Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-32783
WIN OR LOSE ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 59-3685745
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1268 Bayshore Boulevard
Dunedin, Florida 34698
(Address of principal executive offices,
including zip code)
(727) 734-7346
(Registrant's telephone number,
including area 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title of Each Class Outstanding at January 15, 2004
Common Stock, $0.001 Par Value 2,400,000 Shares
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE
ITEM 1 Financial Statements
Balance Sheets as of September 30, 2002 and 2003 3
Statements of Operations for the three- and nine-month periods
ended September 30, 2002 and 2003 4
Statements of Cash Flow for the nine-month periods
ended September 30, 2002 and 2003 5
Notes to Financial Statements 6
ITEM 2 Management's Discussion and Analysis of Results of
Operations, Financial Condition and Plan of Operations 11
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk 11
PART II OTHER INFORMATION 12
SIGNATURES 13
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
BALANCE SHEETS
ASSETS
September 30, December 31,
2003 2002
(unaudited) (audited)
Current Assets:
Cash $ 1,085 $ 10,210
----- ------
Total current assets 1,085 10,210
------ ------
Deferred Offering Costs
Filing fees 2,502 2,502
Miscellaneous offering costs 64,659 62,382
Legal fees 109,328 109,328
-------- -------
Total deferred offering costs 176,489 174,212
-------- -------
Total Assets $ 177,574 $184,422
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,500 $ -
Due to affiliates $ 6,852 $ 2,837
---------- -------
Total current liabilities $ 9,352 $ 2,837
---------- -------
Long-term Debt
Total long-term debt $ - $ -
--------- -----
Total Liabilities $ 9,352 $ 2,837
---------- -------
Stockholders' Equity
Common stock, $0.001 par value, 25,000,000 shares authorized, 2,400,000 shares
outstanding at September 30,
2003 and 2002 $ 2,400 $ 2,400
Preferred Stock, $0.001 par value, 5,000,000 shares
authorized, no shares outstanding - -
Additional paid in capital $ 206,591 $206,591
Deficit accumulated during development stage $ (40,769) $(27,407)
- ----------- - ---------
Total Stockholder's Equity $ 168,222 $181,584
- ----------- - --------
Total Liabilities and Stockholders' Equity $ 177,574 $184,421
= =========== = ========
The accompanying notes are an integral part of this Balance Sheet.
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
STATEMENTS OF OPERATIONS
Three Months Ended September 30, Nine-Months Ended September 30,
----------------------------------------- ----------------------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $ - $ - $ - $ -
Expenses
Organization Costs $ - $ - $ - $ -
General and administrative $ 3,750 $ 6,500 $ 13,363 $ 9,750
---------- ---------- ---------- -------
Total Expenses $ 3,750 $ 6,500 $ 13,363 $ 9,750
---------- ---------- ---------- -------
Net(Loss) $ (3,750) $ (6,500) $ (13,363) $ (9,750)
=========== =========== =========== =========
Net (Loss) Per Common Share $ - $ - $ - $ -
=========== ========== ========= =========
Number of common shares issued
and outstanding during period 2,400,000 2,400,000 2,400,000 2,400,000
========= ========= ========= =========
Number of common shares used in
calculation of net loss per share 2,400,000 2,400,000 2,400,000 2,400,000
========= ========= ========= =========
The accompanying notes are an integral part of this
Statement of Operations.
