UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 2001
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NEMCO, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 22-3656615
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
625 N. Michigan Avenue
Chicago, Illinois 60611
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (312) 867-1052
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As of September 30, 2001, the following shares of the
registrant's common stock were issued and outstanding:
25,000,000 shares authorized, $0.001 par value
14,333,333 shares issued and outstanding
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .8
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .8
Note 3. EARNINGS PER SHARE. . . . . . . . . . . . . 8
Note 4. LIQUIDITY . . . . . . . . . .. . . . . . . .9
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 13
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 13
Item 5. Other information. . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
To the Board of Directors of NEMCO INC.
We have reviewed the accompanying balance sheet of Nemco Inc., (a
development stage company) as of December 31, 2001 and the
related statements of loss and accumulated deficit, and cash
flows for the three months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants. All
information included in these financial statements is the
representation of the management of Nemco Inc.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Graf Repetti & Co., LLP
Dated: New York, New York
May 15, 2002
NEMCO INC.
CONDENSED CONSOLIDATED BALANCE SHEET
As Of As Of
Dec. 31, 2001 June 30, 2001
(Unaudited) (Audited)
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ASSETS
Current Assets
Cash $0 $0
Other Current Assets 0 0
_________ ________
Total Current Assets 0 0
Other Assets 0 0
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TOTAL ASSETS $0 $0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued Expenses 47,825 39,300
Other Liabilities
Loan Payable - Note 5 44,700 44,700
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Total Liabilities 92,525 84,000
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
14,333,333 Shares as of
September 30, 2001; 14,333 14,333
Additional Paid in Capital 26,967 19,767
Deficit Accumulated During the
Development Stage (133,825) (118,100)
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Total Stockholders' Equity (92,525) (84,000)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $0 $0
NEMCO INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
For the 3 Mos Ended For the 3 Mos Ended
December 31 September 30
2001 2000 2001 2000
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TOTAL REVENUES: $ 0 0 0 0
OPERATING EXPENSES:
Accounting 1,750 4,000 1,750 1,750
Legal 2,500 2,500 2,500 2,500
Rent Expense-Note 2 3,600 3,600 3,600 3,600
Agent's fee 0 500 0 0
Other Start Up 0 0 0 0
Filing Fee 12 13 13 12
________ _______ ________ ________
NET LOSS ( 7,862) (10,613) ( 7,863) (7,862)
DEFICIT - Beginning
of period (125,963) (83,012) (118,100) (75,150)
________ _______ ________ _______
DEFICIT - End of
period (133,825) (93,625) (125,963) (83,012)
NET LOSS PER SHARE (.00) (.00) (.00) (.00)
Weighted Average
Number of Shares
Outstanding 14,333,333 4,615,385 14,333,333 6,000,000
NEMCO INC.
STATEMENT OF CASH FLOWS (unaudited)
For the three For the three
Months Ended Months Ended
to to
Dec. 31, 2001 Dec. 31, 2000
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CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $( 7,862) $(10,613)
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Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Changes in Assets and Liabilities:
Increase in Accrued Expenses ( 4,262) (7,013)
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Total Adjustments ( 4,262) (7,013)
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Net Cash Used in
Operating Activities ( 3,600) ( 3,600)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Paid in Capital contributed by
shareholders for rent 3,600 3,600
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Net Cash Provided
by Financing Activities 3,600 3,600
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Net Change in Cash 0 0
Cash at Beginning of Period 0 0
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Cash at End of Period $ 0 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0 0
Corporate Taxes $ 0 0
NEMCO INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 2001
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
NEMCO INC., ("the Company") is a for-profit corporation,
incorporated under the laws of the State of Delaware on October
31, 1996 as Ecotech Solutions, Inc. On March 3, 1999, the
Company changed its name to Bioincubation Corp. On December 20,
2000, the Company changed its name to Nemco Inc.
The Company is a development stage company and is also considered
a shell company at this time based upon the fact that the Company
has no significant assets. The Company's principal business
purpose is to locate and consummate a merger or alliance with a
private entity.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
C. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts ind disclosures. Accordingly, actual results could
differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going concern. See Note 5.
NOTE 2 - USE OF OFFICE SPACE
The Company uses office space for its executive offices at two
locations. The fair market value of the 200 square foot office
at The Studio, St. Nicholas Close, Elstree, Herts, United Kingdom
is $600 per month. Use of this office space began January 1,
1999. The fair market value of the 300 square foot office at
Suite 600, 625 N. Michigan Avenue, Chicago, Illinois is also $600
per month. Use of this office space began January 1, 1999.
The amount for each office is reflected as an expense with a
corresponding credit to accrued expenses, as the shareholders
expect to be reimbursed in the future.
NOTE 3 - EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED
Net Loss Per Share $ (0.00)
NOTE 4 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to December
31, 2001 no revenue and a net loss from operations of ($133,825).
As of December 30, 2001, the Company had a net capital deficiency
of ($92,525).
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses. It is not anticipated that the
Company will be able to meet its financial obligations through
internal net revenue in the foreseeable future. Bioincubation
Corp., does not have a working capital line of credit with any
financial institution. Therefore, future sources of liquidity
will be limited to the Company's ability to obtain additional
debt or equity funding. See Note 5.
NOTE 5 - LOAN PAYABLE - CHANNING INVESTMENTS LTD.
Channing Investments Ltd., a shareholder of the Company, will
lend up to $50,000 to the Company upon request. The loan is not
evidenced by a note. The informal agreement calls for no payment
of interest. As of December 30, 2001, Channing Investments
Ltd., had paid $44,700 of expenses on behalf of Nemco, Inc. The
Company intends to repay the loan out of any fund raising that it
may carry out or when the company achieves sustainable revenue.
