SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
Commission file number 000-25499
Color Strategies
________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Nevada 88-0390360
____________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization
3050 East 630 North, Suite D1, St. George, Utah 84790
________________________________________________ _____________
(Address of principal executive offices) (Zip Code)
(435) 628-8130
________________________________________________
(Issuer's telephone number, including area code)
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) 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:
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of October 31, 1999, the issuer had outstanding 401,800 shares of its
Common Stock, $0.001 par value.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements of Color Strategies, a Nevada
corporation (the "Company"), as of September 30, 1999, were prepared by
Management and commence on the following page. In the opinion of Management
the financial statements fairly present the financial condition of the
Company.
COLOR STRATEGIES
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
2
TABLE OF CONTENTS
Page Number
ACCOUNTANT'S REPORT .................................................. 1
FINANCIAL STATEMENT:
Balance Sheet ................................................... 2
Statement of Operations and Deficit
Accumulated During the Development Stage ....................... 3
Statement of Changes in Stockholders' Equity .................... 4
Statement of Cash Flows ......................................... 5
Notes to the Financial Statements ............................... 6
3
DAVID E. COFFEY
CERTIFIED PUBLIC ACCOUNTANT
3651 Lindell Road, Suite A, Las Vegas, Nevada 89103
(702) 871-3979
To the Board of Directors and Stockholders
of Color Strategies
Las Vegas, Nevada
I have compiled the balance sheet of Color Strategies as of
September 30, 1999 and the related statements of operations, cash flows
and changes in stockholders' equity for the period ended in
accordance with Statement on Standards for Accounting and Review
Services issued by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of
financial statements information that is the representation of
management. I have not audited or reviewed the accompanying
financial statements and, accordingly, do not express an opinion or
any other form of assurance on them.
/s/ DAVID COFFEY C.P.A.
David Coffey C.P.A.
October 22, 1999
4
COLOR STRATEGIES
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 1999
(Unaudited)
ASSETS
Cash $ 24,587
Organizational costs less accumulated amortization of $160 375
Deposit 600
----------
Total Assets $ 25,562
==========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 1,700
==========
Total Liabilities 1,700
Stockholders' Equity
Common stock, authorized 25,000,000 shares at $.001
par value, issued and outstanding 401,800 shares 402
Additional paid-in capital 36,336
Deficit accumulated during the development stage (12,876)
-----------
Total Stockholders' Equity 23,862
Total Liabilities and Stockholders' Equity $ 25,562
===========
The accompanying notes are an integral part of these financial statements.
-2-
5
COLOR STRATEGIES
(A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS
AND DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED September 30, 1999
(With Cumulative Figures From Inception)
(Unaudited)
From Inception,
January 1, 1999 March 24, 1998
To Sept. 30, 1999 To Sept. 30, 1999
--------------- ---------------
Sales $ 2,258 $ 2,708
Expenses
Amortization 80 160
Advertising 0 724
Conference expenses 1,594 1,594
Consulting 3,500 3,500
Guest speakers 500 500
Licenses and fees 537 1,031
Office expenses 0 560
Professional fees 3,115 3,115
Rent 3,600 4,400
-------------- --------------
Total expenses 12,926 15,584
Net loss (10,668) (12,876)
==============
Retained earnings,
beginning of period (2,208)
-------------
Deficit accumulated during
the development stage $ (12,876)
=============
Earnings (loss) per share
assuming dilution:
Net loss $ (.03) (.04)
============= ==============
Weighted average shares outstanding 401,800 338,737
============= ==============
The accompanying notes are an integral part of these financial statements.
-3-
6
COLOR STRATEGIES
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM March 24, 1998 (Date of Inception)
To September 30, 1999
(Unaudited)
Additional
Common Stock Paid-in
Shares Amount Capital Total
---------- ---------- ------------ -----------
Balance,
March 24, 1998 --- $ --- $ --- $ ---
Issuance of common
stock for cash
March of 1998 200,000 200 9,800 10,000
Issuance of common
stock for cash
August of 1998 201,800 202 50,248 50,450
Less offering costs --- --- (11,888) (11,888)
Less net loss --- --- --- (2,208)
---------- ---------- ------------ -----------
Balance,
December 31, 1998 401,800 402 48,160 46,354
Less offering costs 0 0 (11,824) (11,824)
Less net loss --- --- --- (10,668)
---------- ---------- ------------ -----------
Balance,
September 30, 1999 401,800 $ 402 $ 36,336 $ 23,862
========== ========== ============ ===========
The accompanying notes are an integral part of these financial statements.
