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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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[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
Commission file number 33-30365-C
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CCC GLOBALCOM CORPORATION
(Name of Small Business Issuer as specified in its charter)
Nevada 36-3693936
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
16350 Park Ten Place, Suite 241, Houston, Texas 77084
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(Address of principal executive offices)
Registrant's telephone no., including area code: (281) 599-7878
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Emerald Capital Investments, Inc.
536 North 100 West, Heber City, Utah 84032
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Former name, former address, and former fiscal year, if changed
since last report.
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
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 registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes X No
.
Common Stock outstanding at August 13, 2000 - 31,693,435 shares of $.001 par
value Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
CCC GLOBALCOM CORPORATION
For the Quarter ended June 30, 2000
The following financial statements and schedules of the registrant are
submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
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Item 1. Financial Statements:
Condensed Consolidated Balance Sheet--June 30, 2000 3
Condensed Consolidated Statements of Operations--for the
three months and six months ended June 30, 2000 and
June 30, 1999 4
Condensed Consolidated Statements of Cash Flows--for the
six months ended June 30, 2000 and June 30, 1999 5
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II - OTHER INFORMATION
Page
Item 1. Legal Proceedings 9
Item 2. Changes in the Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Results of Votes of Security Holders 9
Item 5. Other Information 9
Item 6(a). Exhibits 9
Item 6(b). Reports on Form 8-K 9
2
CCC GLOBALCOM CORPORATION
Condensed Consolidated Balance Sheet
June 30, 2000
(Unaudited)
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Assets:
Current assets:
Cash $ 1,101,378
Accounts receivable 430,057
Inventory 375
Prepaid expenses 14,250
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Total current assets 1,546,060
Property and equipment, net 94,522
Intangible asset, net 465,510
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Total assets $ 2,106,092
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 287,325
Accrued liabilities 39,132
Short-term notes payable 308,650
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Total current liabilities 635,107
Long-term note payable 8,025
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Total liabilities 643,132
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Stockholders' equity:
Common stock - par value $.001 per share. Authorized
100,000,000 shares; issued and outstanding
31,693,435 shares 31,693
Additional paid-in capital 2,441,353
Accumulated deficit (1,010,086)
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Total stockholders' equity 1,462,960
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Total liabilities and stockholders' equity $ 2,106,092
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3
CCC GLOBALCOM CORPORATION
Condensed Consolidated Statement of Operations
(Unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
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2000 1999 2000 1999
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Revenue $ 494,383 $ - $ 625,636 $ 1,521
Cost of goods sold 318,663 - 440,848 8,032
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Gross margin 175,720 - 184,788 (6,511)
General and administrative
expenses (230,861) - (461,960) (258,417)
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Loss from operations (55,141) - (277,172) (264,928)
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Other income (expense):
Interest expense (146) - (2,575) -
Interest income 784 - 1,878 -
Other income (expense) 5,431 - (4,409) -
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6,069 - (5,106) -
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Loss before income tax (49,072) - (282,278) (264,928)
Income tax benefit - - - -
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Net loss $ (49,072) $ - $(282,278) $ (264,928)
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Net loss per share -
basic and diluted (.0) .0 (.01) (.01)
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Weighted average shares -
basic and diluted 24,216,667 21,200,000 22,708,332 21,200,000
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4
CCC GLOBALCOM CORPORATION
Condensed Consolidated Statement of Cash Flows
(Unaudited)
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Six Months Ended
June 30,
2000 1999
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Cash flows from operating activities:
Net loss $(282,278) $ (264,928)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 10,519 605
(Increase) decrease in:
Accounts receivable (407,875) (4,855)
Inventory - (375)
Prepaid expenses (11,892) -
Other assets 5,000 (14,630)
Increase (decrease) in:
Accounts payable 233,032 22,960
Accrued liabilities (24,493) 36,900
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Net cash used in
operating activities (477,987) (224,323)
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Cash flows from investing activities-
Purchase of property and equipment (24,533) (37,180)
Acquisition of intangible (150,000) -
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Net cash used in
operating activities (174,533) (37,180)
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Cash flows from financing activities:
Payments on short-term notes payable (6,860) -
Proceeds from issuance of stock 1,644,046 483,000
Payments on long-term debt (18,364) -
Proceeds from long-term debt - 8,500
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Net cash provided by
financing activities 1,618,822 491,500
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Net increase in cash 966,302 229,997
Cash, beginning of period 135,076 -
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Cash, end of period $1,101,378 $ 229,997
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Condensed Consolidated Statement of Cash Flows
Continued
(Unaudited)
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Supplemental disclosure of non cash investing and financing activities:
During the six months ended June 30, 2000, CCC Globalcom purchased the assets
of Virtual Network Company & Local Network, Inc. for cash plus a note payable
totaling $315,510.
