UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NUMBER 1
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12 (b) or (g)
of the Securities Exchange Act of 1934
DISTRIBUTION MANAGEMENT SERVICES, INC.
(Name of Small Business Issuer in its Charter)
Florida 65-0574760
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
11601 Biscayne Boulevard - #201
Miami, Florida 33181
- -------------------------------- ----------
(Address of Principal Executive (Zip Code)
Offices)
Issuer's Telephone Number:
(305) 893-9273
Securities to be registered pursuant to Section 12(b) of the Act:
Common Stock, no par value per share
------------------------------------
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
None
----
<PAGE>
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
-----------------------------
PAGE
----
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statements of Operations F-3
Statements of Stockholders' Deficiency F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6 to F-13
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders and Directors
Distribution Management Services, Inc.
(A Development Stage Company)
North Miami, Florida
We have audited the accompanying balance sheet of Distribution Management
Services, Inc. (A Development Stage Company) as of May 31, 1999, and the related
statements of operations, stockholders' deficiency and cash flows for each of
the two years in the period then ended. These financial statements are the
responsibility of the management of the Company. 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.
Those 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 Distribution Management
Services, Inc. (A Development Stage Company) as of May 31, 1999 and the results
of its operations and its cash flows for each of the two years in the period
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring net losses and is
dependent upon the continued sale of its securities or obtaining debt financing
for funds to meet its cash requirements. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
with regard to these matters are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
RACHLIN COHEN & HOLTZ LLP
Miami, Florida
September 13, 1999
F-1
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, May 31,
ASSETS 1999 1999
------ ---- ----
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 37,796 $ 207,869
Restricted cash - certificate of deposit 10,000 10,000
Accounts receivable 1,803 --
Prepaid interest 15,786 17,786
--------- -----------
Total current assets 65,385 235,655
Property, Plant and Equipment 907,862 904,846
Other Assets 4,590 4,590
--------- -----------
Total assets $ 977,837 $ 1,145,091
========= ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current Liabilities:
Accounts payable, construction liens $ 96,445 $ 96,445
Accrued interest 49,582 45,021
Notes payable - stockholder and related party 194,643 205,534
Advance payable 65,746 75,000
Current portion of obligation related to litigation settlement 50,000 185,000
--------- -----------
Total current liabilities 456,416 607,000
--------- -----------
Long-Term Debt:
Mortgage payable 375,000 375,000
Obligation related to litigation settlement 225,000 225,000
--------- -----------
600,000 600,000
========= ===========
Commitments and Contingencies -- --
Stockholders' Deficiency:
Common stock; 15,000,000 shares of $.001 par value
authorized; 5,050,000 shares issued and outstanding 5,050 5,050
Additional paid-in capital 782,390 777,404
Deficit accumulated during the development stage (862,419) (840,763)
Subscription receivable (3,600) (3,600)
--------- -----------
Total stockholders' deficiency (78,579) (61,909)
--------- -----------
Total liabilities and stockholders' deficiency $ 977,837 $ 1,145,091
========= ===========
</TABLE>
See notes to financials statements.
F-2
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
August 31, Year Ended May 31, Cumulative
---------- ------------------ from
1999 1998 1999 1998 Inception
---- ---- ---- ---- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Recycling fees $ 18,334 $ -- $ 7,315 $ -- $ 25,649
Interest 143 -- 35 -- 178
----------- ----------- ----------- ----------- ---------
18,477 -- 7,350 -- 25,827
----------- ----------- ----------- ----------- ---------
Costs and Expenses:
Compensation 3,900 9,375 27,075 255,625 286,600
General and administrative 18,917 7,241 73,127 17,914 158,854
----------- ----------- ----------- ----------- ---------
22,817 16,616 100,202 273,539 445,454
----------- ----------- ----------- ----------- ---------
Loss from Operations (4,340) (16,616) (92,852) (273,539) (419,627)
----------- ----------- ----------- ----------- ---------
Other Expenses:
Interest 17,316 -- 15,476 -- 32,792
Litigation settlement -- -- 410,000 -- 410,000
----------- ----------- ----------- ----------- ---------
17,316 -- 425,476 -- 442,792
----------- ----------- ----------- ----------- ---------
Net Loss $ (21,656) $ (16,616) $ (518,328) $ (273,539) $(862,419)
=========== =========== =========== =========== =========
Net Loss Per Common Share $ -- $ -- $ (0.12) $ (0.13)
=========== =========== =========== ===========
Weighted Average Number of
Common Shares Outstanding 5,050,000 4,157,613 4,296,140 2,174,247
=========== =========== =========== ===========
</TABLE>
See notes to financials statements.
F-3
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
Stock
Subscription
Shares Amount Receivable
------ ------ ----------
<S> <C> <C> <C> <C> <C>
Balance, Inception, as Restated for 15,000 for 1 Stock Split 1,200,000 $1,200 $(1,200)
Year Ended May 31, 1995:
Net loss -- -- --
--------- ------ -------
Balance, May 31, 1995 1,200,000 1,200 (1,200)
Year Ended May 31, 1996:
Net loss -- -- --
--------- ------ -------
Balance, May 31, 1996 1,200,000 1,200 (1,200)
Year Ended May 31, 1997:
Net loss -- -- --
--------- ------ -------
Balance, May 31, 1997 1,200,000 1,200 (1,200)
Year Ended May 31, 1998:
Credit for estimated fair value of services performed by officer -- -- --
Credit for estimated fair value of office space used -- -- --
Issuance of common stock ($.001 per share) 2,400,000 2,400 (2,400)
Credit for compensation related to issuance of common stock -- -- --
Issuance of common stock in private placement ($.10 per share) 500,000 500 --
Net loss -- -- --
--------- ------ -------
Balance, May 31, 1998 4,100,000 4,100 (3,600)
Year Ended May 31, 1999:
Credit for estimated fair value of services performed by officer -- -- --
Credit for estimated fair value of office space used -- -- --
Exercise of warrants ($.40 per share) 850,000 850 --
Exercise of warrants ($1.00 per share) 100,000 100 --
Net loss -- -- --
--------- ------ -------
Balance, May 31, 1999 5,050,000 5,050 (3,600)
Three Months Ended August 31, 1999 (Unaudited) -- -- --
Credit for estimated fair value of services performed by officer -- -- --
Credit for estimated fair value of office space used -- -- --
Net loss -- -- --
--------- ------ -------
Balance, August 31, 1999 (Unaudited) 5,050,000 $5,050 $(3,600)
========= ====== =======
</TABLE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Paid-In Development
Capital Stage Total
------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, Inception, as Restated for 15,000 for 1 Stock Split $ -- $ -- $ --
Year Ended May 31, 1995:
Net loss -- -- --
-------- --------- ---------
Balance, May 31, 1995 -- -- --
Year Ended May 31, 1996:
Net loss -- -- --
-------- --------- ---------
Balance, May 31, 1996 -- -- --
Year Ended May 31, 1997:
Net loss -- (48,896) (48,896)
-------- --------- ---------
Balance, May 31, 1997 -- (48,896) (48,896)
Year Ended May 31, 1998:
Credit for estimated fair value of services performed by officer 15,625 15,625
Credit for estimated fair value of office space used 1,810 1,810
Issuance of common stock ($.001 per share) -- -- --
Credit for compensation related to issuance of common stock 240,000 -- 240,000
Issuance of common stock in private placement ($.10 per share) 49,500 -- 50,000
Net loss -- (273,539) (273,539)
-------- --------- ---------
Balance, May 31, 1998 306,935 (322,435) (15,000)
Year Ended May 31, 1999:
Credit for estimated fair value of services performed by officer 27,075 27,075
Credit for estimated fair value of office space used 4,344 4,344
Exercise of warrants ($.40 per share) 339,150 -- 340,000
Exercise of warrants ($1.00 per share) 99,900 -- 100,000
Net loss -- (518,328) (518,328)
-------- --------- ---------
Balance, May 31, 1999 777,404 (840,763) (61,909)
Three Months Ended August 31, 1999 (Unaudited) -- -- --
Credit for estimated fair value of services performed by officer 3,900 -- 3,900
Credit for estimated fair value of office space used 1,086 -- 1,086
Net loss -- (21,656) (21,656)
-------- --------- ---------
Balance, August 31, 1999 (Unaudited) $782,390 $(862,419) $ (78,579)
======== ========= =========
</TABLE>
See notes to financials statements.
