SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarter Ended: June 30, 2000; or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _________ to __________
Commission File Number: 033-20848-D
CONDOR CAPITAL INC.
------------------
Nevada 91-2301401
- ------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. Number)
Incorporation or organization)
3858 West Carson Street, Suite 127, Torrance, California 90503-6705
- -------------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
(310) 944-9771
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ X ] No [ ]
On June 30, 2000 there were 20,155,010 shares of the registrant's Common
Stock, no par value, issued and outstanding.
Transitional Small Business Disclosure Format Yes [ ] No [ X ]
This Form 10-QSB has 15 pages, the Exhibit Index is located at page 14.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements included herein have been prepared by the Company,
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.
In the opinion of the Company, all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position of the
Company as of June 30, 2000 and the results of its operations and changes in its
financial position from inception through June 30, 2000 have been made. The
results of operations for such interim period is not necessarily indicative of
the results to be expected for the entire year.
Index to Financial Statements
Page
----
Balance Sheets......................................................... 3
Statements of Operations............................................... 4
Statements of Cash Flows............................................... 5
Notes to Financial Statements for Period............................... 7
All other schedules are not submitted because they are not applicable or
not required or because the information is included in the financial statements
or notes thereto.
2
CONDOR CAPITAL, INC.
(A Development Stage Company)
Balance sheets
ASSETS
------
June 30, September 30,
2000 1999
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ 78,020 $ 201
------------- -------------
Total Current Assets 78,020 201
------------- -------------
PROPERTY AND EQUIPMENT 16,625 -
------------- -------------
OTHER ASSETS
Investments 144,470 -
------------- -------------
Total Other Assets 144,470 -
------------- -------------
TOTAL ASSETS $ 239,115 $ 201
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,939 $ 8,100
------------- -------------
Total Current Liabilities 1,939 8,100
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: no par value, 10,000,000 shares
authorized:
Series A convertible preferred stock:
liquidation preference $0.01 per share, 141,100
shares authorized, none issued or outstanding - -
Series B convertible preferred stock:
liquidation preference $0.01 per share, 140,000
shares authorized, none issued or outstanding - -
Common stock: no par value; 80,000,000 shares
authorized 20,155,010 and 17,620,010 shares
issued and outstanding, respectively 2,434,128 334,516
Deficit accumulated prior to the development stage (172,222) (172,222)
Deficit accumulated during the development stage (2,024,730) (170,193)
------------- -------------
Total Stockholders' Equity (Deficit) 237,176 (7,899)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 239,115 $ 201
============= =============
3
CONDOR CAPITAL, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
October 1,
For the Nine Months Ended For the Three Months Ended 1990 Through
June 30, June 30, June 30,
----------------------------------------------------------- ------------
2000 1999 2000 1999 2000
------------ ------------- ------------- ------------ ------------
REVENUE $ - $ - $ - $ - $ -
COST OF SALES - - - - -
------------ ------------- ------------- ------------ ------------
GROSS PROFIT - - - - -
------------ ------------- ------------- ------------ ------------
EXPENSES
General and administrative 31,937 5,602 5,752 863 210,291
------------ ------------- ------------- ------------ ------------
Total Expenses 31,937 5,602 5,752 863 210,291
------------ ------------- ------------- ------------ ------------
LOSS FROM OPERATIONS (31,937) (5,602) (5,752) (863) (210,291)
------------ ------------- ------------- ------------ ------------
OTHER INCOME (EXPENSE)
Write down of goodwill (1,578,350) - - - (1,578,350)
Interest income - - - - 471
Loss on investment (244,250) - (24,250) - (244,250)
------------ ------------- ------------- ------------ ------------
Total Other Income (Expense) (1,822,600) - (24,250) - (1,822,129)
------------ ------------- ------------- ------------ ------------
