SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended DECEMBER 31, 1997
Commission file number 1-9431
ESCAGENETICS CORPORATION
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Delaware 94-3012230
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Suite 605, 1075 Bellevue Way NE, Bellevue, WA 98004
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(206) 901-3595
- --------------------------------------------------------------------------------
(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 Exchange Act during the past 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 past 90 days.
Yes X No____
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes X No____
The number of shares of the issuer's common stock outstanding as of December 15,
1998 was 73,402,516 shares, par value $0.0001 per share.
Part 1
ITEM 1 - Financial Statements
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
- -------------------------------------------------------------------------------
December 31,
1997
------------
ASSETS
Current assets:
Cash $ 4,000
---------
Total assets $ 4,000
---------
---------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 3,000
Due to GLF Ultra Fund, Ltd. 49,000
---------
Total liabilities 52,000
---------
Shareholders' equity (deficiency):
Preferred stock; $0.01 par value; 1,000,000 shares
authorized; none issued or outstanding
Common stock; $0.0001 par value; 101,000,000 shares
authorized; 73,402,516 shares issued and outstanding 7,000
Additional paid-in capital 134,000
Accumulated deficit (189,000)
---------
Total shareholders' equity (deficiency) (48,000)
---------
Total liabilities and shareholders' equity (deficiency) $ 4,000
---------
---------
SEE FOOTNOTE TO FINANCIAL STATEMENTS
2
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
- -------------------------------------------------------------------------------
Three months ended December 30,
-----------------------------------
1997 1996
------------ ------------
Revenues:
Miscellaneous $ 0 $ 3,000
------------ ------------
Operating expenses:
Accounting and legal 3,000 76,000
General and administrative 3,000 24,000
------------ ------------
Total expenses 6,000 100,000
------------ ------------
Net loss (6,000) (97,000)
Accumulated deficit, beginning of period (183,000) (15,000)
------------ ------------
Accumulated deficit, end of period $ (189,000) $ (112,000)
------------ ------------
------------ ------------
Net loss per share $ (0.00) $ (0.00)
------------ ------------
------------ ------------
Weighted average common shares outstanding 73,402,516 73,402,516
------------ ------------
------------ ------------
SEE FOOTNOTE TO FINANCIAL STATEMENTS
3
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- -------------------------------------------------------------------------------
Three months ended December 30,
-------------------------------
1997 1996
--------- ---------
Cash flows from operating activities:
Net loss $ (6,000) $ (97,000)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Changes in operating assets and liabilities:
Accounts payable 14,000
Amounts due to pre-petition creditors (24,000)
--------- ---------
Net cash used in operating activities (6,000) (107,000)
--------- ---------
Cash flows from investing activities:
Additional investment in Potato Products
International, Ltd. prior to sale (27,000)
--------- ---------
Net cash used in investing activities 0 (27,000)
--------- ---------
Cash flows from financing activities:
Advances from GLF Ultra Fund, Ltd. 10,000 105,000
--------- ---------
Net cash provided by financing activities 10,000 105,000
--------- ---------
Net increase (decrease) in cash 4,000 (29,000)
Cash at beginning of period 0 224,000
--------- ---------
Cash at end of period $ 4,000 $ 195,000
--------- ---------
--------- ---------
SEE FOOTNOTE TO FINANCIAL STATEMENTS
4
ESCAGENETICS CORPORATION AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
1. Unaudited information
The consolidated financial statements for the three month periods ended
December 30, 1997 and 1996 are unaudited and reflect all adjustments which
are, in the opinion of management, necessary for the fair presentation of
the financial position and operating results for the periods presented.
Certain footnote disclosures normally included with financial statements
prepared in accordance with generally accepted accounting principles have
been omitted from these consolidated financial statements. Accordingly,
these unaudited consolidated financial statements should be read in
conjunction with the September 30, 1997 audited consolidated financial
statements and notes thereto included in the Company's annual report on
Form 10-KSB for the year ended September 30, 1997.
5
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Effective as of August 22, 1996 the Company was reorganized pursuant to a plan
of reorganization that was confirmed by the US Bankruptcy Court. Since the
reorganization date, the Company has adopted a September 30 fiscal year.
The Company has had no revenues from operations since the reorganization date.
The Company does not plan to continue the business activities that it previously
conducted. It plans to pursue a business combination or other strategic
transaction. No candidate for such a transaction has been identified. The
Company believes its status as a public company may be attractive to a private
company wishing to avoid an initial public offering but there is no guarantee
that a business combination or other strategic transaction will be consummated.
The Company expects to fund its expenses during fiscal 1998 with advances from
its majority shareholder, GFL Ultra Fund, Ltd. ("Ultra"). These advances are
expected to total approximately $15,000 during fiscal 1998. The Company expects
Ultra to continue to fund its expenses until a business combination or other
strategic transaction is consummated. There is no guarantee that the Company is
a viable party for a business combination or other strategic transaction. If a
business combination or other strategic transaction is not consummated in a
timeframe suitable to Ultra or cannot be consummated due to excessive cost or
for any other reason, Ultra will cease to advance funds to the Company.
The Company has no employees and no fixed assets. The Company does not
anticipate hiring any employees or purchasing any assets until such time as a
business combination or other strategic transaction is consummated or is
imminent.
PART II
ITEM 1 - Legal Proceedings
None.
ITEM 2 - Changes in Securities and Use of Proceeds
None.
ITEM 3 - Defaults Upon Senior Securities
None.
ITEM 4 - Submission of Matters to a Vote of Security Holders
None.
6
ITEM 5 - Other Items
None.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Forms 8-K
No reports on Form 8-K were filed during the quarter ended December 31, 1997.
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.
ESCAGENETICS CORPORATION
By /s/ Michelle Kline
-----------------------------
Michelle Kline
President and Treasurer
(Principal Executive Officer and
Principal Financial Officer)
Dated: January 12, 1999
-------------------------
7