F-4
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
August 31, Year Ended May 31,
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (21,656) $ (16,616) $(518,328) $(273,539)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Litigation settlement -- -- 410,000 --
Expenses paid by issuance of common stock -- -- -- 240,000
Credit for estimated fair value of services
performed by officer 3,900 9,375 27,075 15,625
Credit for esimated fair value of office space 1,086 1,086 4,344 1,810
Depreciation 5,000 -- 5,000 --
Changes in operating assets and liabilities:
Increase in accounts receivable (1,803) -- -- --
Decrease (increase) in prepaid interest 2,000 4,415 (8,924) (8,862)
Increase in deposits -- -- (4,590) --
Increase in accrued interest payable 4,561 -- -- --
Increase (decrease) in accounts payable -- -- 96,445 (23,896)
--------- --------- --------- ---------
Net cash provided by (used in)
operating activities (6,912) (1,740) 11,022 (48,862)
--------- --------- --------- ---------
Cash Flows from Investing Activities:
Restricted cash -- -- (10,000) --
Purchase of land -- -- -- --
Construction of recycling facility (8,016) (103,588) (426,524) (313,301)
--------- --------- --------- ---------
Net cash used in investing activities (8,016) (103,588) (436,524) (313,301)
--------- --------- --------- ---------
Cash Flows from Financing Activities:
Payments of obligation related to litigation settlement (135,000) -- -- --
Proceeds from issuance of common stock -- -- -- 50,000
Proceeds from exercise of warrants -- 100,000 440,000 --
Proceeds from mortgage payable -- -- 50,000 325,000
Proceeds from advance payable -- -- 75,000 --
Repayment of advance payable (9,254) -- -- --
Proceeds from stockholder and related party loans -- 8,912 141,707 283,551
Repayment of stockholder and related party loans (10,891) -- (100,165) (269,559)
--------- --------- --------- ---------
Net cash (used in) provided by financing activities (155,145) 108,912 606,542 388,992
--------- --------- --------- ---------
Net (Decrease) Increase in Cash (170,073) 3,584 181,040 26,829
Cash, Beginning 207,869 26,829 26,829 --
--------- --------- --------- ---------
Cash, Ending $ 37,796 $ 30,413 $ 207,869 $ 26,829
========= ========= ========= =========
Cash Paid and Capitalized During the
Period for Interest $ -- $ -- $ 53,924 $ 23,120
========= ========= ========= =========
</TABLE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
Cumulative
from
Inception
---------
(Unaudited)
<S> <C>
Cash Flows from Operating Activities:
Net loss $(862,419)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Litigation settlement 410,000
Expenses paid by issuance of common stock 240,000
Credit for estimated fair value of services
performed by officer 46,600
Credit for esimated fair value of office space 7,240
Depreciation 10,000
Changes in operating assets and liabilities:
Increase in accounts receivable (1,803)
Decrease (increase) in prepaid interest (15,786)
Increase in deposits (4,590)
Increase in accrued interest payable 4,561
Increase (decrease) in accounts payable 96,445
---------
Net cash provided by (used in)
operating activities (69,752)
---------
Cash Flows from Investing Activities:
Restricted cash (10,000)
Purchase of land (125,000)
Construction of recycling facility (747,841)
---------
Net cash used in investing activities (882,841)
---------
Cash Flows from Financing Activities:
Payments of obligation related to litigation settlement (135,000)
Proceeds from issuance of common stock 50,000
Proceeds from exercise of warrants 440,000
Proceeds from mortgage payable 375,000
Proceeds from advance payable 75,000
Repayment of advance payable (9,254)
Proceeds from stockholder and related party loans 575,258
Repayment of stockholder and related party loans (380,615)
---------
Net cash (used in) provided by financing activities 990,389
---------
Net (Decrease) Increase in Cash 37,796
Cash, Beginning --
---------
Cash, Ending $ 37,796
=========
Cash Paid and Capitalized During the
Period for Interest
</TABLE>
See notes to financials statements.
F-5
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - Development Stage Enterprise
Distribution Management Services, Inc. (the Company) was
incorporated in the State of Florida on January 25, 1995. The
Company was organized for the purpose of operating a transfer
station for recycling of construction and demolition materials in
Miami, Florida. Since incorporation, the Company has been
principally engaged in organizational activities, construction of
its recycling facility and raising capital. Revenues received to
date are primarily the result of the initial operation of the
Company's recycling facility, and are not considered to be
significant. Accordingly, the Company is considered to be in the
development stage, and the accompanying financial statements
represent those of a development stage enterprise.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, including
interest incurred during the period of construction. Depreciation
has been calculated using the straight-line method of depreciation
over the estimated useful lives of the assets. The estimated useful
life of the recycling facility is 40 years.
Revenue Recognition
The limited revenues generated by the Company consist solely of
recycling fees in connection with the Operation Agreement described
in Note 8. The Company recognizes revenue when the recycling
services are performed.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash. At various times
during the year the Company had deposits in financial institutions
in excess of the federally insured limits. At May 31, 1999, the
Company had approximately $118,000 on deposit in excess of these
limits. The Company maintains its deposits with a high quality
financial institution that the Company believes limits these risks.
Unaudited Financial Information
The accompanying financial statements as of August 31, 1999 and for
the three months ended August 31, 1999 and 1998 are unaudited.
However, in the opinion of management, such financial statements
contain all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of financial
position, results of operations and cash flows for such periods.
Results of interim periods are not necessarily indicative of
results to be expected for an entire year.
F-6
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results
could differ from those estimates.
Net Loss Per Common Share
The net loss per common share in the accompanying statements of
operations has been computed based upon the provisions of Statement
of Financial Accounting Standards No. 128, Earnings Per Share. The
basic and diluted net loss per common share in the accompanying
statements of operations is based upon the net loss divided by the
weighted average number of shares outstanding during each period.
Diluted per share data is the same as basic per share data since
the inclusion of all potentially dilutive common shares that would
be issuable upon the exercise of options and warrants would be
anti-dilutive.
Income Taxes
The Company accounts for income taxes using Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes",
which requires recognition of deferred tax liabilities and assets
for expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse.
Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS
No. 130, "Reporting Comprehensive Income" and No. 131, "Disclosures
About Segments of an Enterprise and Related Information." SFAS No.
130 establishes standards for reporting and displaying
comprehensive income, its components and accumulated balances. SFAS
No. 131 establishes standards for the way that public companies
report information about operating segments in annual financial
statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public. Both SFAS No. 130 and SFAS No. 131 are effective for
periods beginning after December 15, 1997. The Company adopted
these new accounting standards in 1998, and their adoption had no
effect on the Company's financial statements and disclosures.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 requires companies to recognize all
derivatives contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. If certain
conditions are met, a derivative may be specifically designated as
a hedge, the objective of which is to match the timing of the gain
or loss
F-7
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
recognition on the hedging derivative with the recognition of (I)
the changes in fair value of the hedged asset or liability that are
attributable to the hedged risk or (ii) the earnings effect of the
hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the
period of change. SFAS No. 133 is effective for all fiscal quarters
of fiscal years beginning after June 15, 1999.
Historically, the Company has not entered into derivatives
contracts to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of the new
standard to affect its financial statements.
NOTE 2. GOING CONCERN
Going Concern
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles which
assume that the Company will continue on a going concern basis,
including the realization of assets and liquidation of liabilities
in the ordinary course of business. For the three months ended
August 31, 1999 (Unaudited) and during the years ended May 31, 1999
and 1998, the Company incurred net losses of $21,656, $518,328 and
$273,539, respectively, and as of August 31, 1999 (Unaudited) and
May 31, 1999, reflects a stockholders' deficiency of $78,579, and
$61,909, respectively and has minimal operating activities. As more
fully described below under "Liquidity and Plan of Operations",
significant uncertainties exist with regard to the Company's
ability to generate sufficient cash flows from operations or other
sources to meet and fund its commitments with regard to existing
liabilities and recurring expenses. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
The accompanying financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
Liquidity and Plan of Operations
As of August 31, 1999 (Unaudited) and May 31, 1999, the Company had
cash of $37,796 and $207,869, respectively and negative working
capital of $391,031 and $371,345, respectively. The Company's
ability to meet its future obligations in relation to the orderly
payment of its recurring general and administrative expenses on a
current basis is totally dependent upon its ability to secure and
develop new business opportunities through acquisitions or other
joint venture opportunities. Since the Company's sources of
liquidity are limited, the Company is unable to project how long it
may be able to survive without a significant infusion of capital
from outside sources, and it further is unable to predict whether
such capital infusion, if available, would be at terms and
conditions that are acceptable to the Company.