LOSS BEFORE EXTRAORDINARY
INCOME AND INCOME TAXES (1,854,537) - (30,002) - (2,032,420)
------------ ------------- ------------- ------------ ------------
EXTRAORDINARY INCOME
Gain on settlement of debt - net
of zero tax benefit - - - - 7,690
------------ ------------- ------------- ------------ ------------
Total Extraordinary Income - - - - 7,690
------------ ------------- ------------- ------------ ------------
PROVISION FOR INCOME TAXES - - - - -
------------ ------------- ------------- ------------ ------------
NET LOSS $(1,854,537) $ (5,602) $ (30,002) $ (863) $(2,024,730)
============ ============= ============= ============ ============
BASIC LOSS PER SHARE $ (0.10) $ (0.00) $ (0.00) $ (0.00)
============ ============= ============= ============
FULLY DILUTED LOSS PER SHARE $ (0.10) $ (0.00) $ (0.00) $ (0.00)
============ ============= ============= ============
4
CONDOR CAPITAL, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
October 1,
For the Nine Months Ended For the Three Months Ended 1990 Through
June 30, June 30, June 30,
----------------------------------------------------------- ------------
2000 1999 2000 1999 2000
------------ ------------- ------------- ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(1,852,598) $ (5,602) $ (30,002) $ (863) $(2,024,730)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Loss on disposal of assets - - - - 20,169
Common stock issued for
services 1,500 - - - 8,200
Write-down of goodwill 1,578,700 - - - 1,578,700
Allowance for investments 244,250 - 24,250 - 244,250
Management services contributed - - - - 31,900
Changes in assets and liabilities:
(Increase) decrease in prepaid
expenses - - - - 3,634
Increase (decrease) in accounts
payable (8,100) (3,498) (35,295) (4,830) 800
------------ ------------- ------------- ------------ ------------
Net Cash Used by Operating
Activities (36,248) (9,100) (41,047) (5,693) (137,077)
------------ ------------- ------------- ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property and equipment (16,625) - (16,625) - (16,625)
Investment in Konnect Corp. (168,720) - (168,720) - (168,720)
------------ ------------- ------------- ------------ ------------
Net Cash Used by Financing
Activities (185,345) - (185,345) - (185,345)
------------ ------------- ------------- ------------ ------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Cash proceeds from merger 76,300 - - - 76,300
Proceeds from sale of common
stock - 11,000 - - 44,435
Proceeds from notes payable - 2,000 - - 3,000
Payment of notes payable - (3,000) - (3,000) (3,000)
Contributions to capital 223,112 - 223,112 - 237,112
------------ ------------- ------------- ------------ ------------
Net Cash Provided by Financing
Activities $ 299,412 $ 10,000 $ 223,112 $ (3,000) $ 357,847
------------ ------------- ------------- ------------ ------------
5
CONDOR CAPITAL, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
From
Inception on
October 1,
For the Nine Months Ended For the Three Months Ended 1990 Through
June 30, June 30, June 30,
----------------------------------------------------------- ------------
2000 1999 2000 1999 2000
------------ ------------- ------------- ------------ ------------
INCREASE (DECREASE) IN CASH $ 77,819 $ 900 $ (3,280) $ (8,693) $ 35,425
CASH AT BEGINNING OF PERIOD 201 901 81,300 10,494 42,595
------------ ------------- ------------- ------------ ------------
CASH AT END OF PERIOD $ 78,020 $ 1,801 $ 78,020 $ 1,801 $ 78,020
============ ============= ============= ============ ============
SUPPLEMENTAL DISCLOSURES
OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Stock for stock exchange $ 1,875,000 $ - $ - $ - $ 1,875,000
Common stock issued for services $ 1,500 $ - $ - $ - $ 8,200
CASH PAID FOR:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
6
CONDOR CAPITAL, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and September 30, 1999
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the
Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at March 31, 2000 and 1999 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's September 30, 1999 audited financial
statements. the results of operations for periods ended March 31,
2000 and 1999 are not necessarily indicative of the operating
results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not
established revenues sufficient to cover its operating costs and
allow it to continue as a going concern. The Company has merged
with an operating company that has no revenue as of yet. In the
interim, management has committed itself to meeting the company's
minimal operating expenses.
