10QSB/A 1 delta10qsba93002.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2002. [ ] 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: 33-61892-FW EMERGING DELTA CORPORATION (Exact name of small business issuer in its charter) DELAWARE 72-1235451 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 220 Camp Street, New Orleans, Louisiana 70130 (Address of principal executive offices) (Zip Code) 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 / / The number of shares outstanding of the issuer's classes of Common Stock as of September 30, 2002: Common Stock, $1.00 Par Value - 43,600 shares EXPLANATORY NOTE TO FORM 10-QSB/A Emerging Delta Corporation is filing this Amendment to its Quarterly Report on Form 10-QSB for the Quarter ended September 30, 2002. It is amending the 302 Certifications (Certification of Chief Executive Officer and Certification of Chief Financial Officer) to correct the names in the first line of each Certification to the names listed on the signature line. This error did not effect the filing and there is no other change to the Form 10-QSB. EMERGING DELTA CORPORATION Index to Form 10-Q Part I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets as of September 30, 2002 and March 31, 2002 Statements of Operations for the Six and Three Months Ended September 30, 2002 and 2001 Statements of Cash Flows for the Six Months Ended September 30, 2002 and 2001 Notes to the Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Controls and Procedures Part II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities and Use of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K PART I. FINANCIAL STATEMENTS Item 1. Financial Statements
EMERGING DELTA CORPORATION BALANCE SHEETS ASSETS September 30, March 31, 2002 2002 (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 291,750 $ 296,946 ---------------- ------------- Total Assets $ 291,750 $ 296,946 ================ ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 1,500 $ 1,500 STOCKHOLDERS' EQUITY: Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares subscribed, issued and outstanding $ --- --- Common Stock, $1.00 par value; 20,000,000 shares authorized; 43,600 shares issued and outstanding 43,600 43,600 Additional Paid-in Capital 252,214 252,214 Retained Deficit (5,564) (368) -------------- ------------- Total Stockholders' Equity 290,250 295,446 Total Liabilities and Stockholders' Equity $ 291,750 $ 296,946 =============== ============= The accompanying notes are an integral part of these financial statements.
EMERGING DELTA CORPORATION STATEMENTS OF OPERATIONS (Unaudited) For the Six For the Six For the Three For the Three Months Ended Months Ended Months Ended Months Ended September 30, September 30, September 30, September 30, 2002 2001 2002 2001 INTEREST INCOME $ 2,153 $ 6,177 $ 1,097 $ 3,682 COSTS AND EXPENSES (7,349) (7,321) (3,346) (3,030) ----------- ----------- ------------ -------------- INCOME (LOSS) BEFORE TAX PROVISION (5,196) (1,144) (2,249) 652 TAX PROVISION --- --- --- --- ----------- ----------- ------------ ------------ NET INCOME (LOSS) $ (5,196) $ (1,144) $ (2,249) $ 652 ============ ============ ============= ============= BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.12) $ (0.03) $ (0.05) $ 0.01 ============ ============ ============= ============== WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED SHARES OUTSTANDING 43,600 43,600 43,600 43,600 ============ ============ ============= ============== The accompanying notes are an integral part of these financial statements.
EMERGING DELTA CORPORATION STATEMENTS OF CASH FLOWS (Unaudited) For the Six For the Six Months Ended Months Ended September 30, 2002 September 30, 2001 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (5,196) $ (1,144) Adjustments to reconcile net loss to net cash used in operating activities: Increase (decrease) in accounts payable --- (1,500) Increase (decrease) in income tax payable --- (368) Decrease (increase) in interest receivable --- (672) --------------- --------------- CASH USED IN OPERATING ACTIVITIES (5,196) (3,684) --------------- -------------- DECREASE IN CASH (5,196) (3,684) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 296,946 303,841 --------------- -------------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 291,750 $ 300,157 =============== ============== The accompanying notes are and integral part of these financial statements.
