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 quarterly period ended March 31, 2002
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[ ] 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 333 - 42936
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ZURICKIRCH CORP.
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(Exact name of registrant as specified in charter)
Nevada 87-0631750
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3960 Howard Hughes Parkway, 5th Floor, Las Vegas, Nevada 84124
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(Address of principal executive offices) (Zip Code)
1-801-750-1511
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Registrant's telephone number, including area code
NA
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(Former name, former address, and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [x ] No [ ] and (2) has
been subject to such filing requirements for the past 90 days. Yes [x ] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
Class Outstanding at March 31, 2002
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Common Stock, $0.001 10,000,000
TABLE OF CONTENTS
Page
Number
PART I. ---------
ITEM 1. Financial Statements (unaudited)............................... 3
Balance Sheets..................................................... 4
March 31, 2002 and December 31, 2001
Statements of Operations
For the three months ended March 31, 2002 and 2001................ 5
and the period May 9, 1997 to March 31, 2002
Statements of Cash Flows
For the three months ended March 31, 2002 and 2001............... 6
and the period May 9, 1997 to March 31, 2002
Notes to Financial Statements...................................... 7
ITEM 2. Plan of Operation.............................................. 9
PART II
ITEM 1. Legal Proceedings............................................. 11
ITEM 2 Changes in securities......................................... 11
ITEM 3. Defaults upon Senior Securities............................... 11
ITEM 4. Submission of Matters to a Vote of Security Holders........... 11
ITEM 5 Other Information............................................. 11
ITEM 6. Exhibits and Reports on 8-K................................... 12
Signatures.................................................... 12
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Zurickirch Corp. at March 31,
2002 and December 31, 2001, and the statements of operations and cash flows
for the three months ended March 31, 2002 and 2001 and the period May 9, 1997
to March 31, 2002, have been prepared by the Company's management in
conformity with accounting principles generally accepted in the United States
of America. In the opinion of management, all adjustments considered
necessary for a fair presentation of the results of operations and financial
position have been included and all such adjustments are of a normal recurring
nature.
Operating results for the quarter ended March 31, 2002, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2002.
-3-
ZURICKIRCH CORP.
(Development Stage Company)
BALANCE SHEETS
March 31, 2002 and December 31, 2001
==============================================================================
Mar 31, Dec 31,
2002 2001
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ASSETS
CURRENT ASSETS
Cash $ 375 $ 3,791
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Total Current Assets $ 375 $ 3,791
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related parties - Note 3 $ - $ 50,466
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Total Current Liabilities - 50,466
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STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized at $0.001
par value; none outstanding - -
Common stock
50,000,000 shares authorized at $0.001
par value; 10,000,000 issued and out-
standing at March 31, 2002; 6,745,000
at December 31, 2001 10,000 6,745
Capital in excess of par value 366,168 312,957
Accumulated deficit during the development stage (375,793) (366,377)
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Total Stockholders' Deficiency 375 (46,675)
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$ 375 $ 3,791
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The accompanying notes are an integral part of these financial statements.
-4-
ZURICKIRCH CORP.
(Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2002 and 2001 and the
period May 9, 1997 (date of inception) to March 31, 2002
==============================================================================
Period
Mar 31, Mar 31, May 9, 1997
2002 2001 to Mar 31, 2002
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REVENUES $ - $ - $ -
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EXPENSES
Product development - 22,045 111,122
Administrative 9,416 19,654 160,123
Interest expense - - 2,348
Depreciation - 225 2,500
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9,416 41,924 276,093
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NET LOSS FROM OPERATIONS (9,416) (41,924) (276,093)
DISCONTINUED OPERATIONS - Note 1
Loss from abandoned
business activity - - (99,700)
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NET LOSS $ (9,416) $ (41,924) $ (375,793)
============= ============= ===============
NET LOSS PER COMMON SHARE
Basic $ - $ (.01)
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AVERAGE OUTSTANDING SHARES
Basic 10,000,000 6,745,000
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The accompanying notes are an integral part of these financial statements.
-5-
ZURICKIRCH CORP.
(Development Stage Company)
STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2002 and 2001, and the
Period May 9, 1997 (date of inception) to March 31, 2002
==============================================================================
Period
Mar 31, Mar 31, May 9, 1997 to
2002 2001 Mar 31, 2002
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (9,416) $ (41,924) $ (375,793)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Changes in accounts payable - (2,300) 50,466
Common capital stock issued
for services - - 1,030
Contribution to capital - - 990
Depreciation - 225 2,500
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Net Cash From (Used)
in Operations (9,416) (43,999) (320,807)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase office equipment - - (4,500)
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CASH FLOWS FROM FINANCING ACTIVITIES
Contributions to capital -
related party 6,000 - 6,000
Proceeds from notes payable - 70,000 77,447
Proceeds from issuance
of common stock - - 242,235
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Net Increase (Decrease) in Cash (3,416) 26,001 375
Cash at Beginning of Period 3,791 204 -
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Cash at End of Period $ 375 $ 26,205 $ 375
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NON CASH FLOWS FROM OPERATING AND FINANCIAL ACTIVITIES
Issuance of 1,030,000 common shares for services - 1997 $ 1,030
Contributions to capital by officer - expenses 990
Issuance of 1,550,000 for payment of debt - 2001 145,447
Issuance of 3,255,000 for payment of debt - 2002 50,466
The accompanying notes are an integral part of these financial statements.
