SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
- - ----------------- ----------------------
March 31, 2002 000-31553
HOUSTON OPERATING COMPANY
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0307819
- - -------------------------------- -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
11145 Rockland Dr., Littleton, 80127
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (720) 981-0523
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 the filing
requirements for at least 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.
7,795,171 common shares as of March 31, 2002
HOUSTON OPERATING COMPANY, INC.
Financial Statements
For the Three Months Ended March 31, 2002
(Unaudited)
MICHAEL JOHNSON & CO., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.s
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors
Houston Operating Company, Inc.
We have reviewed the accompanying balance sheet of Houston Operating Company,
Inc. as of March 31, 2002 and the related statements of operations and cash
flows for the three months ended March 31, 2002 and 2001, included in the
accompanying Securities and Exchange Commission Form 10-QSB for the period ended
March 31, 2002. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States, the
objective of which is the expression of an opinion regarding the financial
statements as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of December 31, 2001, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated January 22,
2002, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of March
31, 2002 is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
Michael Johnson & Co., LLC.
Denver, Colorado
May 10, 2002
/s/Michael Johnson & Co., LLC.
HOUSTON OPERATING COMPANY, INC.
BALANCE SHEETS
(Unaudited)
March 31, December 31,
2002 2001
---------------- -------------
ASSETS:
Current Assets:
Cash $ 429 $ 429
---------------- -------------
Total Current Assets 429 429
---------------- -------------
TOTAL ASSETS $ 429 429
================ =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses $ 6,292 $ 6,292
Advances from shareholders' 3,896 3,896
---------------- -------------
Total Current Liabilities 10,188 10,188
---------------- -------------
Stockholders' Equity (Deficit):
Common stock, $.001 par value; 50,000,000
shares authorized; 7,795,171 shares issued
and outstanding, respectively 7,795 7,795
Additional paid-in capital 38,350 38,350
Retained deficit (55,904) (55,904)
---------------- -------------
Total Stockholders' Equity (Deficit) (9,759) (9,759)
---------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 429 $ 429
================ =============
See accountant's review report.
HOUSTON OPERATING COMPANY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
2002 2001
---- ----
REVENUES: $ - $ -
OPERATING EXPENSES:
Sales and marketing - -
General and administrative - 29
-------- ---------
Total Operating Expenses - 29
-------- ---------
Net Loss from Operations - (29)
Other Income and expenses:
Interest income - -
Interest expense - -
Other - -
-------- ---------
- -
-------- ---------
Net Loss $ - $ (29)
======== =========
Weighted average number of
shares outstanding 7,795,171 7,795,171
======== =========
Basic and diluted net loss per share $ - *
======== =========
* - less than $.001 loss per share
See accountant's review report.
HOUSTON OPERATING COMPANY, INC.
STATEMENTS OFCHANGES IN STOCKHOLDES' EQUITY
(Unaudited)
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit Totals
------ ------ ------- ------- ------
Balance - December 31, 1997 2,795,171 $ 2,795 $ 28,820 $ (38,874) $ (7,259)
Net loss for period - - - (1,725) (1,725)
--------- ------- -------- --------- ---------
Balance - December 31, 1998 2,795,171 2,795 28,820 (40,599) (8,984)
--------- ------- -------- --------- ---------
Conversion of loan payable to additional paid-in
capital - - 9,530 - 9,530
Net loss for year - - - (1,000) (1,000)
--------- ------- -------- --------- ---------
Balance - December 31, 1999 2,795,171 2,795 38,350 (41,599) (454)
--------- ------- -------- --------- ---------
Stock issuance for cash 5,000,000 5,000 (4,000) - 1,000
Net loss for year - - - (7,254) (7,254)
--------- ------- -------- --------- ---------
Balance - December 31, 2000 7,795,171 7,795 34,350 (48,853) (6,708)
--------- ------- -------- --------- ---------
Net loss for year - - - (7,051) (7,051)
--------- ------- -------- --------- ---------
Balance - December 31, 2001 7,795,171 7,795 34,350 (55,904) (6,708)
--------- ------- -------- --------- ---------
Net loss for period - - - - -
--------- ------- -------- --------- ---------
Balance - March 31, 2002 7,795,171 $ 7,795 $ 34,350 $ (55,904) $ (6,708)
--------- ------- -------- --------- ---------
See accountant's review report.
HOUSTON OPERATING COMPANY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
2002 2001
---- ----
Cash Flows From Operating Activities:
Net (Loss) $ - $ (29)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in assets and liabilities:
Increase in accounts payables - -
----- -----
- -
----- -----
Net Cash Used in Operating Activities - (29)
----- -----
Cash Flow From Financing Activities:
Proceeds from notes payable - -
Sale of stock - -
Advances from shareholders - -
----- -----
Net Cash Provided By Financing Activities - -
----- -----
Increase (Decrease) in Cash - (29)
Cash and Cash Equivalents - Beginning of period 429 541
----- -----
Cash and Cash Equivalents - End of period $ 429 $ 512
===== =====
Supplemental Cash Flow Information:
Cash paid during period for:
Interest paid $ - $ -
===== =====
Taxes paid $ - $ -
===== =====
See accountant's review reports.
HOUSTON OPERATING COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Presentation of Interim Information
In the opinion of the management of Houston Operating Company, Inc., the
accompanying unaudited financial statements include all normal adjustments
considered necessary to present fairly the financial position as of March
31, 2002, and the results of operations and cash flows for the three months
ended March 31, 2002 and 2001. Interim results are not necessarily
indicative of results for a full year.
The financial statements and notes are presented as permitted by Form
10-QSB, and do not contain certain information included in the Company's
audited financial statements and notes for the fiscal year ended December
31, 2001.
MANAGEMENT DISCUSSION & ANALYSIS RESULT OF OPERATION FOR THE QUARTER ENDED MARCH
31, 2002 COMPARED TO QUARTER ENDED MARCH 31, 2001
- - ------------------------------------------------------------------------------
The Company had no revenues or operations for the period in 2002 or 2001. The
Company incurred no miscellaneous expenses in the quarter in 2002 and $29 in
miscellaneous expenses in the quarter in 2001. The net loss for the quarter was
none in 2002 and ($29) in 2001. Loss per share was none in 2002 and nominal in
2001 for the quarter.
The current trend of lack of revenues and occasional expenses can be expected to
continue until a business combinatin with a revenue producing business can be
acheived.
LIQUIDITY AND CAPITAL RESOURCES
The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Securities and Exchange Act of 1934. The Company will have to seek loans or
equity placements to cover such cash needs. In the event the Company isable to
complete a business combination during this period, lack of its existing capital
may be a sufficient impediment to prevent it from accomplishing the goal of
completing a business combination. There is no assurance, however, that without
funds it will ultimately allow registrant to complete a business combination.
Once a business combination is completed, the Company's needs for additional
financing are likely to increase substantially.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
Appointment of New Directors and Resignation of Directors
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K were made for the period for which
this report is filed.
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.
Date: May 14, 2002
HOUSTON OPERATING COMPANY
/s/ J.R. Nelson
-----------------------------
J.R. NELSON, President