-----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, F0AeVTFV5wgjex/mDeMon0S5l0qDThFXwvke31xyngJoaTX5lYetXplmmq6sQ2UC ifXeLbzic529Pty+o3mI/w== 0000868667-99-000040.txt : 19991022 0000868667-99-000040.hdr.sgml : 19991022 ACCESSION NUMBER: 0000868667-99-000040 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19991021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERALD CAPITAL HOLDINGS INC CENTRAL INDEX KEY: 0000868667 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 223096351 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-19490 FILM NUMBER: 99731920 BUSINESS ADDRESS: STREET 1: 4193 S TAMIAMI TRAIL # 140 CITY: VENICE STATE: FL ZIP: 34293 BUSINESS PHONE: 9414845995 MAIL ADDRESS: STREET 1: 4193 S TAMIAMI TRAIL # 140 CITY: VENICE STATE: FL ZIP: 34293 FORMER COMPANY: FORMER CONFORMED NAME: LICON INTERNATIONAL INC DATE OF NAME CHANGE: 19930328 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 1998 [ ] 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 0-19490 EMERALD CAPITAL HOLDINGS, INC. (Exact name of Issuer as specified in charter) DELAWARE 22-3096351 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4195 S. Tamiami Trail, #140, Venice, Fl. 34293 (Address of principal executive offices)(zip code) (941) 484 5995 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.001, 1991 Warrants. 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 _____ Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in a definitive proxy or information statements incorporated by reference in Part III of this Form 10-QSB or any amendment to this Form 10-QSB. [__X___] The issuer's aggregate revenues, excluding discontinued operations, for the quarter ended March 31, 1998 were $0._________. As of March 31, 1998 (I) the aggregate market value of the shares of the registrant's common stock held by non-affiliates of the registrant was not available as the Company was awaiting listing on the OTC Bulletin Board; (ii) 1,419,533 shares of the Registrant's common stock were issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE: NONE EMERALD CAPITAL HOLDINGS, INC. BALANCE SHEET (UNAUDITED) March 31,1998 ASSETS Current Assets Cash $ - Accounts Receivable, net $ - Prepaid Expenses and other $ - Property, Plant and Equipment, net $ - Notes Receivable $ 16,000 Other Assets $ - _________ $ 16,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Bank Notes Payable $ 144,506 Notes Payable Stockholders $ 297,722 Notes Payable other $ 50,000 Accounts Payable $ 206,513 Accrued Expenses $ - $ 698,741 Stockholders Equity Preferred Stock, $.001 par value authorized 2,000,000 shares, none outstanding $ - Common Stock, $.001 par value, authorized 100,000,000 shares, issued and outstanding, 1,419,553 $ 1,418 Additional paid-in-capital $ 21,291,838 Deficit $( 21,991,997) Due from Shareholder $ - $ (698,741) See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three Months Ended March 31, March 31, 1998 1997 Sales $ - $ 22,773 Cost of Goods Sold $ - - Selling, general & administrative expenses $ - 86,148 Depreciation and Amortization $ - 724 Operating (Loss) $ - (64,099) Other (Income) Expenses Interest and other expenses $ - 8,820 Inerest and other income $ - - Net (Loss) from continuing operations $ - (72,919) Net (Loss) from discontinued $ - operations - Loss per Common Share From continued operations $ - (72,919) From discontinued operations $ - Net (loss) per share $ - (72,919) Loss per Common Share From continued operations $ - $ - Discontinued operations $ - $ (0.05) Net (loss) per share $ - $ (0.05) Weighted Average number of common shares used in computation of net (loss) per share 1,419,553 1,344,553 See accompanying notes to the financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (UNAUDITED) Common Stock Additional Cumulative Shares Amount Paid-in-Capital Translation ___________________________________ Adjustment Balance at December 31, 1996 1,344,553 $ 1,343 $ 21,277,746 $ - Issuance of Shares for cash Issuance of Shares in connection with consulting $ - and legal services Issuance in settlement of debt Net (Loss) $ - $ - $ - $ - Balance at December 31, 1997 1,419,553 $ 1,343 $ 21,277,746 $ - Issuance of Shares for cash Issuance of Shares in connection with consulting $ - and legal services Issuance in settlement of debt _________ ____________ ______________ __________ Net (Loss) $ - $ - $ - $ - Balance at March 31, 1998 1,419,553 $ 1,418 $ 21,277,746 $ - See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (UNAUDITED) Due from Deficit Total Stockholder Balance at December 31, 1996 $ (20,000) $(22,365,302) $ (1,106,213) Issuance of Shares in connection with consulting - and legal services Issuance in settlement of debt Net (Loss) $ - $ (72,919) $ (72,919) Balance at December 31, 1997 $ (20,000) $(22,438,221) $ (1,179,132) Issuance of Shares in connection with consulting - $ - $ - and legal services Issuance in settlement of debt