SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
Swifty Carwash & Quik-Lube, Inc.
(Exact name of registrant as specified in its charter)
Florida 65-078-3722
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
17521 Crawley Road, Odessa, Florida 33556
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 926-1603
Securities to be registered pursuant to
Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
n.a.
Securities to be registered pursuant to
Section 12(g) of the Act:
(Title of class)
Common stock, $.0001 par value
Class A Common Stock Warrants, $.01 par value
<PAGE>
Description of the Business.
Swifty Carwash is a Florida Corporation formed on September 23, 1997(the
"Company"). The Company is a successor to Steele Holdings, Inc., a Florida
Corporation formed on August 13, 1997. Rachel Steele was the sole shareholder of
and President of Steele Holdings. On January 20, 1998, the Company and Steele
Holdings, Inc., were reorganized with all the assets of Steele Holdings being
transferred into the Company. All 6,000 authorized shares of common stock were
exchanged on a one to one thousand basis for shares in the Company. The real
estate owned by Steele Holdings, which was used to build the first Carwash
Center in Pinellas County, and Steele Holdings' contract with Oliveri Architects
for the design of the first carwash, were assigned to the Company for no
consideration. After the reorganization, all stock in the Company was owned by
the Company's president, Rachel Steele. Steele Holdings has conducted no other
business, held no other assets and was dissolved on October 16, 1998.
The Company was formed to develop, own and operate a chain of full-service car
washes and express oil change centers (the "Centers"). The Company's founders
plan to capitalize on various trends that they believe will create demand for
the auto-related products and services to be provided by the Centers. One such
trend is the steady reduction in the number of gas stations providing routine
automobile maintenance such as oil changes. Thousands of the traditional,
full-service stations have closed and many others have been converted to
self-service stations offering no maintenance services. A second trend is the
increased demand for convenience created by Americans' busier lifestyles. A
majority of U.S. households now have two working spouses or a single working
adult. Work and family responsibilities have both reduced spare time and
increased the dependence on automobile transportation. As a result, fewer and
fewer Americans are taking the time to change their own oil and/or wash their
cars at home. Several companies have attempted to exploit these trends by
opening stand-alone car washes or quick-lube centers. The Company believes that
a market niche exists for the combination of these two services at one
establishment. Accordingly, the Company anticipates that its full service
Centers will be designed to fill this niche by offering a car wash, oil change
and fluid check within a 15 to 20 minute period, all without an appointment.
The Company has spent approximately $200 on demographic surveys of the area
surrounding the first Center in Palm Harbor, Florida compiled by Urban Decisions
Marketing, Inc. In addition to the trends discussed above, the Company is
targeting high growth, high traffic areas for its Centers. With the assistance
of data from Urban Decision MArketing, Inc. the Company found the area off of
U.S. Highway 19 in Palm Harbour, Florida to be an area of high urban growth
consistent with its target market for its first Center location. Additional
locations will be targeted in similar areas to capture what the Company believes
is its market niche.
The Company anticipates that each Center will contain a full service carwash,
car detailing station, oil change and lube bays and a retail area. The Centers
will be designed so that cars can drive through the oil and lube bays and then
drive through the carwash. The oil change and lube areas will be located in two
or three bays designed and equipped to provide oil and filter changes,
lubrication and replacement of most engine fluids. The service bays will each
feature a basement in order to eliminate the need for hydraulic lifts and allow
more than one technician to work on the car simultaneously. To increase
efficiency, one technician will work from the basement and another technician
will work at ground level. In addition to changing the oil, the technicians will
also lubricate the chassis, check and fill the transmission, brakes,
differential, power steering, window washer and battery fluids, check the air
filter and inflate the tires to the proper pressure. The Company plans to have
each Center use top-quality replacement motor oils, lubricants and filters as
part of its standard oil change. The Centers will be designed and stocked to
service almost every kind of vehicle, including foreign and older vehicles.
Certain parts and supplies offered by the Company will be sold on a consignment
basis, thereby reducing the amount of capital required for inventory.
The Company anticipates that each Center will be equipped with a 100-foot fully
automatic conveyer featuring touch free equipment. The equipment will be fully
computerized and will feature the latest technology in automated carwash
equipment. Each car will be vacuumed prior to entering the wash and window
interiors will be manually cleaned after the car exits the wash. Customers will
also be given the opportunity to choose from a variety of optional services such
as tire and interior treatment. The Company anticipates that each Center will
also feature a separate station providing complete auto detailing on an
expedited basis.
The Company plans for each Center to feature a customer lounge as well as a
snack bar with coffee, espresso and related items. The lounge will include a
retail area which will display a complete line of novelty and unique
accessories. From windows located along one wall of the retail area, customers
will be able to watch their cars as they are being washed.
