-----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, Rah0lzGVRHbIxIxPy8CQpcSwAr74DVI9v4mbsO3I9hLbms5rq7+BkcKPWntjS5Q4 1cHZVlBioTxrEMovEjEEfg== 0001123312-02-000004.txt : 20020802 0001123312-02-000004.hdr.sgml : 20020802 20020513140908 ACCESSION NUMBER: 0001123312-02-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020330 FILED AS OF DATE: 20020513 DATE AS OF CHANGE: 20020802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NICHOLAS INVESTMENT CO INC CENTRAL INDEX KEY: 0001123312 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330788829 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-31899 FILM NUMBER: 02643350 BUSINESS ADDRESS: STREET 1: P O BOX 370420 CITY: SAN DIEGO STATE: CA ZIP: 92137 MAIL ADDRESS: STREET 1: NICHOLAS INVESTMENT CO INC STREET 2: P O BOX 370420 CITY: SAN DIEGO STATE: CA ZIP: 92137 FORMER COMPANY: FORMER CONFORMED NAME: NICHOLAS INVESTMENT INC DATE OF NAME CHANGE: 20000905 10KSB 1 tenkmay.txt 10K 3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q SB (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter report ended March 31, 2002 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ___________ Commission File number 000-31899 NICHOLAS INVESTMENT COMPANY, INC. (Exact name of small business issuer as registrant as specified in charter) Nevada 33-0788293 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2220 Otay Lake Rd., #50925, Eastlake, CA 91915 (Address of principal executive office) Registrants telephone no., including area code (619) 421-5492 N/A (Former name, changed since last report) Check 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), Yes [X] No [ ] and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date. Class Outstanding as of March 31, 2002 Common Stock, $0.001 11,345,250 i TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION Heading Page Item 1. Consolidated Financial Statements 1 Consolidated Balance Sheets March 31, 2002 And December 31, 2001 2 Consolidated Statements of Operations three months Ended March 31, 2002 and March 31, 2001 3 Consolidated Statement of Stockholders Equity 4 Consolidated Statements of Cash Flows three months Ended March 31, 2002 and 2001 5 Notes to Consolidated Financial Statements 6 Item 2. Managements Discussion and Analysis and Results of Operations 7-8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 8 Item 2. Changes in Security 8 Item 3. Defaults Upon Senior Securities 8 Item 4. Submission of Matter to a Vote of 8 Securities Holders Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 Signatures S-1 ii PART 1 FINANCIAL INFORMATION Item 1. Financial Statement The accompanying unaudited financial statements have been prepared in accordance with the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The unaudited balance sheet of the Company as of March 31, 2002, and the balance sheet of the Company as of December 31, 2001, derived from the Companys audited financial statements and the unaudited statement of operations and cash flows for the three months ended March 31, 2002 and 2001, the statements of stockholders equity for the period from December 31, 1999 through March 31, 2002 are attached hereto and incorporated herein by this reference. Operating results for the quarters ended March 31, 2002 are not necessarily indicative of the results that can be expected for the year ending December 31, 2002. NICHOLAS INVESTMENT COMPANY FINANCIAL STATEMENTS March 31, 2002 and December 31, 2001 NICHOLAS INVESTMENT COMPANY Balance Sheets ASSETS March 31, December 31, 2002 2001 (Unaudited) CURRENT ASSETS Cash$ 8,257 $ 15,573 Prepaid interest 1,548 - Accounts receivable 1,000 - Total Current Assets 10,805 15,573 PROPERTY - NET 529,063 529,582 TOTAL ASSETS $ 539,868 $ 545,155 LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Accounts payable $ 2,021 $ 1,537 Accrued expenses 23,000 23,000 Notes payable, current portion 4,314 5,681 Notes payable, current portion (related party) 1,303 2,187 Total Current Liabilities 30,638 32,405 LONG-TERM LIABILITIES Notes payable (related party) 295,410 295,410 Notes payable 155,491 155,491 Total Long-Term Liabilities 450,901 450,901 Total Liabilities 481,539 483,306 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS EQUITY Common stock: $0.001 par value, authorized 100,000,000 shares; 11,345,250 shares issued and outstanding 11,345 11,345 Additional paid-in capital 374,371 374,371 Accumulated deficit (327,387) (323,867) Total Stockholders Equity 58,329 61,849 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 539,868 $ 545,155 The accompanying notes are an integral part of these financial statements. NICHOLAS INVESTMENT COMPANY Statements of Operations (Unaudited) For the Three Months Ended March 31, 2002 2001 REVENUES Rental revenue $ 13,675 $ 11,765 Total Revenues 13,675 11,765 OPERATING COSTS Amortization and depreciation 2,330 2,217 General and administrative 4,303 6,593 Total Operating Costs 6,633 8,810 INCOME FROM OPERATIONS 7,042 2,955 OTHER EXPENSE Interest expense 10,562 9,684 Total Other Expense 10,562 9,684 LOSS BEFORE TAXES (3,520) (6,729) INCOME TAX EXPENSE - - NET LOSS $ (3,520) $ (6,729) BASIC LOSS PER COMMON SHARE $ (0.00) $ (0.00) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 11,345,250 11,345,250 The accompanying notes are an integral part of these financial statements. NICHOLAS INVESTMENT COMPANY Statements of Stockholders Equity Common Stock Shares Amount Balance, December 31, 1999 10,795,250 $ 10,795 March 16, 2000 common stock issued at $0.20 per share for conversion of related party debt 550,000 550 Net loss for the year ended December 31, 2000 - - Balance, December 31, 2000 11,345,250 11,345 Net loss for the year ended December 31, 2001 - - Balance, December 31, 2001 11,345,250 11,345 Net loss for the three months ended March 31, 2002 (unaudited) - - Balance, March 31, 2002 (unaudited) 11,345,250 $ 11,345 Additional Paid in Accumulated Capital deficit Balance, December 31, 1999 $ 264,921 $(218,520) March 16, 2000 common stock issued at $0.20 per share for