NOTE 6 - NON CASH FINANCIAL TRANSACTIONS
Non-cash financing transactions consisting of the cost of
contributed rent and the related additional paid in capital
contributed by shareholders have been included in expenses and
additional paid in capital, respectively, in the accompanying
financing statements. These are valued at $3,600.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company on December 11, 2000 acquired all the outstanding
shares of common stock of Netmedia Developments Ltd.,(hereinafter
"Netmedia") a company incorporated under the laws of the United
Kingdom, whereunder the Company acquired all of the outstanding
shares of common stock of Netmedia. Additionally, the company
effectuated a 3 for 1 reverse split of its outstanding shares of
common stock prior to the acquisition of Netmedia. The company
thereafter issued 13,000,000 post reverse split shares of the
Company in exchange for the outstanding shares of common stock of
Netmedia. The transaction was approved by shareholders of both
the company and Netmedia.
As a result of the acquisition of Netmedia, control of the
company passed to the shareholders of Netmedia. Pursuant to the
terms of the Acquisition Agreement, the company changed its name
to Nemco, Inc. A Form 8/K was filed on December 11, 2000
disclosing the transaction.
Thereafter, Nemco was to file, within sixty (60) days of the
transaction audited consolidated financial statements of Netmedia
on a Form 8/K-A. Nemco however could not compile the financial
statements of Netmedia and did not file the requisite Form 8/K-A.
Additionally, Nemco was unable to further develop its business
plan and effectively carry on operations due to market
conditions. The Company was also unable to file interim
financial reports on Form 10Q without incurring substantial
hardship and expense.
Based on the mutual agreement between the directors and
shareholders of Bioincubation and Nemco, the parties agreed to
terminate the original acquisition agreement entered into on
December 11, 2000 and reverse the transaction. Control of the
company has now reverted back to the original Bioincubation
shareholders and the name of the company shall remain Nemco.
Nemco shall now proceed as a blank check company whose principal
business shall be to merge with or acquire another operating
entity. Nemco shall proceed to update all its filings and become
current with its reporting obligations with the Securities and
Exchange Commission.
Nemco is a blank check development stage company and its
principal business purpose is to locate and consummate a merger
or acquisition with a private entity.
The SEC defines a blank check company as one which has no
specific business or plan other than to consummate an acquisition
of or merge into another business or entity. A number of states
have enacted statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective
jurisdictions. Additionally, some states prohibit the initial
offer and sale as well as any subsequent resale of securities of
shell companies to residents of their states. For this reason,
management advises that any potential investor who has an
interest in the Company should consult local Blue Sky counsel to
determine whether the state within which that investor resides
prohibits the purchase of shares of the Company in that
jurisdiction.
Once the Company has acquired or merged with another entity which
possesses an active business plan, the Company will no longer be
considered a "blank check" company. Additionally, shareholders
of the Company have not entered into any "lock-up" letter
agreement, which would prevent them from selling their respective
shares of the Company's common stock until such time as the
Company consummates a merger with or acquisition of another
company.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Nemco is a voluntarily reporting company in order to make
information concerning itself more readily available to the
public. Management believes that a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
could provide a prospective merger or acquisition candidate with
additional information concerning the Company. In addition,
management believes that this might make the Company more
attractive to an operating business opportunity as a potential
business combination candidate. As a result of filing its
registration statement, the Company is obligated to file with the
Commission certain interim and periodic reports including an
annual report containing audited financial statements. The
Company intends to continue to voluntarily file these periodic
reports under the Exchange Act even if its obligation to file
such reports is suspended under applicable provisions of the
Exchange Act.
Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any such business combination. Thus, in the
event that the Company successfully completes an acquisition or
merger with another operating business, the resulting combined
business must provide audited financial statements for at least
the two most recent fiscal years or, in the event that the
combined operating business has been in business less than two
years, audited financial statements will be required from the
period of inception of the target acquisition or merger
candidate.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully. Further, there
can be no assurance that the Company will have the ability to
acquire or merge with an operating business, business opportunity
or property that will be of material value to the Company.
There is always a present potential that the Company may acquire
or merge with a business or company in which the Company's
promoters, management, affiliates or associates directly or
indirectly have an ownership interest. There is no formal
existing corporate policy regarding such transactions, however,
in the event such a potential arises, the Company shall disclose
any conflict of interest to its directors and shareholders for
purposes of determining whether to acquire or merge with such a
business. Management does not foresee or is aware of any
circumstances under which this policy may be changed.
The Company has held preliminary discussions with a number of
entities for the purpose of consummating an acquisition or
merger. These discussions have not developed into any serious
negotiations, arrangement or understandings between the Company
and such entities and are merely part of the Company's efforts to
explore all available opportunities. The Company will consider
the operations and business activity of any entity with which it
wishes to consummate a transaction for the purpose of determining
whether such entity will be able to sustain growth, profit and
viable operations over the long term. At this time, the Company
has not entered into any letters of intent, agreements or
preliminary term sheets with any entity for the purpose of any
transaction.
The Company at this time does not have any preliminary agreements
or understandings for the purpose of providing any consulting
services. The Company will consider paying consultant or
finders' fees to its principal shareholders on the same basis
that it would pay any outside consultant or finder's fee.
The Company at this time does not foresee generating any
substantial income over the next twelve (12) months. The
Company's main purpose and goal is to locate and consummate a
merger or acquisition with a private entity. The Company's
directors will be compensated with stock of any surviving
Company subsequent to a merger or acquisition with a private
entity.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
There were no changes in securities for this period.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
Item 4. Submission of Matters to a Vote of Security Holders
There were no submission of matters to a vote of security holders
during this period.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits attached and no reports on Form 8-K were
filed during the quarter for which this report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEMCO, INC.
(Registrant)
Date: May 23, 2002
/s/ Julian Andrews
President