0001010412-99-00002810QSB SIERRA HOLDINGS GROUP INC 19990225199902251226351226161226160 0001010412-99-000028 10QSB 2 19990131 19990225 SIERRA HOLDINGS GROUP INC 0001059137 6770 870565018 NV 1031 10QSB 34 333-72019 99549636 5445 SOUTH HIGHLAND DRIVE SALT LAKE CITY UT 84117 8012782805 5445 SOUTH HIGHLAND DRIVE SALT LAKE CITY UT 84117 10QSB 1 FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED JANUARY 31,1999 U. S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1999 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to____________ Commission File No. 0-23995 SIERRA HOLDINGS GROUP, INC. --------------------------- (Name of Small Business Issuer in its Charter) NEVADA 87-0576421 ------ ---------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 4843 Wallace Lane Salt Lake City, Utah 84117 --------------------------- (Address of Principal Executive offices) Issuer's Telephone Number: (801) 278-2805 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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. (1) Yes X No (2) Yes No X --- --- --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Not applicable. APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: January 31, 1999 9,326,744 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. The Financial Statements of the Registrant required to be filed with this 10-QSB Quarterly Report were prepared by management, and commence of the following page, together with Related Notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant. SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) FINANCIAL STATEMENTS January 31, 1999 and October 31, 1998 SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) Balance Sheets
ASSETS January 31, October 31, 1999 1998 (Unaudited) CURRENT ASSETS Cash $ 3,517 $ 1,156 Total Current Assets 3,517 1,156 TOTAL ASSETS $ 3,517 $ 1,156 LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable $ 3,072 $ 615 Shareholder loan payable (Note 2) 16,500 10,000 Accrued interest payable 905 575 Total Liabilities 20,477 11,190 STOCKHOLDERS EQUITY (DEFICIT) Common stock: 100,000,000 shares authorized of $0.001 par value, 9,326,744 shares issued and outstanding 9,327 9,327 Capital in excess of par value 78,950 78,950 Deficit accumulated during development stage (105,237) (98,311) Total Stockholders Equity (Deficit) (16,960) (10,034) TOTAL LIABILITIES, AND STOCKHOLDERS EQUITY (DEFICIT) $ 3,517 $ 1,156
SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) Statements of Operations (Unaudited)
From Inception on December 26, For the Three Months Ended 1986 Through January 31, October 31, 1999 1998 1999 REVENUES $ - $ - $ - EXPENSES 6,926 10,086 (105,237) NET LOSS $ (6,926)$ (10,086)$ (105,237) BASIC LOSS PER SHARE $ (0.00)$ (0.09) WEIGHTED AVERAGE NUMBER OF SHARES 9,327,744 118,132
SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) Statements of Stockholders Equity (Deficit)
Deficit Accumulated Capital in During the Common Stock Excess of Development Shares Amount Par Value Stage Balance at inception on December 26, 1986 - $ - $ - $ - Shares issued for cash at $7.50 per share 667 1 4,999 - Partial liquidating dividend - April 17, 1987 - - (2,484) - Net loss for the year ended October 31, 1987 - - - (910) Balance, October 31, 1987 667 1 2,515 (910) Net loss for the year ended October 31, 1988 - - - (1,701) Balance, October 31, 1988 667 1 2,515 (2,611) Net income for the year ended October 31, 1989 - - - 251 Balance, October 31, 1989 667 1 2,515 (2,360) Contribution and cancellation of shares by officers of the Company (465) - - - Shares issued for services valued at $3.00 per share 1,697 2 5,088 - Expenses paid on behalf of the Company by a shareholder - - 304 - Net loss for the year ended October 31, 1990 - - - (5,650) Balance, October 31, 1990 1,899 3 7,907 (8,010) Net loss for the year ended October 31, 1991 - - - (100) Balance, October 31, 1991 1,899 $ 3 $ 7,907 $ (8,110) Shares issued for services valued at $3.00 per share 2,900 3 8,697 - Shares issued in acquisition of Nature Talks Corp. valued at $3.00 per share 3,333 3 9,997 - Net loss for the year ended October 31, 1992 - - - (19,275) Balance, October 31, 1992 8,132 9 26,601 (27,385) Net loss for the year ended October 31, 1993 - - - (100) Balance, October 31, 1993 8,132 9 26,601 (27,485) Net loss for the year ended October 31, 1994 - - - (100) Balance, October 31, 1994 8,132 9 26,601 (27,585) Net loss for the year ended October 31, 1995 - - - (107) Balance, October 31, 1995 8,132 9 26,601 (27,692) Shares issued for services valued at $3.00 per share 10,000 10 29,990 - Expenses paid on behalf of the company by a shareholder - - 667 - Net loss for the year ended October 31, 1996 - - - (30,160) Balance, October 31, 1996 18,132 19 57,258 (57,852) Net loss for the year ended October 31, 1997 - - - (114) Balance, October 31, 1997 18,132 $ 19 $ 57,258 $(57,966) Issuance of fractional shares for 1-for-300 reverse stock split 7,375 7 (7) - Shares issued for cash at $0.01 per share 300,000 300 2,700 - Issuance of fractional shares for 1-for-10 reverse stock split 1,237 1 (1) - Shares issued for services valued at $0.003 per share 6,000,000 6,000 12,000 - Shares issued for cash at approximately $0.003 per share 3,000,000 3,000 7,000 - Net loss for the year ended October 31, 1998 - - - (40,345) Balance, October 31, 1998 9,326,744 9,327 78,950 (98,311) Net loss for the three months ended January 31, 1999 (unaudited) - - - (6,926) Balance for the three months ended January 31, 1999 (unaudited) 9,326,744 $ 9,327 $78,950 $(105,237)
SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) Statements of Cash Flows (Unaudited)
From Inception on December 26, For the Three Months Ended 1986 Through January 31, October 31, 1999 1998 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (6,926) $ (10,086) $(105,237) Adjustments to reconcile net loss to net cash (used) by operating activities: Depreciation and amortization - - 3,496 Stock issued for services - - 71,790 Changes in assets and liabilities: Increase in organization costs - - (1,065) Increase in accounts payable 2,458 10,086 3,072 Increase in accrued interest payable 330 - 905 Increase in taxes payable - - - Net Cash (Used) by Operating Activities (4,138) - (27,039) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment - - (4,887) Net Cash (Used) by Investing Activities - - (4,887) CASH FLOWS FROM FINANCING ACTIVITIES Disbursement of partial liquidating dividend - - (2,484) Capital contributed by stockholders - - 971 Non-cash sale of video cassettes - - (369) Issuance of common stock - 3,000 18,000 Proceeds of loan from shareholder 6,500 - 19,325 Net Cash Provided by Financing Activities $ 6,500 $ 3,000 $ 35,443 NET INCREASE IN CASH $ 2,362 $ 3,000 $ 3,517 CASH AT BEGINNING OF PERIOD 1,155 - - CASH AND END OF PERIOD $ 3,517 $ 3,000 $ 3,517 Cash Payments For: Income taxes $ - $ - $ - Interest $ - $ - $ - Non-Cash Financing Activities: Exchange of video cassettes in lieu of note payable $ - $ - $ 369
SIERRA HOLDINGS GROUP, INC. (A Development Stage Company) Notes to the Financial Statements January 31, 1999 and October 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Organization The financial statements presented are those of Sierra Holdings Group, Inc. (formerly Sierra International, Inc.) The Company was incorporated as Celebrity Videos, Inc. under the laws of the State of Utah on December 26, 1986. On April 17, 1987, the Company was spun off of Loki Holding Corporation (formerly Dynamic Video, Inc.) in a partial liquidating dividend. On July 18, 1990, the Company changed its name to Vegas Gaming Services, Inc. On April 15, 1992, the Company changed its name to Nature Talks Corporation. At a meeting on November 18, 1997, the shareholders approved a proposal to reverse stock split the outstanding common shares at a rate of 1 share for every 300 shares outstanding, with no stockholders holdings to be reduced below 50 shares as a result of such reverse split. All references to shares outstanding and loss per share have been retroactively restated to reflect the reverse stock split. On November 26, 1997, the Company changed its name to Sierra International, Inc. At a meeting on February 9, 1998, the shareholders approved a proposal to reverse stock split the outstanding common shares at a rate of 1 share for every 10 shares outstanding, with no stockholders holdings to be reduced below 50 shares as a result of such reverse split. All references to shares outstanding and earnings per share have been retroactively restated to reflect the reverse stock split. On February 13, 1998, Sierra International, Inc. merged with Sierra Holdings Group, Inc. changing the Company s state of incorporation from Utah to Nevada and its name to Sierra Holdings Group, Inc. (SHG). Accordingly, SHG became the continuing entity for accounting purposes, and the transaction was accounted for as a recapitalization of the Company with no adjustment to the basis of the Company s assets or liabilities assumed by SHG. For legal purposes, SHG was the surviving entity. b. Accounting Method The Company's financial statements are prepared using the accrual method of accounting. The Company has adopted an October 31 year end. c. Basic Loss Per Share The computations of basic loss per share of common stock are based on the weighted average number of shares issued and outstanding during the period of the financial statements. d. 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 statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. e. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. NOTE 2 - RELATED PARTY TRANSACTIONS A shareholder loaned the Company $16,500 to cover operating expenses. The note payable is unsecured, due on demand and accrues interest at 12% annually. Accrued interest payable at January 31, 1999 and October 31, 1998 was $591 and $575, respectively. NOTE 3 - GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. It is the intent of the Company to seek a merger with an existing, operating company. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses. NOTE 4 - ISSUANCE OF STOCK During the year ended October 31, 1987, the Company issued 667 shares of common stock for $5,000 cash. During the year ended October 31, 1990, shareholders of the Company contributed 465 shares of common stock back to the Company. In addition, 1,697 shares of common stock were issued for services valued at an average price of $3.00 per share. During the year ended October 31, 1992, the Company issued 2,900 shares of common stock for services valued at an average price of $3.00 per share. In addition, the Company issued 3,333 shares of common stock in the acquisition of Nature Talks Corporation. During the year ended October 31, 1996, the Company issued 10,000 shares of common stock for services valued at $3.00 per share. During the year ended October 31, 1998, the Company issued 7,375 fractional shares of common stock as a result of the 300-to-1 reverse stock split. The Company also issued 300,000 post reverse stock split shares of common stock for $3,000 cash. In addition, the Company issued 1,237 fractional shares of common stock as a result of the 10-to-1 reverse stock split. Finally, 6,000,000 post- split shares of common stock were issued for services valued at $18,000 and 3,000,000 post-split shares of common stock were issued for $10,000 cash. Item 2. Management's Discussion and Analysis or Plan of operation. Plan of Operation. The Company has not engaged in any material operations since its inception or during the quarterly period ended January 31, 1999. During this period, the Company received no revenues. During the same period, total expenses were $6,926; the Company incurred a loss from operations of ($6,926) during the three months ended January 31, 1999. The Company's plan of operation for the next 12 months is to continue to seek the acquisition of assets, properties or businesses that may benefit the Company and its stockholders. Management anticipates that to achieve any such acquisition, the Company will issue shares of its common stock as the sole consideration for such acquisition. During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining the Company in good standing or the payment of expenses associated with reviewing or investigating any potential business venture. Management expects that the Company's cash on hand of $3,517 at January 31, 1999, will not be sufficient to meet these requirements. If additional moneys are needed, they may be advanced by management or principal stockholders as loans to the Company. Because the Company has not identified any such venture as of the date of this Report, it is impossible to predict the amount of any such loan. However, any such loan will not exceed $25,000 and will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction. As of the date of this Report, the Company has not begun seeking any acquisition. Results of Operations. During the quarterly period ended January 31, 1999, the Company had no business operations. During this period, the Company received total revenues of $0 and had a loss from operations of ($6,926). Liquidity. At January 31, 1999, the Company had total current assets of $3,517 and total liabilities of $20,477. Year 2000. The Company presently has no material operations, and is presently seeking a suitable candidate for a merger or acquisition transaction. Due to its very limited activities and assets, management does not believe that the change of year to the year 2000 will have any material effect on its business, results of operations or financial condition. In seeking out a merger or acquisition target, the Company will take into account the ways in which the Year 2000 may materially affect the operations of any such target. However, until such an entity has been identified, management can not accurately predict how (if at all) the Year 2000 issue may affect the operations of the reorganized Company. At such time as the Company completes such a reorganization, it will timely disclose all material Year 2000 issues in the appropriate filing with the Securities and Exchange Commission. For the foregoing reasons, the Company has determined that the potential consequences of the Year 2000 would not have a present material effect on its business, results of operations or financial condition. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None; not applicable. Item 2. Changes in Securities. None; not applicable. Item 3. Defaults Upon Senior Securities. None; not applicable. Item 4. Submission of Matters to a Vote of Security Holders. None; not applicable. Item 5. Other Information. None; not applicable. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Financial Data Schedule. (b) Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements 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. SIERRA HOLDINGS GROUP, INC. Date: 2/24/99 By:/s/Steven D. Moulton Steven D. Moulton Director and President Date: 2/24/99 By:/s/Michelle Wheeler Michelle Wheeler Director and Secretary/Treasurer EX-27 2 FINANCIAL DATA SCHEDULE
5 0001059137 SIERRA HOLDINGS GROUP, INC. 3-MOS OCT-31-1999 JAN-31-1999 3517 0 0 0 0 3517 0 0 3517 20477 0 0 0 9327 (26287) 3517 0 0 0 0 6926 0 0 (6926) 0 (6926) 0 0 0 (6926) (0.00) (0.00)