-4-
7
COLOR STRATEGIES
A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED September 30, 1999
(With Cumulative Figures From Inception)
(Unaudited)
From Inception,
January 1, 1999 March 24, 1998
To Sept. 30, 1999 To Sept. 30, 1999
----------------- ----------------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net Loss $ (10,668) $ (12,876)
Non-cash items included in net loss
Amortization 80 160
Adjustments to reconcile net loss to
cash used by operating activity
Deposits 0 (600)
Accounts payable (815) 1,700
----------------- ----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (9,793) (11,616)
CASH FLOWS USED BY INVESTING ACTIVITIES
Organizational costs 0 535
----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES 0 535
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 0 402
Paid-in capital 0 48,160
Less offering costs (11,824) (11,824)
----------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES (11,824) 36,738
----------------- ----------------
NET INCREASE IN CASH (21,597) $ 24,587
================
CASH AT BEGINNING OF PERIOD 46,184
-----------------
CASH AT END OF PERIOD $ 24,587
=================
The accompanying notes are an integral part of these financial statements
-5-
8
COLOR STRATEGIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
NOTES TO THE FINANCIAL STATEMENTS
Color strategies (the Company) has elected to omit
substantially all footnotes to the financial statements for
the nine months ended September 30, 1999, since there have been
no material changes (other than indicated in the other
footnotes) to the information previously reported by the
Company in the audited financial statements for the period
ended December 31, 1998.
UNAUDITED INFORMATION
The information furnished herein was taken from the books
and records of the Company without audit. However, such
information reflects all adjustments which are, in the
opinion of management, necessary to properly reflect the
results of the period presented. The information presented
is not necessarily indicative of the results from
operations expected for the full fiscal year.
9
Item 2. Management's Discussion and Analysis of Financial Condition or
Plan of Operation
The following discussion provides information which Management believes
is relevant to an assessment and understanding of the Company's plan of
operation. This discussion should be read in conjunction with the Company's
financial statements and notes.
The Company's limited capital and its lack of significant operating
history, designate that the Company must be considered a development stage
company. Development stage companies are inherently more risky than
established companies because there is no earnings history and no assurance
that future revenues will develop. The Company's business purpose is that of
creating and presenting self-improvement and motivational seminars which
utilize the concept of (1) identifying individual characteristics through
"color coded" personality profiles, (2) enhancing an individual's self-image
once such personality traits are recognized, and/or (3)effectively utilizing
such "color coded" personality profiles in a wide range of situations which
include individual success in the work place, corporate hiring strategies and
employee relations, and more effective use of mass-media presentations such as
training videos or infomercials. The Company plans to introduce to the
established topics of self-improvement and motivation the concepts of image
and style enhancement by profiling personality characteristics through "color
coding". The Company's concept of integrating the "color coding" of behavioral
characteristics with self-improvement and motivational techniques is
hereinafter referred to as its "Color/Image Strategies". The "color coding"
system enables you to identify your behavioral profile, capitalize on your
behavioral strengths, increase your appreciation of different profiles and
anticipate and minimizes potential conflicts with others. The Company's
largest hurdle is, and will be, to convince its various target markets that
the use of its Color/Image Strategies will prove beneficial.
During the next twelve months the Company's plan of operation is to
continue to introduce its Color/Image Strategies to various markets and
hopefully achieve a certain amount of market penetration in one or more of
these markets by achieving a client base. In order to achieve this, the
Company has narrowed its target market, which was initially broad in scope, to
three areas: (1) Motivational Seminars, (2) Keynote Speaking Services, and (3)
One-on-One Image Consulting. The Company plans to continue to research and
develop these markets. Although the Company had intended to pursue the market
of employee and management training in the Hotel/Casino industry, at present
time, the Company's efforts in this direction have found this market to be
highly saturated and too competitive for the Company's resources. The Company
will explore this market at a later time when resources allow.
