SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2002
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 0-31401
HERCULES ACQUISITION CORPORATION
(Exact name of registrant as
specified in its charter)
Delaware 52-2257555
(State or other jurisdiction (I.R.S. Employer
of incorporation organization) Or Identification No.)
1504 R Street, N.W., Washington, D.C. 20009
(Address of principal executive offices (zip code)
202/387-5400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1)
filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934
during the last 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
Indicate the number of shares outstanding of each
of the issuer's classes of common equity, as of the
latest practicable date.
Class Outstanding at March 31, 2002
Common Stock,
par value $0.0001 1,000,000
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HERCULES ACQUISITION CORPORATION
(A Development Stage Company)
As of March 31, 2002
(Unaudited)
ASSETS
Cash
$ 100
--------
TOTAL ASSETS
$ 100
========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
$ -
-------
STOCKHOLDER'S EQUITY
Preferred Stock, $.0001 par value,
20,000,000 shares authorized, none
issued and outstanding -
Common Stock, $.0001 par value,
100,000,000 shares authorized,
1,000,000 issued and outstanding 100
Additional paid-in capital 535
Deficit accumulated during
development stage (535)
-------
Total Stockholder's Equity 100
-------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $100
======
See accompanying notes to financial statements
HERCULES ACQUISITION CORPORATION
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the three For the three March24,1999
Months Ended Months ended (Inception)to
March 31, 2002 March 31, 2001 March 31, 2002
Income $ - $ - $ -
Expenses
Organization
expense - - 535
---------- -------- --------
Total expenses - - 535
---------- -------- -------
NET LOSS - - (535)
========= ======== =======
See accompanying notes to financial statements
HERCULES ACQUISITION CORPORATION
(A Development Stage Company)
Statement of Changes in Stockholder's Equity
For the Period From March 24, 1999 (Inception)
To March 31, 2002
(Unaudited)
Deficit
Accumulated
Common Stock Additional During
Issued Paid-In Development
Shares Amount Capital Stage Total
Common Stock
Issuance 1,000,000 $ 100 $ - $ - $ 100
Fair value of
expenses contributed - - 535 - 535
Net loss for the periods ended:
December 31, 1999 - - - (535) (535)
December 31, 2000 - - - - -
December 31, 2001 - - - - -
March 31, 2002 - - - - -
------- ------- ------- --------- --------
BALANCE AT
March 31, 2002 1,000,000 $ 100 $535 $ (535) $ 100
============== ========= ====== ======= ========= ========
See accompanying notes to financial statements
HERCULES ACQUISITION CORPORATION
(A Development Stage Company)
Statements of Cash Flows
Unaudited
January 1, 2002 January 1, 2001 March 24, 1999
to to (Inception) to
March 31, 2002 March 31, 2001 March 31, 2002
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ - $ - $ (535)
Adjustment to reconcile net
loss to net cash
used by operating activities
Contributed expenses - - 535
---------- ------------ ----------
Net cash used in operating
activities - - -
---------- ------------ ----------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
---------- ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock - - 100
---------- ------------ ----------
Net cash provided by
financing activities - - 100
---------- ------------ ----------
INCREASE IN CASH AND CASH
EQUIVALENTS - - 100
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 100 100 -
---------- ----------- ----------
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 100 $100 $ 100
========== =========== ===========
See accompanying notes to financial statement.
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Hercules Acquisition Corporation (a development stage company) ("the
Company") was incorporated in Delaware on March 24, 1999 to serve as a
vehicle to effect a merger, exchange of capital stock, asset acquisition
or other business combination with a domestic or foreign private business.
At March 31, 2002, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation.
The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business.
(B) Use of Estimates
The preparation of the 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
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected
to be recovered or settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. There were no current or
deferred income tax expense or benefits due to the Company not having any
material operations for the years ended December 31, 2001 and 2000.
(E) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued several new
Statements of Financial Accounting Standards. Statement No. 141, "Business
Combinations" supersedes APB Opinion 16 and various related pronouncements.
Pursuant to the new guidance in Statement No. 141, all business combinations
must be accounted for under the purchase method of accounting; the pooling-of-
interests method is no longer permitted. SFAS 141 also establishes new rules
concerning the recognition of goodwill and other intangible assets arising in a
purchase business combination and requires disclosure of more information
concerning a business combination in the period in which it is completed.
This statement is generally effective for business combinations initiated on
or after July 1, 2001.
