SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM        10-QSB

 

| (X) | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                        SECURITIES EXCHANGE ACT OF 1934. |
|-----|-----------------------------------------------------------------------------------------------------------------|

 

For the        Quarter ended December 31, 2007

 

| (   ) | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                        SECURITIES EXCHANGE ACT OF 1934. |
|-----------------|------------------------------------------------------------------------------------------------------------------|

         

For the transition period from ____________________ to        _____________________

         

Commission File No. 0-15862

         

              

| GVC VENTURE CORP.                                                                        |
|------------------------------------------------------------------------------------------|
| (Exact name of small business issuer as specified in its                        charter) |

 

|   | Delaware   | 13-3018466   |
|--------|----------------------|------------------------|

|   | (State or other jurisdiction of | (I.R.S. Employer |
|--------|---------------------------------|------------------|

| incorporation or organization) | Identification No.) |
|--------------------------------|---------------------|

                    

| The Chrysler Building, 405 Lexington Avenue, Suite 2600, New                    York, NY | 10174                                    |
|------------------------------------------------------------------------------------------|------------------------------------------|
|                                                                                     | (Address of principal executive offices) | (Zip Code) |

 

| Registrant’s telephone number, including area                        code:                                    (212) 907-6610 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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 the past 90 days. Yes         x  No  o          

Indicate by check mark whether the registrant is a shell company (as defined        in Rule 12b-2 of the Exchange Act). Yesx  No  o  

State the number of shares outstanding of each of the issuer’s classes        of common equity, as of latest practicable date: As of February 1, 2008, there were        14,194,516 shares of Common Stock, $.01 par value per share outstanding.

| Transitional Small Business Disclosure Format: | Yes                            o   | No  x |
|------------------------------------------------|------------------------------------------------------------------|-----------------|

 

 

 

 

 

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| **Item 1.** | **Financial Statements** |
|-------------|--------------------------|

**GVC        VENTURE CORP.**

**BALANCE SHEETS**

**(Dollars in thousands)**

 

|                                                                                                                        | December 31,2007 |    | June 30,2007 |
|-----------------------------------------------------------------------------------------------------------------------------|------------------|---------|--------------|
|                                                                                                                        | (Unaudited)      |    | (Audited)    |
| **ASSETS**                                                                                                                  |             |    |         |   |   |   |   |
| Current assets:                                                                                                             |             |    |         |   |   |   |   |
| Cash and cash equivalents                                                                                                   | $                | 67      |         |   | $ | 79 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| Total current assets                                                                                                        |             | 67      |         |   |   | 79 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| Other assets                                                                                                                |             | 1       |         |   |   | 1 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| **TOTAL ASSETS**                                                                                                            | $                | 68      |         |   | $ | 80 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                              |             |    |         |   |   |   |   |
| Current liabilities:                                                                                                        |             |    |         |   |   |   |   |
| Accounts payable and accrued expenses                                                                                       | $                | 119     |         |   | $ | 118 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| Total current liabilities                                                                                                   |             | 119     |         |   |   | 118 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| **TOTAL LIABILITIES**                                                                                                       | $                | 119     |         |   | $ | 118 |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| Commitments and contingencies                                                                                               |             |    |         |   |   |   |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| Stockholders’ equity (deficit):                                                                                       |             |    |         |   |   |   |   |
| Common stock, $.01 par value, authorized 50,000,000 shares,                        issued and outstanding 14,194,516 shares |             | 142     |         |   |   | 142 |   |
| Preferred stock, $.01 par value, authorized 1,000,000                        shares, none issued or outstanding             |             | -       |         |   |   | - |   |
| Additional paid-in capital                                                                                                  |             | 2,266   |         |   |   | 2,266 |   |
| Accumulated deficit                                                                                                         |             | (2,459) |         |   |   | (2,446) |   |
| Total stockholders’ deficit                                                                                           |             | (51)    |         |   |   | (38) |   |
|                                                                                                                        |             |    |         |   |   |   |   |
| **TOTAL LIABILITIES AND****STOCKHOLDERS’ EQUITY**                                                                     | $                | 68      |         |   | $ | 80 |   |

| See notes to financial statements.