In order to expand future operating activities, the Company intends
to search for, investigate and attempt to secure and develop,
business opportunities through acquisitions, reverse mergers or
other joint venture activities. However, there can be no assurance
that the Company will be successful in its search for new business
opportunities or that any such businesses or ventures acquired will
be successful.
F-8
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 3. RESTRICTED CASH
At August 31, 1999 (Unaudited) and May 31, 1999 the Company had
restricted cash of $10,000 invested in a certificate of deposit earning
interest at 4.22%, which matures on April 23, 2000. The certificate was
invested for the purpose of securing debt owed to a supplier.
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
August 31,
Estimated Useful 1999 May 31,
Lives (Years) (Unaudited) 1999
------------- ----------- ----
Land - $125,000 $125,000
Recycling facility 40 792,862 784,846
-------- --------
917,862 909,846
Less accumulated depreciation 10,000 5,000
-------- --------
$907,862 $904,846
======== ========
Property and plant includes the capitalization of aggregate interest
costs of $88,804.
Included in capitalized construction costs are labor costs paid to a
related party. Total labor capitalized since inception amounted to
approximately $82,000 paid to this related party.
NOTE 5. MORTGAGE PAYABLE
Mortgage payable to an individual; collateralized by the property,
plant and equipment. Interest at 12% is payable monthly. Principal is
due February 1, 2001. $375,000
== ===== ========
NOTE 6. NOTES PAYABLE - STOCKHOLDER AND RELATED PARTY
<TABLE>
<CAPTION>
August 31, May 31,
1999 1999
---- ----
(Unaudited)
<S> <C> <C>
Note payable to a stockholder; unsecured; interest at the applicable
federal rate (5.63% at May 31, 1999); due on demand $150,000 $150,000
Note payable to a related party; unsecured; interest at the applicable
federal rate (5.63% at May 31, 1999); due on demand 44,643 49,642
Other -- 5,892
-------- --------
$194,643 $205,534
======== ========
</TABLE>
Total interest capitalized to related parties for the years ended May
31, 1999 and 1998 amounted to $12,677 and $9,594, respectively.
F-9
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 7. ADVANCE PAYABLE
<TABLE>
<CAPTION>
August 31, May 31,
1999 1999
---- ----
(Unaudited)
<S> <C> <C>
Advance payable to management company; unsecured; interest at
7%; due on demand. $65,746 $75,000
====== ======
</TABLE>
NOTE 8. COMMITMENTS AND CONTINGENCIES
Litigation Settlement
A suit was filed against the Company by two former stockholders
alleging that a principal stockholder of the Company forged their
names on certain agreements, contracts and stock certificates. One
former stockholder entered into a settlement agreement with the
Company which provided for the payment of $185,000 and the issuance
of 5,000 shares of common stock valued at $10,000. On July 7, 1999,
the Company paid $135,000 of this obligation with the remaining
$50,000 of this obligation and the issuance of 5,000 shares of
common stock due December 31, 1999. The Company has reached an
agreement in principle with the second former stockholder to settle
this claim. As settlement, the Company will issue shares of common
stock valued at approximately $215,000. No documents have been
finalized relating to this agreement in principle.
The total of $410,000 related to the settlement of this litigation
has been charged to operations in the year ended May 31, 1999. In
the accompanying balance sheet as of August 31, 1999 (Unaudited)
and May 31, 1999, the portion of the obligation related to this
litigation settlement payable in cash ($50,000 and $185,000,
respectively) has been presented as a current liability; the
portion of this settlement to be settled by issuance of common
stock ($225,000) has been presented as a long-term liability
(obligation related to litigation settlement) inasmuch as this
obligation has been intended to be satisfied by issuance of common
stock as an integral part of the agreement in principle with the
former stockholder. Recognition of this litigation settlement had
the impact of increasing net loss and loss per common share by
$410,000 and $.09, respectively, for the year ended May 31, 1999.
Construction Liens
At August 31, 1999 (Unaudited) and May 31,1999, the Company was
still settling claims and disputes primarily regarding the
construction contractors who built the facility. Estimated costs
for these settlements have been included in accounts payable at
August 31, 1999 (Unaudited) and May 31, 1999. Should the claim
settlements exceed the amounts recorded, the additional expense
will be recognized at the time of settlement.
F-10
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 8. COMMITMENTS AND CONTINGENCIES (Continued)
Operation Agreement
During December 1998, the Company entered into an Operation
Agreement (as amended) with a management company to operate a
recycling facility. The agreement called for an advance to the
Company by the management company in the amount of $75,000 (see
Note 7). The management company will be reimbursed by retaining
fifty percent of the gross amounts collected until the advance is
fully repaid. Interest will accrue on the unpaid balance at a rate
of 7% per month. Use of the advanced funds was exclusively for the
purpose of obtaining the use permit from the City of Miami and the
completion of any necessary work for the commencement of the
facility's operations.
The agreement also stated that the management company will operate
the facility on a day to day basis, including providing equipment
necessary for operations, performing hiring and firing of its
employees and paying all necessary operating expenses relating to
the operations of the facility.
The Company will receive revenues in an amount equal to 6% of
amounts collected for receipt of 0 - 450 cubic yards of
construction and demolition debris received each day, less any
applicable local, state or federal sales taxes due thereon. For
each cubic yard in excess of 450 yards per day, the Company will
receive an amount equal to 10% of the gross amounts collected.
The agreement also includes an option to purchase the facility. The
option is exercisable during the first five years of the Company's
operation. Based on the timing of the exercise of the option, the
purchase price ranges from $1,495,000 to $2,275,000.
The term of the agreement is for five years commencing December 22,
1998 and automatically renews for four sequential terms of one year
each.
Environmental Regulation and Compliance
The Company is subject directly and indirectly to regulations and
various laws of both the State of Florida and Miami-Dade County as
well as Federal regulations and statutes. The Company believes it
is in compliance with all applicable laws and has obtained an
annual solid waste operating permit, which expires December 31,
1999.
NOTE 9. RELATED PARTY TRANSACTIONS
Officer's Compensation
The current President has agreed not to receive compensation. In
order to reflect all appropriate administrative expenses of the
Company, a provision of approximately $27,000
F-11
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 9. RELATED PARTY TRANSACTIONS (Continued)
Officer's Compensation (Continued)
and $16,000 has been made in the accompanying financial statements
for the estimated fair value of the services rendered by the
President. These amounts have been charged to compensation expense
for the years ended May 31, 1999 and 1998, respectively, with a
corresponding credit to additional paid in capital. This estimate
of the fair value of such services was determined by management
based upon an analysis of compensation paid to presidents of other
organizations and the amount of time spent performing such duties.
For the three months ended August 31,1999 and 1998 (Unaudited) a
provision of approximately $4,000 and $9,000, respectively, has
been made in the accompanying financial statements for the
estimated fair value of the services provided by the President.
Office Rent
The Company uses the office facilities of a related party as its
administrative offices. There is currently no lease agreement with
this related party. However, in order to reflect all appropriate
administrative expenses of the Company, a provision of
approximately $4,000 and $2,000 has been made in the accompanying
financial statements for the estimated fair value of the office
space used by the Company. These amounts have been charged to
general and administrative expense for the years ended May 31, 1999
and 1998, respectively, with a corresponding credit to additional
paid in capital. This estimate of the fair value of office space
used was determined by management based on the terms of the
operating lease executed by the related party. For the three months
ended August 31, 1999 and 1998 (Unaudited) a provision of
approximately $1,000 for both periods has been made in the
accompanying financial statements for the estimated fair value of
the office space used by the Company.
Consulting Fees
The Company paid consulting fees in the amount of $11,750 and
$10,000 to related parties for the years ended May 31, 1999 and
1998, respectively.