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
STATEMENTS OF CASH FLOW
Nine-Months Ended September 30,
2003 2002
(Unaudited) (Unaudited)
Cash flows from operating activities
Net income (loss) $ (13,363) $ (9,750)
Less expenses paid by affiliates $ - $ 750
--------- - ------
Net cash operating loss $ (13,363) $ (9,000)
Change in operating assets and liabilities:
Increase (decrease) in current $ 6,515 $ -
---------- -----
liabilities
Net cash provided by (used in)
operating activities $ (6,848) $ (9,000)
Cash flows from financing activities
(Increase) in deferred offering costs
incurred by the company $ (2,277) $ -
---------- - -----
Net cash provided by (used in)
financing activities $ (2,277) $ -
---------- - -----
Net increase (decrease) in cash $ (9,125) $ (9,000)
Cash balance, beginning of period $ 10,210 $ 38,426
---------- - --------
Cash balance, end of period $ 1,085 $ 29,426
========== = ========
Supplemental disclosure of non-cash
transactions involving direct payment
of certain costs by affiliates
Proceeds from direct payment of
operating costs by affiliates $ - $ 1,250
Proceeds from direct payment of
offering costs by affiliates $ - $ 39,106
--------- --------
Total non-cash transactions involving
direct payments by affiliates $ - $ 40,356
========= ========
The accompanying notes are an integral part of this Statement of Cash Flow
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Operations
Win or Lose Acquisition Corporation (the "Company") was incorporated in
Delaware on December 1, 2000, for the purpose of raising capital through a
public offering of securities (the "Offering), which will be used to effect a
merger, acquisition or other business combination transaction (a "Business
Combination") with an unidentified privately-held company (a "Target"). Since
the Company has not yet identified Target, investors in the Offering will have
virtually no substantive information available for advance consideration of any
specific Target. The Company's business strategy may also be referred to as a
"blind pool" because neither the management of the Company nor the investors in
the Offering know what the business of the Company will be.
The Company's business goal is to increase stockholder value by
concluding a Business Combination with a suitable Target where the expected
market value of the stock of the combined companies will be greater than the
offering price of the Company's shares in the Offering.
The Company is currently in the development stage. All activity of the
Company to date relates to its organization and financing activities.
2. Distribution of Securities
On June 7, 2002, the Securities and Exchange Commission granted an order
of effectiveness with respect to the Company's Form S-1 registration statement
under the Securities Act of 1933. The Company's registration statement includes
the following securities:
o 400,000 shares that the Company's officers will transfer to a total of
800 donees selected by them;
o 1,600,000 shares that the Company's officers will offer to sell to
advisors to the Company, the owners of a target and other participants
in a business combination; and
o 12,600,000 shares that the Company will offer to issue in connection
with a business combination.
The Distribution is subject to and was conducted in compliance with Rule
419, which was adopted to strengthen the regulation of securities offered by
"blank check" companies. Rule 419 defines a blank check company as a development
stage company (a) that has no specific business plan or has indicated that its
business plan is to engage in a merger or acquisition with an unidentified
company and (b) is proposing to issue a "penny stock." For purposes of Rule 419,
penny stocks include all shares that have a price of less than $5 per share and
are not listed on Nasdaq or a stock exchange.
The Company's officers completed the gift share distribution on August 2,
2002. In connection with the Distribution, the Company's officers have
distributed a total of 400,000 gift shares and 3,000 founders' shares to 806
individual donees selected by them. Each donee received 500 gift shares and will
be subject to the resale restrictions described in the prospectus.
The Company has retained Global Securities Transfer, Inc., Denver,
Colorado to act as the transfer agent and registrar for its common stock. The
Company's officers have delivered a total of 2,400,000 shares to the transfer
agent, together with instructions that authorize the transfer agent to hold such
shares in un-certificated form pending completion of the Distribution.
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
2. Distribution of Securities (continued)
The Company's officers have delivered instructions to the transfer agent
with respect to the 400,000 gift shares and 3,000 founders' shares that were
distributed to donees. The transfer agent has issued stock certificates for the
403,000 shares that were distributed to donees and delivered those stock
certificates to First Union National Bank, the escrow agent for the Company's
Rule 419 escrow. The stock certificates on deposit in the Rule 419 escrow will
be held in trust for the sole benefit of the donees until the shares are either
released from escrow or returned to the Company's officers in compliance with
Rule 419.
In connection with the Company's reconfirmation offering, each Donee must
approve the proposed transaction in writing and elect to accept delivery of his
gift shares. In the absence of an affirmative election by a Donee, the escrow
agent will surrender the Donee's stock certificates to the officer who made the
original gift.