The Company plans to use a computerized point of sale computer system in each
Center, enabling the Company's management to identify strengths and weaknesses
in each Center's operation. The computer system will also track customer data,
sales and employee information. Each Center's computer system will eventually be
linked to the Company's home office so that results can be analyzed by the
Company's management on a daily basis.
In addition to the Company's full-service Centers, the Company may in the future
develop one or more self-service Centers. The self-service Centers would be
placed in locations that are not large enough to otherwise be usable for a
full-service Center. Self-service Centers would probably consist of a series of
four to five bays in which customers can wash their own cars using a devise that
emits soap, pressurized water and wax. In addition, one bay may be dedicated to
a touchless carwashing machine. The Company has not determined when it may
develop self-service Centers, if ever, and accordingly, has not provided for the
development of self-service Centers in its business plans described herein.
Unless expressly stated otherwise, the use of the term "Center" throughout this
Registration Statement means a full-service Center, not a self-service Center.
The Company constructed its prototype Center in Palm Harbor Florida on real
property owned by the Company (hereinafter the "Prototype Center"). The
approximately one (1) acre site was purchased from Champion Hills by the
Company's predecessor for $312,500. The land was assigned to the Company along
with Steele Holdings' other assets in the reorganization. The Company entered
into a contract in the amount of $15,500 with Oliveri Architects for the design
of the Prototype Center. Equipment for the Prototype Center in the amount of
$271,000.10 was purchased from O'Hanrahan Consultant's, Inc. Its contract
provided for assistance with construction of the carwash and installation and
operation of the equipment. The first Center was opened on January 18, 1999. It
is too early to anticipate the profitability of operations at the first Center.
Letters of intent have been issued regarding acquisition of other Center sites
but none have been agreed upon as of January 26, 1999.
At its Prototype Center, the Company currently has four employees. The Company
anticipates that each Center will have approximately 15-20 full and part-time
employees, consisting of one manager, two assistant mangers, five to seven
clerical and sales personnel and seven to ten employees in the Center's carwash
and oil change operations. In addition, it has agreements for services with
Donald Hughes, Raymond Lipsch and Stanley Rabushka all of whom are officers or
founding shareholders in the Company.
The Company anticipates that it will participate in a product indemnification
program with Pennzoil Products Company ("Pennzoil") for the disposal of product
waste. Under the program, a Pennzoil approved waste-oil hauler removes the oil
and lubricant waste from pre-approved containers on-site. Pennzoil will agree to
indemnify the Company against any waste oil spills or improper disposal of the
waste oil materials. In addition, the Centers are built without any drainage in
the oil change pits to prevent accidental spills. 70% of the detergent and wax
products used in the carwash are recycled within a built-in reclaim system at
the Center. No permit was required to dispose of the additional waste products
in the public sewage system.
The Company is subject to various local, state and federal laws regulating the
discharge of pollutants into the environment. The Company believes that its
operations are in compliance in all material respects with applicable
environmental laws and regulations. Compliance with these laws and regulations
is not expected to materially affect the Company's competitive position. Even if
the Company is able to enter into the Pennzoil indemnification program, there
can be no assurance that the Company will not incur material environmental
liability in connection with any of its properties.
The Company is in the development stage of conducting its business. Its
operations are subject to various risks inherent in any start-up enterprise with
no operating history. New ventures, such as the Company, frequently encounter
unforeseen problems which often require more time and capital than budgeted, and
are subject to all of the risks inherent in the organization of a new business
venture. As a result of its developmental nature and its limited history, the
Company may be expected, at least initially, to continue to sustain operating
losses.
The officers and directors of the Company have no experience operating a
business of this type. The Company is working with consultants who have
experience in the industry: John Oster, and Edward O'Hanrahan. John Oster will
be given 10,000 shares of the Company's restricted common stock in exchange for
consulting regarding carwash start-up and operation for a period of one year.
There are other carwash companies and car lube companies with more operating
experience and financial resources than the Company. Currently, only minimal
revenue has been received by the Company from operations. There can be no
assurance that the Centers will be profitable.
The Company has concluded that in order to facilitate the trading of its
securities a voluntary filing of a registration statement on Form 10-SB pursuant
to the Security Exchange Act of 1934, as amended, (the "Exchange Act") is
warranted.
The Company's business plan for the twelve months following registration
consists of completing the development of its first six Centers and the standard
operating policies and procedures that will be applicable to all Centers. The
Company anticipates that as the fifth and sixth Centers are being developed, the
Company will also open a centralized administrative office.
The Company has been able to complete the first Center without the funds from
its private offering which was completed in October 1998. The second Center will
require approximately all of the funds from the Company's private offering.
Funds raised from public sales of securities will be used to complete the
remaining Centers. In the event that an active trading market does not develop
for the Company's securities, the Company anticipates future cash requirements
will be met by borrowing from institutional lenders.
