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 quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-30365-C
EMERALD CAPITAL INVESTMENTS, INC.
(Name of Small Business Issuer as specified in its charter)
Delaware 36-3693936
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification No.)
330 East Main Street, Barrington, IL 60010
(Address of principal executive offices)
Registrant's telephone no., including area code: (708) 990-0244
N/A
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 May 13, 1996 - 5,808,698 shares of $.001 par value
Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
[PAGE]
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
EMERALD CAPITAL INVESTMENTS, INC.
For the Quarter ended March 31, 1996.
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
Item 1. Financial Statements:
Balance Sheet--March 31, 1996 3
Statements of Operations--for the three months
ended March 31, 1996 and March 31, 1995 4
Statements of Cash Flows--for the three months
ended March 31, 1996 and March 31, 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
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
[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Consolidated Balance Sheet
March 31, 1996
(Unaudited)
Assets
Current assets - cash $ 22,959
===========
Liabilities and Stockholders' Equity
Stockholders' equity:
Common stock - $.001 par value.
100,000,000 shares authorized;
5,808,698 shares issued and
outstanding, respectively 5,809
Additional paid-in capital 2,600,656
Retained deficit (2,583,506)
----------
Total stockholders' equity 22,959
Total liabilities and stockholders'
equity $ 22,959
See accompanying notes to financial statements.
3
[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Operations
(Unaudited)
Cumulative
Amounts Since
December 29,
1995
(Commencement
Three Months Ended of the
March 31, Development
1996 1995 Stage)
------ ------ -------
Revenue $ - - -
Selling, general and administrative 376 - 376
------- ------ --------
Loss from continuing operations (376) - (376)
Discontinued operations:
Loss from discontinued operations - (447,319) -
Income on disposal of discontinued - - -
operations ------- -------- --------
Loss from discontinued operations - (447,319) -
------- --------- --------
Net loss $ (376) (447,319) (376)
======= ========= ========
Net loss per share continuing
operations $(.00) (.00) (.00)
Net loss per share discontinued
operations $(.00) (.08) (.00)
------ ------- ---------
$(.00) (.08) (.00)
======= ======== =========
Weighted average number of shares
outstanding 5,808,698 5,345,000 5,808,698
========== ========= ==============
See accompanying notes to financial statements.
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[PAGE]
EMERALD CAPITAL INVESTMENTS, INC.
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
Cumulative
Amounts Since
December 29,
1995
(Commencement
Three Months Ended of the
March 31, Development
1996 1995 Stage)
Cash flows from operating activities:
Net Loss $ (376) (447,319) (376)
Adjustment to reconcile net loss
to net cash used in operating
activities:
Loss on discontinued operations - 447,319 -
(Decrease) in accounts payable (6,665) - (6,665)
------- --------- --------
Net cash used in
operating activities (7,041) - (7,041)
-------- --------- --------
Cash flows from investing activities -
Payments on receivable 30,000 - 30,000
Cash flows from financing activities - - - -
-------- --------- --------
Net increase in cash 22,959 - 22,959
Cash, beginning of year - - -
Cash, end of year $22,959 - 22,959
======== ========= ========
See accompanying notes to financial statements.
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[PAGE]
EMERALD CAPITAL INVESTMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
(1) The unaudited financial statements include the accounts of Emerald
Capital, Inc., and subsidiary 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 March 31, 1996
and the results of operations and cash flows for the three months ended
March 31, 1996 and 1995. The results of operations for the three
months ended March 31, 1996 are not necessarily indicative of the
results to be expected for the entire year.
(2) Income (loss) per common share is based on the weighted average number
of shares outstanding during the period.
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[PAGE]
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Prior to December 29, 1995, the Company had been involved in the
business of recycling used tires and designing, manufacturing and marketing
shredding equipment. The Company's tire recycling and shredding equipment
operations were unsuccessful and the Company generated significant losses
during 1994 and 1995. During 1995 the Company funded its operations with loans
from a commercial bank from management and other individuals. By November
1995, the Board of Directors had concluded that the Company did not have the
capital, or the ability to obtain capital necessary to continue its current
operations. The Company's Board of Directors initiated efforts to sell the
Company's WRTI and CTR operations. The Company was able to interest one of
its directors and several other individuals in purchasing WRTI and CTR.