The Company's business plan was based on the assumption that it will
require $45,000 in cash to finance its operations during the period between the
effective date of the registration statement and the completion of its
reconfirmation offering. Since the Company had $37,426 in cash at June 7, 2002,
the officers subsequently contributed $7,574 to the Company for the purpose of
increasing its' available cash balance to $45,000.
As a result of its limited resources, the Company will, in all
likelihood, have the ability to affect only a single Business Combination.
Accordingly, the prospects for the Company's success will be entirely dependent
upon the future performance of a single business.
The Company is unlikely to enter into an agreement with a Target that
does not have sufficient net tangible assets or operating income to satisfy the
minimum listing standards of the Nasdaq stock market. Therefore management
expects a business combination to result in a change in control. After a change
in control, the owners of the Target will have the right to appoint their own
officers and directors, and the Company's current officers will have no ability
to influence future business decisions.
The Company may not qualify for a Nasdaq listing upon completion of a
Business Combination. In such an event, the Company's common stock will be
traded on the over-the-counter market. It is anticipated that the common stock
will qualify for quotation on the OTC Bulletin Board; a NASD sponsored and
operated inter-dealer automated quotation system for equity securities that are
not included in Nasdaq. It is also anticipated that the company's common stock
will qualify for inclusion in the National Quotation Bureau "OTC Pink Sheets."
There can be no assurance that the liquidity and prices of the Company's common
stock in the secondary market will not be adversely affected.
There is no assurance that the Company will be able to affect a Business
Combination. If the Company is unable to close a transaction before December 7,
2003, Rule 419 will require that all gift share transactions be unwound and all
certificates for gift shares be returned to the Company's officers. In that
event, the Donees will receive nothing.
At September 30, 2003, the Company had 810 stockholders, including its
four officers and 806 donees.
3. Summary of Significant Accounting Policies
Interim Financial Statements
The financial statements as of and for the three- and nine-month periods
ended September 30, 2002 and 2003 are unaudited, but in the opinion of
management include all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of the Company's financial position and
results of operations.
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
3. Summary of Significant Accounting Policies (continued)
Use of 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Fiscal Year
The Company's fiscal year begins on January 1 and ends on December 31 of
each year.
Net Income (Loss) Per Common Share
The Company computes net income (loss) per common share in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" and SEC Staff Accounting Bulletin No. 98 ("SAB No. 98"). Under the
provisions of SFAS No. 128 and SAB No. 98, basic net income (loss) per common
share ("Basic EPS") is computed by dividing net income (loss) by the weighted
average number of common shares outstanding.
The Company's net income (loss) per common share has been calculated on
the basis of 2,400,000 shares issued and outstanding, which gives retroactive
effect to a three share for five stock dividend implemented on December 28,
2001. There were no warrants outstanding at either September 30, 2003 or 2002.
Income Taxes
Income taxes are accounted for in accordance with SFAS No. 109,
"Accounting for Income Taxes." Under this method, deferred income taxes are
determined based on differences between the tax bases of assets and liabilities
and their financial reporting amounts at each year-end, and are measured based
on enacted tax rates and laws that will be in effect when the differences are
expected to reverse. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized.
4. Capital Stock
The Company's Certificate of Incorporation authorizes the issuance of
25,000,000 shares of Common Stock. The Company's Board of Director's has the
power to issue any or all of the authorized but unissued Common Stock without
stockholder approval. The Company currently has no commitments to issue any
shares of Common Stock other than as described in the Proposed Offering;
however, the Company will, in all likelihood, issue a substantial number of
additional shares in connection with a Business Combination. To the extent that
additional shares of Common Stock are issued, dilution to the interests of the
Company's stockholders participating in the Proposed Offering will occur.
The Board of Directors of the Company is empowered, without stockholder
approval, to issue up to 5,000,000 shares of "blank check" preferred stock (the
"Preferred Stock") with dividend, liquidation, conversion, voting or other
rights that could adversely affect the voting power or other rights of the
holders of the Company's Common Stock. There are no shares of preferred stock
issued or outstanding.