Description of the Property.
The Prototype Center began operations on January 18, 1999. It is located in Palm
Harbor, Florida, on U.S. Highway 19. The Prototype Center cost $1.2 million
dollars and the remaining Centers should cost between $800,000 and $900,000 to
construct. The subject property containing the Prototype Center consists of
approximately one (1) acre and previously received approval from Pinellas County
for site construction. A construction contract was entered into between the
Company and Brandon Construction Company for the Prototype Center construction
with the amount of $525,486 being paid to Brandon. The Company and Rachel
Steele, President of the Company, personally, entered into a promissory note
with People's Bank in the amount of $525,000 to cover the construction of the
carwash. The note has a maturity date of May 1, 2014 at a rate of one (1%)
percent in excess of the Prime Rate. Said note is secured by a mortgage on the
land owned in Pinellas County for the construction of the Prototype Center.
Sites for the other Centers have not been finalized.
Directors, Executive Officers and Significant Employees.
The following is a brief description of the educational and business experience
of each director, executive officer and key employee of the Company:
Rachel L. Steele, age 30, is a Director as well as President and Secretary of
the Company. Ms. Steele is a graduate of the University of Southern Florida with
a degree in Business Administration. Since graduating from college in May of
1994, Ms. Steele has spent the majority of her time managing her own investment
portfolio. In addition, Ms. Steele has from time to time provided certain
financial consulting services to individuals and corporations.
Raymond Lipsch, age 59, is a Director, Chief Executive Officer, Chief Financial
Officer and Treasurer of the Company. Mr. Lipsch attended Northwestern
University at Illinois. Mr. Lipsch has over 30 years of entrepreneurial and
management experience, specializing in the development of new companies,
developing new divisions and re-energizing troubled ones. Since 1992, Mr. Lipsch
has been engaged in the sales and marketing of insurance products, first as an
independent agent, then as a sales representative for American Express. Since
May 1994, Mr. Lipsch has been employed as a sales representative for Av-Med.
Donald C. Hughes, age 44, is a Director as well as a Vice President of the
Company. Mr. Hughes graduated from the University of Florida in 1977 with a
degree in Building Construction. In 1985, Mr. Hughes formed his own construction
company, Donald C. Hughes General Contractor, Inc., which has been in operation
for thirteen years and which engages primarily in the development and
construction of single family residences and small commercial buildings.
Stanley D. Rabushka, age 64, has been employed by the Company as a business
advisor and consultant since operations began in September 1997. Mr. Rabushka
graduated from Washington University in 1956 and 1958 with degrees of Bachelor
of Science in Engineering Physics and Master of Arts in Mathematics. After a
career involving scientific and engineering work for Emerson Electric and the
United States Government, among others, Mr. Rabushka served for more than 15
years as Vice President and General Manager for Louis Cap Company, a leading
manufacturer of men's headwear. Mr. Rabushka earned his Juris Doctoris degree
from Saint Louis University in 1977 and has been a practicing attorney since
that time with offices in St. Louis, Missouri. Mr. Rabushka, however, will not
provide legal service for the Company, as the Company has retained other counsel
for that purpose.
The above listed individuals have been officers and directors of the Company
since its reorganization on January 20, 1998. No voting arrangements exist and
the above persons were selected pursuant to provisions in Article IV of the
Company's By-Laws, all holding office for a period of one year or until their
successors are elected and qualified. None of the officers or directors of the
Company have been involved in legal proceedings during the past five years which
are material to an evaluation of the ability or integrity of any director,
person nominated to become a director, or executive officer of the issuer,
including any state or Federal criminal and bankruptcy proceedings.
Remuneration of Directors and Officers.
Name of Individual Capacities in which Aggregate Renumeration
Was received
Rachel Steele President $ 96,166
Raymond Lipsch Consultant $ 72,500
Donald Hughes Consultant $210,000
None of the Company's officers currently receive a salary from the Company, and
all but Ms. Steele are engaged in other enterprises on a full-time basis. Rachel
Steele has received advances in lieu of salary totaling $96,166 which have been
repaid at a rate of eight (8%) percent interest as of December 31, 1998. This
advance represents her services from start-up until the filing of the Company's
registration statement, during which time she acted on behalf of the Company
arranging the construction of the first Center and preparing to list the
Company's stock on over-the-counter markets. In addition, Ms. Steele donated
services valued by the Company at $35,000 in preparing the Company to sell its
securities over-the-counter and working with contractors and employees to open
the Prototype Center. Although the Company anticipates entering into an
employment contract with Ms. Steele in the future, no agreements have been
reached regarding the terms of any future compensation.