NOTE 3 - INVESTMENTS
The Company has an equity investment in Konnect Corp. of
$144,470. This amount is net of the allowance of $24,250.
7
Item 2. Management's Discussion and Results of Financial Condition and
Results of Operations.
----------------------------------------------------------------------
The following discussion and analysis should be read together with the
Annual Report of Condor Capital Inc., Consolidated Financial Statements of
Condor Capital Inc. and the notes to the Consolidated Financial Statements
included elsewhere in this Form 10-QSB.
This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of Condor Capital Inc. for the period ended June 30, 2000. Except for historical
information, the matters discussed in this Management's Discussion and Analysis
of Financial Condition and Results of Operations are forward looking statements
that involve risks and uncertainties and are based upon judgments concerning
various factors that are beyond our control. Actual results could differ
materially from those projected in the forward-looking statements as a result
of, among other things; the factors described below under the caption
"Cautionary Statements and Risk Factors."
Overview
- --------
During the past six months, the company has continued to concentrate
primarily on developing into a multi-faceted corporation providing digital
network communication services and solutions within the fiber optic environment.
Through the creation of its joint venture entity, Konnect Corp. (Delaware),
the Company has positioned itself to become the foremost independent provider of
digital network services and solutions, resulting in real-time seamless
collaborative video & audio conferencing, secure digital asset storage and
distribution, digital collaboration, e-commerce transactions, unified messaging
and generic data services. By utilizing existing "backbone" fiber optic
networks, Condor is able to offer these network solutions free from the
legislative and territorial restrictions imposed upon local and international
telecommunication companies. Condor is able to provide the best possible service
and price available to its clients by not having to enter into an exclusive
affiliation with any single fiber optic telecommunications provider.
To achieve its objectives, Condor has embarked upon a program of Joint
Venture relationships, affiliations and acquisitions, firstly being that of
Konnect Corp. Konnect Corp. furthers research and development of network
programs through its wholly owned subsidiary, Konnect Strategic Services, Ltd.
While, the Company continues to concentrate on the identification and
evaluation of prospective merger or acquisition "target" entities, energies and
monies for the next one hundred eighty days shall be focused on the further
development of digital network communication services and solutions within the
fiber optic network. Such focus will assist the Company in narrowing the
criteria in targeting potential acquisition, merger or partnership candidates
who will ensure growth in broadband application layer network environments.
Plan of Restructure
- -------------------
On April 19, 2000 the Company held its Annual Shareholders meeting,
whereupon the shareholders voted majority in favor for (a) a reincorporation to
change the legal domicile of the Company to the State of Nevada, and (b)
approval of the "2000 Stock option Plan" authorizing the issuance of 5,000,000
shares under the terms and conditions of the Stock Option Plan. The
reincorporation became effective on May 15, 2000.
Development Plan
- ----------------
Management intends to promote growth and development through a program of
joint ventures, affiliations and acquisitions. In evaluating target companies,
Management intends to concentrate on identifying prospects that ensure the
Registrant growth in broadband application layer network environments.
Essentially, this will entail a determination by Management as to whether or not
the prospects are in an environment that appears promising and whether or not
these prospects themselves have the potential to enhance the Registrant's
position within the targeted industry. The Registrant is in the process of
overhauling its current corporate infrastructure, pursuing strategic
acquisitions, mergers, partnerships or alliances, and pursuing capital funding
to support this new initiative.
8
SIX MONTHS ENDED JUNE 30, 2000
- ------------------------------
NET SALES AND GROSS PROFIT The Registrant did not realize any sales or
other areas of revenue generation during the period ending June 30, 2000. The
Registrant did not realize any sales or profit for the six month period ended
June 30, 2000.
OPERATING EXPENSES AND PRODUCTION COSTS The Registrant realized an
operating expense loss of $31,937.00 on costs related to the Company.
