SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended June 30, 2003
Commission file number 1-9431
ESCAGENETICS CORPORATION
(Name of Small Business Issuer in Its Charter)
Delaware 94-3012230
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
383 Inverness Parkway, Suite 100 80112
(Address of Principal Executive Offices) (Zip Code)
(720) 889-0133
(Issuer's Telephone Number, Including Area Code)
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 past 90 days.
Yes [X] No [ ]
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [X] No [ ]
The number of shares of the issuer's common stock outstanding as of June 30,
2003 was 1,000,000 shares, par value $.001 per share.
ESCAgenetics Corporation
(a development stage company)
Balance Sheets
(unaudited)
================================================================================
June 30, 2003 September 30,2002
ASSETS -- --
Current Assets -- --
Checking/Savings -- --
Money Market Access $ 16,476 $ 123
--------- ---------
Total Checking/Savings $ 16,476 $ 123
Total Current Assets $ 16,476 $ 123
--------- ---------
TOTAL ASSETS $ 16,476 $ 123
========= =========
LIABILITIES & EQUITY -- --
Accounts Payable $ 4,633 $ 3,600
Due to Parent -- 240,000
--------- ---------
Total Current Liabilities 4,633 243,600
--------- ---------
TOTAL LIABILITIES $ 4,633 $ 243,600
========= =========
Equity
Common Stock 7,424 5,243
Additional Paid-in Capital 454,082 135,993
Accumulated Deficit Prior to Development Stage (405,734) (384,713)
Deficit Accumulated During Development Stage (43,929) --
--------- ---------
Total Equity 11,843 (243,477)
--------- ---------
TOTAL LIABILITIES & EQUITY $ 16,476 $ 123
========= =========
ESCAgenetics Corporation
(a development stage company)
Statement of Operations
(unaudited)
================================================================================
Period from
April 1, 2003
(inception of
development stage)
to June 30, 2003
and Three-month Three-month
period ended June period ended June Nine-month period Nine-month period
30, 2003 30, 2002 ended June 30, 2003 ended June 30, 2002
--------------------------------------------------------------------------------
Ordinary Income/Expense
Expense $ -- $ -- $ -- $ --
Accrued Expenses -- -- -- --
Bank Service Charges 2,000 -- -- --
Interest Expense -- -- -- --
Office Expenses 536 -- 536 25
Marketing 57 -- 69 --
Postage 716 -- 716 --
Professional Fees -- -- -- --
Accounting Fees 2,200 2,000 8,450 10,415
Edgar Filing Services -- 3,541 1,625 --
Escrow Agent -- -- -- --
Legal Fees 10,558 98 14,974 7,298
Registered Agent -- -- -- --
Transfer Agent 2,496 -- 8,609 11,101
Rental Expenses 85 645 730 1,290
Salary Expenses 24,500 -- 24,500 --
Shareholder Expenses 781 -- 963 --
Telephone -- 110 244 355
Tax and License -- -- 3,534 4,867
--------------------------------------------------------------------------------
Total Operating Expenses 43,929 6,394 64,950 35,351
Total Expense 43,929 6,394 64,950 35,351
Net Ordinary Income (43,929) (6,394) (64,950) (35,351)
Other Income/Expense -- -- --
Other Income -- -- -- --
Interest Income -- -- -- --
Total Other Income -- -- -- --
Net Other Income -- -- -- --
Net Loss $ (43,929) $ (6,394) $ (64,950) $ (35,351)
================================================================================
Net Loss Per Common Share $ (0.06) (0.00) (0.11) (0.00)
================================================================================
Weighted-Average Number of Shares -- -- -- --
Outstanding $ 683,214 73,402,516 577,274 73,402,516
================================================================================
ESCAgenetics Corporation
(a development stage company)
Statement of Cash Flows
(unaudited)
================================================================================
Period from
April 1, 2003
(inception of
Nine-month Nine-month development
period ended period ended stage) to
June 30, 2003 June 30, 2002 June 30, 2003
------------ ------------- --------------
OPERATING ACTIVITIES
Net Income $ (64,950) $ (35,351) $ (43,929)
Stock issued in lieu of compensation 24,500 -- 24,500
Adjustments to reconcile net income
to net cash provided by operations: -- -- --
Accounts Payable 1,033 2,000 (6,789)
Accrued Expenses 13,100 -- --
------------ ------------ ------------
Net cash provided by Operating Activities (26,317) (33,351) (26,218)
------------ ------------ ------------
FINANCING ACTIVITIES
Due to Parent -- 24,000 --
Proceeds for the issuance of stock 42,670 -- 42,670
------------ ------------ ------------
Net cash provided by Financing Activities 42,670 24,000 42,670
------------ ------------ ------------
Net cash increase for period 16,353 (9,351) 16,452
------------ ------------ ------------
Cash at beginning of period 123 11,684 24
------------ ------------ ------------
Cash at end of period $ 16,476 $ 2,333 $ 16,476
============ ============ ============
SCHEDULE OF NON-CASH
FINANCING ACTIVITIES
Conversion of Promissory Note and
Accrued interest to common stock 253,100 -- 253,100
ESCAGENETICS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTH PERIOD ENDED JUNE 30, 2003 AND 2002
1. Unaudited information:
The financial statements for the nine months ended June 30, 2003 and 2002 are
unaudited and reflect all adjustments which are, in the opinion of management,
necessary for the fair presentation of the financial position and operating
results for the periods presented. Certain footnote disclosures normally
included with financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
from these financial statements. Accordingly, these unaudited financial
statements should be read in conjunction with the September 30, 2002 audited
consolidated financial statements and notes thereto included in the Company's
annual report on Form 10-KSB for the year ended September 30, 2002.