Since the reorganization and through November 15 1998, Mr. Lipsch has received
compensation for consulting services totaling $72,500 pursuant to his oral
agreement for regarding the private and public offerings for a time not less
then 250 hours per year. Mr. Lipsch's contract provides for this same
arrangement every calendar year expiring on November 15, 2001. The Company has
not reached any agreement regarding future compensation to Mr. Lipsch beyond
November 2001.
Don Hughes as president of Don Hughes General Contractor, Inc., who is also a
Director and Vice-President of Swifty, has entered into a contract with the
Company to provide consulting services in construction and real estate for which
a sum of $210,000 was deposited for his use. None of the funds have been used as
of the date of this offering. This arrangement is anticipated to be applied when
the second Center site is located, to end after its construction. Mr. Hughes'
contract provides that his Corporation will provide construction services for
the Centers when agreeable to both parties. No agreements regarding compensation
beyond the terms of the aforementioned contract have been reached between the
Company and Mr. Hughes.
The above three officers of the Company may be paid a salary at some point in
the future as their responsibilities as Directors with the Company increase. At
this time, the Company does not plan on paying its Board of Directors in return
for their services as Directors.
Security Ownership of Management and Certain Security Holders.
None of the officers and directors has received a salary during the past twelve
months. There are no officer or director groups. The Offering referred to below
is the Company's private offering of securities which was completed in October
of 1998. As a group, the officers and directors of the Company own 81% of the
outstanding shares of common stock.
Title Name and Amount owned Amt owned Percent
of Address before the After of
Class of Owner Offering Offering Class
Common ....... Rachel L. Steele 5,940,000 5,940,000 71%
Stock 17521 Crawley Road
Odessa, FL 33556
Common ....... Stanley and Arlene 1,400,000 1,400,000 17%
Stock ........ Rabushka
250 South Brentwood,
Suite 4-L
St. Louis, MO 63105
Common ....... Raymond Lipsch 600,000 611,520 07%
Stock 19522 Michigan Avenue
Odessa, FL 33556
Common ....... Donald Hughes 235,000 267,720 03%
Stock 3112 Harborview Avenue
Tampa, FL 33611
Common
Stock ........ Total 8,175,000 8,219,240 98%
Warrants
Name of Title and amount Exercise Date
securities called for by of
Holder options, warrants or rights price Exercise
Donald Hughes Class A Common Stock 65,440 7.25 12/31/00
Raymond
Lipsch Class A Common Stock 23,040 7.25 12/31/00
Interest of Management and Others in Certain Transactions.
On January 20, 1998, the Company and Steele Holdings, Inc., were reorganized
with all the assets of Steele Holdings being transferred into Swifty Carwash &
Quik-Lube, Inc. All 6,000 shares of common stock were exchanged on a one to one
thousand basis for shares in the Company. The real estate owned by Steele
Holdings, which was used to build the first Carwash Center in Pinellas County,
and Steele Holdings' contract with Oliveri Architect for the design of the first
carwash, were assigned to the Company for no consideration. After the
reorganization, all stock in the Company was owned by the Company's president,
Rachel Steele.
Rachel Steele also received advances in lieu of salary totaling $96,166 which
have been repaid at a rate of eight (8%) percent interest as of December 31,
1998. This advance was for the time from start-up until the beginning of the
Company's public offering, during which time she acted on behalf of the Company
arranging the construction of the first Center and preparing to list the
Company's stock on over-the-counter markets. In addition, Ms. Steele donated
services valued by the Company at $35,000 in preparing the Company to sell its
securities over-the-counter and working with contractors and employees to open
the Prototype Center.
Mr. Lipsch has received compensation for consulting services totaling $72,500
pursuant to his agreement regarding the private and public offerings for a time
of not less then 250 hours per year. Mr. Lipsch's contract provides for this
same arrangement every calendar year expiring on November 15, 2001.
Don Hughes as president of Don Hughes General Contractor, Inc., who is also a
Director and Vice-President of Swifty, has entered into a contract with the
Company to provide consulting services in construction and real estate for which
a sum of $210,000 was deposited for his use. None of the funds have been used as
of the date of this offering. This arrangement is anticipated to be applied when
the second Center site is located, to end after its construction. Mr. Hughes'
contract provides that his Corporation will provide construction services for
the Centers when agreeable to both parties.
Securities being Registered.
As of November 17, 1998, there are 8,394,120 shares and 318,240 Purchase
Warrants outstanding. 8,235,000 shares of the Company's stock are restricted
and may only be resold pursuant to Rule 144. 159,120 shares have been issued
pursuant to Rule 504 without restrictive legend.
Each share of issued and outstanding stock shall entitle the holder thereof to
fully participate in all shareholder meetings, to cast one vote on each matter
with respect to which shareholders have the right to vote, and to share ratably
in all dividends and other distributions declared and paid with respect to the
common stock, as well as in the net assets of the Company upon liquidation or
dissolution.