NOTE 10. INCOME TAXES
No credit for income taxes has been reflected in the accompanying
financial statements for 1999 and 1998 because of the significant
uncertainty that exists regarding the realization of such income tax
credits (see below).
As of May 31, 1999, the Company estimates that it has net operating
loss carryforwards of approximately $493,000 which expire in various
years through 2014; however, the utilization of the benefits of such
carryforwards may be limited, as more fully discussed below. Sufficient
uncertainty exists regarding the realization of these operating loss
carryforwards and, accordingly, deferred tax assets of approximately
$189,000 as of May 31, 1999 were subject to and presented net of a 100%
valuation allowance.
F-12
<PAGE>
DISTRIBUTION MANAGEMENT SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 10. INCOME TAXES (Continued)
The Company is delinquent in the filing of various federal, state and
local income and other tax returns. The ultimate determination of the
Company's taxable income, including the amount and expiration dates of
net operating loss carryforwards, is subject to, among other things,
certain restrictions as a result of the late filing of the various tax
returns. The Company may also be subject to possible review and
examination of such tax returns by the appropriate taxing authorities.
Additional income taxes, including penalties for non-compliance and
interest, if any, which may be assessed, will be charged to operations
when determined.
In accordance with certain provisions of the Tax Reform Act of 1986, a
change in ownership of greater than 50% of a corporation within a three
year period will place an annual limitation on the corporation's
ability to utilize its existing tax benefit carryforwards. Under such
circumstances, the potential benefits from utilization of the tax loss
carryforwards as of that date may be substantially limited or reduced
on an annual basis. To the extent that net operating loss
carryforwards, when realized, relate to stock option deductions, the
resulting benefits will be credited to stockholders' equity.
NOTE 11. COMMON STOCK
During 1998, the Company issued a total of 2,400,000 shares of common
stock for certain services rendered, including services rendered in
connection with certain environmental matters pertaining to operations
and the location of available landfills for potential acquisition by
the Company. These shares were valued at $240,000 or $.10 per share,
based upon the price of a recent cash sale of common stock. The Company
charged compensation expense and credited additional paid-in capital
for the value of the services for the year ended May 31, 1998.
F-13
<PAGE>
PART I
ITEM l. DESCRIPTION OF BUSINESS
(a) Business Development
Distribution Management Services, Inc. ("Distribution" or the
"Company"), was incorporated in Florida on January 25, 1995. The Company was
formed specifically to operate a construction and demolition recycling center.
In furtherance of its business plan, the Company acquired a tract of land at
2000 N. Miami Avenue, Miami, Florida and caused same to be zoned for operation
as a recycling center. The recycling center was licensed with the Florida
Department of Environmental Regulation ("DERM") on July 6, 1995. The license is
renewable annually, through Miami-Dade County, Florida, upon payment of $2,100.
The Company constructed the buildings and placed the improvements on
the land and obtained a temporary Certificate of Occupancy from the City of
Miami on December 4, 1998. It commenced operations on or about February 1, 1999.
The permanent Certificate of Occupancy was obtained from the City of Miami on
June 24, 1999 upon compliance with all state, county and city regulations. These
certificates are issued by the City of Miami to permit occupancy and use of the
facility. The permanent Certificate of Occupancy requires no renewals or
reissuance.
(1) Principal Operations, Services and Markets.
The Company, through a third party operator, operates a
transfer station (also referred to herein as the recycling center) at the site
which provides contractors, truckers and demolition companies, under state
supervision, a conveniently located facility where recyclable materials from
demolition or new construction jobs can be segregated into usable or waste
categories. Once segregated, the materials are disposed of in accordance with
the requirements of DERM.
Materials from the demolition or construction of buildings,
such as aluminum, glass, cardboard, paper, wood and like materials are
segregated and sold to junk dealers. The materials are then sold by such dealers
to manufacturers and are subsequently used in the manufacture of recycled goods
of a like kind. Materials which are not recyclable are delivered to a landfill
operated by Peerless Dade, Inc., at 15490 N.W. 97th Avenue, Miami, Florida. This
landfill is operated under license from Miami-Dade County, Florida. There are
several other landfills scattered in locations throughout Miami-Dade County.
In addition to the transfer station, the Company is exploring
the possibility of expanding its operations into other areas of environmental
concern including the acquisition of a landfill which would be operated in
conjunction with the Company's recycling center and trucking facilities which
would enable the Company to provide a full service operation to contractors and
developers. Management expects that once the recycling center begins to
regularly receive approximately 1,200 yards of material daily, which is
anticipated to occur in the first half of the 2000 fiscal year based upon
current levels, it will finalize its decision to develop the proposed trucking
operations.
In connection with its desire to develop its own trucking
operations, the Company expects to seek financing to acquire fifty, twenty yard
containers which are rented by developers and building contractors to collect
and dispose of construction and demolition waste material for removal from job
sites. Containers typically cost from $2,000 to $3,000 each. Additionally, two
heavy duty Mack trucks at a cost of approximately $35,000 each would initially
be purchased for the trucking operations. Purchase of such equipment is subject
to available financing which can customarily be obtained through regular
automobile finance companies. The Company will then use its own trucking
facilities for "pick up" from construction and demolition sites throughout
Miami-Dade County and Broward County, Florida. Revenues from these operations
are anticipated to be in the range of $650,000 to $1,000,000 per annum once full
operations commence although there can be no assurances that these revenue
levels will be attained.
Presently the Company derives its income solely from its
Amended Operation Agreement (the "Agreement") with Peerless Dade, Inc., the
owner and operator (the "Operator") of the landfill at 15490 N.W. 97th Avenue,
Miami, Florida. The Agreement was entered into by the Company and the Operator
on December 22, 1998, and is for a period of five years with four automatically
renewable terms of one year each. The Operator also has an option to purchase
the property and recycling center (collectively, the "Center") during the
initial five year term of the Agreement at a purchase price of from 115% to 175%
(determined by which year of the Agreement the option is exercised) of
$1,300,000 which was set by the Company and the Operator based, in part, upon
the Company's investment in the recycling center.
The Operator charges construction or waste removal companies
"tipping fees" of $7.00 to $7.50 per yard for dumping of construction waste or
demolition materials at the transfer station which, on average, will receive
from 500 to 1,000 yards of material per day. The Agreement provides for the
Company to receive 6% of the gross amount collected by the Operator from
"tipping fees" for the first 450 yards of materials received each day and 10%
for all yardage received in excess of 450 yards per day. Notwithstanding the
foregoing, pursuant to the terms of the Agreement and commencing in June 1999,
the Operator retains 50% of the Company's share of the gross amount collected by
the Operator until the advance made by the Operator on behalf of the Company in
the sum of $75,000 to obtain the Use Permit for the recycling center from the
City of Miami has been repaid. Interest on the unpaid balance accrues at the
rate of 7% per annum. As of October 31, 1999, the most recent date for which
figures are available, the amount owed to the Operator, including all accrued
interest, was $59,129.34.
The Operator provides all machinery for the operation and
assumes all costs, expenses and maintenance of the operation of the recycling
center. Under the terms of the Agreement, the Company is responsible for the
payment of mortgages, real estate taxes, permits and licenses (which taxes,
permits and licenses cost approximately $2,500 per year in the aggregate) and
any capital improvements.
The transfer station is presently receiving an average of 650
yards of materials per day which constitutes approximately $8,700 per month in
revenues received by the Company, less amounts withheld to repay the $75,000
advance from the Operator.
<PAGE>
(2) Distribution Methods.
Construction and demolition waste materials are delivered to
the recycling center by independent truckers who pay a fee of $7.00 to $7.50 per
yard as "tipping fees" to dispose of the materials. The materials are then
segregated into categories mandated by DERM and are then removed by truckers to
junk dealers or landfill operations. At the present time, the Company does not
handle the materials once they are removed from the Company's transfer station.
If the required financing can be obtained, the Company intends, as set forth
above, to purchase a landfill and acquire the necessary equipment to transport
the materials to the Company's landfill, thereby establishing additional sources
of revenue.
(3) Status of Publicly Announced Products or Services.