Net (Loss) $ - $ - $ - Balance at March 31, 1998 $ (20,000) $(22,438,221) $ (1,179,132) See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three Months Ended March 31 March 31 OPERATING ACTIVITIES 1998 1997 Net (Loss) $ - $ (72,919) Non-cash adjustments: Depreciation & Amortization $ - $ 724 Common stock issued for services $ - Cash provided (used) by changes in assets $ - Accounts Receivable $ (16,498) $ (2,393) Inventories $ - $ - Prepaid Expenses & other $ - $ - Accounts payable & accrued expenses $ 25,784 $ 73,120 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ - $ (1,468) INVESTING ACTIVITIES $ - Decrease in property & $ - equipment $ (3,040) $ - Other assets $ (3,570) $ - NET CASH PROVIDED (USED) $ - BY INVESTING ACTIVITIES $ 2,676 $ - $ - FINANCING ACTIVITIES $ - Net increase in short term $ - borrowing $ 18,100 $ 1,000 Proceeds (repayments) long-term $ - debt and revolving line-of-credit $ - $ - NET CASH PROVIDED BY FINANCING ACTIVITIES $ 18,100 $ 1,000 $ - NET INCREASE (DECREASE) IN CASH $ - CASH EQUIVALENTS $ - $ (468) CASH AND CASH EQUIVALENTS, beginning $ - $ 737 $ - CASH AND CASH EQUIVALENTS,ending $ - $ 269 See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended March 31 March 31 1998 1997 Net (Loss) $ - $ (161,928) Non-cash adjustments: Depreciation & Amortization $ - $ 1,448 Common stock issued for $ - services $ - $ 14,167 Cash provided (used) by changes in assets & liabilities $ - Accounts Receivable $ (16,498) $ (1,132) Inventories $ - $ - Prepaid Expenses & other $ - $ - Accounts payable & accrued expenses $ 206,513 $ 146,240 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 190,015 $ (1,205) INVESTING ACTIVITIES Decrease in property & equipment $ (3,040) $ - Other assets $ (3,570) $ - NET CASH PROVIDED (USED) $ - BY INVESTING ACTIVITIES $ (6,610) $ - $ - FINANCING ACTIVITIES $ - Net increase in short term $ - borrowing $ 18,100 $ 1,000 Proceeds (repayments) long-term $ - debt and revolving line-of-credit $ - $ - Net proceeds of common stock issued NET CASH PROVIDED BY FINANCING ACTIVITIES $ 18,100 $ 1,000 $ - NET INCREASE (DECREASE) IN CASH $ - CASH EQUIVALENTS $ - $ (205) CASH AND CASH EQUIVALENTS, beginning $ - $ 737 $ - CASH AND CASH EQUIVALENTS,ending $ - $ 532 See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDING MARCH 31, 1998 EMERALD CAPITAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - SIGNIFICANT ACCOUNTING POLICIES Business: Emerald Capital Holdings, Inc. (Company or Emerald) is a holding company the intent of which is to acquire, manage and develop businesses in a variety of sectors. The Company has no operations. The Company is seeking acquisitions. See - "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Subsequent Events." Background The Company has significantly restructured its business and has closed or sold all unprofitable operations. See "Certain Transactions" and "Management's Discussion and Analysis of Financial Condition and Operations" and "Subsequent Events." The Company may in the future utilize the SportAde name, beverage concept and trademark for an isotonic sports drink from its former beverage subsidiary, SportAde, Inc. to enter the beverage business, or to sell, license the name and concept for or otherwise develop a beverage business. On March 29, 1996, the Company effected a one-for-one hundred twenty reverse stock split, previously approved by a majority of the Company's Common Stock holders. All share information described herein reflects such reverse stock split except as otherwise noted. Principles of Consolidation: The consolidated financial statements include the accounts of Emerald Capital Holdings, Inc. include the accounts of Emerald Capital Holdings, Inc. Preparation of Financial Statements 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Per Share Data: In 1996, the shareholders of the Company approved a one for one hundred and twenty reverse stock split. All share and per share amounts have been retroactively adjusted. Net loss per share of common stock is computed based on net loss, and the weighted average number of common shares outstanding. Common stock equivalents are anti- dilutive for all periods presented and accordingly are not included in the computation. Cash Equivalents: The Company considers all highly liquid debt securities with a maturity of three months or less when purchased to be cash equivalents for the purposes of the statement of cash flows. Inventories: Inventories, if noted, are stated at the lower of cost (first-in, first-out method) or market. Property and Equipment: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the useful lives of the assets, which range from three to thirty years. Cost in Excess of Net Assets Acquired: Cost in excess of net assets acquired is being amortized on a straight-line basis over period of ten years. The Company, on an ongoing basis, evaluates the operations using undiscounted