conversion of related party debt 109,450 - Net loss for the year ended December 31, 2000 - (85,747) Balance, December 31, 2000 374,371 (304,267) Net loss for the year ended December 31, 2001 - (19,600) Balance, December 31, 2001 374,371 (323,867) Net loss for the three months ended March 31, 2002 (unaudited) - (3,520) Balance, March 31, 2002 (unaudited) $ 374,371 $(327,387) The accompanying notes are an integral part of these financial statements. NICHOLAS INVESTMENT COMPANY Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Loss from operations $ (3,520) $ (6,729) Adjustments to reconcile net income to net cash used by operating activities: Amortization and epreciation expense 2,330 2,217 Changes in operating assets and liabilities: (Increase) in accounts receivable (1,000) - Decrease in accounts payable 486 2,092 Decrease in accrued expenses - (10,000) (Increase) in prepaid interest (1,548) - Net Cash (Used) by Operating Activities (3,252) (12,420) CASH FLOWS FROM INVESTING ACTIVITIES: Improvement of property (1,811) - Net Cash Used by Investing Activities (1,811) - CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments in long-term debt (2,253) (1,279) Net Cash (Used) by Financing Activities (2,253) (1,279) (DECREASE) IN CASH (7,316) (13,699) CASH AT BEGINNING OF PERIOD 15,573 47,338 CASH AT END OF PERIOD $ 8,257 $ 33,639 Cash paid for: Interest $ 10,562 $ 9,684 Income taxes $ $ - Non-Cash Financing Activities: The accompanying notes are an integral part of these financial statements. NICHOLAS INVESTMENT COMPANY Notes to the Financial Statements March 31, 2002 and December 31, 2001 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the 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 in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Companys most recent audited financial statements and notes thereto included in its December 31, 2001 Annual Report on Form 10-KSB. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. NOTE 2 - GOING CONCERN The Companys 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 complete a limited offering of its common stock. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses; however, there can be no assurance that the plans of management will prove successful. NOTE 3 - SUBSEQUENT EVENT On April 1, 2002, the Company entered into an agreement with Virgin Lakes Development Corp., in which the Company bought 100% of the equity interest (common stock) of Virgin Lakes Development Corp., in exchange for 6,000,000 shares of the Companys common stock. Further information can be found in the Companys 8-K dated April 15, 2002. ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Going Concern and Ability of the Company to Continue The Company has a net operating loss carry forward of $327,387 since inception through March 31, 2002. The Companys consolidated 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. Management believes that the Company will soon be able to generate revenues sufficient to cover its operating costs. In the interim, the Company intends to raise additional capital through private placements of its common stock. Liquidity and Capital Resources As of March 31, 2002 the Company has $10,805 in total current assets compared to total current assets of $ 15,573 for the same period of 2001. The current assets are comprised of $8,257 in cash, $1,000 in accounts receivable and $1,548 in prepaid expenses. The Company has total current liabilities of $30,638 as of March 31, 2002 compared to current liabilities of $32,405 for the same period of 2001. The current liabilities are comprised of $ 25,021 in accrued expenses, $ 4,314 in current portion of mortgages payable and $1,303 in current portion of notes due to a related party. The Company is involved in a best efforts financing in order to increase the Companys liquidity and capital resources. Results of Operations For the first quarter ended March 31, 2002 the Company had revenues of $13,675 and expenses of $17,195 compared to revenues of $11,765 and expenses of $18,494 as of March 31, 2001. The reason for the increase in revenues is due to the fact that the Company had a vacancy for one month in one of its properties in the first quarter of 2001. General and Administrative expense dropped $2,090 when compared to the same period the year before. Interest expense increased $ 878 for the three months ended March 31, 2002 compared to the same period the year before because of a second mortgage that was taken out on the Manos property in the second half of 2001. Net Operating Loss The Company has accumulated approximately $327,387 of net operating losses carryforwards as of March 31, 2002, which maybe offset against taxable income and income taxes in future years. The use of these to losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net loss carryforwards. The carryforwards expire in the year 2022. In the event of certain changes in control of the Company, there will be an annual limitation on the amount of carryforwards, which can be used. Sale of Common Capital Stock None. Risk Factors and Cautionary Statements Forward-looking statements in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company wished to advise readers that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed on or implied by the statements, including, but not limited to, the following: the ability of the Company to successfully meet its cash and working capital needs, the ability of the Company to successfully market its product, and other risks detailed in the Companys periodic report filings with the Securities and Exchange Commission. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITES None. ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON 8-K a. Form 10SBA filed by reference on March 7, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed in its behalf by the undersigned hereto duly authorized. NICHOLAS INVESTMENT COMPANY INC. Dated: May 13, 2002 By:/S/ John Kirchner John Kirchner President S-1 -----END PRIVACY-ENHANCED MESSAGE-----