                     

2 |
|-------------------------------------------------------------------|

 

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| **GVC VENTURE CORP.**

**STATEMENTS OF OPERATIONS**

**(Unaudited)****(Dollars in thousands, except per share                        data)** |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                         |   |
|                                                                                                                                         |   |
|                                                                                                                                         |   |

 

 

 

|                                                      | Three Months Ended December 31, |
|-----------------------------------------------------------|---------------------------------|
|                                                      | 2007                            |   | 2006 |
|                                                      |                            |   |   |   |   |   |   |
| Fee and other income                                      | $                               | 1 |   |   | $ | 1 |   |
|                                                      |                            |   |   |   |   |   |   |
| Expense:                                                  |                            |   |   |   |   |   |   |
| Corporate office, legal, audit andadministrative expenses |                            | 6 |   |   |   | 6 |   |
| Total expense                                             |                            | 6 |   |   |   | 6 |   |
| Income (loss) from operations                             |                            | (5) |   |   |   | (5) |   |
| Income tax expense                                        |                            | - |   |   |   | - |   |
| Net income (loss)                                         | $                               | (5) |   |   | $ | (5) |   |
|                                                      |                            |   |   |   |   |   |   |
| Basic and diluted income (loss) per share                 | $                               | - |   |   | $ | - |   |
| Weighted average common shares outstanding:               |                            |   |   |   |   |   |   |
| Basic and diluted                                         |                            | 14,194,516 |   |   |   |    14,194,516 |   |

 

| See notes to financial statements.

                         

3 |
|-----------------------------------------------------------------------|

 

 

 

 

 

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| **GVC VENTURE CORP.**

**STATEMENTS OF OPERATIONS**

**(Unaudited)****(Dollars in thousands, except per share data)** |
|-----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                  |   |
|                                                                                                                  |   |
|                                                                                                                  |   |

 

|                                                      | Six Months Ended December 31, |
|-----------------------------------------------------------|-------------------------------|
|                                                      | 2007                          |   | 2006 |
|                                                      |                          |   |   |   |   |   |   |
| Fee and other income                                      | $                             | 2 |   |   | $ | 1 |   |
|                                                      |                          |   |   |   |   |   |   |
| Expense:                                                  |                          |   |   |   |   |   |   |
| Corporate office, legal, audit andadministrative expenses |                          | 14 |   |   |   | 12 |   |
| Total expense                                             |                          | 14 |   |   |   | 12 |   |
| Income (loss) from operations                             |                          | (12) |   |   |   | (11) |   |
| Income tax expense                                        |                          | 1 |   |   |   | 1 |   |
| Net income (loss)                                         | $                             | (13) |   |   | $ | (12) |   |
|                                                      |                          |   |   |   |   |   |   |
| Basic and diluted income (loss) per share                 | $                             | - |   |   | $ | - |   |
| Weighted average common shares outstanding:               |                          |   |   |   |   |   |   |
| Basic and diluted                                         |                          | 14,194,516 |   |   |   | 14,194,516 |   |
|                                                      |                          |   |   |   |   |   |   |

 

| See notes to financial statements.

                         

4 |
|-----------------------------------------------------------------------|

 

 

 

 

 

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| **GVC VENTURE CORP.**                                                          |
|--------------------------------------------------------------------------------|
| **STATEMENTS OF CHANGES IN STOCKHOLDERS’                        EQUITY** |
| **For the six months ended december 31, 2007**                                 |
| **(Dollars in thousands)**                                                     |

 

|                                                                                   | Common Stock | Paid-in                                                                                  | Accumulated                                                                          |                                                                                                     |
|----------------------------------------------------------------------------------------|--------------|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                                                                   | Shares       | Amount                                                                                   | Capital                                                                              | Deficit                                                                                                  | Total |
| Balance, June 30, 2007 (audited)                                                       | 14,194,516   | $              142 | $             2,266 | $                (2,446) | $              (38) |
| Net loss (unaudited) for the six months ended December 31,                        2007 | -            | -                                                                                        | -                                                                                    | (13)                                                                                                     | (13) |
| Balance, December 31, 2007 (unaudited)                                                 | 14,194,516   | $              142 | $             2,266 | $                (2,459) | $              (51) |
|                                                                                   |         |                                                                                     |                                                                                 |                                                                                                     |   |

 

| See notes to financial statements.