GENERAL AND ADMINISTRATIVE EXPENSES The Registrant realized an increase in
operating expense to $31,937.00 for the period ended June 30, 2000. The increase
in operating expenses is primarily due to the Registrants pursuant of
acquisition, merger or partnership candidates and the cost associated with
increased legal fees, filings and other general expenses relating to the normal
operation of the Registrant. Additionally, funds were forwarded to GTE
Communications Corporation in the form of a deposit against upcoming services
provided by GTECC.
EXTRAORDINARY EXPENSES The Registrant realized a net loss of $1,854,537.00
during the period ending June 30, 2000. This has resulted in a fully diluted
loss of $0.10 per share.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary needs for funds are to provide working capital
associated with the normal operations of the Company and for financial demands
required to complete the acquisition, merger or partnership with strategically
positioned entities necessary for the fulfillment of the Company's "digital
network services and solutions" directive. Funds are also required to promote
future business development and market awareness. Working capital for the six
months ended June 30, 2000 was funded primarily through management and
shareholder loans.
Cash used in operating activities during the six months ended June 30, 2000
was primarily attributable to a net loss of $31,937.00 Cash was used primarily
in legal fees, proxies, transfer agent costs, filings and other costs relating
to the daily operation of the Company
No private placements, warrants or other financial instruments were issued
for the six month period ended June 30, 2000.
At present, the Registrants anticipated capital commitments are primarily
for the expenditures associated with the acquisition, merger or partnership with
strategically positioned entities necessary for the fulfillment the Registrants
directive. The Registrant has insufficient capital to meet the needs and goals
of the Company. Based on the current operating plan, the Registrant anticipates
that further capital will be required during the next twelve months to satisfy
our expected increased working capital and the Company's acquisition, merger or
partnership directives. The Registrant is currently exploring alternatives to
fulfill the needed financing requirements though no assurance can be given that
additional financing will be available when needed or that, if available, it
will be on terms favorable to our stockholders and management. If needed funds
are not available, the Company may be required to curtail operations, which
could have a material adverse effect on business, operating results and
financial condition. There can be no assurance that the working capital
requirements during this period will not exceed its available resources or that
these funds will be sufficient to meet the Company's longer-term cash
requirements for operations.
9
CAUTIONARY FORWARD - LOOKING STATEMENT
- --------------------------------------
Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Operations, and in future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases and in oral statements made with the approval of an authorized
executive officer which are not historical or current facts are "forward-looking
statements" made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the future
could affect the Company's actual results and could cause the Company's actual
financial performance to differ materially from that expressed in any
forward-looking statement: (i) the extremely competitive conditions that
currently exist in the industry are expected to continue, placing further
pressure on pricing which could adversely impact sales and erode profit margins;
(ii) many of the Company's major competitors in its channels of distribution
have significantly greater financial resources than the Company; and (iii) the
inability to carry out marketing and sales plans would have a materially adverse
impact on the Company's projections. The foregoing list should not be construed
as exhaustive and the Company disclaims any obligation subsequently to revise
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.
IMPACT OF YEAR 2000
- -------------------
During 1999 we completed our remediation and testing of our platform
systems, management support, systems, and our internal information technology
and non-information technology systems. Because of those planning and
implementation efforts, we experienced no disruptions in our information
technology and non-information technology systems and those systems have
successfully responded to the Year 2000 date change. We did not incur any
significant expenses during 1999 in conjunction with remediating our systems. We
are not aware of any material problems resulting from Year 2000 issues, either
with our products, internal systems, or the products and services of third
parties. We will continue to monitor our mission critical computer applications
and those of our suppliers and vendors throughout the year 2000 to ensure any
latent Year 2000 matters arising are addressed promptly.
RISK FACTORS
- ------------
FUTURE CAPITAL REQUIREMENTS; UNCERTAINTY OF FUTURE FUNDING. The Company's
plan of operation calls for The Registrant to acquire assets or business of
other entities primarily in instances where the Registrant exchanges its common
stock with those held by the target company and/or the target company's
shareholders. Another possibility, although less likely, is that the Registrant
may give its common stock to a target in exchange for the target's assets.