Effective December 29, 1995, the Company sold all of its shares of WRTI
and CTR for $30,000. As a result of such sale, the Company's total
liabilities,on a consolidated basis, decreased from $1,758,308 to $6,665.
The Company currently has no active business operations and is seeking
investments in other business entities.
The financial statements attached hereto exclude WRTI and CTR for both
1996 and 1995 inasmuch as they are discontinued operations.
As a result of the matters described above, the Company's historical
financial statements and this Management's Discussion and Analysis are not
necessarily reflective of the Company's future operations or financial
condition.
Financial Condition
Total assets at March 31, 1996 were $22,959, all of which was cash.
This reflects the sale of WRTI and CTR on December 29, 1995. On March 31,
1995, the Company's total assets on a consolidated basis which included the
assets of WRTI and CTR, was $1,246,103. On March 31, 1996, the Company had
no liabilities. All of its previously liabilities, which had been reflected on
its consolidated financial statements, were paid by or assumed by the Buyers of
WRTI and CTR. Accordingly, at March 31, 1996, the Company's only assets
consisted of $22,959 in cash. The Company intends to use such cash to pay for
various filing fees and professional fees relating to its reporting obligations
and to fund the costs which may arise from seeking new business opportunities.
It is likely that the Company will be required to raise additional
capital in order to attract and potential acquisition partner but there can be
no assurance that the Company will be able to raise any additional capital. It
is also likely that any future acquisition will be made through the issuance of
shares of the Company's common stock which will result in the dilution of the
percentage ownership of the current shareholders.
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[PAGE]
Results of Operations
All of the Company's revenues for the quarter ended March 31, 1996 and
1995 were derived from the operations of WRTI and CTR. As stated above, the
Company sold WRTI and CTR on December 29, 1995 and has treated them as
discontinued operations. Therefore, the revenues of WRTI and CTR have been
excluded from the Statement of Operations which is included in the financial
statements attached hereto. Therefore, excluding the operations of WRTI and
CTR, the Company had no revenues during 1995 and 1994. If the revenues of
WRTI and CTR were included in the Statement of Operations, total consolidated
revenues would have been $1,093,283 during 1995 and $305,387 during 1994.
The Company's total loss for 1995 was $1,238,194 compared to
$1,166,927 for 1994. This includes losses from the operations of WRTI and CTR.
It is unlikely that the Company will be able to generate any revenues
unless and until it acquires an operating company, of which there can
be no assurance.
Plan of Operation
Commencing in the fourth quarter of 1995, the Company's Plan of
Operation was essentially the plan to sell its WRTI and CTR operation.
Effective December 29, 1995 these operations were sold. The Company's current
plan of operation is to acquire another operating company. It is likely that
any acquisition will be a "reverse merger" acquisition whereby the Company
acquires a larger company by issuing shares of the Company's common stock to
the shareholders of the larger company. Although the Company would be the
surviving or parent company from a corporate law standpoint, the shareholders
of the larger company would be the controlling shareholders of the Company and
the larger company would be treated as the survivor or parent company from an
accounting point of view. It can be expected that any company which may desire
to be acquired by the Company will do so as method of potentially becoming a
public company more quickly and less expensively than if such company undertook
its own public offering. The Company has not identified any potential
acquisition target and there can be no assurance that it will be able to
acquire any other company. Furthermore, even if the Company is able to acquire
another company, there can be no assurance that the Company will ever operate
at a profit.
8
[PAGE]
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. No matter was
submitted to a vote of the Company's security holders for the
quarter ended March 31, 1996.
Item 5. Other Information.
Item 6(a). Exhibits. None.
Item 6(b). Reports on Form 8-K. None filed.
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[PAGE]
SIGNATURE
In accordance with 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: December 20, 1995 EMERALD CAPITAL INVESTMENTS, INC.
---------------------------------
By /s/ Frank H. Ross, III
Frank H. Ross, III
President/Principal Executive Officer
Principal Financial Officer
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