estimated future cash flows of the acquired businesses and assesses recoverability of the recorded amounts of cost in excess of net assets acquired. Provisions for impairment are recorded upon the Company's determination that cash flows of the acquired business will be insufficient to recover the associated cost in excess of net assets acquired. Income Taxes: The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109. The statement requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Future Accounting Pronouncements: In March 1995, the Financial Accounting Standards Board issued Statement No. 121 "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," the Statement requires, among other things, impairment loss of assets to be held and gains for losses from assets that are expected to be disposed of be included as a component of income from continuing operations before taxes on income. The Company will adopt the Statement as of January 1, 1996 and its implementation is not expected to have a material effect. In October 1995, the Financial Accounting Standards Board issued Statement No. 123 "Accounting for Stock-Based Compensation." The Statement establishes a fair value method for accounting for stock-based compensation plans either through recognition or disclosure. The Company does not presently intend to adopt the fair value based method, but instead will, beginning in 1996, disclose the effects of the calculation required by the Statement. Financial Condition and Liquidity The Company's continued existence is dependent on its ability to acquire, merge or conclude a reverse merger, and/or obtain additional financing. Management's plans in regard to these matters are described below. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company incurred a loss of $0 and consumed no cash in operating activities for the period ended March 31, 1998 and had a working capital deficiency of $(682,741) and a capital deficit of $(21,991,997) at March 31, 1998. The Company has no paid employees and no operations. If the Company cannot conclude an acquisition, merger, reverse merger, or become relisted on the OTC Bulletin Board, the Company would consider a corporate reorganization or liquidation. Historically, certain affiliates of the Company and others have made advances to meet the Company's short-term cash needs. At March 31, 1998, convertible promissory notes owed to such persons aggregated approximately $300,000. In addition, all accrued salaries and deferred payments, including all reimbursable expenses, have been forgiven by an affiliate. NOTE C - PROPERTY AND EQUIPMENT Property and equipment consists of the following: Equipment (net) $0 _____________ Total (net) $0 ============ NOTE D - SUBSIDIARIES AND ACQUISITIONS The Company discontinued all operations as of December 31, 1997, and wrote off all assets leasehold improvements. See "Certain Transactions" and Note J. NOTE F - COMMON AND PREFERRED STOCK (1) During 1996, 677,667 shares of common stock were issued by the Company in a private placement and for conversion of debt. The Company received cash proceeds of $294,000. NOTE G - STOCK OPTIONS, WARRANTS AND RIGHTS Stock Option Plan: The Company's Stock Option Plan (the "Plan"), as amended, provides for the grant of up to 528 options to purchase common stock to directors, officers and other key employees of the Company. No options have been granted in 1995, 1996, 1997. Non-Plan Options No options have been granted in 1995,1996, 1997. Warrants and Rights: The Company's 1991 Warrants expired on December 31, 1997. No 1991 Warrants have been exercised. NOTE H - DISCONTINUED AND DIVESTED OPERATIONS In 1996, the Company discontinued all of its operations as of December 31 1997. NOTE I - BUSINESS SEGMENTS Not applicable as the Company has no operations as of March 31, 1998: NOTE J - COMMITMENTS AND CONTINGENCIES The Company utilizes at no cost minimum office facilities. It believes that its facilities are suitable for its present operations. If required, the Company believes that additional space is available at favorable rental rates. Legal Proceedings: The Company is a plaintiff and defendant in several legal proceedings the outcome of which is uncertain. The Company cannot estimate whether the positive or adverse outcome of such proceedings would have a material effect on the Company's business. Consulting and Employment Agreements None. NOTE K - INCOME TAXES At December 31,1997, the Company had net operating loss carry forwards for income tax purposes of approximately $$18,000,000 which expire substantially from 2005 through 2010. Deferred income taxes are comprised principally of the following at March 31, 1998: Net operating loss carry forwards $6,500,000 Deferred tax asset valuation allowance $(6,500,000) Net deferred tax asset $ -0- ============ Realization of any portion of the net deferred tax asset, of approximately $6,500,000 