UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(MarkOne)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2001
[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to _____________
Commission file number 000-32045
New Allied Development Corporation
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0809889
- -------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
201 East Round Grove Road, #1028, Lewisville, Texas 75067
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(Address of principal executive offices)
(469) 671-0400
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(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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
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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: 5,674,707 shares of common stock,
$.001 par value per share, outstanding as of May 20, 2002.
Transitional Small Business Disclosure Format (Check one): Yes No X
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
New Allied Development Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
March 31, 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,064
Available for sale securities 223,125
-----------
Total current assets 224,189
FURNITURE AND EQUIPMENT
Furniture and equipment 13,202
Less accumulated depreciation (11,623)
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Furniture and equipment - net 1,579
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OTHER ASSETS
Land held for sale, pledged as collateral for
account payable 399,000
Intangibles - net of amortization of $21,532 4,104
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Total other assets 403,104
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TOTAL ASSETS $ 628,872
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LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 246,450
Accrued expenses 291,424
Property taxes payable 26,467
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Total current liabilities 564,341
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LONG-TERM LIABILITIES, LESS CURRENT PORTION
Note payable - related party 12,000
Note payable 755,454
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Total long-term liabilities 767,454
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TOTAL LIABILITIES 1,331,795
STOCKHOLDERS' DEFICIT
Common stock, no par value; 25,000,000
shares authorized; 5,489,379 shares issued
and outstanding 3,534,112
Accumulated deficit (4,077,086)
Accumulated other comprehensive loss (159,949)
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Total stockholders' deficit (702,923)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 628,872
===========
The accompanying notes are an integral part of the
consolidated financial statements.
F-1
New Allied Development Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
For the quarter For the quarter
ended ended
March 31, March 31,
2002 2001
----------- -----------
REVENUES $ -- $ --
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OPERATING EXPENSES
Professional fees 13,432 19,907
General and administrative 1,674 8,478
Provision for uncollectible loan 46,516 --
Depreciation and amortization 990 786
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Total operating expenses 62,612 29,171
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OPERATING INCOME (LOSS) (62,612) (29,171)
OTHER INCOME/EXPENSE
Gain on sale of mineral rights 383,074
Other income -- 2,057
Interest expense (18,000) (17,009)
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Total other income (expense) 365,074 (14,952)
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Net Income (loss) before income tax 302,462 (44,123)
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Provision for income taxes -- --
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NET INCOME (LOSS) 302,462 (44,123)
Accumulated deficit
Balance, beginning of period (4,379,548) (4,302,443)
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Balance, end of period $(4,077,086) $(4,346,566)
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BASIC NET INCOME (LOSS) PER SHARE $ .06 $ (0.01)
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WEIGHTED AVERAGE NUMBER OF
SHARESVOUTSTANDINGTANDING 5,489,379 4,895,599
=========== ===========
OTHER COMPREHENSIVE INCOME
Net income(loss) $ 302,462 $ (44,123)
Unrealized loss on marketable securities (159,949) --
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Other Comprensive income $ 142,513 $ (44,123)
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The accompanying notes are an integral part of the
consolidated financial statements.
F-2
New Allied Development Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the quarter For the quarter
ended ended
March 31, March 31,
2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 302,462 $ (44,123)
Adjustments to reconcile net income (loss) to net cash
flows from operating activities:
Isuance of stock for services -- 2,500
Gain on sale of mineral rights (383,074) --
Provision for uncollectable loan 46,516 --
Depreciation and amortization 990 786
Increase in notes payable - related party 12,000 --
Increase in accounts payable
and accrued expenses 19,622 25,391
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Net cash flows from operating activities (1,484) (15,446)
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of stock for cash -- 34,992
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Net cash flows from financing activities -- 34,992
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NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,484) 19,546
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 2,548 359
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 1,064 $ 19,905
========= =========
NON CASH INVESTING AND FINANCIANG ACTIVITY
Securties received though the sale of mineral rights $ 383,074 $ --
========= =========
The accompanying notes are an integral part of the
consolidated financial statements.
F-3
New Allied Development Corporation and Subsidiary
Notes to the Financial Statements
March 31, 2002
1. Management's Representation of Interim Financial Information
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The accompanying financial statements have been prepared by New Allied
Development Corp. without audit pursuant to rules and regulations of the U.
S. Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted as allowed by such rules and regulations, and
management believes that the disclosures are adequate to make the
information presented not misleading. These financial statements include
all of the adjustments, which, in the opinion of management, are necessary
to a fair presentation of financial position and results of operations. All
such adjustments are of a normal and recurring nature. These financial
statements should be read in conjunction with the audited financial
statements at December 31, 2001.
2. Sale of Mineral Rights
----------------------
During the quarter, NADC received securities with a market value of
$383,074 in exchange for mineral rights owned by the company. The mineral
rights had no basis for financial reporting purposes, and consequently,
gain of $383,074 was recognized. The company received 85,000 shares of
Success Financial Services Group, a public company trading on the OTCBB
under the symbol SFSG.
F-4
Item 2. Management's Discussion and Analysis or Plan of Operation.
This discussion may contain forward-looking statements that involve risks
and uncertainties. Our actual results may differ materially from the results
discussed in these forward-looking statements. We undertake no obligation to
release publicly the results of any revisions to these forward-looking
statements to reflect events or circumstances arising after the date of this
report.
General
Since January 1, 1999, we have realized no revenues. Since 1999, the last
of five years during which we were engaged in the business of lending money, we
have been inactive except for the sale during the quarter of certain mineral
rights for securities having a market value of $383,074. The securities are
85,000 shares of common stock of Success Financial Services Group ("SFSG"), a
public financial services company whose stock is traded over-the-counter in the
"pink sheets" under the symbol "SFSG." The mineral rights had no basis for
financial reporting purposes and, accordingly, we recognized a gain on the sale
of $383,074. We realized net income of $302,462 ($.06 per share) for the quarter
ended March 31, 2002, as a result of this transaction. We realized a net loss of
$(77,105) ($-0- per share) for the fiscal year ended December 31, 2001, and a
net loss of $(261,168) ($.06 per share) for the fiscal year ended December 31,
2000. We have one subsidiary corporation, Tommyknocker Casino Corp.
Plan of Operation
Our plan of operation for the next twelve months is to pursue negotiations
and, ultimately, complete a business combination with a qualified,
privately-held company interested in becoming publicly-traded by means of a
business combination with us, in lieu of offering its own securities to the
public. The transaction may take the form of a statutory merger or
consolidation; an exchange of securities for assets or outstanding equity
securities; the sale of securities for cash or other value; and similar
transactions. The success of this plan is dependent upon our ability to satisfy
a portion of our liabilities with the proceeds from the sale of our parcel of
real estate located in Monument, Colorado, and/or the common stock of SFSG we
acquired during the quarter and convert the balance of the indebtedness to
equity or otherwise extinguish it. If we are successful in extinguishing the
bulk of our indebtedness, we believe that we will be an attractive
publicly-quoted company, with minimal assets and liabilities, to a suitable
privately-held company. We are unable to calculate the cost of our plan of
operations over the next twelve months and we cannot be certain that it will be
successful. We expect to be able to satisfy our cash requirements from funding
provided by Ms. Erica J. Hull, our President and Chief Executive Officer, until
we are successful, if ever, in consummating a business combination with a
suitable candidate. We believe that this will be feasible because Ms. Hull's
salary is presently being accrued and we have no office rent and limited other
operating expenses, including, primarily, professional fees and general and
administrative expenses. We have no current plans to raise additional capital
and our fund-raising efforts have been minimal since we ceased business
operations in 1999. We do not expect to perform any research and development
during the term of this plan. We do not expect the purchase or sale of any
significant equipment or a significant change in the number of employees for the
next twelve months. Results of Operations
Quarter Ended March 31, 2002, Versus Quarter Ended March 31, 2001
We realized no revenues during the years ended December 31, 2001, and
December 31, 2000, because we conducted no operations during these periods.
We incurred net income of $(302,462 ($.06 per share) for the quarter ended
March 31, 2002, as compared to a net loss of $(44,123) ($(.01) per share) for
the quarter ended March 31, 2001, because of the factors described below.
Operating expenses, consisting of professional fees, general and administrative
expenses, provision for uncollectible loan and/or depreciation and amortization,
increased approximately 215%, from $29,171 for the quarter ended March 31, 2001,
to $62,612 for the quarter ended March 31, 2002. Other income increased
approximately 786%, from $(44,123) to $302,462 for the quarter ended March 31,
2001, and 2002, respectively. This was, primarily, because of our sale of
mineral rights for the securities of SFSG.
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the date indicated.
Date: May 20, 2002 By: /s/ Erica J. Hull
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Erica J. Hull, President,
Chief Executive Officer and Director