-----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, N/x40/8Pb8SSRzTy4wcxSCjTyXHsq/0lIYNnlqiK7Sr53y6ez7KjA17eTlrTDoXh Sp0FKMUsFOxcb3th4jjITQ== 0000950148-99-002576.txt : 19991123 0000950148-99-002576.hdr.sgml : 19991123 ACCESSION NUMBER: 0000950148-99-002576 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DISCOVERY INVESTMENTS INC CENTRAL INDEX KEY: 0001083459 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 88049151 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26175 FILM NUMBER: 99762269 BUSINESS ADDRESS: STREET 1: 2980 S RAINBOW BLVD STREET 2: SUITE 108 CITY: LAS VEGAS STATE: NV ZIP: 89102 BUSINESS PHONE: 7022481047 MAIL ADDRESS: STREET 1: 2980 S RAINBOW BLVD STREET 2: SUITE 108 CITY: LAS VEGAS STATE: NV ZIP: 89102 10QSB 1 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 1999. OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________. COMMISSION FILE NUMBER 000-26175 DISCOVERY INVESTMENTS, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 88-0409151 ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2980 S. Rainbow Boulevard, Suite 108 Las Vegas, Nevada 89146 - -------------------------------------------- ---------------- (Address of principal executive offices) (Zip Code) N/A ---------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required 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 [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At September 30, 1999, there were outstanding 2,100,000 shares of the Registrant's Common Stock, $.001 par value. Transitional Small Business Disclosure Format: Yes [ ] No [X] 2 PART I FINANCIAL INFORMATION Item I. Financial Statements TABLE OF CONTENTS
PAGE ---- BALANCE SHEET - ASSETS 1 BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY 2 STATEMENT OF OPERATIONS 3 STATEMENT OF STOCKHOLDERS' EQUITY 4 STATEMENT OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-10
3 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) BALANCE SHEET ASSETS
6 Mos Ending Year Ended Sep. 30,1999 Mar.31,1999 (Unaudited) (Audited) ------------ ----------- CURRENT ASSETS $ 0 $ 0 ---------- ---------- TOTAL CURRENT ASSETS $ 0 $ 0 ---------- ---------- OTHER ASSETS $ 0 $ 0 ---------- ---------- TOTAL OTHER ASSETS $ 0 $ 0 ---------- ---------- TOTAL ASSETS $ 0 $ 0 ---------- ----------
The accompanying notes are an integral part of these financial statements - 1 - 4 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) BALANCE SHEET LIABILITIES AND STOCKHOLDERS' EQUITY
6 Mos Ending Year Ended Sep. 30, 1999 Mar. 31, 1999 (Unaudited) (Audited) ------------- ------------- CURRENT LIABILITIES Officers Advances (Note 6) $ 15,654 $ 0 -------- -------- TOTAL CURRENT LIABILITIES $ 15,654 $ 0 -------- -------- STOCKHOLDERS EQUITY (Note 1) Common stock, $.001 par value authorized 25,000,000 shares issued and outstanding at March 31, 1999 - 2,100,000 shares $ 2,100 September 30, 1999 - 2,100,000 shares $ 2,100 Additional paid in Capital 0 0 Deficit accumulated during Development stage -17,754 -2,100 -------- -------- TOTAL STOCKHOLDERS' EQUITY $-15,654 $ 0 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 0 $ 0 -------- --------
The accompanying notes are an integral part of these financial statements -2- 5 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) STATEMENT OF OPERATIONS (UNAUDITED)
Sep. 10, 1996 3 Mos Ended 3 Mos Ended 6 Mos Ended 6 Mos Ended (Inception) Sep. 30, Sep. 30, Sep. 30, Sep. 30, to Sep. 30, 1999 1998 1999 1998 1999 ---------- ---------- ---------- ---------- ---------- REVENUE: $ 0 $ 0 $ 0 $ 0 $ 0 ---------- ---------- ---------- ---------- ---------- EXPENSES: General, Selling and Administrative $ 2,429 $ 0 $ 15,654 $ 0 $ 17,754 ---------- ---------- ---------- ---------- ---------- Total Expenses $ 2,429 $ 0 $ 15,654 $ 0 $ 17,754 ---------- ---------- ---------- ---------- ---------- Net Profit/Loss (-) $ -2,429 $ 0 $ -15,654 $ 0 $ -17,754 ---------- ---------- ---------- ---------- ---------- Net Profit/Loss(-) per weighted share (Note 2) $ -.0012 $ NIL $ -.0075 $ NIL $ -.0085 ---------- ---------- ---------- ---------- ---------- Weighted average number of common shares outstanding 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 ---------- ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these financial statements -3- 6 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu- Common Stock paid-in lated Shares Amount Capital Deficit --------- --------- --------- -------- Balance, March 31, 1997 21,000 $ 2,100 $ 0 $ -2,100 Net loss year ended March 31, 1998 0 --------- --------- --------- -------- Balance, December 31, 1997 21,000 $ 2,100 $ 0 $ -2,100 March 15, 1999 Changed from NO PAR VALUE to $.001 -2,079 +2,079 March 15, 1999 Forward Stock Split 100:1 2,079,000 +2,079 -2,079 Net loss year ended March 31, 1999 0 --------- --------- --------- -------- Balance, March 31, 1999 2,100,000 $ 2,100 $ 0 $ -2,100 Net Loss, April 1, 1999, to September 30, 1999 -15,654 --------- --------- --------- -------- Balance, September 30, 1999 2,100,000 $ 2,100 $ 0 $-17,754 --------- --------- --------- --------