--------------------------------------------------------------------------------
2. Stock Transactions:
During April 2003, the Company declared a one for 140 reverse split of all
outstanding common stock. All periods presented have reflected the reverse stock
split.
During April, 2003, an entity owning 90% of the Company's common stock sold its
interest to an individual (the Principal Stockholder), along with a $253,100
convertible note (the Note) due from the Company. The Principal Stockholder then
converted the Note into 235,021 shares (per split) of common stock, in
accordance with the terms of the note. As a result of this transaction, the
Company is considered a development stage enterprise effective April 1, 2003.
The Company issued the Principal Stockholder and two other individuals 70,000
shares of common stock for services (valued at approximately $25,000) during the
three months ended June 30, 2003.
The Company sold 179,625 shares of common stock to two individuals during the
three months ended June 30, 2003 and received proceeds totaling $42,670.
ITEM 2 - Plan of Operation
Effective as of August 22, 1996, the Company was reorganized pursuant to a plan
of reorganization that was confirmed by the U.S. Bankruptcy Court. The Company
has had no revenues from operations since the reorganization date. The Company
does not plan to continue the business activities that it previously conducted.
It plans to pursue a business combination or other strategic transaction. The
Company believes its status as a public company may be attractive to a private
company wishing to avoid an initial public offering but there is no guarantee
that a business combination or other strategic transaction will be consummated.
The Company has funded its expenses since the reorganization date with advances
from its majority shareholder, Genesee Holdings, Inc. ("Holdings"). During
April, 2003, Holdings sold its 90% interest in the Company's to an individual
(the Principal Stockholder), along with a $253,100 convertible note (the Note)
due from the Company. The Principal Stockholder then converted the Note into
235,021 shares of common stock, in accordance with the terms of the note. As a
result of this transaction, the Company is considered a development stage
enterprise effective April 1, 2003. If a business combination or other strategic
transaction is not consummated in a suitable timeframe or cannot be consummated
due to excessive cost or for any other reason, there is substantial doubt the
Company will be able to continue as a going concern.
The Company has no employees and no fixed assets. The company does not
anticipate hiring any employees or purchasing any assets until such time as a
business combination or other strategic transaction is consummated or is
imminent.
On June 20, 2003, the Company entered into a letter of intent to effect an
acquisition of Shecom Corporation, a California-based value-added developer and
distributor of computer hardware and electronic devices established in 1986.
The acquisition will be completed pursuant to the terms of a formal Acquisition
Agreement. The Acquisition Agreement will require the issuance of 23 million
newly issued shares of the Company common stock and will entail Shecom becoming
a wholly-owned subsidiary of the Company. Upon completion of the Acquisition,
the current owners of Shecom will own approximately 92.5% of the outstanding
stock of the Company and the Company will change its name to Shecom Corporation.
The acquisition is dependent upon Shecom completing a bridge financing of at
least $500,000 and other representations and conditions to be contained in a
formal Acquisition Agreement. There can be no assurance that this acquisition
will be completed.
ITEM 3 - Controls and Procedures
The Company was dormant during the fiscal quarter ended June 30, 2003. The
Company has had no employees since November 1996. Within 90 days prior to the
filing date of this report, to the extent applicable to a dormant company, the
Company carried out an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures (as defined in
Exchange Act Rule 13a-14(c) and 15d-14(c)). Based upon that evaluation, the
Chief Executive and Financial Officer concluded that the Company's disclosure
controls and procedures are effective.
There are no significant changed in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation.
PART II
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 Matters to a Vote of Security Holders - None
ITEM 5 - Other Information - -None
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit # Exhibit Title
--------- -------------
3.1* Certificate of Incorporation
3.2** By-Laws
31 Certification pursuant to Rule 13a-14(a) and 15d-14(a)
32 Certification pursuant to Section 1350 of Title 18 of the
United States Code
------------------
* Incorporated by reference to the Company's Form 10-QSB for the quarter ended
December 31, 1998.
** Incorporated by reference to the Company's Form 10-QSB for the quarter ended
December 31, 1996.
(b) Forms 8-K
Two current reports on Form 8-K were filed during the quarter ended March 31,
2003: Form 8-K dated February 11, 2003, reporting the termination of Deloitte &
Touche LLP as the Company's independent auditors; Form 8-K dated March 12, 2003,
reporting the appointment of Hein + Associates LLP as the Company's independent
public accounts.
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.
ESCAGENETICS CORPORATION
By:_____________________________
Dated: August _____, 2003