Management expects that an exchange of the Registrant's Common Stock in a merger
or acquisition, if ever, would require the Registrant to issue a substantial
number of shares of its common stock. Accordingly, the percentage of common
stock held by the Registrant's then current shareholders would be reduced as a
result of the increased number of shares of common stock issued and outstanding
following any such merger or acquisition.
The Registrant expects to continue to concentrate primarily on the
identification and evaluation of prospective merger or acquisition "target"
entities. The Registrant does not intend to act as a general or limited partner
in connection with partnerships it may merge with or acquire. Management has not
identified any particular area of interest within which the Registrant will
continue its efforts. The Registrant's officers and directors will devote only
such time as is necessary to seek out a suitable opportunity.
Management contemplates that the Registrant will seek to merge with or
acquire a target company with either assets or earnings, or both, and that
preliminary evaluations undertaken by the Registrant will assist in identifying
possible target companies. The Registrant has not established a specific level
of earnings or assets below which the Registrant would not consider a merger or
10
acquisition with a target company. Moreover, Management may identify a target
company generating losses which the Registrant will seek to acquire or merge
with the Registrant. There is no assurance that if the Registrant acquires a
target company with assets or earnings, or both, that the price of the
Registrant's common stock will increase.
SUBSTANTIAL DOUBT THAT THE COMPANY CAN CONTINUE AS A GOING CONCERN. The
Company expects to continue to incur significant capital expenses in pursuing
its plans to seek to merge with or acquire a target company with either assets
or earnings, or both. In order for the Company to continue its operations at its
existing levels, the Company will require additional funds over the next twelve
months. The Company presently cannot generate funds necessary to maintain its
operations. Therefore the Company is dependent on funds raised through equity or
debt offerings. Additional financing may not be available on terms favorable to
the Company, or at all. If adequate funds are not available or are not available
on acceptable terms, the Company may not be able to execute its business plan or
take advantage of business opportunities. The ability of the Company to obtain
such additional financing and to achieve its operating goals is uncertain. In
the event that the Company does not obtain additional capital, there is a
substantial doubt of its being able to continue as a going concern.
Additionally, it should be noted that the Company's independent auditors
have included a going concern opinion in the note to financial statements. The
auditor's have included this provision because the Company has an accumulated
deficit which the auditor believes raises substantial doubt about its ability to
continue as a going concern. Until such time as the Company does receive
additional debt or equity financing, there is a risk that the Company's auditors
will continue to include a going concern provision in the notes to financial
statements.
PATENTS AND PROPRIETARY RIGHTS. The Company does not rely on patents,
contractual rights, trade secrets, trademarks, and copyrights to establish and
protect its proprietary rights in products. The Company does not have any
patented technology.
DEPENDENCE ON KEY EMPLOYEES. The Company currently has no employees.
Historically, the Company has not employed any person who has been expected to
make significant contributions to the business of the Registrant and who is not
an executive officer. In the event of future growth in administration,
marketing, and merger or acquisition support functions, the Company may have to
increase the depth and experience of its management team by adding new members.
The Company's success will depend to a large degree upon the active
participation of its key officers and directors. Loss of services of any of the
current officers and directors could have a significant adverse effect on the
operations and prospects of the Company. There can be no assurance that it will
be able to employ qualified persons on acceptable terms to replace officers that
become unavailable.
NEED FOR ADDITIONAL SPECIALIZED PERSONNEL. Although the management of the
Company is committed to the business and continued development and growth of the
business, the addition of specialized key personnel to assist the Company in its
plan of merger or acquisition may be necessary. There can be no assurance that
the Company will be able to locate and hire such specialized personnel on
acceptable terms.
COMPETITION. The Registrant will remain an insignificant participant among
the firms which engage in mergers with and acquisitions of privately-financed
entities. There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources and technical
expertise than the Registrant. In view of the Registrant's limited financial
resources and limited management availability, the Registrant will continue to
be at a significant competitive disadvantage compared to the Registrant's
competitors.
VOTING CONTROL. The Registrant is aware that some shareholders have been in
negotiations with prospective purchasers of their shares, which if accomplished,
would result in a change in control of the Registrant. To the knowledge of the
Registrant, there are no legally binding agreements with respect to any such
proposed sales.