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
4. Capital Stock (continued)
In December 2000, the Company's founders purchased 1,500,000 shares of
common stock for cash at a price of $0.03 per share. On December 28, 2001, the
board of directors implemented a three share for five stock dividend that
increased the number of issued and outstanding shares from 1,500,000 to
2,400,000 shares.
5. Organization and Start-up Costs
In accordance with FASB Statement of Position 98-5, all organization and
start-up costs were charged to expense on a current basis during the period
ended December 31, 2000.
6. Deferred Offering Costs
Deferred offering costs will be carried as an asset until the Company
completes a business combination or liquidates. Upon the occurrence of either
event, deferred offering costs will be offset against additional paid-in
capital. The cumulative deferred offering costs incurred through September 30,
2003 were $176,489, including:
Expense Class Amount
Filing fees $ 2,502
Legal fees 119,328
Document preparation and printing 17,667
Travel, lodging and publicity 19,734
Transfer agent fees 2,758
Website development and support 14,500
------------
Total deferred offering costs $ 176,489
=========
Of this total, the Company paid $31,037 and the founders of the Company
paid or agreed to pay $145,452 from their personal funds.
7. Non-cash Capital Contributions
The following table presents summary information on the total
organization, operating and offering costs incurred as of September 30, 2003 and
allocation of such costs between the Company and its founders:
Paid by Paid by Total costs
company founders incurred
Organization costs 500 6,715 7,215
Operating costs
Year ended December 31, 2000 1,000 1,000
Year ended December 31, 2001 72 3,000 3,072
Year ended December 21, 2002 14,870 1,250 16,120
Nine-months ended September 30, 2003 13,363 13,363
Offering costs
Year ended December 31, 2000 3,500 15,040 18,540
Year ended December 31, 2001 1,502 90,307 91,809
Year ended December 21, 2002 23,758 40,105 63,863
Nine-months ended September 30, 2003 2,277 - 2,277
----- --- -----
Totals $60,842 $156,417 $217,259
======== ========= ========
WIN OR LOSE ACQUISITION CORPORATION
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
8. Unpaid Organization and Offering Costs
The following table summarizes differences between the organization,
operating and offering costs that the Company's founders had agreed to pay as of
September 30, 2003 and the amounts actually paid prior to that date.
Expense Class Amount
Organization costs $ 6,715
Operating costs through June 30, 2003 4,250
Offering costs through June 30, 2003 145,452
Less: payments made through June 30, 2003 134,716
-------
Unpaid balance at September 30, 2003 $ 21,701
========
The Company is not contingently liable for the unpaid balance of the
offering costs that its founders have agreed to pay.
9. Incentive Stock Plan
The Company's 2000 Incentive Stock Plan was adopted and approved in
connection with the organization of the Company. The common stock reserved for
issuance under the plan will be the lesser of 750,000 shares, or 10% of the
total number of shares outstanding after the closing of a Business Combination.
The class of persons eligible to participate in the plan includes all
full-time and part-time employees of the Company, provided that the eligible
participants do not include employees who are eligible to receive awards under
the terms of any employment contract or specialty plan adopted by us in the
future. The plan permits the grant of a variety of incentive awards including
(i) non-qualified stock options, (ii) incentive stock options, (iii) shares of
restricted stock, (iv) shares of phantom stock, and (v) stock bonuses. In
addition, the plan allows us to grant cash bonuses that will be payable when an
employee is required to recognize income for federal income tax purposes because
of the vesting of shares of restricted stock or the grant of a stock bonus.
The exercise price of all Incentive Stock Options granted under the Plan
must be at least equal to the fair market value of such shares on the date of
grant or, in the case of Incentive Stock Options granted to the holder of 10% or
more of the Company's Common Stock, at least 110% of the fair market value of
such shares on the date of grant. The exercise period for which incentive awards
may be granted is ten years from the date of grant (five years in the case of
Incentive Stock Options granted to an individual owning more than 10% of the
Company's Common Stock). The aggregate fair market value (determined at the date
of the grant) of such shares with respect to which Incentive Stock Options are
exercisable for the first time by the holder of the option during any calendar
year shall not exceed $100,000.