                         

5 |
|-----------------------------------------------------------------------|

 

 

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| **GVC VENTURE CORP.**                       |
|---------------------------------------------|
| **STATEMENTS OF CASH FLOWS**                |
| **(Unaudited)**

**(Dollars in thousands)** |
|                                        |   |
|                                        |   |

|                                                                                                    | Six Months Ended December 31, |
|---------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                    | 2007                          |   | 2006 |
|                                                                                                    |                          |   |   |   |   |   |   |
| **Cash Flows from Operating Activities:**                                                               |                          |   |   |   |   |   |   |
| Net income (loss)                                                                                       | $                             | (13) |   |   | $ | (12) |   |
| Adjustments to reconcile net income (loss) to cash provided by                    operating activities: |                          |   |   |   |   |   |   |
| Increase in other assets                                                                                |                          | - |   |   |   | - |   |
| Increase in accounts payable and accrued expenses                                                       |                          | 1 |   |   |   | - |   |
|                                                                                                    |                          |   |   |   |   |   |   |
| Net cash used by operating activities                                                                   |                          | (12) |   |   |   | (12) |   |
| **Cash Flows from Investing Activities:**                                                               |                          | **-** |   |   |   | **-** |   |
| **Cash Flows from Financing Activities:**                                                               |                          | **-** |   |   |   | **-** |   |
|                                                                                                    |                          |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                    |                          | (12) |   |   |   | (12) |   |
| Cash and cash equivalents, beginning of period                                                          |                          | 79 |   |   |   | 85 |   |
| Cash and cash equivalents, end of period                                                                | $                             | 67 |   |   | $ | 73 |   |
|                                                                                                    |                          |   |   |   |   |   |   |
| Supplemental cash flow disclosures:                                                                     |                          |   |   |   |   |   |   |
| Cash payments of interest                                                                               | $                             | - |   |   | $ | - |   |
| Cash payments of income taxes                                                                           | $                             | 1 |   |   | $ | 1 |   |

 

 

| See notes to financial statements.

                     

6 |
|-------------------------------------------------------------------|

 

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GVC        VENTURE CORP.

NOTES        TO FINANCIAL STATEMENTS

 

NOTE A        – BASIS OF PRESENTATION:

         

The        accompanying unaudited financial statements of GVC Venture Corp. (the        “Company”) have been prepared in accordance with accounting principles        generally accepted in the United States of America (GAAP) for interim financial information        and with the instructions to Form 10-QSB and Article 10 of Regulation S-X promulgated by        the Securities and Exchange Commission. Accordingly, they do not include all of the        information and notes required by GAAP for complete financial statements. In the opinion of        management, all adjustments (consisting of normal recurring accruals) considered necessary        for a fair presentation have been included herein. The balance sheet presented herein as of        June 30, 2007 was derived from the Company’s audited financial statements as of and        for the year ended June 30, 2007. Operating results are not necessarily indicative of the        results that may be expected for the year ending June 30, 2008 or other future periods. For        further information, refer to the financial statements and notes thereto included in the        Company’s Annual Report on Form 10-KSB for the fiscal year ended June 30,        2007.

The        financial statements have been prepared assuming the Company will continue as a going        concern. Management believes that the Company has sufficient cash and understandings with        various creditors to continue its efforts to seek merger (including reverse merger)        acquisition and business combination opportunities with operating businesses or other        business or financial transactions for more than the next twelve months. However, the        Company has no operations and has experienced recurring quarterly and annual losses which        significantly weakened the Company’s financial condition and its potential ability to        meet current operating expenses. In addition, the Company’s current liabilities        exceed its current assets by $51,000 at December 31, 2007. The appropriateness of using the        going concerning basis is dependent upon, among other things, the Company’s ability        to raise additional capital to fund operating losses and consummate a merger (including        reverse merger), acquisition, sale, other business combination or other financial        transactions. The uncertainty of obtaining these goals raises doubt about the        Company’s ability to continue as a going concern through December 31, 2008. The        financial statements do not include any adjustments to the carrying value of the assets and        liabilities that might be necessary as a consequence of these uncertainties.

The        Company has implemented all new accounting pronouncements that are in effect and that may        impact its financial statements and does not believe that there are any other new        accounting pronouncements that have been issued that might have a material impact on its        financial statements.

 

7

 

 

 

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NOTE B -        NATURE OF OPERATIONS:

For        several years, the Company has been engaged in no operating activities other than seeking        potential opportunities for an acquisition, sale, reverse merger or other business        combination with operating businesses and other appropriate financial transactions,        including a transaction with a privately held company seeking to operate as a publicly-held        company. During the third quarter of fiscal 2007, ended March 31, 2007, the Company entered        into a standstill arrangement with a potential candidate for a reverse merger transaction,        which was terminated by mutual agreement at the end of February 2007. Under that        arrangement, the Company received $5,000 for each of the months of January and February        2007.

NOTE C -        ESTIMATES:

The        preparation of financial statements in conformity with U.S. generally accepted accounting        principles requires management to make estimates and assumptions that affect certain        reported amounts and disclosures. Accordingly, actual results could differ from those        estimates.