The Company held its first complete motivational seminar on May 15, 1999
in St. George, Utah. Revenues from this seminar were $1,757, with over 100
people in attendance. Management feels the quality of presentation and the
performance of Ms. Tischner, the Company's President, and that of other
special quest speakers was well taken, and the response of the people in
audience was positive. The Company attributes the attendance to promotion,
and a targeted audience of professional working women. The Company will
continue to pursue this market aggressively. Although the Company experienced
a slight loss on this seminar, the Company will adjust its seminar fees
during the next quarter so that revenues are sufficient to cover costs with a
slight profit. The Company, however, believes it must keep seminar fees
competitive to encourage attendance and hopefully, as a result, a certain
amount of name recognition will develop as well as referrals. The Company had
10
planned to organize and hold a two day seminar in Mesquite, Nevada; however,
Ms. Tischner, after reviewing all the requirements to this type of seminar,
decided to participate as a guest speaker for a fee of $500. After expenses
the Company's net profit for this engagement was $457.
To date, the Company has accumulated a net loss of $12,876. The
Company's net loss for the nine months ended September 30, 1999, was $10,668.
The Company received revenues from guest speaking engagements during the
quarter ended September 30, 1999 of $500 and the cost of this engagement was
$43. The Company expended almost $13,000 during its nine months ended
September 30, 1999, the majority of which were expenses associated with its
offering which closed in August of 1998, and which were unpaid at its year
ended December 31, 1998: $5,789 during its first quarter and $6,035 during its
second quarter and $1,052 during its third quarter. Expenses in the Company's
fourth quarter were limited to its monthly lease payments, payments to
Progressive Management, its consultant (prior to its agreement to defer fees),
legal and accounting expenses, as well as nominal day-to-day operating
expenses.
During the next year, the Company will need a minimum of $4,800 for
lease payments, an estimated $4,000 for legal and accounting in order to meet
compliance requirements as a "reporting company", in addition to other day to
day operating expenses. Ms. Tischner has continued to defer her agreed upon
$1,000 per month salary. Also, the Company's normal $500 a month consulting
fee to Progressive Management and Consulting, Inc. has been deferred until
such time the Company's cash flow position can support such payment.
Progressive Management and Consulting, Inc. has agreed to continue performing
bookkeeping, audit preparation and SEC filing on a deferred basis. In an
effort to further reduce expenses, the Company has also reduced its
advertising budget to approximately $ 500 per month, and it is likely the
Company will spend less than that if it continues on its current trend of
incurring minimal advertising and marketing expenses. The Company has no plans
for additional employees or for purchase of any equipment during the next 12
months unless the Company begins generating significant revenues. It is
possible that the approximate $25,000 available to the Company at September
30, 1999, will be insufficient to fund operations for an additional 12 months
without revenues from operations, especially if compliance with SEC reporting
requirements costs more than anticipated.
Since inception on March 24, 1998, the Company has funded its operations
through offerings of its common stock: the Company's founders paid $10,000 for
their initial stock position at inception and the Company raised an additional
$50,450 in gross proceeds through the sale of unregistered common shares of
its stock during August of 1998. If the Company does not succeed in seeing
limited revenues in the next nine to twelve months, it may be forced to seek
additional financing, look at new business purposes or opportunities, or to
discontinue operations altogether. Even if the Company begins generating
revenues, it could require additional funding for expansion. It may be
difficult for the Company to succeed in securing additional financing. The
Company may be able to attract some private investors, or officers and
directors may be willing to make additional cash contributions, advancements
or loans. Or, in the alternative, the Company could attempt some form of debt
or equity financing. However, there is no guarantee that any of the foregoing
12 methods of financing would be successful. If the Company fails to achieve
at least a portion of its business goals in the next nine months with the
funds available to it, there is substantial uncertainty as to whether it will
continue operations.
11
YEAR 2000
The Company is currently addressing a universal situation know as the
Year 2000 problem or the Y2K problem. The Y2K problem relates to the
inability of certain computer software programs to properly recognize and
process date-sensitive information relative to year 2000 and beyond. The
Company's internal computer operating system is Y2K compliant as is all
software currently utilized by the Company. The Company does not intend to
add any software to its operating system without making sure that it is Y2K
compliant. The Company does not rely on computers for any purpose but day-
today operations. The only other way the Company's perceives its business
could be impacted by Y2K, is it could suffer some minor problems with hotel
bookings/reservations systems in relation to seminars, if certain hotels do
not prove to be Y2K compliant in their own operating systems.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits filed with this Report
Exhibit no. Description
----------- ------------
27 Financial Data Schedule
(b) Reports on Form 8-K -- None
12
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.
COLOR STRATEGIES
(Registrant)
Date: November 8, 1999 By: /s/ Tami Tischner
------------------------
Tami Tischner