-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GLySrzIqlnebV30IdnkvpiDGsjdaNbDMH8GRxp4Hxqnb8l5EstQd7jJKCo1YPhij E7dopYeTBk3kHAN+G4lWiw== 0001077357-00-000176.txt : 20000522 0001077357-00-000176.hdr.sgml : 20000522 ACCESSION NUMBER: 0001077357-00-000176 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CUIDAO HOLDING CORP CENTRAL INDEX KEY: 0001018765 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-BEER, WINE & DISTILLED ALCOHOLIC BEVERAGES [5180] IRS NUMBER: 650639616 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 333-43457 FILM NUMBER: 639893 BUSINESS ADDRESS: STREET 1: 3201 W GRIFFIN STREET 2: STE 204 CITY: FT LAUDERDALE STATE: FL ZIP: 33312 BUSINESS PHONE: 9549641060 MAIL ADDRESS: STREET 1: 3201 W GRIFFIN STREET 2: STE 204 CITY: FT LAUDERDALE STATE: FL ZIP: 33312 10QSB 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 [_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____________ to ____________ Commission File Number: 333-43497 CUIDAO HOLDING CORP. -------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) FLORIDA 65-0639616 - ------------------------------------------ -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2951 SIMMS STREET HOLLYWOOD, FL 33020-1510 - ------------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number: (954) 924-0047 Securities to be registered under Section 12(b) of the Act: Title of each class Name of each exchange on which registered None None - ----------------------------------- --------------------------- Securities to be registered under Section 12(g) of the Act: Common Stock, $.0001 par value per share -------------------------------------------------------- (Title of class) Copies of Communications Sent to: Mintmire & Associates 265 Sunrise Avenue, Suite 204 Palm Beach, FL 33480 Tel: (561) 832-5696 - Fax: (561) 659-5371 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 the past 90 days: Yes x No --------- --------- 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 court. Yes No ------ ------- 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: At March 31, 2000, the registrant had outstanding 2,402,175 shares of common stock, par value $0.0001, which is the registrant's only class of common stock. Part I. FINANCIAL INFORMATION
CUIDAO HOLDING CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2000 DECEMBER 31, (UNAUDITED) 1999 (AUDITED) ASSETS Current Assets: Cash and Cash Equivalents $ - $ 1,533 Accounts Receivable 20,631 27,422 Inventory 231,867 304,346 ------------- ------------- Total Current Assets 252,498 333,301 ------------- ------------- Property, Plant and Equipment (Net of $26,701 and $22,113 accumulated depreciation at March 31, 2000 and December 31, 1999) 586,323 584,873 ------------- ------------- Other Assets: Goodwill (Net of $15,000 and $13,333 accumulated amortization at March 31, 2000 and December 31, 1999) - 1,667 Organizational Costs (Net of $1,125 and $1,048 accumulated amortization at March 31, 2000 and December 31, 1999) 415 492 Deferred Loan Costs (Net of $4,375 and $3,500 accumulated amortization at March 31, 2000 and December 31, 1999) 6,125 7,000 Deposits and Escrow Balances 8,895 19,314 ------------- ------------- Total Other Assets 15,435 28,473 ------------- ------------- Total Assets $ 854,256 $ 946,647 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Cash Overdraft $ 10,148 $ - Accounts Payable and Accrued Expenses 387,401 417,616 Security Deposits 2,700 5,724 Notes Payable - Current Portion 179,279 48,324 Unearned Revenue 3,024 - ------------- ------------- Total Current Liabilities 582,552 471,664 Long Term Liabilities: Notes Payable 352,072 480,000 ------------- ------------- Total Liabilities 934,624 951,664 ------------- ------------- Stockholders' Equity: Common Stock, $.0001 Par Value; 100,000,000 Shares Authorized; 2,402,175 Issued and Outstanding 240 240 Additional Paid In Capital 768,812 768,812 Accumulated Deficit (849,420) (774,069) ------------- -------------- Total Stockholders' Equity (80,368) (5,017) ------------- -------------- Total Liabilities and Stockholders' Equity $ 854,256 $ 946,647 ============= ==============
CUIDAO HOLDING CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED) 2000 1999 Revenues $ 93,877 $ 24,683 Cost of Goods Sold 37,897 19,920 ---------------- ---------------- Gross Profit 55,980 4,763 Operating Expenses: General and Administrative 112,948 101,975 ---------------- ---------------- Income (Loss) Before Interest Expense (56,968) (97,212) Interest Expense 18,383 377 Net Income (Loss) $ (75,351) $ (97,589) ================ ================ Loss Per Common Share $ (0.0271) $ (0.0410) ================ ================ Weighted Average Common Shares Outstanding 2,402,175 2,356,175 ================ ================