NOTE D        – ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts        payable and accrued expenses consisted of the following at December 31 and June 30,        2007:

|                    | December 31,                         |  | June 30,                              |
|-------------------------|--------------------------------------|--|---------------------------------------|
|                    | 2007                                 |  | 2007                                  |
|                    |                                 |  |                                  |
| Administrative expenses | $     3,000 |  | $      6,000 |
| Professional fees       | 116,000                              |  |   110,000                        |
| State and local taxes   | -                                    |  | 2,000                                 |
|                    |                                 |  |                                  |
| Total                   | $ 119,000                       |  | $  118,000                  |

 

 

| **Item 2.** | **Management’s Discussion and Analysis or Plan of                        Operation** |
|-------------|--------------------------------------------------------------------------------------------|

         

**General**

For        several years, including the quarters and six months ended December 31, 2007 and 2006, the        Company has engaged in no operating activities, while seeking potential opportunities for        an acquisition, sale, merger, including a reverse merger, or other business or financial        transaction.

The        Company plans to continue as a public entity and to actively seek other merger (including a        reverse merger), acquisition and business combination opportunities with operating        businesses or other business or financial transactions, including with a privately-held        company seeking to operate as a publicly-held company. However, there can be no assurance        that this plan will be successfully implemented. The Company

 

8

 

 

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believes        it has sufficient working capital to continue its efforts for more than one year. At this        time, the Company has no other arrangements, commitments or understandings with respect to        any potential merger, acquisition or business combination candidate. The Company has not,        to date, set any specific criteria or models for any such other transaction.

**Results        of Operations**

**Quarter EndedDecember 31,        2007**

**Compared to the Quarter Ended December 31,        2006**

The        Company’s revenues consisted of interest income of $1,000 during each of the quarters        ended December 31, 2007 and December 31, 2006.

The        Company incurred corporate office, legal, audit and administrative expenses of $6,000        during each of the fiscal quarters ended December 31, 2007 and December 31, 2006, in each        case primarily for corporate office, accounting, legal, reporting and stockholder        expenses.

There was        no income tax expense reported in either period.

As a        result, the Company had a net loss of $5,000 in each of the quarters ended December 31,        2007 and December 31, 2006.

**Six        Months Ended December 31, 2007 Compared**

**To        the Six Months Ended December 31, 2006**

 

The        Company’s revenues in the six months ended December 31, 2007 of $2,000 consisted of        interest income compared to interest income of $1,000 in the six months ended December        31 ̧2006. The increase was primarily due to the time period over which cash was        invested.

 

The Company        incurred corporate office, legal, audit and administrative expenses of $14,000 in the six        months ended December 31, 2007 compared to $12,000 for the similar six months of 2006. The        increase was due to increased costs of several items in this category of        expense.

 

Income tax        expense of $1,000 remained consistent in both six month periods.

 

As a        result, the Company had a net loss of $13,000 in the six months ended December 31, 2007        compared to a net loss of $12,000 in the six months ended December 31, 2006.

 

**Liquidity and Capital Resources**

The        Company had cash on hand at December 31, 2007 of $67,000 compared to $79,000 at June 30,        2007 and $73,000 at December 31, 2006. The reduction since June 30, 2007 was due to losses        sustained by the Company.

 

9

 

 

 

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The        Company has no commitment for any capital expenditure. The Company’s cash        requirements for the next twelve months are relatively modest, consisting principally of        rent, legal, accounting and other expenses relating to filings required under the        Securities Exchange Act of 1934, stockholder expenses and other expenses that are expected        to be incurred in its search for an acquisition candidate or other business or financial        transaction.

The        Company believes it has sufficient cash to continue its efforts for more than one year. The        Company does not have any arrangements with banks or other financial institutions with        respect to the availability of financing in the future.

**Off-Balance Sheet Arrangements**

The        Company has no off-balance sheet financing arrangements within the meaning of Item 303(c)        of Regulation S-B.