On or about December 15, 1998 the Company announced that the
recycling center would be open and ready to receive construction and demolition
waste materials on or about January 15, 1999. On February 1, 1999, the recycling
center opened for formal business and continues in operation through the current
date. At the time of the announcement, the Company was not a reporting company
and, therefore, not subject to the safe-harbor protections of the Private
Securities Litigation Reform Act as set forth in its press release at such time.
(4) Competitive Business Conditions.
The issuance of permits for the operation of facilities
similar to the Company's recycling center are extremely limited. There are
presently no similar facilities available to contractors and waste removal
companies in the City of Miami. Management believes that no additional permits
in proximity to the Company's recycling center will be issued in the near
future. Accordingly, management does not anticipate that it will be subject to
significant competition in the foreseeable future.
(5) Dependence on Major Customer.
The Company's income is presently solely dependent on the
Operator who is the exclusive operator for the recycling center pursuant to the
Agreement. The existence of the Agreement may have an adverse effect on the
income received by the Company since the volume of business is controlled by the
Operator. The Agreement provides, however, that the Operator is required to
exercise commercially reasonable efforts to maximize the business operations of
the recycling center. In the event that the Operator fails to fulfill its
obligations under the Agreement, the Company believes that it would be able to
terminate the Agreement and operate the facility or obtain other operators to do
so on more favorable terms to the Company.
(6) Intellectual Property.
The Company has no intellectual property.
<PAGE>
(7) Governmental Approval.
The Company's recycling center has been approved by and
operates under licenses issued by the State of Florida, City of Miami and
Miami-Dade County, Florida, all in accordance with the regulations imposed by
DERM and enforced through the City of Miami and Miami-Dade County, Florida. As
of the date of this filing, all licenses and permits are in good standing. The
Solid Waste Operating Permit issued, through DERM by Miami-Dade County, Florida,
must be renewed annually.
(8) Governmental Approval, Regulation and Environmental Compliance.
The Company and the Operator are subject, directly and
indirectly, to regulations and various laws of the State of Florida, City of
Miami and Miami-Dade County, Florida relating to the operation of the Company's
business. The Company and the Operator are in material compliance with all
applicable laws relating to the Company's business and operations, particularly
the requirements of DERM which has required that the Company file a
Contamination Assessment Plan (the "Plan"). The Plan was filed with DERM on
September 16, 1999. The Plan was prepared by LandScience, Inc. Environmental
Consultants. LandScience, Inc., whose office is located at 2124 NE 123rd Street,
#206, North Miami, Florida 33181, specializes in environmental concerns. All
groundwater samples from the recycling center were previously submitted to DERM.
On September 1, 1999, Leo Greenfield, the President and a
director of the Company, was individually charged by the State of Florida
with "littering" in violation of Fla.Stat. 403.413(4) which is a third degree
felony and carries a maximum penalty of up to five years imprisonment and a
possible $5,000 fine. Such charge is based on a claim that 22 barrels of liquid
material pumped from a ground storage tank during construction of the facility
were temporarily stored by the contractor in a fenced-off alley adjoining the
Company's property. At such time, Leo Greenfield was not an officer or director
of the Company. Three months prior to the charges being made, the barrels and
material were disposed of in accordance with the requirements and approval of
DERM and in accordance with all environmental regulations. Mr. Greenfield denies
any violation of such statute or wrongdoing of any kind and intends to
vigorously defend this asserted claim.
(9) Research and Development.
The Company is not involved with any research or development
at this time.
(10) Employees and Facilities.
As of the present time the Company has no paid employees. The
President and the Secretary of the Company presently serve without compensation
and have provided the services required to establish the Company's current
business and operation.
The Company's executive offices are located in, and
substantially all of its operating activities are conducted from, the offices of
the President without charge to date. The President is under no continuing
obligation to provide the use of the Company's executive offices free of charge
Management believes that as the Company expands its operations it will enter
into an appropriate
<PAGE>
lease agreement for such facilities as may be necessary for conducting its
operations. Any such lease agreement is expected to be on such terms and
conditions as customary for similar facilities in the Company's geographical
area. The Company's operations are conducted from facilities located on real
property owned by the Company.
(11) Reports to Security Holders.
Prior to filing this Form 10-SB, the Company has not been
required to deliver annual reports. To the extent that the Company is required
to deliver annual reports to security holders through its status as a reporting
Company, or as may be required by the rules or regulations of any exchange upon
which the shares of the Company are traded, the Company shall deliver annual
reports. If the Company is not required to deliver annual reports, the Company
will not go to the expense of producing and delivering such reports. If the
Company is required to deliver annual reports they will contain audited
financial statements as required.
Prior to the filing of this Form 10-SB the Company has not
filed any other reports with the Securities and Exchange Commission. Once the
Company becomes a reporting company, management anticipates the Forms 3, 4, 5,
10-KSB, 10-QSB, 8-K and Schedules 13D along with appropriate proxy materials
will be filed as they come due. If the Company issues additional shares, the
Company may file additional registration statements for those shares.
The public may read and copy materials the Company files with
the Securities and Exchange Commission at the Commission's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1.800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The Internet
address of the Commission's site is (http://www.sec.gov).
(d) Year 2000 Disclosure.
Since the Company does not presently require extensive
accounting procedures, it is not presently employing any computer facilities. As
its operations expand and computer facilities are required, it will install
systems which are new and are Year 2000 compliant. With respect to the Company's
non-information technology systems, management does not anticipate a problem at
the turn of the century. The Company has discussed the Year 2000 issue with the
Operator to determine the extent to which its computer systems (insofar as they
relate to the Company's business) are Year 2000 compliant and has been assured
that they are so compliant. The Company is currently unable to predict, however,
the extent to which the Year 2000 issue will affect the Operator"s vendors, and,
in turn, the Company, or the extent to which the Company would be vulnerable to
a vendor's failure to remediate any Year 2000 issue on a timely basis. The
failure of a major vendor subject to the Year 2000 to convert its systems on a
timely basis or a effect a conversion that is incompatible with the Operator's
systems could potentially have an adverse effect on the Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION.
Results of Operation
The Company received an aggregate of approximately $490,000
from the proceeds of its private placement offering and exercise of its
warrants. A portion of these funds were used for payment of construction costs
of approximately $280,000 in the aggregate. As of August 31, 1999, the Company
had cash on hand of approximately $ 37,800. During the quarterly period ended
August 31, 1999, payments were made against various obligations of the Company,
including the payment of $135,000 in connection with certain litigation. For the
year ended May 31, 1999 the Company received revenues from the operation of the
recycling center of approximately $7,315 based upon the four months that the
facility was open and operating. This amount represents the Company's 6% share
of revenues pursuant to the Operation Agreement described in Note 8 to the
Company's audited financial statements and there were no deductions made for the
then outstanding $75,000 loan made by the Operator. For the quarter ended August
31, 1999, the Company received approximately $12,807 in revenues after deduction
for loan payments due the Operator which have been deducted on a monthly basis
commencing June 1, 1999 and will continue to be deducted until paid in full. As
of October 31,1999, the amount owed to the Operator, including accrued interest,
was approximately $59,100.
The gross volume of materials delivered to the recycling
center averaged approximately 650 yards per day in October 1999 which is
approximately 30% less than the anticipated volume of 1,000 yards per day. The
daily volume, however, continues to increase. The Operator regularly solicits
business throughout Miami-Dade County and Broward County, Florida through
telephone and direct mail advertising Management anticipates that as more
contractors and waste disposal companies become familiar with the convenient
location of the facility and with the continual increase of demolition and
construction activity in downtown Miami and Miami Beach, revenues will continue
to improve during the fourth quarter and thereafter.
Liquidity and Capital Resources
-------------------------------
There has been a steady monthly increase in the number of cubic yards
being delivered to the recycling center which, in turn, increases the monthly
revenue received by the Company pursuant to the Operation Agreement. The monthly
gross revenue received by the Company from February 1999, when the recycling
center commenced operations, through October 31, 1999, has increased from
$164.88 to $8,681.59, respectively. Management believes that these numbers
represent a positive upward trend in the amount of materials that are being
delivered to the recycling center on a daily basis. Management is in the process
of obtaining a commitment to refinance the current mortgage on the recycling
center which it anticipates will occur in the first quarter of 2000. If the
mortgage cannot be refinanced prior to its due date in February 2001, management
expects that the mortgagor will extend the maturity date. The refinanced amount
of the mortgage is expected to be $700,000.
