted average
shares outstanding
(denominator) 3,991,180 3,991,180 3,991,180 3,991,180
Basic loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Use of 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 and
disclosure of contingent assets and liabilities at the date
of the financial statement and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
f. Provision for Taxes
At June 30, 2000, the Company had net operating loss
carryforwards of approximately $53,000 that may be offset
against future taxable income through 2020. No tax benefit
has been reported in the financial statements, because the
potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the
same amount.
g. Unaudited Financial Statements
The accompanying unaudited financial statements include all
of the adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of
a normal, recurring nature.
NOTE 2 - REVERSE STOCK SPLIT
On October 24, 1997, the board of directors of the Company
approved a 1-for-250 reverse stock split and on October 30,
1998, the board of directors of the Company approved a 1-
for-15 reverse stock split while retaining the authorized
shares at 100,000,000 and retaining the par value at
$0.001. This change has been applied to the financial
statements on a retroactive basis back to inception of the
development stage. The Company provided that no
shareholder would be reduced below 100 shares, accordingly,
18,984 post-split fractional shares were issued.
NOTE 3 - RELATED PARTY TRANSACTIONS
On November 11, 1997, the Company issued 466,667 shares of
its restricted common stock to officers of the Company for
cash of $5,000.
On November 12, 1997, the Company issued 499,999 shares of
its restricted common stock for $8,000 cash.
On October 30, 1998, the Company issued 1,500,000 post-
split shares of restricted common stock to officers of the
Company for services valued at $5,000 and 1,500,000 to
Company officers for $5,000 cash.
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and December 31, 1999
NOTE 3 - RELATED PARTY TRANSACTIONS (Continued)
In 1999, an officer of the company contributed $15,000 to
the Company in expenses incurred on the Company's behalf.
The officer contributed $1,753 in 1998.
In 1999, an officer of the Company contributed a $10,000
note payable to the capital of the Company.
The Company has a note payable to an officer totaling
$8,000 at June 30, 2000. The note is unsecured and due
upon demand. Interest is imputed on the note at 10% per
annum.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of assets
and liquidation of liabilities in the normal course of
business. However, the Company does not have significant
cash or other material assets, nor does it have an
established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek a merger
with an existing, operating company. In the interim,
shareholders of the Company have committed to meeting its
minimal operating expenses.
Item 2. Management's Discussion and Analysis or Plan
of Operations
The following information should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in
this Form 10-QSB.
Quazon Corp. (the "Company"), a development stage company, has
not engaged in material operations or realized revenues for several
years. Certain costs and expenses of the Company have been paid
for by funds advanced by an officer pursuant to a note payable and
the private sale of shares of Company common stock. It is
anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company. Necessary funds,
including funds to cover expenses associated with being subject to
the reporting requirements of the Securities Exchange Act of 1934,
will most likely be provided by the Company's officers and
directors in the immediate future. It must be noted that unless
the Company is able to facilitate an acquisition of or merger with
an operating business, or is able to obtain significant outside
financing, there is substantial doubt about its ability to continue
as a going concern.
At June 30, 2000 and December 31, 1999, the Company had total
assets consisting of cash of $5,589 and $2,474, respectively. The
cash represents advances to the Company by an officer. Total
liabilities at June 30, 2000 were $8,200, consisting of accounts
payable of $200 and notes payable to related parties of $8,000.
Total liabilities at December 31, 1999 were $500 in accounts
payable. During the first quarter of 2000, the Company received
$8,000 from a related party, to be used for general operating
expenses. The notes are unsecured and due upon demand. Interest
is imputed at the rate of ten percent (10%) per annum, which is
contributed by the officer to the capital of the Company. No
additional funds were advanced to the Company during the second
quarter of 2000.
For the three and six months ended June 30 , 2000, general and
administrative expenses were $852 and $4,085, respectively,
compared to $0 and $7,987 for the comparable 1999 periods. General
and administrative expenses are primarily for legal and accounting
expenses. These expenses were greater during first half of 1999
due to costs related to the Company's initial filing of its Form
10-SB registration statement in July 1999. Interest expense was
$200 for the three and six months ended June 30, 2000 compared to
$375 for the second quarter of 1999 and $750 for the first half of
1999. The Company's net loss for the second quarter and first half
of 2000 was $1,052 and $4,285, respectively, compared to $375 and
$8,737 for the comparable 1999 periods.
The Company does not anticipate any material revenues until it
is able to complete an acquisition of or merger with an operating
business. During this interim period, the Company anticipates that
its expenses will be stable.
In the opinion of management, inflation has not and will not
have a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition
or merger. At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.
Plan of Operation
During the next 12 months, the Company will actively seek out
and investigate possible business opportunities with the intent to
acquire or merge with one or more business ventures. Because the
Company lacks funds, it may be necessary for the officers and
directors to either advance funds to the Company or to accrue
expenses until such time as a successful business consolidation can
be made. Management intends to hold expenses to a minimum and to
obtain services on a contingency basis when possible. Further, the
Company's directors will defer any compensation until such time as
an acquisition or merger can be accomplished and will strive to
have the business opportunity provide their remuneration. However,
if the Company engages outside advisors or consultants in its
search for business opportunities, it may be necessary for the
Company to attempt to raise additional funds. As of the date
hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any
capital.
In the event the Company needs additional capital, most likely
the only method available will be the private sale of its
securities. Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender. There can be no assurance that the
Company will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.
The Company does not intend to use any employees, with the
possible exception of part-time clerical assistance on an as-needed
basis. Outside advisors or consultants will be used only if they
can be obtained for minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this
manner and to continue its search for business opportunities during
the next twelve months.
Net Operating Loss
The Company has accumulated approximately $48,500 of net
operating loss carryforwards as of December 31, 1999, and
approximately $53,000 at June 30, 2000. This loss carryforward may
be offset against taxable income and income taxes in future years.
The use of these losses to reduce future income taxes will depend
on the generation of sufficient taxable income prior to the
expiration of the net operating loss carryforwards. The
carry-forwards expire in the year 2020. In the event of certain
changes in control of the Company, there will be an annual
limitation on the amount of net operating loss carryforwards which
can be used. No tax benefit has been reported in the financial
statements for the year ended December 31, 1999 or the period ended
June 30, 2000 because there is a 50% or greater chance that the
carryforward will not be used. Accordingly, the potential tax
benefit of the loss carryforward is offset by a valuation allowance
of the same amount.
Risk Factors and Cautionary Statements
This report contains certain forward-looking statements. The
Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-
looking statements involve risks and uncertainties that could cause
actual results to differ materially from those expressed in or
implied by the statements, including, but not limited to, the
following: the ability of the Company search for appropriate
business opportunities and subsequently acquire or merge with such
entity, to meet its cash and working capital needs, the ability of
the Company to maintain its existence as a viable entity, and other
risks detailed in the Company's periodic report filings with the
Commission.
PART II
Item 1. Legal Proceedings
There are presently no other material pending legal
proceedings to which the Company or any of its subsidiaries is a
party or to which any of its property is subject and, to the best
of its knowledge, no such actions against the Company are
contemplated or threatened.
Item 2. Changes In Securities and Use of Proceeds
This Item is not applicable to the Company.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company.
Item 5. Other Information
This Item is not applicable to the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three month period ended June 30, 2000.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
QUAZON CORP.
Date: August 17, 2000 By: /S/ Steven D. Moulton
STEVEN D. MOULTON
C.E.O., C.F.O., President
and Director
Date: August 17, 2000 By /S/ Dianne Reed
DIANE REED
Secretary/Treasurer, and
Director
(Principal Accounting
Officer)