Statement No. 142, "Goodwill and Other Intangible Assets" supercedes APB
Opinion 17 and related interpretations. Statement No. 142 establishes new
rules on accounting for the acquisition of intangible assets not acquired in
a business combination and the manner in which goodwill and all other
intangibles should be accounted for subsequent to their initial recognition
in a business combination accounted for under SFAS No. 141. Under SFAS
No. 142, intangible assets should be recorded at fair value. Intangible
assets with finite useful lives should be amortized over such period and
those with indefinite lives should not be amortized. All intangible assets
being amortized as well as those that are not, are both subject to review
for potential impairment under SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of". SFAS
No. 142 also requires that goodwill arising in a business combination should
not be amortized but is subject to impairment testing at the reporting unit
level to which the goodwill was assigned to at the date of the business
combination.
SFAS No. 142 is effective for fiscal years beginning after December 15,
2001 and must be applied as of the beginning of such year to all goodwill
and other intangible assets that have already been recorded in the balance
sheet as of the first day in which SFAS No. 142 is initially applied,
regardless of when such assets were acquired. Goodwill acquired in a
business combination whose acquisition date is on or after July 1, 2001,
should not be amortized, but should be reviewed for impairment pursuant
to SFAS No. 121, even though SFAS No. 142 has not yet been adopted.
However, previously acquired goodwill should continue to be amortized
until SFAS No. 142 is first adopted.
Statement No. 143 "Accounting for Asset Retirement Obligations" establishes
standards for the initial measurement and subsequent accounting for obligations
associated with the sale, abandonment, or other type of disposal of long-lived
tangible assets arising from the acquisition, construction, or development
and/or normal operation of such assets. SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002, with earlier application
encouraged.
The adoption of these pronouncements will not have a material effect on the
Company's financial position or results of operations.
NOTE 2 STOCKHOLDER'S EQUITY
(A) Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred stock at
$.0001 par value, with such designations, voting and other rights and
preferences as may be determined from time to time by the Board of Directors.
(B) Common Stock
The Company is authorized to issue 100,000,000 shares of common stock at
$.0001 par value. The Company issued 1,000,000 shares of its common stock to
Pierce Mill Associates, Inc. pursuant to Section 4(2) of the Securities Act
of 1933 for an aggregate consideration of $100.
(C) Additional Paid-In Capital
Additional paid-in capital at March 31, 2002 represents the fair value of the
amount of organization and professional costs incurred by related parties on
behalf of the Company (See Note 3).
NOTE 3 AGREEMENT
On April 1, 1999, the Company signed an agreement with Rock Creek Capital
Corporation ("Rock Creek"), a related entity (See Note 4). The Agreement
calls for Rock Creek to provide the following services, without reimbursement
from the Company, until the Company enters into a business combination as
described in Note 1(A):
1. Preparation and filing of required documents with the Securities and
Exchange Commission.
2. Location and review of potential target companies.
3. Payment of all corporate, organizational, and other costs incurred by the
Company.
NOTE 4 RELATED PARTIES
Legal counsel to the Company is a firm owned by a director of the Company who
also owns 100% of the outstanding stock of Pierce Mill Associates, Inc. and Rock
Creek (See Note 3).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company was formed to locate and negotiate
with a business entity for the combination of that
target company with the Company. A combination will
normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange (the "business
combination"). In most instances the target company
will wish to structure the business combination to be
within the definition of a tax-free reorganization
under Section 351 or Section 368 of the Internal
Revenue Code of 1986, as amended. No assurances can
be given that the Company will be successful in
locating or negotiating with any target business.
The Company has not restricted its search for
any specific kind of businesses, and it may acquire a
business which is in its preliminary or development
stage, which is already in operation, or in
essentially any stage of its business life. It is
impossible to predict the status of any business in
which the Company may become engaged, in that such
business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may
offer.
In implementing a structure for a particular
business acquisition, the Company may become a party
to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another
corporation or entity.
It is anticipated that any securities issued in
any such business combination would be issued in
reliance upon exemption from registration under
applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or
a part of such securities as part of the business
combination or at specified times thereafter.
Negotiations with a target company will likely
focus on the percentage of the Company which the
target company shareholders would acquire in exchange
for their shareholdings. Although the terms of such
agreements cannot be predicted, generally such
agreements will require certain representations and
warranties of the parties thereto, will specify
certain events of default, will detail the terms of
closing and the conditions which must be satisfied by
the parties prior to and after such closing and will
include miscellaneous other terms. Any merger or
acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage
of shares held by the Company's shareholders at such
time.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the
Company and the Company is unaware of such proceedings
contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the
Company during the quarter.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HERCULES ACQUISITION CORPORATION
By: James M. Cassidy
/s/ President
Dated: May 14, 2002