<PAGE>
After repayment of the existing mortgage, the balance of the loan due
the Operator and approximately $80,000 due in settlement of all litigation,
management anticipates that the remaining $180,000 balance, together with cash
flow from revenues which is expected to average approximately $ 10,000 to
$12,000 per month during fiscal 2000, will be sufficient to finance the
Company's working capital requirements for the next 12 months, including the
funds required to pay the expected $7,000 per month mortgage expense. The
existing litigation is related to materialmen's liens in connection with the
construction of the facility in the approximate amount of $30,000 and a lawsuit
claiming an ownership interest in the loan to purchase the Company's real
property. The balance of the cash required to settle the latter lawsuit is
$50,000 and shares of the Company's common stock. There are no future expenses
expected in connection with this litigation. The Company's monthly cash
operating expense averages approximately $6,000, which amount is not expected to
materially increase based upon current operations. If the Company is unable to
refinance its existing mortgage and cannot secure alternative funding necessary
to satisfy its existing obligations, it may be unable to continue as a going
concern.
If the Company refinances its existing mortgage and satisfies its
other outstanding obligations from the proceeds therefrom, it may seek
additional financing in connection with the possible expansion of its business
to include trucking and landfill operations. Such funding will likely come from
conventional sources of financing, including automobile financing companies for
the trucks, the availability of which cannot be assured, and there is no
assurance that the terms of such financing, if available, will be satisfactory
to the Company. If such financing is not available, the Company may seek to
raise funds through the sale of the Company's debt and/or equity securities, the
successful sale of which, if any, cannot be assured.
There are currently outstanding two loans from related parties in the
principal sum of $49,000 and $150,000, respectively. Both loans are due upon
demand and bear interest at the applicable Federal rate. The Company may repay
these loans from the proceeds of the anticipated mortgage refinancing. The
Company and each of the lenders have agreed to execute promissory notes for the
principal amount of each loan at the same annual interest rate with maturity
dates of February 2001. In the event that these notes are not repaid when due,
management expects that the maturity dates will be extended by the lenders.
These related parties have no obligation to make any further loans to the
Company in the future notwithstanding that they have made loans in the past.
From time to time, the Company may evaluate potential acquisitions
involving complementary businesses, services, products or technologies. The
Company has no present agreements or understanding with respect to any such
acquisition. The Company's future capital requirements will depend on many
factors, including acquisitions, if any, growth of the Company's customer base,
economic conditions and other factors including the results of future
operations.
The Company currently has no paid employees. If operations are expanded
through growth or acquisitions, the Company will hire personnel to meet these
needs and may enter into employment agreements with its President or others to
oversee its operations. The number of employees which may be hired will be
determined by the continuity or modification of the present Agreement and/or its
expansion into the trucking and container operations and/or acquisition of a
landfill. The number of employees actually hired will be based on the Company's
ability to support the increased cost through cash flow generated by such
business.
<PAGE>
ITEM 3. DESCRIPTION OF PROPERTY
The Company is the owner in fee simple of a tract of land comprising
approximately 32,000 square feet located at 2000 North Miami Avenue, Miami,
Florida, upon which it has constructed the recycling center. The recycling
center is enclosed by an 8' high concrete wall, and consists of a 5,000 square
foot open operations building and a 900 square foot office facility. The
remaining areas of the site are appropriately paved and drained and are used as
receiving areas. The improvements were financed in part by a mortgage loan from
an unaffiliated third party in the aggregate amount of $375,000 which bears
interest at 12% per annum payable monthly until maturity on February 1, 2001.
The executive offices are maintained at the private offices of the
President located off-site at 11601 Biscayne Blvd, Suite 201, Miami, Florida
33181. If additional executive offices are required, such facilities will be
leased at an appropriate location. The Company is not in the business of
investing in real estate or real estate mortgages.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) 5% Shareholders.
The following information sets forth certain information as of November
19, 1999, about each person or entity who is known to the Company to be
beneficial owners of more than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
Title of Class of Beneficial Owner Beneficial Ownership Percent of Class(1)
- -------------- ------------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Common CEDE & CO.
P.O. Box 222
Bowling Green Station
New York, NY 10274 1,241,000 24.6%
Common Empresas Flagler SA
Cable Beach Court
1 West Bay Street
Nassau, Bahamas 380,000 7.5%
Common Fidra Holdings, Inc.
Cable Beach Court
1 West Bay Street
Nassau, Bahamas 570,000 11.3%
<PAGE>
Common F.M.S. Distributors,
8700 N.W. 47th Drive
Coral Springs, FL 33067 500,000 9.9%
(b) Security Ownership of Management:
Title Name and Address Amount and Nature of
of Class of Beneficial Owner Beneficial Ownership Percent of Class(1)
- -------------- ------------------- -------------------- -------------------
Common Double D, Inc.
1721 Trafalgar Circle
Hollywood, FL 33069 1,200,000 23.8%
</TABLE>
- -----------------------------------------
(1) All percentages are calculated based upon 5,050,000 shares issued and
outstanding as of the date of filing this Form 10-SB.
(2) Double D, Inc. is a Florida corporation. 100% of the common stock of
Double D, Inc. is owned by Barbara Greenfield, vice president and a
director of the Company, and the wife of Leo Greenfield, President of
the Company. For the purposes of Rule 13(d), Mr. Greenfield claims
beneficial ownership of these shares with his wife.
(3) Double D, Inc. has committed to deliver 100,000 shares of the 1,200,000
shares of the Company's restricted common stock it owns to Maria Elena
Lopez de Mendoza, Secretary and a director of the Company, for
administrative services provided to the Company without remuneration
from the Company since March 1998
(c) Changes in Control:
There is no arrangement which may result in a change of control.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
(a) Directors and Executive Officers.
As of November 19, 1999, the directors and executive officers of the
Company, their ages, positions in the Company, the date of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors, are as follows:
<PAGE>
<TABLE>
<CAPTION>
Period Served
Name Age Position as Director *
- ---- --- -------- -------------
<S> <C> <C> <C>
Leo Greenfield 75 President and Director March 1999 to Present
Barbara Greenfield 61 Vice President and March 1998 to Present
Director
Maria Elena
Lopez de Mendoza 59 Secretary and Director March 1998 to Present
</TABLE>
- -------------------------------------------------------------------------
* The Company's directors are elected at the annual meeting of stockholders and
hold office until their successors are elected and qualified. The Company's
officers are appointed by the Board of Directors and serve at the pleasure of
the Board and subject to employment agreements, if any, approved and ratified by
the Board.
* From inception until March 1999, Romolo Egidi was President and a director of
the Company.
(b) Business Experience:
Leo Greenfield, age 75, has been President and a director of the
Company since March 1999. He is also the vice president of Double D, Inc., a
privately held Florida holding company with no operations or business, which is
a major shareholder of the Company. From May 1997 to March 1998, he acted as
business consultant for the Company in arranging the financing for and
supervising construction of the Company's facilities. In March 1998, he became
the General Manager of the Company. He still serves in that capacity although he
has now become President and Director of the Company. He holds an LLB Degree
from the University of Miami (1948) and a BSBA Degree from the University of
Miami (1950). He served as a fighter pilot in the U.S. Army Air Corps
(1943-1946) in the European Theater. He was award the Purple Heart, the Belgian
Fourragere, Presidential Unit Citation and Air Medal with three Clusters. He
practiced law in Florida from 1948 through 1990. He was an instructor of law at
the University of Miami Law School during 1952-1954. In 1990 he was convicted of
obstruction of justice and resigned from The Florida Bar. He has served on the
boards of Mercantile National Bank, Miami Beach, Florida, Capital National Bank,
Miami, Florida and Curtiss National Bank of Miami Springs, Florida. He has been
owner and operator of resort hotels in Miami Beach, Florida, built and owned
apartment buildings and shopping centers in South Florida and has been employed
as a hotel consultant. On September 1, 1999 Mr. Greenfield was individually
charged by the State of Florida with "littering" in violation of Fla.