Six Months Ended
June 30,
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2000 1999
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Supplemental disclosure of cash flow information:
Interest Paid: $ 2,575 $ -
Income Tax Paid $ - $ -
5
CCC GLOBALCOM CORPORATION
Notes to Condensed Consolidated Financial Statements
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(1) On June 9, 2000, CCC Globalcom (formerly Emerald Capital Investments,
Inc.) (Emerald) merged in CCC Globalcom (CCC) (a nonoperating entity which
had previously merged in Ciera Network Systems, Inc. (Ciera) (the
Operating Company) (the Acquiree) (collectively the Company). The terms of
the agreement provide that the stockholders of the Acquiree received
30,250,000 shares (post reverse split) of Emerald common stock.
The condensed consolidated financial statements at June 30, 2000 and
1999 assume the acquisition of Emerald by the Acquiree, occurred January
1, 1999. Because the shares issued in the acquisition of the Acquiree
represent control of the total shares of Emerald's common stock issued and
outstanding immediately following the acquisition, the Acquiree is deemed
for financial reporting purposes to have acquired Emerald in a reverse
acquisition. The business combination has been accounted for as a
recapitalization of Emerald giving effect to the acquisition of 100% of
the outstanding common shares of the Acquiree. The surviving entity
reflects the assets and liabilities of Emerald and the Acquiree at their
historical book value and the historical operations of the Company is that
of the Acquiree's. The issued common stock is that of Emerald and the
accumulated deficit is that of the Acquiree. The statement of operations
is that of the Acquiree for the three and six month periods ended June 30,
2000 and 1999 and that of Emerald from June 9, 2000 (date of acquisition)
through June 30, 2000. Separate breakout of operations for Emerald have
not been presented as the amounts not related to the Acquiree are
immaterial.
(2) During the period ended June 30, 2000 the Company had a reverse stock
split of 1 share for 20 shares. All earnings (loss) per share reflect the
reverse stock split as if it had taken place January 1, 1999.
(3) The unaudited financial statements include the accounts of CCC
Globalcom, Inc. and subsidiaries and include all adjustments (consisting
of normal recurring items) which are, in the opinion of management,
necessary to present fairly the financial position as of June 30, 2000 and
the results of operations and changes in financial position for the three
month and six month periods ended June 30, 2000. The results of operations
for the six months ended June 30, 2000 are not necessarily indicative of
the results to be expected for the entire year.
(4) Loss per common share is based on the weighted average number of
shares outstanding during the period.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
CCC Globalcom Corporation (the "Company") was, prior to June 12, 2000,
named Emerald Capital Investments, Inc. On June 9, 2000, the Company commenced
operations in the telecommunications industry through the acquisition of CCC
Globalcom, Inc. a Texas corporation ("CCC Texas"). CCC Texas was formed in 1999
to commence operations in the telecommunications industry. CCC Texas has
conducted no operations except for its acquisition of Ciera Network Systems,
Inc. ("Ciera"). Ciera commenced operations in 1999. Currently, all of the
Company's operations are conducted by Ciera. The Company's acquisition of CCC
Texas, and as result of such acquisition, the acquisition of Ciera, is accounted
for as a reverse merger. Accordingly, for accounting purposes, Ciera is deemed
to be the survivor of such acquisitions and the financial statements included in
this Form 10-QSB for quarters in 1999 are the financial statements of Ciera. The
financial statements for the quarters in 2000 are consolidated financial
statements of CCC Texas and Ciera for the entire period and the financial
statements of Emerald since June 9, 2000, the date of the merger.