at March 31, 1998, is not considered more likely than not and accordingly, a valuation allowance has been provided for such amount. Changes in ownership of greater than 50% which occurred as a result of the Company's initial public offering and subsequent stock issuances resulted in a substantial annual limitation being imposed upon the future utilization of the net operating losses for U.S. tax purposes. NOTE L - SUBSEQUENT EVENTS (a) As of January 1, 1998, the Company sold its interest in AccuMed, Inc. for a note payable to the Company. EMERALD CAPITAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments consist principally of cash, accounts receivable, accounts payable and accrued expenses, and notes payable. The carrying amounts of such financial instruments as reflected in the consolidated balance sheet approximate their value as of March 31, 1998. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or of future earnings or cash flows. NOTE N - SUPPLEMENTAL CASH FLOW INFORMATION The following are supplemental disclosures to the Consolidated Statements of Cash Flows: Year ended December 31, 1997 1996 Interest paid for 1997 and 1996 $ 0 $2,538 Non-cash investing and financing activities: Common stock (677,667 shares for 1996) in a private 0 $178,860 placement, convertible note conversion and for legal and other services. Common stock (42,260 shares) issued in settlement of accounts payable. 0 $236,366 Units issued for forgiveness of debt 0 $263,000 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's consolidated revenues were $0 for the period ended March 31, 1998. Prior year revenues were from discontinued operations and are not comparable. Financial Condition and Liquidity The Company's continued existence is dependent on its ability to acquire, merge or conclude a reverse merger, and/or obtain additional financing. Management's plans in regard to these matters are described below. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company incurred a loss of $0 and consumed no cash in operating activities for the quarter ended March 31, 1998 and had a working capital deficiency of $(682,741) and a capital deficit of $(21,991,997) at March 31, 1998. The Company has no paid employees and no operations. If the Company cannot conclude an acquisition, merger, reverse merger, or become relisted on the OTC Bulletin Board, the Company would consider a corporate reorganization or liquidation. Historically, certain affiliates of the Company and others have made advances to meet the Company's short-term cash needs. At March 31, 1998, convertible promissory notes owed to such persons aggregated approximately $300,000. In addition, all accrued salaries and deferred payments, including all reimbursable expenses, have been forgiven by an affiliate. Inflation As the Company has no operations presently, there are no inflationary considerations. SIGNATURES In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Robert Springer Chairman (Acting Principal Executive Officer, Acting Chief Financial Officer) 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. EMERALD CAPITAL HOLDINGS, INC. BY: _ _____________________ Rob ert Springer Cha irman In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date Robert Springer Chairman (Acting Principal Executive Officer, Acting Chief Financial Officer) INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION 3.1 Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on August 14, 1991(1) 3.1a Amended Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on June 7, 1995. (7) 3.1b Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended (7) 3.2 Bylaws of the Company(2) 3.3 Certificate of Retirement of Preferred Stock as filed with the Secretary of State of Delaware(3) 3.4 Amendment to By-Laws of the Company(6) 4.1 Warrant Agreement, dated as of August 13, 1991, among the Company, American Stock Transfer & Trust Co. ("American") and Stratton(1) 4.2 First Amendment, dated October 30, 1992, to Warrant Agreement, dated August 13, 1991, among the Company, American and Stratton(3) 4.3 Warrant Agreement, dated February 16, 1993, between the Company and American(5) 4.4 Form of First Amendment to Warrant Agreement to be entered into between the Company and American(5) 4.5 Specimen Common Stock Certificate(2) 4.6 Class A Warrant Agreement, dated October 12, 1993, between the Company and AWH(5) 4.7 Class B Warrant Agreement, dated October 12, 1993, between the Company and AWH(5) 4.8 Form of Class C Warrant(6) 4.9 Form of Class D Warrant(6) 10.1 Amended and Restated 1990 Stock Option Plan(4) 10.2 Form of Indemnification Agreement with Officers and Directors(3) 10.3 Indemnification Agreement, dated August 17, 1991, between the Company and Robert Springer(1) 10.4 Form of Confidential Information and Intellectual Property Rights Agreement(2) 10.5 AccuMed Acquisition Agreement (6) -----END PRIVACY-ENHANCED MESSAGE-----