Stat.403.413(4), a class three felony with a maximum penalty of five years
imprisonment and possibly up to a $5,000 fine, based on a claim that 22 barrels
of liquid material were pumped from a ground storage tank during construction of
the facility by the contractor and during the time that Mr. Greenfield was not
an officer or director of the Company. They were temporarily stored in a
fenced-off alley adjoining the Company's property. These barrels and the
material were disposed of in accordance with the requirements and approval of
DERM and all environmental regulations three months prior to the charges being
made and. Mr. Greenfield denies any violation of such statute or wrongdoing of
any kind and intends to vigorously defend this asserted claim.
<PAGE>
Barbara Greenfield, age 61, has been Vice President and a director of
the Company since March 1998. She is president of Double D, Inc., a majority
shareholder of the Company. Ms. Greenfield has been employed as a controller and
consultant in designing computer programs. From 1977 through 1996 she was
employed as controller of all books and records at the Law Firm of Leo
Greenfield, P.A., and its successor Harvie DuVal, P.A. d/b/a Greenfield & DuVal.
In 1998 she was employed by Panciera Funeral Homes in Hollywood, Florida and
designed a computer program for their Pre-Need Division. She was formerly
co-owner and co-operator of an apartment building at 1500 N.E. 145th Street,
North Miami, Florida until 1981 when it was sold, and an office building at 1680
N.E. 135th Street, North Miami, Florida 33181, from 1972 until 1994 when it was
sold. She is presently involved in the ownership and management of Powergate
Plaza, a shopping center located in Pompano Beach, Florida. Ms. Greenfield
attended the University of Miami and graduated from the School of Interior
Design, a private design school. She is a licensed practitioner and has been
active in the field since 1969. She continued her education in computing at
Florida International University from 1990 through1997 and has become skilled in
the field of computer operation.
Maria Elena Lopez de Mendoza, age 59, has been Secretary and Director
of the Company since March 1998 and has been providing administrative services
to the Company since such time. She had previously been employed by Mr.
Greenfield, President of the Company, since 1973 in both the operation of his
law office as well as various business enterprises in which he had been engaged.
She is highly skilled in computer operations. She graduated from Merici Academy,
Havana, Cuba, with a degree in Business.
(c) Directors of Other Reporting Companies:
None of the Company's executive officers or directors is a director of
any company that files reports with the Securities and Exchange Commission.
(d) Employees:
In addition to the officers and directors described, the Company
presently employs no other persons.
(e) Family Relationship:
Leo Greenfield and Barbara Greenfield, President/Director and Vice
President/Director of the Company, respectively, have been married since 1959.
No other family relationship exists between the officers or any other person who
may be selected as a director or executive officer of the Company.
(f) Involvement in Certain Legal Proceedings:
None of the officers, directors, promoters or control persons of the
Company have been involved in the past five (5) years in any of the following:
<PAGE>
(1) A bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
(2) Any conviction in a criminal proceedings.
(3) Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, or any Court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities.
(4) Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities laws or commodities law, and the judgment
has not been reversed, suspended, or vacated.
ITEM 6. EXECUTIVE COMPENSATION.
The Company did not compensate prior management in the years ended
December 31, 1998, 1997 and 1996, since it did not engage in business during
those years, nor is it presently compensating its officers or directors. It does
intend at a future date to enter into employment contracts with its officers for
compensation on a reasonable basis as may be approved by the board of Directors.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Annual Restricted Under- Other
Name and Compen- Stock lying LTIP Comp-
Principal Position Year Salary Bonus sation Awards Option Payouts ensation
- ------------------ ---- ------ ----- ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leo Greenfield 1998 None None None None None None None
President/Director 1997 None None None None None None None
1996 None None None None None None None
Barbara Greenfield 1998 None None None None None None None
Vice President/Director 1997 None None None None None None None
1996 None None None None None None None
Maria Elena 1998 None None None None None None None
Lopez de Mendoza 1997 None None None None None None None
Secretary/Director 1996 None None None None None None None
</TABLE>
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past two (2) years, the Company has not, entered
into a transaction with a value in excess of $60,000, with an officer or
director, a beneficial owner of 5% or more of the Company's common stock, except
as disclosed in the following paragraph.
From inception of the Company in 1995 until September 1997,
Romolo Egidi and Dorothy Egidi, his wife, through their wholly owned
corporation, All Florida Demolition, Inc., owned 100% of the common stock of the
Company. On September 23, 1997, the Company issued 1,200,000 shares of common
stock to Double D., Inc., in consideration for arranging and obtaining financing
and providing consulting and supervisory services to the Company, upon payment
of $.001 per share to the Company. As of such date, the shares issued to Double
D, Inc. represented 50% of the issued and outstanding shares of the Company. Mr.
Egidi continued as President and a director of the Company until his resignation
in March 1999 and in June 1999 All Florida Demolition, Inc. sold all of the
shares it owned to six unrelated persons and entities.
On or about December 31, 1997, Double D, Inc., a company owned
by Leo Greenfield, President and a director of the Company, and Barbara
Greenfield, Vice President and a director of the Company, loaned the Company
$150,000. The note is payable upon demand and bears interest at the applicable
Federal rate. The proceeds of this loan provided additional funding for the
construction of the facility.
From approximately May 1998 through December 1998, Greenfield
and DuVal, P.A. loaned the Company an aggregate of approximately $49,000. This
sum is due upon demand and bears interest at the applicable Federal rate. The
proceeds of this loan provided additional funding for the construction of the
facility.
Double D, Inc., a major shareholder of the Company which is
owned and controlled by Leo Greenfield and Barbara Greenfield, both directors
and President and Vice President, respectively, of the Company, has committed to
issue 100,000 shares of the 1,200,000 shares of the Company's common stock which
it owns to Maria Elena Lopez de Mendoza, Secretary and a director of the
Company, in consideration for services she has provided to the Company without
remuneration since March 1998.
ITEM 8. DESCRIPTION OF SECURITIES
The Company's Articles of Incorporation authorize the issuance of
15,000,000 shares of common stock, no par value per share. There is no preferred
stock authorized. Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the stockholders. Holders of shares
of common stock are entitled to share ratably in dividends, if any, as may be
declared from time to time by the Board of Directors in its discretion from
funds legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, the holders of shares are entitled to share pro rata
all assets remaining after payment in full of all liabilities. Holders of common
stock have no preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions with respect to such
shares.
<PAGE>
PART II.
ITEM 1. MARKET PRICE OF AND DIVIDENDS OF REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS.
Market Information:
The Company's common stock currently trades in the "pink sheets" under
the trading symbol "DMGS". The Company's common stock was listed for trading on
the over-the-counter bulletin board (OTC:BB) on August 17, 1998, but became
ineligible to continue trading on November 3, 1999 because its Form 10-SB was
not effective as of such date. The Company intends to apply for listing on the
OTC:BB once it commences reporting under the Securities Exchange Act of 1934.
The following table sets forth the highest and lowest bid prices for
the common stock for each calendar quarter and subsequent interim period since
the common stock commenced actual trading, as reported by the National Quotation
Bureau, and represent interdealer quotations, without retail markup, markdown or
commission and may not be reflective of actual transactions:
Fiscal 1998 High Bid Low Bid
Third Quarter 2.375 2.375
Fourth Quarter 4.00 3.00
Fiscal 1999
First Quarter 5.375 2.00
Second Quarter 5.75 1.4375
Third Quarter 5.50 1.50
September1- November 3* 3.50 1.50
------------------------------------------------
* Since November 3, 1999, the Company's common stock no longer trades
on the OTC:BB.
There can be no assurance that an active public market for the common
stock will continue or be sustained. In addition, the shares of common stock are
subject to various governmental or regulatory body rules which affect the
liquidity of the shares.
Holders:
There were approximately 26 holders of record of the Company's common
stock as of November 19, 1999.
<PAGE>
Dividends:
The Company has never paid cash dividends on its common stock and does
not intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.
ITEM 2. LEGAL
The Company is a party to the following legal proceedings:
a. Suit filed in May 1999 in the Circuit Court, in and for
Miami-Dade County, Florida, Case No. 99-13058 CA 10, Central Concrete v.
Distribution Management Services, Inc., seeking $26,484.93 pursuant to a claim
for payment in connection with construction materials provided to the Company.
The Company has filed affirmative defenses. The case is currently at issue but
no trial date has been set. Management believes that it will settle this matter
prior to trial.
b. Suit filed in March 1998 in the Circuit Court, in and for
Miami-Dade County, Florida, Case No. 98-6581 CA 02 (03). Ronald L. Book v.