Warrants may be exercised at any time after 30 days from their issue date for
the exercise price of $7.25 per share during the period ending December 31,
2000. Each one is redeemable at a price of $0.01 subject to the right of the
holder to exercise his/her/its purchase rights thereunder within a period of 30
days following the issuance of the Company's written notice of redemption. The
Company may reduce the exercise price of the warrants for limited periods or
through the end of the warrants exercise period if deemed appropriate. The
warrants are subject to price adjustments upon the occurrence of certain events
including: (a) subdivisions or combinations of the common stock; (b) merger of
the Company with or into any other corporation; and (c) a distribution of
Company assets.
Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
The Company has authorized 50,000,000 shares of common stock. There is currently
no public trading market for the Company's securities. This is the Company's
initial registration statement. The approximate number of holders of record of
each class of common equity securities is 28. No dividends have been declared to
date. The future dividend policy will depend upon the Company's earnings,
capital requirements, financial condition and other factors considered relevant
by the Company's Board of Directors. As of the date of registration none of the
outstanding warrants have been exercised.
Legal Proceedings.
The Company is not a party to any pending legal proceedings.
Changes in and Disagreements with Accountants.
The Company has not had any disagreement with its independent auditor on any
matter of accounting principles or practices or financial statement disclosure.
Recent Sales of Unregistered Securities.
Prior to its private offering, the Company sold shares to its officers and
directors as set forth above. Additional sales to qualifying purchasers have
been made by the officers of the Company pursuant to Regulation D, Rule 504. The
Company did not pay any sales commissions or discounts to any person for the
cash sales for any shares and no public solicitation was used. No underwriter
has participated in the sales made to date. The total offering price was one
million dollars. Each Unit sold contained 800 shares of common stock and 1,600
Common Stock Purchase Warrants. The price for each Unit was $5,000. 198.9 Units
were sold for a total consideration of $994,500 was raised under the exempt
offering.
Indemnification of Directors and Officers.
The Company has no provision for indemnification in its By-Laws. Section
607.0850 of the Florida Statutes authorizes the Company to indemnify any person
if he or she acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to, the best interests of the Company and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, the best interests of the Company or, with respect to any criminal
action or proceeding, had reasonable cause to believe that his or her conduct
was unlawful. A Company shall have the power to indemnify any person against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof.
<PAGE>
Financial Statements
The Company's financial statements for the years ended December 31, 1997 have
been examined to the extent indicated in their reports by Pender Newkirk &
Company, independent certified public accountants and have been prepared in
accordance with generally accepted accounting principles and pursuant to
Regulation S-B as promulgated by the Securities Exchange Commission and are
included herein.
The Company's financial statements from January 1, 1998 through September 30,
1998 are unaudited and have been prepared in accordance with generally accepted
accounting principles.
Financial Statements
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
Independent Auditors' Report
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
Contents
Independent Auditors' Report on Financial Statements..........................
Financial Statements:
Balance Sheets............................................................
Statements of Operations..................................................
Statements of Changes in Stockholders' Equity.............................
Statements of Cash Flows..................................................
Notes to Financial Statements.............................................
<PAGE>
Independent Auditors' Report
Board of Directors
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Odessa, Florida
We have audited the accompanying balance sheet of Swifty Carwash & Quik-Lube,
Inc. (a development stage enterprise) as of December 31, 1997 and the related
statements of operations, changes in stockholders' equity, and cash flows for
the period then ended. These financial statements are the responsibility of the
management of Swifty Carwash & Quik-Lube, Inc. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Swifty Carwash & Quik-Lube,
Inc. as of December 31, 1997 and the results of its operations and its cash
flows for the period then ended in conformity with generally accepted accounting
principles.
Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
January 30, 1998, except for the first paragraph of Note 6, as to which the date
is February 18, 1998.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Balance Sheets
September 30, December 31,
1998 1997
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 86,649 $ 357,419
Advances to stockholder 14,500
---------------------------------------
Total current assets 101,149 357,419
---------------------------------------
Building and equipment not
yet placed in service 956,411 18,393
---------------------------------------
Other assets:
Advances to stockholder,
net of current portion 84,666
Deposits 243,948 18,948
Offering costs 8,862 10,166
Organizational costs 749 749
---------------------------------------
Total other assets 338,225 29,863
---------------------------------------
$ 1,395,785 $ 405,675
=======================================
Liabilities and Stockholders'
Equity Current liabilities:
Accounts payable $ 287,099 $ 7,705
Income taxes payable 250
Current portion of note payable 2,161
---------------------------------------
Total current liabilities 289,260 7,955
---------------------------------------
Long-term liabilities:
Stock payable 10,000
Note payable, net of current portion 204,525
---------------------------------------
Total long-term liabilities 204,525 10,000
---------------------------------------
Stockholders' equity:
Common stock; $.0001 par value;
50,000,000 shares authorized;
8,350,920 and 6,000,000 shares
issued and outstanding at
September 30, 1998 (unaudited)
and December 31, 1997, respectively 835 600
Paid in capital 1,127,438 385,777
(Deficit) retained earnings
accumulated during
development stage (226,273) 1,343
---------------------------------------
Total stockholders' equity 902,000 387,720
---------------------------------------
$ 1,395,785 $ 405,675
=======================================
Read independent auditors' report. The accompanying notes are an integral part
of the financial statements.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Statements of Operations
<TABLE>
<CAPTION>
Period Period
Nine-Month August 13, 1997 August 13, 1997
Period Ended (Date of Inception) (Date of Inception)
September 30, through September 30, through December 31,
1998 1998 1997
________________________________________________________________
(Unaudited) (Unaudited)
<S> ................... <C> <C> <C>
Operating and start-up
expenses ...................................... $ 231,036 $ 233,891 $ 2,855
_________________________________________________________________
Loss from operations .............................. (231,036) (233,891) (2,855)
Interest income ................................... 6,512 10,960 4,448
Interest expense .................................. (3,092) (3,092)
_________________________________________________________________
(Loss) income before
income taxes .................................. (227,616) (227,023) 1,593
Income taxes ...................................... 250 250
__________________________________________________________________
Net (loss) income ................................. $ (227,616) $ (226,273) $ 1,343
==================================================================
Loss per common share ............................. $ (.03) $ (.03) $ 0.00
==================================================================
Weighted average common
shares outstanding ............................ 8,116,243 7,409,441 6,000,000
==================================================================
</TABLE>
Read independent auditors' report. The accompanying notes are an integral part
of the financial statements.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
<TABLE>
<CAPTION>
Retained Earnings
(Deficit)
Common Stock Paid In Accumulated During
Shares Amount Capital Development Stage
____________________________________________________________
<S> ....................................................... <C> <C> <C> <C>
Common stock issued for cash,
August 1997 ................................................. 6,000,000 $ 600 $ 149,400
Contributed capital for cash and
reimbursement of expenditures,
September 1997 ............................................. 236,377
Income for period ............................................... $ 1,343
_____________________________________________________________
Balance, December 31, 1997 ...................................... 6,000,000 600 385,777 1,343
Common stock issued January
1998 (unaudited) ............................................ 2,235,000 223 22,127
Common stock issued through Regulation D
Offering, net of offering costs of
$23,304, March 1998 through September
1998 (unaudited) ............................................ 115,920 12 684,534
Services donated by stockholder(unaudited) 35,000
Loss for period (unaudited) ...................................... (227,616)
______________________________________________________________
Balance, September 30, 1998
(unaudited) .................................................. 8,350,920 $ 835 $ 1,127,438 $(226,273)
==============================================================
</TABLE>
Read independent auditors' report. The accompanying notes are an integral part
of the financial statements.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows
<TABLE>
<CAPTION>
Period Period
Nine-Month August 13, 1997 August 13, 1997
Period Ended (Date of Inception) (Date of Inception)
September 30, through September through December 31,
1998 30, 1998 1997
______________________________________________________
(Unaudited) (Unaudited)
<S> ............................................................ <C> <C> <C>
Operating activities
Net (loss) income .......................................... $ (227,616) $ (226,273) $ 1,343
______________________________________________________
Adjustments to reconcile net (loss)
income to net cash and cash
equivalents (used) provided by
operating activities:
Contributed services................................ 35,000 35,000
Increase in accounts payable ........................ 36,500 36,500
Decrease in income taxes payable .................... (250) 250
_____________________________________________________
Total adjustments .......................................... 71,250 71,500 250
_____________________________________________________
Net cash (used) provided by operating
activities ............................................. (156,366) (154,773) 1,593
_____________________________________________________
Investing activities
Acquisition of building and equipment ...................... (695,124) (707,286) (6,162)
Increase in deposits, offering costs,
and organizational costs ............................... (223,696) (245,644) (27,948)
____________________________________________________
Net cash used by investing activities ...................... (918,820) (952,930) (34,110)
____________________________________________________
Financing activities
Proceeds from issuance of notes payable .................... 206,686 206,686
Net proceeds from issuance of stock and
contribution of cash ................................... 706,896 1,086,832 379,936
Advances to stockholder..................................... (99,166) (99,166)
(Increase) decrease in stock payable ....................... (10,000) 10,000
__________________________________________________
Net cash provided by financing activities .................. 804,416 1,194,352 389,936
__________________________________________________
Net (decrease) increase in cash and
cash equivalents ........................................... (270,770) 86,649 357,419
Cash and cash equivalents, beginning
of period .................................................. 357,419
__________________________________________________
Cash and cash equivalents, end of period ....................... $ 86,649 $ 86,649 $ 357,419
==================================================
</TABLE>
Read independent auditors' report. The accompanying notes are an integral part
of the financial statements.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
Supplemental disclosures of noncash investing and financing activities:
During the period August 13, 1997 (date of inception) through December 31,
1997, the Company recorded offering costs, organization costs, project
costs, and equipment totaling $6,441 as contributed capital which were
unreimbursed expenditures incurred by the stockholder.
