-----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, PxfYnRy2UvMFgWXa+rVosadnXlhF+lznFokvgeW3KjcCyAcD2K54zJBOQRShF+KE eSQrx9t1AumDnGiENBVY3w== 0000868667-99-000045.txt : 19991022 0000868667-99-000045.hdr.sgml : 19991022 ACCESSION NUMBER: 0000868667-99-000045 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 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: 99731942 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 September 30, 1999 [ ] 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. 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 and Nine months ended September 30, 1999 were $0._________. As of September 30, 1999 (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) September 30, 1999 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) EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three Months Ended September 30, September 30, 1999 1998 Sales $ - $ - Cost of Goods Sold $ - $ - Selling, general & administrative expenses $ - $ - Depreciation and Amortization $ - $ - Operating (Loss) $ - $ - Other (Income) Expenses Interest and other expenses $ - $ - Inerest and other income $ - $ - Net (Loss) from continuing operations $ - $ - Net (Loss) from discontinued $ - $ - operations Loss per Common Share From continued operations $ - $ - From discontinued operations $ - $ - Net (loss) per share $ - $ - Loss per Common Share From continued operations $ - $ - Discontinued operations $ - $ - Weighted Average number of common shares used in computation of net (loss) per share 1,419,553 1,419,553 See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Nine Months Ended September 30, September 30, 1999 1998 Sales $ - $ - Cost of Goods Sold $ - $ - Selling, general & administrative expenses $ - $ - Depreciation and Amortization $ - $ - Operating (Loss) $ - $ - Other (Income) Expenses Interest and other expenses $ - $ - Inerest and other income $ - $ - Net (Loss) from continuing operations $ - $ - Net (Loss) from discontinued $ - $ - operations Loss per Common Share From continued operations $ - $ - From discontinued operations $ - $ - Net (loss) per share $ - $ - Loss per Common Share From continued operations $ - $ - Discontinued operations $ - $ - Weighted Average number of common shares used in computation of net (loss) per share 1,419,553 1,419,553 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, 1998 1,419,553 $ 1,418 $ 21,291,838 $ - Balance at September 30, 1999 1,419,553 $ 1,418 $ 21,305,930 $ - 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, 1998 $ (20,000) $(22,527,230) $ (1,092,046) Issuance of Shares in connection with consulting - $ - $ - and legal services Issuance in settlement of debt Net (Loss) $ - $ - $ - Balance at September 30, 1999 $ (20,000) $(22,527,230) $ (1,092,046) See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three Months Ended September 30 September 30 OPERATING ACTIVITIES 1999 1998 Net (Loss) $ - Non-cash adjustments: Depreciation & Amortization $ - Common stock issued for services $ - Cash provided (used) by changes in assets $ - Accounts Receivable Inventories $ - Prepaid Expenses & other $ - Accounts payable & accrued expenses NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ - INVESTING ACTIVITIES $ - Decrease in property & $ - equipment Other assets NET CASH PROVIDED (USED) $ - BY INVESTING ACTIVITIES $ - FINANCING ACTIVITIES $ - Net increase in short term $ - borrowing Proceeds (repayments) long-term $ - debt and revolving line-of-credit $ - NET CASH PROVIDED BY FINANCING ACTIVITIES $ - NET INCREASE (DECREASE) IN CASH $ - CASH EQUIVALENTS $ - CASH AND CASH EQUIVALENTS, beginning $ - $ - CASH AND CASH EQUIVALENTS,ending See accompanying notes to financial statements. EMERALD CAPITAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended September 30 September 30 1999 1998 Net (Loss) $ - Non-cash adjustments: Depreciation & Amortization $ - Common stock issued for services $ - Cash provided (used) by changes in assets & liabilities $ (7,488) - - Accounts Receivable Inventories $ - Prepaid Expenses & other $ 7,488 - - Accounts payable & accrued expenses NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ INVESTING ACTIVITIES Decrease in property & equipment Other assets NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ - FINANCING ACTIVITIES $ - Net increase in short term $ - borrowing $ Proceeds (repayments) long-term $ - debt and revolving line-of-credit $ - Net proceeds of common stock issued NET CASH PROVIDED BY FINANCING ACTIVITIES $ - NET INCREASE (DECREASE) IN CASH $ - CASH EQUIVALENTS $ - CASH AND CASH EQUIVALENTS, beginning $ - $ - CASH AND CASH EQUIVALENTS,ending $ - EMERALD CAPITAL HOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDING SEPTEMBER 30, 1999 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." 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: 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 quarter ended September 30, 1999 and had a working capital deficiency of $(682,741) and a capital deficit of $(21,991,997) at September 30, 1999. The Company has no paid employees and no operations. If the Company cannot conclude an acquisition, merger, reverse merger, or obtain market-makers along with a listing on the OTC Bulletin Board, the Company would consider a corporate reorganization or liquidation. Historically, certain affiliates of the Company and others have made and continue to make advances to meet the Company's short-term cash needs. At September 30, 1999, convertible promissory notes owed to such persons aggregated approximately $300,000. 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. NOTE E - 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 1996, ,1997, 1998 Non-Plan Options No options have been granted in 1996, 1997, 1998. NOTE F - DISCONTINUED AND DIVESTED OPERATIONS The Company discontinued all of its operations as of December 31 1997. NOTE G - BUSINESS SEGMENTS Not applicable as the Company has no operations as of September 30, 1999: NOTE H - COMMITMENTS AND CONTINGENCIES The Company has various past due obligations for taxes, accounts payable and judgments which it is unable to pay. Legal Proceedings: None Consulting and Employment Agreements None. NOTE I - INCOME TAXES At December 31,1998, 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 September 30, 1999: 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 September 30, 1999, 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 J - SUBSEQUENT EVENTS NOTE K - 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 September 30, 1999. 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 L - SUPPLEMENTAL CASH FLOW INFORMATION The following are supplemental disclosures to the Consolidated Statements of Cash Flows: Year ended December 31, 1998 1997 Interest paid for 1998 and 1997 $ 0 $ 0 Non-cash investing and financing activities: 0 0 Common stock issued in settlement of accounts payable. 0 0 Units issued for forgiveness of debt 0 0 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company's consolidated revenues were $0 for the Nine months ended September 30, 1999. 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 September 30, 1999 and had a working capital deficiency of $(682,741) and a capital deficit of $(21,991,997) at September 30, 1999. The Company has no paid employees and no operations. If the Company cannot conclude an acquisition, merger, reverse merger, obtain market- makers or become listed on the OTC Bulletin Board, the Company would consider a corporate reorganization or liquidation. Historically, certain affiliates of the Company and others have made and continue to make advances to meet the Company's short-term cash needs. At September 30, 1999, convertible promissory notes and expenses owed to such persons aggregated approximately $300,000. 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) -----END PRIVACY-ENHANCED MESSAGE-----