Romolo Egidi, et al. Plaintiff claimed an ownership interest in the real
property on which the recycling center is located which collateralized a loan
previously made to the Company to purchase the property. The case was settled
and the Court dismissed the suit but retained jurisdiction to reinstate the
claim in the event the Agreement to Settle and Standstill Agreement entered into
on July 7, 1999, is not complied with. A payment was made by the Company to the
plaintiff in the amount of $135,000, with an agreement to make payment of an
additional sum of $50,000 on or before December 31, 1999. Management intends to
comply with the agreement and make payment in accordance with the said claim.
There is an agreement in principal to settle a cross claim made by another party
which, like the main claim, asserts an interest in the loan made to the Company
to purchase the real property, for shares of the Company's common stock with a
value of $215,000. This settlement agreement has not yet been finalized and no
shares have been issued in connection with this suit.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with the Company's
independent auditor.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On September 23, 1997, the Company issued an aggregate of 2,400,000
shares of common stock to the following:
<PAGE>
All Florida Demolition, Inc. 1,200,000
Double D, Inc. 1,200,000
^
The shares issued to All Florida Demolition were issued in connection
with the recapitalization of the Company and in accordance with an exemption
provided by Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). The shares issued to Double D, Inc. were for services
rendered to the Company at a value of $0.10 per share. The certificates for
these shares bear a restrictive legend restricting transferability under the
Securities Act.
On April 30, 1998, the Company issued an aggregate of
1,200,000 shares of common stock to the following:
Vistra Growth Partners, Inc. 500,000
Devken, Inc. 300,000
Cort Poyner 300,000
Toho Partners 100,000
The shares issued to Devken, Inc., Cort Poyner, Vistra Growth
Partners, Inc. and Toho Partners were for services rendered in connection with
certain environmental matters pertaining to operations and the location of
available landfills for potential acquisition by the Company in accordance with
an exemption provided with Section 4(2) of the Securities Act at a value of
$0.10 per share. All certificates representing these shares bear a restrictive
legend restricting transferability under the Securities Act.
On July 10, 1998, the Company issued an aggregate of 500,000 shares of
its common stock at a purchase price of $.10 per share and 950,000 warrants to
the following in accordance with an exemption from registration provided by Rule
504 of Regulation D promulgated under the Securities Act. Thereafter, on or
about March 4, 1999, upon exercise of all the warrants at an exercise price of
$.40 per share for 850,000 shares and $1.00 for 100,000 shares, an additional
950,000 shares of common stock were issued.
<TABLE>
<CAPTION>
Name and Address Shares
---------------- ------ Shares Issued on
Originally Issued Warrants Exercise of Warrants
----------------- -------- --------------------
<S> <C> <C> <C>
IRAKLIS BOUREKAS 50,000 95,000 95,000
57-51 224th Street
Bayside, NY 11364
KYRIAKI BOUREKAS 10,000 19,000 19,000
37-14 23rd Avenue
Astoria, NY 11705
PAULINO BRITO 10,000 19,000 19,000
55 East 210th Street
Apt. 1G
Bronx, NY 10467
<PAGE>
IAN BROWN 10,000 19,000 19,000
85 Dairy Drive
Acton, Ontario
Canada LZJ2X9
PAUL MARKKUS 50,000 95,000 95,000
494 La Guardia Place
Apt. 2B
New York, NY 10012
EUGENIA KALOGERAS 20,000 38,000 38,000
53-11 250th Street
Little Neck, NY 11362
MARKELLA KATOS 25,000 47,500 47,500
23-17 41st Street
Astoria, NY 11105
KALIOPI LIAKARIS 20,000 38,000 38,000
24-64 Cadillac Drive
East Meadow, NY 11554
PERRY MALLAS 20,000 38,000 38,000
879 71st Street
Brooklyn, NY 11228
VIVIE MATHEOS 50,000 95,000 95,000
33-29 158th Street
Flushing, NY 11358
GILBERTO MONTEIRO 50,000 95,000 95,000
90-50 184th Place
Hollis, New York 11423
PARASKEVI PAPPAS 10,000 19,000 19,000
2476 Cadillac Drive
East Meadow, NY 11554
FEDERICO PENA 5,000 9,500 9,500
817 - 40th Street R
Brooklyn, NY 11232
ANDREW PIRGOUSIS 10,000 19,000 19,000
33-49 159th Street
Flushing, NY 11359
GEORGE PIRGOUSIS 50,000 95,000 95,000
33-23 158th Street
Flushing, NY 11358
ANNA RIZOS 20,000 38,000 38,000
226-11 Horrace Harding
Expressway
Bayside, NY 11364
<PAGE>
NICK SARAGIAS 10,000 19,000 19,000
23-21 121st Street
College Point, NY 11356
CHRYSANTOS TENTOMAS 50,000 95,000 95,000
425 Glenn Drive
Shirley, NY 11967
KIKI TSIAKAS 20,000 38,000 38,000
24-64 Cadillac Drive
East Meadow, NY 11554
JOSE RENALDO
QUINTEROS 10,000 19,000 19,000
1163 Stratford Avenue
New York, NY 10472
</TABLE>
The issuance of the foregoing shares was pursuant to an exemption from
registration provided by Rule 504 of Regulation D. Accordingly, the certificates
representing all of the shares, which were issued prior to April 7, 1999, do not
bear a restrictive legend restricting transferability under the Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act (the "FBCA")
allows the Company to indemnify any person who was or is a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the Company, by reason of the fact that such person is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
liability incurred in connection with such proceeding, including any appeal
thereof, 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, conviction or upon a plea of nolo contendre 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, such person had reasonable cause to believe that
his or her conduct was unlawful.
Section 607.0850 of the FBCA also allows the Company to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed proceeding by or in the right of the Company to
procure a judgment in the Company's favor by reason of the fact that such person
is or was a director, officer, employee or agent of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
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. Such
<PAGE>
indemnification shall be authorized if such person 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. Indemnification shall not be made for any claim, issue
or matter as to which such a person has been adjudged by a court of competent
jurisdiction determining, after exhaustion of all appeals therefrom, to be
liable to the Company or for amount paid in settlement to the Company, unless
and only to the extent that, the court in which the proceeding was brought, or
any other court of competent jurisdiction, determines upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
Section 607.0850 of the FBCA also provides that to the extent that a
director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any proceeding referred to in the paragraphs
above, or in defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith.
The Company's by-laws expand the indemnification provisions of the FBCA
by providing that any termination of a civil or criminal action, suit or
proceeding by judgment, settlement, conviction or upon a plea of nolo contendere
shall not in itself create a presumption that any officer or director did not
act in good faith in the reasonable belief that his or her action was in the
best interest of the Company or had reasonable grounds to believe that such
action was not unlawful. The right to indemnification shall apply to the heirs,
executors and administrators of such officer or director.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART F/S
Financial Statements
PART III.
Item 1. Index to Exhibits
The following exhibits are filed with this Form 10-SB:
Assigned Number Description
- --------------- -----------
(2) Articles of Incorporation, as amended*
(3)(ii) Bylaws*
(10)(i) Amended Operation Agreement dated
December 23, 1998*
(27) Financial Data Schedule
- -------------------------------
*previously filed on October 3, 1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment number 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: November 24, 1999
DISTRIBUTION MANAGEMENT SERVICES, INC.
By: /s/ Leo Greenfield
----------------------------
Leo Greenfield, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET, STATEMENT OF OPERATIONS AND STATEMENT OF CASH FLOWS INCLUDED IN THE
COMPANY'S FORM 10 FOR THE THREE MONTHS ENDED AUGUST 31, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-31-1999
<CASH> 37,796
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65,385
<PP&E> 917,862
<DEPRECIATION> 10,000
<TOTAL-ASSETS> 977,837
<CURRENT-LIABILITIES> 456,416
<BONDS> 0
<COMMON> 5,050
0
0
<OTHER-SE> (86,629)
<TOTAL-LIABILITY-AND-EQUITY> 977,837
<SALES> 18,334
<TOTAL-REVENUES> 18,477
<CGS> 0
<TOTAL-COSTS> 22,817
<OTHER-EXPENSES> 17,316
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,316
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,340)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,656)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