We have only recently commenced operations in the telecommunications
industry, and we are a switchless or non-facilities based company offering
residential customers and small to medium sized businesses a wide variety of
bundled voice and data telecommunications services. We are primarily a reseller
of voice and data telecommunications services. Our services include but are not
limited to, the following:
o local telephone service,
o long distance telephone services;
o internet service;
o paging;
o voice messaging; and
o archive data backup and recovery.
We intend to expand our operations through acquisitions of other
telecommunications companies located in the United States, South and Central
America and elsewhere. The key elements of our business strategy are to:
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o focus on residential and small and medium-sized business customers in
select United States and foreign markets;
o develop a flexible, technologically advanced telecommunications network in
a capital-efficient manner through reselling telecommunication services and
products in a seemless method;
o provide our customers a complete telecommunications solution at a
competitive price with superior customer service;
o maintain customer loyalty;
o employ a team sales approach to cross-sell multiple products and services;
and
o expand through acquiring other operating telecommunications companies or
their assets.
Results of Operations
Our revenues are derived from the sale of telecommunications services to
residential and business customers. Currently we have a limited number of
customers and are primarily conducting operations in the State of Texas. Our
business plan includes plans for expansion into states and various Latin
American countries. Although our subsidiary Ciera commenced operations in 1999,
we continue to be in early stages of development and our future revenues are
dependent upon our ability to expand our customer base either through internally
generated growth or through acquisitions. We have recently acquired the customer
base of Virtual Network Company. This customer base consists of approximately
4,000 customers.
Because we have been operating in the telecommunication industry for less
than a year and because we are still in the early stages of pursuing our
business plan, the comparative numbers between 1999 and 2000 are not a
meaningful indication of future results.
Net Revenues Net revenues for the three months ended June 30, 2000 were
$494,383 compared to no revenues for the three months ended June 30, 1999. Net
revenues for the six months ended June 30, 2000 were $625,636 compared to $1,521
for the six months ended June 30, 1999. Revenues are derived from the sale of
telecommunications services. The increase in net revenues for both the three
months and six months ended June 30, 2000 compared to the three and six months
ended June 1999 was primarily attributed to the fact that 1999 was a period of
start-up while operations in 2000, included internally generated customer growth
attributing to increased revenues.
Cost of Sales. For the three months ended June 30, 2000, our cost of sales
were $318,663. For the six months ended June 30, 2000, our cost of sales were
$440,848 compared to $8,032 for the six months ended June 30, 2000.
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General and Administrative Expenses. General and administrative (G&A)
expenses were 47% of revenue for the three months ended June 30, 2000. G&A
expenses for the six months ended June 30, 2000 were 74 % of revenue.
Net Loss. We had a net loss of $49,072 for the three months ended June 30,
2000. We had a net loss of $282,278 for the six months ended June 30, 2000
compared to a net loss of $264,928 for the six months ended June 30, 1999.
Liquidity and Capital Resources
At June 30, 2000, our working capital was $911,290. In June, 2000, we
completed a private placement of our common stock pursuant to which we received
$1,500,000 in gross offering proceeds.
At June 30, 2000, we had total assets of $2,106,092, total liabilities of
$643,132 and stockholders equity of $1,462,960. Our total assets included
$465,510 attributed to intangible assets. Our intangible assets principally
consisted of the customer list purchased from Virtual Network Company.
Our primary needs for capital are to fund acquisitions, purchase
equipment, and fund operations until we operate at a profit. We anticipate that
we will continue to operate at a deficit for at least the remaining of fiscal
2000.
We do not currently have a line of credit or other access to debt
financing and our ability to expand will, at least for the foreseeable future,
be dependent upon our ability to sell shares of our common stock.