EMERGING DELTA CORPORATION NOTES TO FINANCIAL STATEMENTS (All information as of September 30, 2002 and 2001 is unaudited) 1. DESCRIPTION OF ORGANIZATION: --------------------------- Emerging Delta Corporation (the "Company") was incorporated under the laws of the State of Delaware on February 10, 1993, for the purpose of seeking out business opportunities, including acquisitions, that the Board of Directors, in its discretion, believes to be good opportunities. Coincident with the formation of the Company, one similar company, managed by the same officers and directors, is engaged in the same business. The Company will be heavily dependent on the skills, talents, and abilities of its management to successfully implement its business plan. An affiliate of a director is expected to be the source for most business opportunities submitted to the Company. Due to its currently limited funds, it is likely that the Company will not be able to compete with larger and more experienced entities for business opportunities which are less risky and are more attractive to such entities; business opportunities in which the Company ultimately participates will likely be highly risky and speculative. The Company's proposed business is sometimes referred to as a "blind pool" because investors entrust their investment monies to the Company's management before they have a chance to analyze any ultimate use to which their money may be directed. Consequently, the Company's potential success is heavily dependent on the Company's management, which will have virtually unlimited discretion in searching for and entering into a business opportunity. 2. SIGNIFICANT ACCOUNTING POLICIES: ------------------------------- The financial statements as of September 30, 2002, and for the six and three months ended September 30, 2002 and 2001 are unaudited, but in the opinion of the management of the Company, contain all adjustments, consisting of only normal recurring accruals, necessary to present fairly the financial position at September 30, 2002, the results of operations for the six and three months ended September 30, 2002 and 2001 and the cash flows for the six months ended September 30, 2002 and 2001. The results of operations for the six months ended September 30, 2002 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending March 31, 2003. 3. RELATED PARTY TRANSACTIONS: -------------------------- Officers and directors are compensated based on actual time and expenses devoted to the Company's business. During the respective periods ended September 30, 2002 and 2001, a consulting fee of $750 per month was paid to the Company's Treasurer. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company has commenced no operations and has no activities. Interest income for the six and three months ended September 30, 2002 was $2,153 and $1,097 respectively compared to the six and three months ended September 30, 2001 of $6,177 and $3,682 respectively. The decrease in interest income in 2002 is due to lower interest rates compared to 2001. Costs and expenses for the six and three months ended September 30, 2002 was $7,349 and $3,346 respectively compared to the six and three months ended September 30, 2001 of $7,321 and $3,030 respectively. The costs and expenses for the six months ended September 30, 2002 and 2001 each include the annual bank investment fee of $1,250 that was fully expensed in these periods. IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS In connection with forward-looking statements contained in this Form 10-QSB and those that may be made in the future by or on behalf of the Company which are identified as forward-looking by such words as "believes," "intends" or words of a similar nature, the Company notes that there are various factors that could cause actual results to differ materially from those set forth in any such forward-looking statements. The forward-looking statements contained in this Form 10-QSB were prepared by management and are qualified by, and subject to, significant business, economic, competitive, regulatory and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of the Company. Accordingly, there can be no assurance that the forward-looking statements contained in this Form 10-QSB will be realized or the actual results will not be significantly higher or lower. These forward-looking statements have not been audited by, examined by, compiled by or subjected to agreed-upon procedures by independent accountants, and no third-party has independently verified or reviewed such statements. Readers of this Form 10-QSB should consider these facts in evaluating the information contained herein. In addition, the business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in the forward-looking statements contained in this Form 10-QSB. The inclusion of the forward-looking statements contained in this Form 10-QSB should not be regarded as a representation by the Company or any other person that the forward-looking statements contained in this Form 10-QSB will be achieved. In light of the foregoing, readers of this Form 10-QSB are cautioned not to place undue reliance on the forward-looking statements contained herein. ITEM 3. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. Within 90 days prior to the filing of the Quarterly Report on Form 10QSB, we carried out an evaluation, under the supervision and the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the design and operation of these disclosure controls and procedures pursuant to the Exchange Act Rule 13a-14. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to the company (including our consolidated subsidiaries) required to be included in our periodic SEC filings. (b) Changes in internal controls. There were no significant changes in internal controls or other factors that could significantly affect our internal controls subsequent to the date of our evaluation. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION On August 22, 2002, Emerging Delta Corporation ("Delta")and Emerging Gamma Corporation ("Gamma") entered into an agreement with Allen F. Campbell ("Campbell") whereby: 1. Burt H. Keenan and D. B. H. Chaffe agreed to sell 80% of their shares, 6,856 shares and 2,496 shares respectively, of Delta and Gamma to Campbell for $1.25 per share, which is equal to 100% of the cash that Keenan and Chaffe paid for those shares. 2. Three of the four Delta and Gamma current directors, Burt H. Keenan, D. B. H. Chaffe III and Daniel Killeen agreed to resign as directors and to vote for Campbell's designated slate of directors to fill those vacancies. Jerry W. Jarrell will remain as a director and chief financial officer. 3. Campbell will be granted stock options to purchase 4,300 shares each of Delta and Gamma at an exercise price of $15.00 per share. These options will replace the stock options currently granted to the directors who are resigning. 4. Delta Gamma Acquisition LLC, a company controlled by Campbell ("DGA"), would commence a tender offer to purchase shares (the "Shares") of Delta and Gamma. Shareholders of Delta and Gamma would be offered three choices under the terms of the tender offer: 1. To stand pat and not tender any Shares. 2. To tender 40% of their Shares of both Delta and Gamma at $12.50 per Share. 3. To tender 80% of their Shares of both Delta and Gamma at $12.50 per Share. The Tender Offer described above commenced September 16, 2002 and expired October 8, 2002. The total shares tendered by shareholders of each of Delta and Gamma were 1,760. The Tender Offer documents were filed with Form 8-K on September 16, 2002, and describe in more detail the terms and conditions of the tender offer and the views of management with respect to the tender offer. 5. The above agreements result in Campbell and DGA together owning 11,112 shares of each of Delta and Gamma or 25.5% of the issued and outstanding shares of each company. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 3. Certificate of Incorporation and Bylaws *3.1 Restated Certificate of Incorporation *3.2 Bylaws *3.3 Proposed Certificate of Amendment to the Restated Certificate of Incorporation 10. Material Contracts *10.1 1993 Stock Option Plan *10.2 Form of Stock Option Agreements with Messrs. Keenan, Killeen, Jarrell and Chaffe with Schedule of Details **99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *Filed with Registration Statement on Form SB-2, File No. 33-61892-FW (the Registration Statement) and incorporated by reference. **Filed herewith (b) Reports on Form 8-K. August 8, 2002 The Company engaged Pannell Kerr Forster of Texas P.C. to serve as its Independent public accountants for fiscal year 2002 and notified Arthur Andersen LLP it would no longer serve as its independent public accountants. September 16, 2002 On September 16, 2002, Delta Gamma Acquisition LLC, a company controlled by Allen Campbell, commenced a tender offer to purchase shares of Emerging Delta and Emerging Gamma Corporation. See Item 5 Other Information above for the results of the tender offer and the Form 8-K for detailed information regarding the tender offer and the tender documents. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 on November 14, 2002. EMERGING DELTA CORPORATION By: /S/ BURT H. KEENAN -------------------------- Burt H. Keenan Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on November 14, 2002. By: /S/ BURT H. KEENAN Chairman of the Board, Chief ------------------------------ Executive Offier and Director Burt H. Keenan By: /S/ D. B. H. CHAFFE III Director ------------------------------ D. B. H. Chaffe III By: /S/ DANIEL B. KILLEEN Director ------------------------------ Daniel B. Killeen By: /S/ JERRY W. JARRELL Chief Financial Officer, Secretary ------------------------------ and Director Jerry W. Jarrell Certification of Chief Executive Officer of Emerging Delta Corporation I, Burt H. Keenan, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Emerging Delta Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 14, 2002 /S/ BURT H. KEENAN -------------------------- Burt H. Keenan Chief Executive Officer Certification of Chief Financial Officer of Emerging Delta Corporation I, Jerry W. Jarrell, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Emerging Delta Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 14, 2002 /S/ JERRY W. JARRELL -------------------------- Jerry W. Jarrell Chief Financial Officer