**New        Accounting Pronouncements**

In        December 2004, the Financial Accounting Standards Board (“FASB”) issued        Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004)        “Share-Based Payment,” (“SFAS 123(R)”). SFAS 123(R) requires        compensation costs related to share-based payment transactions to be recognized in the        financial statements. This guidance became effective for the Company with the quarter ended        March 31, 2006. With limited exceptions, the amount of compensation cost is now measured        based on the grant-date fair value of the equity or liability instruments issued. In        addition, liability awards are to be re-measured each reporting period. Compensation cost        is to be recognized over the period that an employee provides service in exchange for the        award. SFAS 123(R) replaced SFAS 123, “Accounting for Stock-Based Compensation”        and supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock        Issued to Employees.” Under Accounting Principles Board Opinion No. 25, if the        exercise price of stock options granted by the Company equaled or exceeded the market price        of the underlying stock on the date of grant, no compensation cost was recognized. SFAS        123(R) did not effect the Company for any of the reported periods since no stock options        have been granted since January 1, 2006 and no options were outstanding at January 1, 2006.        SFAS 123(R) may effect the Company in the future if it issues share-based        compensation.

In July        2002, the Sarbanes-Oxley Act of 2002 was enacted. Section 404 of the Act stipulates that        public companies must take responsibility for maintaining an effective system of internal        control. The Act requires the Company to report on the effectiveness of its control over        financial reporting beginning with the current fiscal year ending June 30, 2008 and obtain        an attest report from their independent registered public accountant about        management’s report beginning with the Company’s fiscal year ending June 30,        2009.

The        Company has implemented all new accounting pronouncements that are in effect and that may        impact its financial statements and does not believe that there are any other        new

 

10

 

 

 

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accounting        pronouncements that have been issued that might have a material impact on its financial        statements

**Forward        Looking Statements**

 

Certain        statements in this Report are "forward-looking statements" within the meaning of the        Private Securities Litigation Reform Act of 1995. When used in this Report, words such as        "may," "should," "seek," "believe," "expect," “anticipate," "estimate," "project,"        “plan,” “goal,” "intend," "strategy" and similar expressions are        intended to identify forward-looking statements regarding events, conditions and financial        trends that may affect the Company's future plans, operations, business strategies,        operating results and financial position. Forward-looking statements are subject to a        number of known and unknown risks and uncertainties that could cause the Company's actual        results, performance or achievements to differ materially from those described or implied        in the forward-looking statements and its goals and strategies to not be        achieved.

 

These risks        and uncertainties, many of which are not within the Company’s control, include, but        are not limited to:

 

| • | general economic and business conditions; |
|--------|-------------------------------------------|

| • | the Company’s ability to find a candidate for, enter                        into an agreement with respect to, and consummate a merger, acquisition or                        business combination or other financial transaction that is acceptable,                        both as to the candidate and as to transaction terms and                        conditions; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | competition for transactions of the nature the Company is                        seeking; |
|--------|-------------------------------------------------------------------------------------------|

| •

                          | potential future regulatory restrictions that could limit or                        pose restrictions on, or make less advantageous to potential candidates,                        transactions of the nature the Company is seeking; and |
|----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | the availability of additional financing on satisfactory                        terms if a delay is encountered in consummating a transaction that the                        Company is seeking. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

You are        cautioned not to place undue reliance on forward-looking statements, which speak only as of        the date of this Report. We do not undertake any responsibility to publicly update or        revise any forward-looking statement or report.

| **Item 3.** | **Controls and Procedures** |
|-------------|-----------------------------|

As of the end of the period covered by this Report, the Company's President,        who is its principal executive officer and is also its Treasurer and principal financial        officer, evaluated the effectiveness of the Company's “disclosure controls and        procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934.        Based on that evaluation, this officer concluded that, as of the date of his evaluation,        the Company's disclosure controls and procedures were effective to provide reasonable        assurance that information required to be disclosed in the Company's periodic filings under        the

 

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Securities        Exchange Act of 1934 is accumulated and communicated to management, including that officer,        to allow timely decisions regarding required disclosure.

During the period covered by this Report, there were no changes in the        Company's internal control over financial reporting that have materially affected, or are        reasonably likely to materially affect, the Company's internal control over financial        reporting.

 

**PART        II. OTHER INFORMATION**

 

| **Item                        6****.** | **Exhibits** |
|----------------------------------------|--------------|

|   | Exhibit |
|--------|---------|

|   | Number | Description |
|--------|--------|-------------|

|   | 31 | Certificate of the Principal Executive Officer and Principal                        Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of                        2002. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | 32 | Certificate of the Principal Executive Officer and Principal                        Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to                        Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

**Signatures**

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this        Report has been signed below on its behalf by the undersigned thereunto duly        authorized.

 

|   | GVC VENTURE CORP. |
|--------|-------------------|

         

         

          

| Date:February 4,                    2008 | By: | /s/ Bernard                    Zimmerman |
|------------------------------------------|-----|------------------------------------------|
|                                          |     | Bernard Zimmerman, President             |