The accompanying notes are an integral part of these financial statements - 4 - 7 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) STATEMENT OF CASH FLOWS (UNAUDITED)
Sep. 10, 1996 3 Mos Ended 3 Mos Ended 6 Mos Ended 6 Mos Ended (Inception) Sep. 30, Sep. 30, Sep. 30, Sep 30, to Sep. 30, 1999 1998 1999 1998 1999 -------- -------- -------- -------- -------- Cash Flow from Operating Activities Net Loss $ -2,429 $ 0 $-15,654 $ 0 $-17,754 Adjustment to reconcile net loss to net cash provided by operating activities 0 0 0 0 0 Changes in Assets and Liabilities Increase in current Liabilities Officers Advances +2,429 0 +15,654 0 $+15,654 -------- -------- -------- -------- -------- Net cash used in operating Activities $ 0 $ 0 $ 0 $ 0 $ -2,100 Cash Flows from Investing Activities 0 0 0 0 0 Cash Flows from Financing Activities Issuance of Common Stock 0 0 0 0 +2,100 -------- -------- -------- -------- -------- Net increase (decrease) in cash $ 0 $ 0 $ 0 $ 0 $ 0 Cash, beginning of period 0 0 0 0 0 -------- -------- -------- -------- -------- Cash, end of period $ 0 $ 0 $ 0 $ 0 $ 0 -------- -------- -------- -------- --------
The accompanying notes are an integral part of these financial statements - 5 - 8 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 1999, and March 31, 1999 NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY The Company was organized September 10, 1996, under the laws of the State of Nevada as Discovery Investments, Inc., Inc. The Company currently has no operations and in accordance with SFAS #7, is considered a development company. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Method The Company records income and expenses on the accrual method. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and equivalents The Company maintains a cash balance in a non-interest-bearing bank that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with the maturity of three months or less are considered to be cash equivalents. There are no cash equivalents as of September 30, 1999. - 6 - 9 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 1999, and March 31, 1999 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes Income taxes are provided for using the liability method of accounting in accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary difference between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Loss Per Share Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects per share amounts that would have resulted if dilative common stock equivalents had been converted to common stock. As of September 30, 1999, the Company had no dilative common stock equivalents such as stock options. Year End The Company has selected March 31st as its year-end. - 7 - 10 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 1999, and March 31, 1999 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Year 2000 Disclosure The year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Computer programs that have time sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruption of normal business activities. Since the Company currently has no operating business and does not use any computers, and since it has no customers, suppliers or other constituents, there are no material Year 2000 concerns. NOTE 3 - INCOME TAXES There is no provision for income taxes for the period ended September 30, 1999, due to the net loss and no state income tax in Nevada, the state of the Company's domicile and operations. The Company's total deferred tax asset as of March 31, 1999, is as follows: Net operation loss carry forward $2,100 Valuation allowance $2,100 Net deferred tax asset $ 0