-6-
ZURICKIRCH CORP.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
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1. ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on May 9,
1997 with authorized common stock of 50,000,000 shares with a par value of
$.001 and preferred stock of 10,000,000 shares with a par value of $.001 with
the name "Weston Caribbean Corp". No terms and conditions have been determined
by management for the preferred capital stock. On March 9, 2000 the name was
changed to "Zuric Kirch Acquisitions, Inc." and on April 17, 2000 to
"ZuricKirch Corp."
The Company has been in the business of the development of resort properties
in the Caribbean however during 1998 the business purpose was changed to the
health products industry. The company sustained a loss of $99,700 (with no
adjustment for income tax) during its investigation of a potential development
property in the Caribbean.
The Company has not started operations and is in the development stage.
During May, 2000 the Company completed a private placement offering of 435,000
common shares of its capital stock for $43,565 and during April and May 2001
an offering of 1,000,000 shares for $100,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
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The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
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The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
- ------------
On March 31, 2002, the Company had a net operating loss carry forward of
$375,793. The income tax benefit of approximately $112,738 from the loss carry
forward has been fully offset by a valuation reserve because the use of the
future tax benefit is undeterminable since the Company has no operations. The
loss carryover expires in the years from 2013 through 2023.
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
-7-
ZURICKIRCH CORP.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS - continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basic and Diluted Net Income (Loss) Per Share
- ---------------------------------------------
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding, after the stock split. Diluted
net income (loss) per share amounts are computed using the weighted average
number of common shares and common equivalent shares outstanding as if shares
had been issued on the exercise of the preferred share rights unless the
exercise becomes antidilutive and then only the basic per share amounts are
shown in the report.
Comprehensive Income
- --------------------
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity.
Recent Accounting Pronouncements
- --------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Financial Instruments
- ---------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
3. SIGNIFICANT TRANSACTIONS WITH RELATED PARTY
Transactions with related parties have been completed between the Company and
the president- director and family which consists of the following.
Acquisition of 78% of the outstanding common capital stock after the
issuance of stock listed below.
A demand interest bearing loan to the Company of $50,466 was paid by the
issuance 3,255,000 shares.
4. GOING CONCERN
The Company does not have sufficient working capital to service its debt
and to develop the products for the health care field, however, the
management has developed a strategy to obtain the additional working capital
needed through additional equity funding and long term debt which will enable
the Company to conduct operations for the coming year.
-8-
ITEM 2. PLAN OF OPERATION
Forward Looking Information
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This report on Form 10-QSB contains certain "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934.
Generally, the words "anticipates," "expects," "believes," "intends," "could,"
"may," and similar expressions identify forward looking statements. Forward-
looking statements involve risks and uncertainties. We caution you that while
we believe any forward-looking statement are reasonable and made in good
faith, expectations almost always vary from actual results, and the
differences between our expectations and actual results may be significant.
The following discussion and analysis of our results of operations and our
financial condition should be read in conjunction with the information set
forth in the audited financial statements for the year ended December 31,
2001.
Overview
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Our plan of operation focuses on products which have been designed as a
result of the belief our natural medicines and nutritional supplements offer a
better alternative to traditional nutritional supplements currently being
produced by providing specialized combinations of nutrients. Prior to the
formation of Zurickirch Corp., an associate of our predecessor developed our
initial product formulations. Since this time we have worked on establishing
relationships with suppliers of the various nutrients comprising the
Zurickirch health products. Additionally, we have investigated establishing a
relationship with a Utah "contract" manufacturer, which would provide us with
product manufacturing, bottling and packaging.
During the past year the we have also been seeking to establish a
distributor network with marketing firms involved in the nutritional
supplement industry throughout the country. We also investigated marketing our
products through the internet, various retail markets including health food
stores, and direct sales through a toll-free number.
We have not been successful in our efforts to establish sufficient market
interest in our products and have therefore not yet pursued manufacturing
contracts or undertaken any mass manufacturing or marketing. We will require
additional funding to continue pursuing our business plan.
Plan of Operation over the Next Twelve Months
- ---------------------------------------------
At this time we have only $375 in cash, no other assets and no source of
revenues. The cash available to us will not be sufficient to fund our day to
day operations over the next twelve months. We will need a minimum of
approximately $4,000 to fund day to day expenses which include $165 in office
rent, and approximately $6,000 for legal, accounting and compliance expenses
associated with our reporting obligations under the Exchange Act. Our
president has indicated that he will be willing to contribute the office rent
to capital; he will also likely advance any funds necessary for minimal day to
day operations. Such advances will be repaid in either cash, when available
to us, or equity.