Forward-Looking Statements
This Quarterly Report contains "forward-looking statements" within the
meaning of the securities laws. These forward-looking statements are subject to
a number of risks and uncertainties, many of which are beyond our control. All
statements included in this Quarterly Report, other than statements of
historical facts, are forward-looking statements, including the statements under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding our strategy, future operations, financial position,
projected costs, prospects, plans and objectives of management.
Certain statements contained in this Quarterly Report, including without
limitation, statements containing the words "will," "anticipate," "believe,"
"intend," "estimate," "expect," "project" and words of similar import,
constitute forward-looking statements, although not all forward-looking
statements contain such identifying words. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results,
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performance or achievements expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors include, among others,
the following:
o our limited operating history and expectation of operating losses;
o the availability and terms of the significant additional capital
required to fund our expansion;
o our reliance on third party vendors and suppliers;
o the extensive competition we expect to face in each of our markets;
o our dependence on sophisticated information and processing systems;
o our ability to manage growth;
o our ability to access markets and obtain any required governmental
authorizations, franchises and permits, in a timely manner, at
reasonable costs and on satisfactory terms and conditions;
o our ability to attract customers away from their existing
telecommunications providers;
o technological change; and
o changes in, or the failure to comply with, existing government
regulations.
All forward-looking statements speak only as of the date of this Quarterly
Report. We do not undertake any obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Although we believe that our plans, intentions and
expectations reflected in or suggested by the forward-looking statements made in
this Quarterly Report are reasonable, we can give no assurance that such plans,
intentions or expectations will be achieved. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on such
forward-looking statements.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the Company's management,
the Company is not a party to any legal proceeding or litigation.
Item 2. Changes in the Rights of the Company's Security Holders. None.
Item 3. Defaults by the Company on its Senior Securities. None.
Item 4. Submission of Matters to Vote of Security Holders. A Special
Meeting of Stockholders was held June 9, 2000, at which the
following matters were voted upon:
1. A proposal to effect a 1-for-20 reverse split of the issued and
outstanding shares of the Company's common stock.
2. A proposal to reincorporate the Company in the State of Nevada
and in connection therewith to change the Company's name to CCC
Globalcom Corporation.
3. A proposal to approve an Agreement and Plan of Merger (the
"Merger Agreement") between the Company and CCC Globalcom, Inc.
("CCC Globalcom") and the acquisition ("Merger") of CCC Globalcom
by the Company. In connection with the Merger, the Company issued
to the shareholders of CCC Globalcom approximately 30,250,000
shares of its common stock, calculated after the proposed
1-for-20 reverse stock split discussed in Proposal 1 of this
Proxy Statement.
4. The election of directors.
All proposals were approved by the Company's shareholders and the results
of the voting were as follows:
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Item: For: Against: Abstain:
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Reverse Stock Split 4,722,334 0 12,000
Reincorporation and Name Change 4,722,334 0 12,000
Merger Transaction
4,722,334 0 0
Election of Directors
Ziad A. Hakim 4,722,334 12,000 0
Paul Licata 4,722,334 12,000 0
Douglas P. Morris 4,734,334 0 0
Item 5. Other Information.
Item 6(a) Exhibits. Schedule 27 - Financial Data Schedule.
Item 6(b). Reports on Form 8-K. The Company filed the following Form 8-K's
during the quarter ended June 30, 2000:
May 23, 2000. This Form 8-K was filed to report on the Company's
execution of an Agreement and Plan of Merger with privately held CCC
Globalcom, Inc., a Texas corporation.
June 14, 2000. This Form 8-K was filed to report the completion of
the reverse, split, change of name and domicile and the Merger which are
further described and referred to above.
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SIGNATURE
Pursuant to the requirements of the Exchange Act, the Company has caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: August 17, 2000 CCC GLOBALCOM CORPORATION
By /s/ Ziad A. Hakim
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Ziad A. Hakim
CEO/Principal Executive Officer
Principal Financial Officer
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