11
RISKS OF "PENNY STOCKS." The Company's common stock may be deemed to be
"penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ-listed stocks must still meet requirement (i) above);
or (iv) of an issuer with net tangible assets less than US $2,000,000 (if the
issuer has been in continuous operation for at least three years) or US
$5,000,000 (if in continuous operation for less than three years), or with
average annual revenues of less than US $6,000,000 for the last three years.
Section 15(g) of the 1934 Act and Reg. Section 240.15g-2 of the Commission
require broker-dealers dealing in penny stocks to provide potential investors
with a document disclosing the risks of penny stocks and to obtain a manually
signed and dated written receipt of the document before effecting any
transaction in a penny stock for the investor's account. Potential investors in
the Company's common stock are urged to obtain and read such disclosure
carefully before purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Commission requires broker-dealers
in penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires
the broker-dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common stock to resell their shares to third parties or to otherwise dispose of
them.
MARKET FOR COMMON STOCK. During the fiscal year end September 30, 1999, and
during the preceding two fiscal years, there has been no established market for
the Registrant's common stock and to the best of the Registrants knowledge there
has been no trading before May of 1999. The bid price on June 30, 2000 was
$1.25. There are no outstanding options or warrants to purchase any Common
Stock, as all previously issued warrants have expired by their terms. Any market
price for shares of common stock of the Company is likely to be very volatile,
and numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and continue
to experience, extreme price and volume fluctuations which have affected the
market price of many small capital companies and which have often been unrelated
to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop.
PART II - OTHER INFORMATION.
----------------------------
Item 1. Legal Proceedings
-----------------
There are no pending legal proceedings involving the Registrant and the
Registrant is not aware of any proceeding that any governmental authority or any
other party is contemplating.
Item 2. Changes in Securities
---------------------
On April 19, 2000, at the Annual Meeting of the Shareholders of the
Registrant, the Shareholders approved the reincorporation and change of domicile
of the Registrant from Colorado to Nevada. The Articles of Incorporation of the
Condor Capital, Inc., a Nevada Corporation, which are now in effect are attached
to the Proxy Statement of the Registrant on Form 14A, filed on March 28, 2000 a,
which is incorporated herein by reference.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not required.
12
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) On April 19, 2000, the Annual Meeting of Shareholders of the Registrant
was held. Of the Company's 20,155,010 shares of Common Stock entitled to vote at
the meeting, 14,780,981 were represented, either in person or by proxy. The
purpose of the meeting was to consider and act upon the following proposals:
1. Election of three (3) Directors for a term of one year each;
2. Ratification of the appointment of Jones, Jensen & Company as the
Company's (now known as H & J Associates, LLC) independent accountants
for the fiscal year 2000;
3. To consider and vote upon a proposed change in the Company's state of
incorporation from Colorado to Nevada;
4. The adoption of the Condor Capital, Inc., 2000 Stock Option Plan;
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
(b) At this Annual Meeting the following persons were elected as Directors
of the Registrant: Lee E. Gahr, W. Patrick Battista, and George H. Lerg.
Votes for all nominees 14,780,768
Withhold Authority for all nominees 213
(c) At this Annual Meeting, the following other matters were voted on with
the number of votes cast for, against or withheld, and abstentions as to each
matter as follows:
Proposal No. 2 - Ratification of the appointment of Jones, Jensen &
Company (now known as H & J Associates, LLC) as the Company's
independent accountants for the fiscal year 2000.
Votes for 14,179,583
Votes against 0
Abstaining 601,398
Proposal No. 3 - To consider and vote upon a proposed change in the
Company's state of incorporation from Colorado to Nevada.
Votes for 14,179,575
Votes against 2
Abstaining 601,404
Proposal No. 4 - The adoption of the Condor Capital, Inc., 2000 Stock
Option Plan.
Votes for 14,173,351
Votes against 5,216
Abstaining 602,414
Shareholders of record at the close of business on March 17, 2000, were
entitled to notice and to vote at the meeting or any postponements or
adjournments.
