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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Nine Months Ended September 30, 2001
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CAPITAL DEVELOPMENT GROUP, INC.
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(Exact name of registrant as specified in its charter)
OREGON 93-1113777
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(State or other jurisdiction (IRS Employer Identification
of incorporation or No.)
organization)
4333 Orange Street, Suite 3600 Riverside, CA 92501-3839
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(Address of principal administrative (City, State, Zip Code)
offices)
(909) 276-0873
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(Registrants telephone number)
Check whether the issuer (1) 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 No X
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Shares Outstanding, September 30, 2001
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Common Stock, $.0001 par value 15,000,000
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Financial Statements are included as part of this document at the end of the
document.
Item 2. Management Discussion and Analysis or Plan of Operation
Disclosure regarding forward-looking statements.
This filing includes "forward-looking statements" as that term is defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
based on management's beliefs and assumptions based on currently available
information. All statements other than statements of historical fact regarding
our financial position, business strategy and management's plans and objectives
for future operations are forward-looking statements. Although the Company
believes that management's expectations as reflected in forward-looking
statements are reasonable, we can give no assurance that those expectations will
prove to be correct. Forward-looking statements are subject to various risks and
uncertainties that may cause our actual results to differ materially and
adversely from our expectations as indicated in the forward-looking statements.
Many of these risks and uncertainties are disclosed in our recent filings with
the Securities and Exchange Commission, including those set forth below and
those disclosed in our quarterly report on Form 10-Q for the quarter ended June
30, 2000. You should be aware that these factors are not an exhaustive list, and
you should not assume these are the only factors that may cause our actual
results to differ from our expectations.
(a) Plan of Operation
The company is currently evaluating companies to merge with and form a
profitable on-going concern.
(b) Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company has split IntraMed Corporation out of Capital Development Group,
Inc. The purpose of this was to transfer all of the assets and liabilities of
Capital Development Group into IntraMed. IntraMed is owned by the shareholders
of Capital Development Group in the proportional share that they own Capital
Development Group as of September 28, 2001. IntraMed gave Capital Development
Group some cash as part of the transaction to cover some of the Accounts
Payables that IntraMed did not assume.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings have occurred or are occurring in this quarter.
ITEM 2. CHANGES OF SECURITIES
4,826,065 shares were issued during the period. These were issued for conversion
of debt to the company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No defaults have occurred this quarter.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted for a vote of the security holders this quarter.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Capital Development Group, Inc.
By: /s/ Michael P. Vahl, President
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November 14, 2001
Appendix A: Financial Statements
Balance Sheet as of 09/30/2001 09/30/2000
Assets
Current Assets
Cash 18 288
A/R, net 0 0
Other Current Assets 0 85,500
Total Current Assets 18 85,788
Fixed Assets, net 0 32,033
Intangible Assets, net 0 77,156
Total Assets 18 194,977
Liabilities & Stockholders Deficit
Current Liabilities
A/P & Accrued Liabilities 42,795 27,580
Due to Related Parties 0 164,785
Convertible Notes Payable 0 210,000
Notes Payable 0 15,000
Other Liabilities 0 1,553
Total Current Liabilities 42,795 418,919
Stockholders Deficit
Common Stock 1,500 963
Convertible Series A Preferred 0 16
Additional Paid-in Capital 6,226,010 2,195,462
Accumulated Deficit (6,270,286) (2,420,383)
Total Stockholders Deficit (42,777) (223,942)
Total Liabilities & Stockholders Deficit 18 194,977
Income Statement for the 9 months ended 09/30/2001 09/30/2000
Revenue (13,886) (17,304)
Operating Expenses
Consulting Fees 54,101 24,687
Management Fees 83,750 113,692
Other Expenses 182,499 122,729
Depreciation & Amortization 123,802 0
Total Operating Expenses 444,152 261,107
Loss Before Provision for Income taxes (458,039) (278,412)
Provision for Income Taxes 0 0
Net Loss (458,039) (278,412)
Basic and Diluted loss per share (0) (0)
Weighted Average # of Shares 15,000,000 8,409,335
Cash Flows from Operating Activities
for the Months Ended 09/30/2001 09/30/2000
Net Loss (458,039) (278,412)
Adj's to reconcile net loss to net cash
Depreciation and Amortization 123,802 0
Interest Expense 0 (2,369)
Changes in Operation Assets and Liabilities 0 0
Accounts Receivable 0 0
Accounts Payable and Accrued Liabilities 115,544 24,340
Due to Related Parties 179,883 127,615
Net Cash used by Operating Activities (38,809) (128,825)
Net Cash used in Investing Activities 0 129,113
Net Decrease in Cash (38,809) 288
Cash at Beginning of Period 38,827 0
Cash at end of Period 18 288
1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
Nature of Business
Capital Development Group, Inc. (the "Company") was incorporated in Oregon on
May 19, 1993. Prior to the acquisitions of IntraMed Corporation and HealthSource
Financial Advisors, LLC, (see Acquisitions of Subsidiaries discussed below) the
Company primarily engaged in the business of purchasing healthcare receivables
from hospitals and other healthcare institutions at a discount and administering
the collection process of such receivables. As of September 30, 2001, the
Company has redirected its efforts and has become primarily focused on the
operations of the newly acquired subsidiaries.