The federal net operating loss carry forward will expire in 2017. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. - 8 - 11 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 1999, and March 31, 1999 NOTE 4 - STOCKHOLDERS' EQUITY Common Stock The authorized common stock of Discovery Investments, Inc. consists of 25,000,000 shares with a par value of $0.001 per share. Preferred Stock Discovery Investments, Inc. has no preferred stock. On September 15, 1996, the Company issued 21,000 shares of its no par value common stock in consideration of $2,100 in cash. On March 15, 1999, the Company filed with the Secretary of State of Nevada, a Certificate of Amendment of its Articles of Incorporation, which increased its capitalization from 25,000 common shares to 25,000,000 common shares. The no par value was changed to $0.001. Further, the Company forward split its common stock 100:1, thus increasing the number of outstanding common stock shares from 21,000 shares to 2,100,000. NOTE 5 - 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. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. It is the intent of the Company to seek a merger with an existing, operating company. Until that time, the stockholders/officers and or directors have committed to advancing the operating costs of the Company interest free. - 9 - 12 DISCOVERY INVESTMENTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (CONTINUED) September 30, 1999, and March 31, 1999 NOTE 6 - RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. An officer of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. NOTE 7 - WARRANTS AND OPTIONS There are no warrants or options outstanding to acquire any additional shares of common stock. - 10 - 13 Item II. Management's Discussion and Analysis or Plan of Operation Results of Operation. The Company has not commenced business activities and has no assets or operations. The Company has commenced negotiations with the shareholders of LLO-Gas, Inc., a Delaware corporation, to acquire the company. See Part II, Item 5, below. Until such time as the Company has completed this acquisition, the Company is dependent upon its officers to meet any de minimis costs which may occur. Kimberly Lynn Jack, an officer and director of the Company, has agreed to provide the necessary funds, without interest, for the Company to comply with the Securities Exchange Act of 1934, as amended, provided that she is an officer and director of the Company when the obligation is incurred. All advances are interest-free. In addition, since the Company has had no operating history nor any revenues or earnings from operations, with no significant assets or financial resources, the Company will in all likelihood sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in the Company incurring a net operating loss which will increase continuously until the Company can consummate a business combination with a profitable business opportunity and consummate such a business combination. PART II OTHER INFORMATION Item 1 - Legal Proceedings ...........................................None Item 2 - Changes in the Rights of the Company's Security Holders ............................................None Item 3 - Defaults by the Company on its Senior Securities ...........................................None Item 4 - Submission of Matter to Vote of Security Holders .....................................................None 14 Item 5 - Other Information The Company has entered into a Letter of Intent to acquire all of the issued and outstanding stock of LLO-Gas, Inc., a Delaware corporation, in exchange for not to exceed 8,500,000 shares of the common stock of the Company. LLO-Gas, Inc. owns seven (7) ARCO AM/PM gas station/convenience stores recently acquired from Atlantic Richfield Company, a Delaware corporation. The total purchase price paid by LLO-Gas, Inc. on or about October 26, 1999 to Atlantic Richfield Company was the approximately sum of $9,467,000. Credit Suisse/CSFC provided secured financing in the approximate sum of $7,750,000 to LLO- Gas, Inc. to complete the transaction and the balance of the funds was provided by unsecured loans from third parties or from cash contributions or loans to LLO-Gas, Inc. by its shareholder(s). The Company and the shareholder(s) of LLO-Gas, Inc. are in the process of completing the definitive agreements covering the proposed transaction which will include LLO-Gas, Inc.'s, representations and warranties satisfactory to the parties that LLO-Gas, Inc. will have proper financial information and such additional information so that the Company can file all applicable documents to comply with the Securities Act of 1934, as amended. Item 6 - Exhibits and Reports on Form 8-K .................................None SIGNATURE Pursuant to the requirements 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. Dated: November 19, 1999 DISCOVERY INVESTMENTS, INC. (Company) By: /s/ Kimberly Lynn Jack -------------------------- Kimberly Lynn Jack President EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS MAR-31-1999 JAN-01-1999 SEP-30-1999 0 0 0 0 0 0 0 0 0 15,654 0 0 0 2,100 (15,654) 0 0 0 0 2,429 0 2,429 0 0 0 0 0 0 0 (2,429) (.001) (.001)
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