Item 5. Other Information
-----------------
None
13
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) List of Exhibits attached or incorporated by referenced pursuant to
Item 601 of Regulation S-B.
Exhibit
Number Description
------ -----------
2.1(a)(+) Acquisition Agreement and Plan of Reorganization with Rogart
Limited, a corporation organized under the laws of the Turkish
Republic of Northern Cyprus. (Incorporated from the Registrants Form
8-K filed February 16, 2000, Commission file number 33-20848-D)
2.1(b)(+) Articles of Merger of Condor Capital, Inc. a Colorado Corporation
into Condor Capital, Inc. a Nevada Corporation. (Incorporated from the
Registrants Form 8-K filed May 17, 2000, Commission file number
33-20848-D)
3.1(a)(+) Articles of Incorporation of Registrant as amended. (Incorporated
by reference to Registrant's Form 10-KSB filed for the fiscal year
ended September 30, 1997)
3.1(b)(+) Bylaws of Registrant. (Incorporated by reference to Registrant's
Form 10-KSB filed for the fiscal year ended September 30, 1997)
3.1(c)(+) Articles of Incorporation of Condor Capital, Inc., a Nevada
Corporation (Incorporated by reference to Registrant's Form 14A Proxy
Statement filed March 28, 2000).
3.1(d)(+) Bylaws of Condor Capital, Inc. a Nevada Corporation (Incorporated
from the Registrants Form 8-K filed May 17, 2000, Commission file
number 33-20848-D)
4.1 (+) Specimen certificate for common stock. (Incorporated by reference
to Registrant's Form 10-KSB filed for the fiscal year ended September
30, 1997)
10.1(+) On March 22, 2000 the Registrant entered into a Joint Venture
Agreement with Tech-Catalyst Ventures Inc., of Vancouver, British
Columbia (Incorporated by reference to Registrant's Form 8-K filed
March 22, 2000)
10.2(+) On June 7, 2000 the Registrant entered into an Amended and Restated
Joint Venture Agreement with Tech-Catalyst Ventures Inc., of
Vancouver, British Columbia (Incorporated by reference to Registrant's
Form 8-K filed June 9, 2000) 27.1 (+)(+) Financial Data Schedule
(submitted electronically for SEC information only).
(+) Previously filed.
(+)(+) Filed herewith.
14
(b) The following reports were filed on Form 8-K during the quarter for
which this report is filed:
On June 7, 2000, the Registrant filed a Form 8-K regarding an Amended and
Restated Joint Venture Agreement with Tech-Catalyst Ventures Inc.("Tech"), of
Vancouver, British Columbia which completely amends, restates, and supersedes
the Joint Venture Agreement dated March 22, 2000 by and between the Registrant
and Tech. Under the terms of the Amended and Restated Joint Venture Agreement,
the Registrant and Tech, through Konnect Corp., a newly formed Delaware
corporation, will join to expand and grow an existing data network developed by
Applied Communications Techniques, Inc. ("ACT"), a subsidiary of Tech.
The original Joint Venture Agreement by and between the Registrant and
Tech, dated March 22, 2000 was amended to adjust and clarify the contributions,
responsibilities, share ownership, and distribution of income to both the
Registrant and Tech in order to more accurately reflect the intent of the
parties to the Joint Venture. Specifically, the Registrant's mandatory capital
contribution will decrease from $1,500,000 to $1,000,000. In addition, the
initial Joint Venture Agreement called for the issuance of Preferred Stock to
the Registrant and Common Stock to Tech, and under the Amended and Restated
Joint Venture Agreement, each party shall receive an equal number of shares of
Common Stock of Konnect Corp.
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the Undersigned, thereunto duly authorized.
CONDOR CAPITAL INC.
(Registrant)
August 18, 2000 /s/ Lee Gahr
------------------------
By: Lee Gahr
President
August 18, 2000 /s/ W. Patrick Battista
------------------------
By: W. Patrick Battista
Secretary
15