The Company is publicly traded on the Over the Counter Bulletin Board ("OTCBB")
under the symbol "CDVG". As discussed in Note 6, the Company is delinquent on
several required SEC filings.
Interim Financial Statements
The accompanying condensed financial statements include the accounts of the
Company. The information furnished has been prepared in accordance with
generally accepted accounting principles for interim financial reporting, the
instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. Accordingly,
certain information and disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. In the opinion of management, all adjustments considered
necessary for the fair presentation of the Company's financial position, results
of operations and cash flows have been included and are only of a normal
recurring nature. These financial statements have not undergone a SAS-71 review.
The results of operations for the quarter ended September, 2001 are not
necessarily indicative of the results of operations for the year ending December
31, 2001.
These financial statements should be read in conjunction with the Company's
audited December 31, 2000 consolidated financial statements included in Form
10-K.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes
Using the liability method required by Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes," the estimated tax
effects of temporary differences between financial and income tax reporting are
recorded in the period in which the events occur. Such differences between the
financial and tax bases of assets and liabilities result in future tax
deductions or taxable income.
Based on management's best estimate of taxable income in the foreseeable future,
it is more likely than not that some portion of deferred income tax assets, due
mostly to net operating loss carryforwards, may not be realized.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Loss per Common Share
Loss per common share is based on the weighted average number of shares of
common stock and common stock equivalents outstanding during the year in
accordance with Statement of Financial Accounting Standards No. 128, "Earnings
per Share."
Recent Accounting Pronouncements
For the nine-month period ended September 30, 2001, the Company adopted
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), as amended. Since the Company
does not presently engage in activities covered by SFAS 133, there was no
significant effect on the Company's September 30, 2001 condensed consolidated
financial statements.
3. NOTES PAYABLE
All notes payables issued by the Company along with their accrued interest have
been converted into common shares of the Company's stock
4. RELATED PARTY TRANSACTIONS
The Company's President/CEO, who is also approximately a 50% shareholder, has
converted approximately $211,000 of the accrued debt into the Company's common
stock. The balance of the debt has assumed by IntraMed Corporation.
The Company's Board of Directors voted to split off IntraMed Corporation on
September 28, 2001. IntraMed Corporation will be owned in a proportional number
of shares to the number of shares that are currently owned by the Company's
shareholders in the Company as of September 28, 2001. IntraMed Corporation
assumed all the Assets and Liabilities of Capital Development Group, Inc., as
well as any rights to all licenses and other potential settlements in exchange
for a small amount of cash to help pay the Company's existing Accounts Payables.
5. CONVERTIBLE SERIES A PREFERRED STOCK
All of the Company's convertible Series A preferred stock was converted into
250,000 shares of the Company's common stock in September 2001.
6. DELINQUENT SEC FILINGS
The Company's June 30, 2000 and September 30, 2000 Form 10-QSB's were not
reviewed by the Company's accountants in accordance with Statement on Auditing
Standards No. 71 ("SAS 71"), "Interim Financial Information". Federal securities
law requires SAS 71 reviews. Such filing delinquencies constitute securities
laws non-compliance and, among other actions enforceable by the SEC, could
result in de-listing of the Company's common stock from the OTCBB.
In addition, any owners of the Company's restricted securities who are otherwise
eligible to sell such securities under Rule 144 may be temporarily unable to do
so until such filing delinquencies are cured.
7. GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The Company has not generated significant revenue or any profit from operations.
Such factors indicate that the Company may be unable to continue as a going
concern for a reasonable period of time. Management is in discussions with
potential investors to pursue additional capital infusions into the Company,
which management believes are necessary until such time that revenues achieve
profitability levels.
The condensed financial statements do not include any adjustments relating to
the recoverability of assets that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern is dependent upon its ability to generate sufficient revenue and related
cash flow to meet its obligations on a timely basis and/or to obtain additional
financing or equity infusions as may be required.