CUIDAO HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED) 2000 1999 Cash Flow from Operating Activities: Net (Loss) $ (75,351) $ (97,589) Adjustments to Reconcile Net Loss to Net Cash Used For Operating Activities: Depreciation and Amortization 7,207 7,017 Changes in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 6,791 (10,022) (Increase) Decrease in Inventory 72,479 (17,472) (Increase) Decrease in Prepayments and Deposits 10,419 29,054 Increase (Decrease) in Cash Overdraft 10,148 - Increase (Decrease) in Accounts Payable and Accrued Expenses (30,215) 5,177 Increase (Decrease) in Security Deposits (3,024) - Increase (Decrease) in Unearned Revenue 3,024 - ---------------- ---------------- Net Cash Used in Operating Activities 1,478 (83,835) ---------------- ---------------- Cash Flow from Investing Activities: Acquisition of Equipment and Building (6,038) (593,057) Cash Flow from Financing Activities: Increase in Loans Payable 3,027 8,209 Increase in Mortgage Payable - 480,000 ---------------- ---------------- Net Cash Used in Financing Activities 3,027 488,209 ---------------- ---------------- Net increase (decrease) in Cash (1,533) (188,683) Cash - Beginning 1,533 353,281 Cash - Ending $ - $ 164,598 ================ ================
CUIDAO HOLDING CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) GENERAL Basis of Presentation - The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary. Intercompany balances have been eliminated in consolidation. Interim Financial Information - The financial information contained herein is unaudited but includes all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the information set forth. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements, which are included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999.The Company's results for interim periods are not necessarily indicative of results to be expected for the fiscal year of the Company ending December 31, 2000. The Company believes that this Quarterly Report filed on Form 10- QSB is representative of its financial position, its results of operations and its cash flows for the periods ended March 31, 2000 and 1999 covered thereby. Comprehensive Income - In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 requires companies to disclose comprehensive income and its components. The Company currently has no items of other comprehensive income and therefore SFAS 130 does not apply. LEGAL PROCEEDINGS As of March 31, 2000, the Company was in default under the terms of its Second Mortgage Promissory Note. In addition the monthly payments for February and March of 2000 are in arrears. A lease with a national credit tenant for fifty percent of the Company's building is out for signature. It is the goal of such refinancing to reduce the overall debt of the Company by paying down the amount being financed and also secure said loan at a more competitive interest rate. Full execution of this lease is expected during May of 2000. In such event that refinancing is not immediately accomplished, bridge financing has been arranged to bring payments current. The Company has filed a lawsuit against Investors Conceptual, Inc. This action is with reference to non-payment and default on the part of Investors Conceptual, Inc., as to funds owed to the Company. The Company received a judgement against it due to non-payment of an obligation to a vendor. The Company's legal council feels that there is a good chance to have the judgement adjusted favorably in appeal. The Company is also investigating if the vendor will be willing to accept a settlement offer in lieu of an appeal. Item 2. Management's Discussion and Analysis General The Company's current portfolio of beers consists of the following line of beers produced in the People's Republic of China by Tsingtao Brewery No. 3, a brewery owned and operated by Tsingtao Brewery Co., Ltd., Red Dragon Draft, Red Dragon Light, and Red Dragon Amber. The Company's marketing strategy for its line of Chinese beer is to first introduce its Red Dragon product line to Asian-theme restaurants (primarily Chinese restaurants), stressing the fact that the Company's line of Chinese beer products will provide the restaurateur with a product that he or she currently does not have, which is a diversified light, extreme, amber and draft Chinese beer line. With its wine products, the Company's objective is to successfully introduce a profitable line of imported wines into the United States retail market. The Company's marketing and sales strategy with respect to its wine products will be to provide the off premise merchandise market with quality products at a reasonable cost to the retailer and the consumer. During the balance of 2000, the Company plans to expand the number of alcoholic beverage products under its management, as well as increase the number of distribution channels for its products. This expansion may be accomplished by the acquisition of other importers and/or distributors of alcoholic beverage products. Currently, the Company is involved in negotiation to acquire a distributor of alcoholic beverage products. These negotiations have not been finalized, and there is no assurance that they will be finalized. The Company intends on continuing three basic principal objectives: (1) aggressively manage and market its current portfolio of beers, wines and spirits in specific niche markets of the overall alcoholic beverage industry; (2) expand its management and administrative personnel to support its alcoholic beverage product lines; and (3) expand its product line and distribution channels through strategic alliances and/or through acquisitions of other importers and distributors of alcoholic beverage products or through the acquisition of producers of alcoholic beverage products. Results of Operations During the three month period ending March 31, 2000, the Company increased its revenues $69,194, or approximately 280%, compared to revenues during