The above referenced cash needs are our minimum needs to continue
development of the company but do not include funds necessary to pursue our
business plan. During the next 12 months, the we intend to actively seek out
and investigate possible improvements to our business strategies. Management
intends to actively continue to pursue its business plan. We also intend to
remain open to other business opportunities which may present themselves
including an acquisition or merger with another entity. Because we lack funds,
it may be necessary for management to either advance us funds or we may have
to accrue expenses until such time as
-9-
successful business operations can be established. Management intends to hold
expenses to a minimum and to obtain services on a contingency basis when
possible.
Further, the management intends to defer any compensation until such time
as operations become adequately profitable, and will strive to have the
business operations provide for remuneration. If we elect to engage outside
advisors or consultants in an efforts to achieve successful operations, it may
be necessary for to raise additional funds. As of the date hereof, we have not
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event we elect to raise additional
capital, most likely the only method available to us would be the private sale
of its securities. Because we are a development stage company, it is unlikely
that we could make another 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 we will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on acceptable
terms.
We do 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.
Risk Factors; known trends; uncertainties affecting our business
- ----------------------------------------------------------------
Our company continues to be subject to certain risks which are mainly
associated with development stage companies such as ours:
. We are a development stage company with no revenues; we anticipate
losses for the foreseeable future.
Our company was incorporated in the State of Nevada on May 9, 1997 and
had conducted only limited operating activities. Our sole director/officer
has only limited experience in managing or operating health and nutritional
products business. Although, we intend to locate and hire one or more managers
with significant prior experience, we will only do so if our operations
warrant the same. We currently have no commitment to hire any experienced
managers. Our sole director will only devote part time efforts to this
business due to other business interests he has. We have only a very limited
operating history. We have no customers as yet, and we will not have any
customers until the proposed health product formulas are manufactured, labeled
and available for us to sell. We have had no revenue to date. We may not
succeed in this business and may be required to seek other business
opportunities. It is likely we will continue to see losses in the foreseeable
future.
. We will need additional financing to implement our business plan and
such financing may be unavailable or too costly for us.
The time frame for implementation of our business plan was six to twelve
months from the close of our offering (which closed on May 31, 2001). The
amount of funds needed for this period was estimated to be $50,000 to
$100,000. More than nine months has passed since the close of our offering
and the maximum proceeds of $100,000 have already been expended with little
results. We need additional funding to effectuate our business plan. While we
anticipate that one possible source of funds would be an additional public
offering, we may have to rely on other financing such as private placements or
debt financing to implement our plans. We may not succeed in raising any
additional funds through debt or equity financing.
. Our independent auditor has expressed doubt concerning our ability
to continue as a going concern.
Unless we raise additional capital to address this problem we may be
unable to continue in business. As disclosed in Note 4 to our financial
statements included in this Form 10QSB, we do not have an established source
of revenues sufficient to cover our operating costs to allow us to continue as
a going concern. Our ability to continue as a going concern is dependent upon
our ability to raise additional capital through other means.
-10-
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
Issuance of Unregistered Securities
- ------------------------------------
During the three months ended March 31, 2002, we issued 3,255,000
restricted common shares as payment of debt to one individual, an
officer/director. The shares satisfied $ 50,466 in loans made to us and were
issued in reliance upon the exemption provided under Section 4(2) of the
Securities Act of 1933 as amended in a "transaction not involving a public
offering." We believe we were entitled to rely upon the exemption because:
the purchaser (i) was aware that the securities had not been registered under
federal securities laws, (ii) acquired the securities for his own account for
investment purposes and not with a view to or for resale in connection with
any distribution for purpose of the federal securities laws, (iii) understood
that the securities would need to be indefinitely held unless registered or an
exemption from registration applied to a proposed disposition, and (iv) was
aware that the certificate representing the securities would bear a legend
restricting their transfer. In addition, the purchaser, as an officer and
director, is considered to be "accredited" as that term is defined under the
Securities Act. We believe that, in light of the foregoing, the sale of our
securities to the purchaser did not constitute the sale of an unregistered
security in violation of the federal securities laws and regulations by reason
of the exemptions provided under Section 4(2) of the Securities Act, and the
rules and regulations promulgated thereunder.
Final Use of Proceeds from Offering Closed on
May 31, 2001 reported on Annual Report
- ------------------------------------------
We reported in accordance with Rule 701(f) regarding Use of Proceeds of
a registration under Form SB-2 (which closed on May 31, 2001) in our Form
10-KSB for December 31, 2001. The last of our net proceeds of $84,425 were
expended during that period ended and we are no longer subject to reports on
Use of Proceeds in this Part II, Item 2, under that rule.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
-11-
ITEM 6. EXHIBITS
(a) Exhibits
Exhibit
Number Description
- --------- ------------
3.1* Articles of Incorporation
3.2* By-laws
* previously filed with initial filing on form SB-2, August 3, 2000
(b) Reports on 8-K
No reports on 8-K were filed during the quarter covered by this report.
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 there unto duly authorized.
ZURICKIRCH CORP.
[Registrant]
Dated April 29, 2002 By /s/ John Chris Kirch
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John Chris Kirch , President, Chief
Financial Officer, Chief Executive
Officer and Director