During the period August 13, 1997 (date of inception) through December 31,
1997, the Company incurred a payable in connection with the incurrence of
$7,705 of capitalized offering costs.
During the period ended September 30, 1998, the Company incurred a payable
of $242,894 (unaudited) in connection with its acquisition of equipment.
During the period ended September 30, 1998, the Company reduced paid in
capital by $23,304 of offering costs.
Read independent auditors' report. The accompanying notes are an integral part
of the financial statements.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
1. Basis of Presentation and Reorganization
Steele Holdings, Inc. (a Florida corporation) was incorporated on August 13,
1997. Swifty Carwash & Quik-Lube, Inc. (a Florida corporation) was incorporated
on September 23, 1997. On January 20, 1998, these companies entered into a plan
of reorganization whereby Steele Holdings, Inc. transferred to Swifty Carwash &
Quik-Lube, Inc. all of its assets in exchange for 6,000,000 shares of stock
which represented all of the stock outstanding of Swifty Carwash & Quik-Lube,
Inc. These shares were immediately distributed to the stockholder of Steele
Holdings, Inc. in complete liquidation and cancellation of its stock. The
accompanying financial statements reflect this reorganization in a manner
similar to a pooling of interest and as though it occurred on August 13, 1997.
As part of this reorganization, 2,235,000 shares of stock were issued to three
officers who were considered to be founders. The Company valued these shares at
$.01 per share, an amount they determined to be a fair value based on the risk
and uncertainty of this start-up company.
Since inception of the above companies, they have been in their development
stage, devoting all of their efforts to the development of a car wash and oil
change facility in Pinellas County, Florida.
2. Significant Accounting Policies
The significant accounting policies followed are:
The preparation of financial statements in accordance 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.
In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary for a fair presentation of (a) the
results of operations for the nine-month period ended September 30, 1998
and the period August 13, 1997 (date of inception) through September 30,
1998, (b)
Read independent auditors' report.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
2. Significant Accounting Policies (continued)
the financial position at September 30, 1998, and (c) cash flows for the
nine-month period ended September 30, 1998 and period August 13, 1997
(date of inception) through September 30, 1998, have been made.
Cash equivalents consist of highly liquid debt instruments purchased
with a maturity of three months or less.
The Company maintains cash accounts in excess of the Federal Deposit
Insurance Corporation's insured limit of $100,000.
Building and equipment are stated at cost. Depreciation is calculated
over the useful lives of the assets. No depreciation has been recorded
in the accompanying financial statements since the equipment has not
been placed into service.
During the period ended December 31, 1997, costs pertaining to the
acquisition and construction of facilities had been capitalized as
project costs and were transferred to building and equipment during the
period ended September 30, 1998.
Loss per share is based on the weighted average number of common shares
outstanding during each period after giving effect to the
recapitalization described in Note 1. The Company has implemented SFAS
No. 128. There is no effect on the prior loss per share amounts based on
this statement. In computing diluted earnings per share, warrants
exercisable into 231,840 shares were excluded because the effects were
antidilutive.
Costs incurred in connection with the expected private placement
memorandum have been capitalized as offering costs and will be offset
against proceeds from the offering.
Read independent auditors' report.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
2. Significant Accounting Polices (continued)
Organizational costs are capitalized and amortized over 60 months
beginning in 1998.
Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the
financial statements carrying amounts of existing assets and liabilities
and their respective income tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized as income in the
period that included the enactment date.
Certain minor reclassifications have been made in the 1997 financial
statements to conform to the classifications used in 1998.
3. Building and Equipment Not Yet Placed In Service
Building and equipment not yet placed in service consist of:
September 30, December 31,
1998 1997
(Unaudited)
Land and buildings $ 595,554
Furniture and fixtures 9,487
Machinery and equipment 351,370 $ 10,049
Project costs 8,344
---------------------------------------
$ 956,411 $ 18,393
=======================================
The Company has not recorded depreciation expense on these assets as they have
not been placed in service as of September 30, 1998 (unaudited).