the comparable period of 1999. The increased revenues resulted primarily from an increase in sales, which is a direct result of the Company's overall marketing efforts. The Company did not receive rent revenue from a portion of the Company's new facility, which was at one time leased to an airline. This portion of the Company's new facility and is presently vacant. Management believes that continued implementation and expansion of the Company's use of beer distributors and an increase in wine and liquor sales by using a similar method will have a positive result on sales and revenues in the future. In the Company's pursuit of additional maketing opprotunities, management has entered a short-term trial distribution alliance with another South Florida based beer importer and distributor. Through it's distributiion alliance with World Class Beer Imports, the Company expects to maximize its rollout of the RED DRAGON beer products by reaching more retail and specialty stores, without increasing the Company's personel enumeration. Personel enumeration will be increased by hiring an Asian brand development/salesperson to work specifically with the on premise accounts and to assist out of state distributors on a part time basis. With reference to the various alcoholic products marketed both on a wholesale basis and as a distributor, profit percentages for various products vary depending on which product is being marketed and depending on which venue it is marketed through; i.e., whether to a wholesaler or marketed directly to retailers by the Company acting in some instances as its own distributor. Usually, beer products marketed to other distributors have approximately 25% to 30% profit, while wine and spirit products should have between 35% to 40% profit. These gross profit margins represent an amount over and above the cost of goods sold including all shipping, freight and duty (U.S. Custom charges). When the Company acts as its own distributor, the gross margins are higher due to the Company capturing the profit margins the distributor adds on to goods which are sold to retailers, which is usually an additional 25% to 30%. Thus on goods sold by the Company, acting as its own distributor will result in a gross profit margins of approximately 45% to 55%. Overhead and cost of operations, office, warehouse, marketing expense and administrative staff, etc., is paid out of the revenues generated through the traditional and/or non-traditional means described above. It is a primary concern of the Company to keep all expenses to as much of a minimum as possible without sacrificing the quality of marketing of any products or any areas which need to be explored. This is why the Company has limited the amount of administrative staff and why many duties which are normally delegated are being performed by management. Essentially the philosophy of management is to be as professional as possible in the marketing of products and establishment of distributors and simultaneously to be frugal as possible with the limited funds it has available. Financial Condition The Company's balance sheet for the period ended March 31, 2000, reflects the acquisition of a new building. Management concluded that in both short and long term, it was more financially prudent to own its own facility than to pay a total rent which was higher than the resulting mortgage. There is no assurance that management will be successful in raising additional working capital. Management believes that if the Company resolves its working capital shortage, sales and revenues will significantly increase. Liquidity and Capital Resources The Company's products, particularly its beer products, are receiving market acceptance. Sales growth has been and continues to be constrained by the Company's shortage of working capital. The Company's suppliers require payment at or before time of shipment and the Company's customers do not pay for the products until they receive them. The Company does not have adequate working capital to import sufficient products to meet market demand. As a result of this capital shortage, management has obtained export credit insurance for a portion of its purchases from France. At the end of the third quarter 1999, management finalized a distribution alliance with a major wine producer located in Beaune, France. The result of this credit facilitation and renewing our previously partial credit arrangements with our beer supplier will increase revenue, inventory terms, and resulting profits. Management, subsequent to the end of this quarterly filing, has negotiated and entered into an advisory agreement with Infinity Consulting Group, Inc. of Ft. lauderdale, Florida, to assist the Company in general business and financial issues, consulting the introduction of the Company to public relations firms and others that may assist the Company in raising equity capital via debentures, private placements, or secondary public offerings. Forward-looking Statements This Quarterly Report on Form 10-QSB contains statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical assumptions or facts. Specifically, this report contains forward-looking statements regarding anticipated future sales and revenues and the methods and strategies of increasing those sales and revenues. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to, management's ability to implement its marketing strategy, the availability of capital through sale of additional common stock or other means, including the availability of products for sale through credit insurance and distribution alliances, changes in general economic conditions, foreign exchange rate fluctuations, competitive product and pricing pressures, the impact of tax increases with respect to alcoholic beverage products, regulatory developments, as well as other risk and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitation, data contained in the Company's records and other available data from third parties, but there can be no assurance that management's expectations, beliefs or projections will result, or be achieved, or be accomplished. Part II. Item 1. Legal Proceedings The Company has filed a financial lawsuit against Investors Conceptual Services Incorporated. This action is with reference to non-pyment on the part of Investors Conceptual Services Incorporated, as to funds owed to the Company. The amount of this debt was specified within an obligatory agreement, which was agreed to, by and between the Company and Investors Conceptual Services Incorporated. As of December 31, 1999, the Company had a disputed bill relating to printing charges with Bowne of Los Angeles. As of the date of this filing the Company is in the process of attempting to resolve an equitable settlement with reference to this disputed amount. Upon an unsatisfactory resolvement as to a settlement, the Company anticipates filing an appeal with the appropriate Court in California. As of March 31, 2000, the Company was in default under the terms of its Second Mortgage Promissory Note. In addition the monthly payments for February and March of 2000 are in arrears. A lease with a national credit tenant for fifty percent of the Company's building is out for signature. It is the goal of such refinancing to reduce the overall debt of the Company by paying down the amount being financed and also secure said loan at a more competitive interest rate. Full execution of this lease is expected during May of 2000. In such event that refinancing is not immediately accomplished, bridge financing has been arranged to bring payments current. The Company received a judgement against it due to non-payment of an obligation to a vendor. The Company's legal council feels that there is a good chance to have the judgement adjusted favorably in appeal. The Company is also investigating if the vendor will be willing to accept a settlement offer in lieu of an appeal. 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 Item 5. Other Information NONE Item 6. Exhibits and Reports on Form 8-K (a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as described in the following index of exhibits, are incorporated herein by reference, as follows: Exhibit No. Description - ---------- ------------------------------------------------------------ 3.0 Amended and Restated Articles of Incorporation of Cuidao Holding Corp.(1) 3.1 Bylaws of Cuidao Holding Corp.(1) 4.0 Specimen Stock Certificate(1) 10.0 Cuidao Holding Corp. 1999 Equity Incentive Plan(1) 10.1 Cuidao Holding Corp. 1997 Directors' Stock Option Plan(1) 10.2 Import and Distribution Agreement by and between Cuidao Holding Corp. and the People's Republic of China, Tsingtao Brewery No. 3 Co., Ltd.(1) 10.3 Import and Distribution Agreement by and between Cuidao Holding Corp. and Cave duVignoble Gursonnais(1) 10.4 Import and Distribution Agreement by and between Cuidao Holding Corp. and Les Chais du Prevot(1) 10.5 Import and Distribution Agreement by and between Cuidao Holding Corp. and Vignerons De Buzet(1)
10.6 Import and Distribution Agreement by and between Cuidao Holding Corp. and Godet Freres(1) 10.7 Form of Lock-Up Agreement by and between Cuidao Holding Corp., West America Securities Corp. and certain shareholders of Cuidao Holding Corp.(1) 10.8 Form of Promotional Share Lock-In Agreement by and between Cuidao Holding Corp. and certain shareholders of Cuidao Holding Corp.(1) 10.9 Promissory Note and Mortgage and Security Agreement dated January 22, 1999 by and between Cuidao Holding Corp. and Em-Star Mortgage Co. 10.10 Promissory Note dated January 22, 1999 by and between Cuidao Holding Corp. and Sebastiano Salemi and Nunzia Salemi, as husband and wife. 10.12 Assignment of Lease Agreement dated January 22, 1999 by and between Sebastiano Salemi and Nunzia Salemi, as husband and wife, and Cuidao Holding Corp. 21.0 Subsidiaries of Cuidao Holding Corp. 27.0 * Financial Data Schedule
- --------------------------------------------- (1) Incorporated herein by reference to the Company's Registration Statement on Form SB- 2 filed on December 30, 1997. * Filed herewith (b) No Reports on Form 8-K were filed during the quarter ended March 31, 2000. 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. CUIDAO HOLDING CORP. (registrant) Dated: May 17, 2000 By: /s/ C. Michael Fisher ------------------------------------------ C. Michael Fisher President & Chief Financial Officer EX-27 2 FDS --
5 0001018765 CUIDAO HOLDING CORP. 1 U.S. Currency 3-mos Dec-31-1998 Jan-01-1999 Mar-31-1999 1 0 0 20,631 0 231,867 252,498 586,323 26,701 854,256 582,552 0 0 0 240 (80,368) 854,256 0 93,877 37,897 37,897 112,948 (56,968) 18,383 (75,351) 0 0 0 0 0 (75,351) (0.027) 0
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