Results of Operations for the
Nine Months Ended September 30, 2003
During the nine months ended September 30, 2003, we had no revenue and
paid $13,363 in operating expenses, including
o $9,000 in overhead allowances to our president;
o $1,000 in audit fees; and
o $3,363 in transfer agent fees and other out-of-pocket costs.
We have not yet identified a potential target that satisfies our
acquisition standards. We have, however, engaged in preliminary discussions with
a number of companies that may be able to satisfy our acquisition standards in
the foreseeable future. We have not entered into a letter of intent or
standstill agreement with any potential target. However we have advised a number
of potential targets that we would be willing to negotiate a transaction with
them if they are able to attain certain quantifiable business goals in a timely
manner.
We are continuing with our efforts to find a suitable target and
negotiate a business combination agreement. While our discussions to date
indicate that a number of desirable potential targets would be interested in
pursuing a business combination with our company, all of these companies need to
achieve other business goals before a business combination with our company is a
feasible alternative.
There can be no assurance that we will be successful in our efforts to
locate a potential target, or that we will be able to negotiate a business
combination with any target that is ultimately selected by our officers. Even if
we negotiate and close a business combination, there is no assurance that a
trading market for the stock of the combined companies will ever develop.
Financial Condition and Plan of Operations
At September 30, 2003, we had $1,085 in cash and a working capital
deficit of $8,267. While our entire working capital deficit is principally
attributable to amounts owed to affiliates, our available financial resources
are not sufficient to pay our anticipated operating expenses. Simply stated, we
are running out of money and time.
The SEC's integration and general solicitation doctrines will preclude
private placement transactions until we close a business combination. Therefore,
we cannot obtain funds by selling additional securities. Moreover,. Rule 419
will require us to unwind the gift share distribution and cancel the advisors'
stock purchase rights if we fail to complete a business combination before
December 7, 2003.
After evaluating the time required to prepare, file and obtain an order
of effectiveness for a post-effective amendment and conduct a reconfirmation
offering, the board of directors has decided to liquidate our Company if we are
unable to identify a target and file a post-effective amendment before the end
of September. We have not yet identified a target and there is no assurance that
we will be able to do so before the deadline selected by the board of directors.
If our company requires additional cash resources during the period between the
date of this report and the end of September, our founders will advance the
necessary funds. Such advances will be in the form of stockholder loans that
bear interest at reasonable commercial rates.
We intend to request a reasonable due diligence fee before we begin a
detailed investigation into the affairs of a potential target. There can be no
assurance that any potential target will be willing to pay a due diligence fee,
or that any due diligence fees we receive will be sufficient to offset the
out-of-pocket costs incurred.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Substantially all of our financial assets consist of bank deposits and we
own no portfolio investments that would expose our Company to the type of risks
described in Item 304 of Regulation S-K.
ITEM 4 -- CONTROLS AND PROCEDURES
As of January 15, 2004, an evaluation was completed under the supervision
and with the participation of the Company's management, including the Company's
President and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management including the President and Chief Financial
Officer, concluded that the Company's disclosure controls and procedures were
effective as of January 15, 2004. There have been no significant changes to the
Company's internal controls or other factors that could significantly affect
internal controls subsequent to January 15, 2004.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
NONE
ITEM 3. DEFAULTS ON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
32.1 Statement of Chief Executive Officer Pursuant to Section 1350 of Title
18 of the United States Code
32.2 Statement of Chief Financial Officer Pursuant to Section1350 of Title 18
of the United States Code
(b) REPORTS ON FORM 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WIN OR LOSE ACQUISITION CORPORATION
/s/ Sally A Fonner
Sally A. Fonner, President
Dated: January 15, 2004
/s/ John L. Petersen
-----------------------------------------------------
John L. Petersen, Chief Accounting Officer
Dated: January 15, 2004