Read independent auditors' report.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
4. Note Payable
The note payable as of September 30, 1998 (unaudited) consists of:
Note payable to bank; construction loan; maximum amount of $525,000;
interest at prime plus 1.0% (9.25% at September 30, 1998); interest
only through May 1999; principal and interest payments of
approximately $2,100 per month beginning June 1999 through May 2014;
secured by mortgage;
personally guaranteed by the majority stockholder $ 206,686
Less amounts currently due 2,161
-----------
$ 204,525
The following is a schedule by year of the approximate principal payments
required on this note as of September 30, 1998 (unaudited):
1999 $ 2,161
2000 6,895
2001 7,561
2002 8,291
2003 9,091
Thereafter 172,687
-----------
$ 206,686
5. Income Taxes
The Company anticipates a taxable loss for the year ending December 31, 1998.
The Company has not recorded any benefit from this anticipated loss due to the
uncertainty of its realization in the future.
Read independent auditors' report.
<PAGE>
Swifty Carwash & Quik-Lube, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
Periods August 13, 1997 (Date of Inception)
through September 30, 1998
6. Stock Offering (Unaudited)
On February 18, 1998, Swifty Carwash & Quik-Lube, Inc., the successor company,
herein after referred to as "the Company," offered 160,000 shares of common
stock and 320,000 common stock warrants through a private placement memorandum
to raise $1.0 million. Each warrant will entitle the holder to purchase one
share of the Company's common stock at $7.25 per share at any time after 30 days
from their issue date through December 31, 2000. Prior to their expiration, each
warrant may be redeemable by the Company at a price of $.01.
As of September 30, 1998 (unaudited), 115,920 shares of stock and 231,840 common
stock warrants have been issued under the above offering.
7. Commitments and Related Party Transactions
During the period ended September 30, 1998, subsequent to the Company's
reorganization, the Company issued 2,235,000 shares of stock to directors and
officers at $.01 per share (unaudited).
At September 30, 1998, the Company had $99,166 (unaudited) of advances to a
stockholder. Subsequent to September 30, 1998, $96,166 of this amount was
formalized into an unsecured promissory note which bears interest at eight
percent (unaudited). The note is to be repaid to the Company in quarterly
installments of principal and interest of $5,000 beginning on November 15, 1998
until the balance is repaid in full.
During the development stage, the president performed services for the Company
at no cost. The Board of Directors valued these services at $35,000 and recorded
this amount as additional paid-in capital.
The above related party agreements are not necessarily indicative of the
agreements that would have been entered into by independent parties.
During the period ended September 30, 1998, the Company entered into a contract
to construct a car wash facility for a total contract price, including change
orders, of approximately $546,000. As of September 30, 1998, approximately
$207,000 (unaudited) of construction costs have been incurred under this
contract.
On August 8, 1998, the Company entered into a consulting and contracting
agreement with a stockholder whereby the stockholder will explore, investigate,
and locate appropriate parcels of land and supplies of equipment on behalf of
the Company. In addition, the stockholder will provide certain construction
services to the Company. In exchange for these services, the Company will pay
the stockholder between three and five percent of the total costs of projects
which have been negotiated or performed by the stockholder. Included in deposits
at September 30, 1998 is $210,000 (unaudited) paid to the stockholder in
connection with this agreement.
Read independent auditors' report.
<PAGE>
Exhibits
Index to Exhibits............................................................25
SWIFTY CARWASH & QUIK-LUBE, INC.
INDEX TO EXHIBITS
(1)Underwriting Agreement
(2)Charter and By-Laws........................................................
*(a)Articles of Incorporation.............................. ..............
**(b)By-Laws...............................................................
(3)Instruments Defining the Rights of Security Holders
*(a)Subscription Agreement................................................
*(b)Warrant Agreement.....................................................
(5)Voting Trust Agreements
(6)Material Contracts.........................................................
*(a)Equipment Purchase Contract...........................................
*(b)Construction Contract.................................................
*(c)Architect Contract....................................................
*(d)Consulting Contract-Donald Hughes.....................................
*(e)Employment Contract-Stanley Rabushka..................................
*(f)Promissory Note - Swifty..............................................
*(g)Promissory Note - Steele .............................................
*(h)Consulting Contract-John Oster .......................................
*(i)Raymond Lipsch Contract ..............................................
*(j)Land Purchase Contract................................................
(7)Material Foreign Patents
*(8)Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession........................................
(9)Escrow Agreements
(10)Consents
(11)Opinion re: Legality
(12)Sales Materials
(13)"Test the Water" Material
(14)Appointment of Agent for Service of Process
(15)Additional Exhibits
* Previously filed with Form 10-SB on November 23, 1998.
** Previously filed with Form 10-SBA No. 1 on February 2, 1999.
<PAGE>
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement Amendment No. 2 to Form 10-SB to
be signed on its behalf by the undersigned, thereunto duly authorized.
Swifty Carwash & Quik-Lube, Inc.
Date: February 17, 1999
By: /s/ Rachel Steele
-----------------------
Rachel Steele, President
