U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
ENVIROKARE TECH, INC.,
a Nevada corporation
(Exact name of registrant as specified in its charter)
NEVADA 880412549
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2470 Chandler, Suite 5, Las Vegas, Nevada 89120
(Address of registrant's principal executive offices) (Zip Code)
702.262.1999
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under 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:
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001
(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp, LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile: 949.660.9010
Page 1 of 4
1
<PAGE>
Envirokare Tech, Inc.,
a Nevada corporation
Index to Amendment Number Three to Form 10-SB Registration Statement
Item Number and Caption Page
13. Financial Statements 3
15. Financial Statements and Exhibits 3
15(a) Index to Financial Statements 3
Financial Statements F-1 through F-10
Signatures 4
<PAGE>
Item 13. Financial Statements
Copies of the Company's Unaudited Financial Statements for the six month period
ended June 30, 1999, as required by Item 310(g) of Regulation S-B are filed with
this Amendment Number Four to the Company's Registration Statement Form 10-SB.
Item 15. Financial Statements and Exhibits
(a) Index to Financial Statements. Page
----
Independent Auditor's Report for Fiscal
Year ended December 31, 1998 F-1
Statements of Financial Position as at
December 31, 1998 (audited) and as at
June 30, 1999 (unaudited) F-2
Statements of Operations and Accumulated
Deficit for Period from June 15, 1998
(inception) to December 31, 1998
(audited), Period from June 15, 1998
(inception) to June 30, 1999 (unaudited)
and for the Six-Month Period Ended June
30, 1999 (unaudited) F-3
Statements of Cash Flows for Period from
June 15, 1998 (inception) to December
31, 1998 (audited), for Period from June
15, 1998 (inception) to June 30, 1999
(unaudited) and for the Six-Month Period
Ended June 30, 1999 (unaudited) F-4
Unaudited Statements of Stockholders'
Equity For Period from June 15, 1998
(inception) to June 30, 1999 F-5
Notes to Financial Statements F-6 through F-10
3
<PAGE>
SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange
Act of 1934, the Company has duly caused this Amendment No. 4 to Registration
Statement on Form 10-SB to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Henderson, Nevada, on November 4, 1999.
Envirokare Tech, Inc.,
a Nevada corporation
By: /s/ Charles W. Thomas
-------------------------
Charles W. Thomas
Its: President
4
<PAGE>
[LETTERHEAD]
Board of Directors
Envirokare Tech, Inc.
2470 Chandler, Suite 5
Las Vegas, Nevada 89120
Independent Auditor's Report
We have audited the accompanying balance sheet of Envirokare Tech, Inc. (a
development stage company) as of December 31, 1998 and the related statements of
operations and accumulated deficit, stockholders' equity and cash flows for the
period from June 15, 1998 (inception) to December 31, 1998. These financial
statements are the responsibility of the Company's management. 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 Envirokare Tech, Inc. as of
December 31, 1998, and the results of its operations and its cash flows for the
period from June 15, 1998 (inception) to December 31, 1998, in conformity with
generally accepted accounting principles.
As discussed in Note 2, the Company has been in the development stage since its
inception on June 15, 1998. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing requirements,
and the success of future operations. Management's plans regarding those matters
also are described in Note 2. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Williams & Webster, P.S.
William & Webster, P.S.
Spokane, Washington
February 26, 1999
F-1
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
STATEMENTS OF FINANCIAL POSITION
June 30, 1999
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 2,388 $ 4,835
Prepaid expenses 730 3,387
------------- -------------
TOTAL CURRENT ASSETS 3,118 8,222
------------- -------------
PROPERTY AND EQUIPMENT
Furniture and fixtures 1,014 1,014
Office equipment 2,645 6,488
Less accumulated depreciation (149) (475)
------------- -------------
TOTAL PROPERTY AND EQUIPMENT 3,510 7,027
------------- -------------
OTHER ASSETS
Patent costs acquired from related party 33,330 33,330
------------- -------------
TOTAL OTHER ASSETS 33,330 33,330
------------- -------------
TOTAL ASSETS $ 39,958 $ 48,579
============= =============
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Reimbursement due $ 1,847 $ 1,847
Consulting fees payable, related party -- 21,000
Consulting fees payable -- 3,165
Accrued interest, related party 573 3,670
Accrued interest -- 307
Notes payable -- 14,500
Notes payable, related party - short term 61,965 61,965
------------- -------------
TOTAL CURRENT LIABILITIES 64,385 106,454
------------- -------------
COMMITMENTS AND CONTINGENCIES -- --
------------- -------------
STOCKHOLDERS' EQUITY
Common stock, 200,000,000 shares authorized, $0.001 par value;
5,000,000 and 5,076,540 shares issued and outstanding
at December 31, 1998 and June 30, 1999, respectively 5,000 5,077
Additional paid-in capital 5,000 43,193
Subscriptions received -- 27,530
Accumulated deficit during developmental stage (34,427) (133,675)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY (24,427) (57,875)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,958 $ 48,579
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the Period from inception on June 15, 1998 to June 30, 1999
<TABLE>
<CAPTION>
Period from Period from
June 15, 1998 Six months June 15, 1998
(Inception) to Ended (Inception) to
December 31 June 30 June 30
1998 1999 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C>
REVENUES $ -- $ -- $ --
----------- ----------- -----------
EXPENSES
Consulting fees, related party 10,000 30,000 40,000
Other consulting fees 6,700 10,500 17,200
Rent 2,920 5,874 8,794
General and administrative 4,085 14,424 18,509
Transfer agent fees 1,353 -- 1,353
Depreciation and amortization 149 326 475
Interest - notes payable 573 3,404 3,977
Listing expenses and filing fees 8,647 15,936 24,583
Legal and accounting -- 18,784 18,784
----------- ----------- -----------
TOTAL EXPENSES 34,427 99,248 133,675
NET LOSS FROM OPERATIONS (34,427) (99,248) (133,675)
ACCUMULATED DEFICIT, BEGINNING BALANCE -- (34,427) --
----------- ----------- -----------
ACCUMULATED DEFICIT, ENDING BALANCE $ (34,427) $ (133,675) $ (133,675)
=========== =========== ===========
NET LOSS PER COMMON SHARE $ (0.01) $ (0.02) $ (0.03)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,000,000 5,044,648 5,021,431
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
STATEMENTS OF CASHFLOWS
For the Period from inception on June 15, 1998 to June 30, 1999
<TABLE>
<CAPTION>
Period from Period from
June 15, 1998 Six months June 15, 1998
(Inception) to Ended (Inception) to
December 31 June 30 June 30
1998 1999 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (34,427) $ (99,248) $(133,675)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization 149 326 475
Increase in prepaid expenses (730) (2,657) (3,387)
increase in accrued interest, to related party 573 3,097 3,670
Expenses paid by note payable to related party 2,870 -- 2,870
Increase in accrued expenses -- 3,472 3,472
Increase in accrued expenses to related party -- 21,000 21,000
--------- --------- ---------
Net cash used by operating activities (31,565) (74,010) (105,575)
--------- --------- ---------
Cash flows from investing activities:
Equipment (1,047) (3,843) (4,890)
--------- --------- ---------
Net cash used in investing activities (1,047) (3,843) (4,890)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from sales and subscriptions of common stock 10,000 65,800 75,800
Proceeds from issuance of notes payable to related party 25,000 -- 25,000
Proceeds from issuance of notes payable -- 14,500 14,500
--------- --------- ---------
Net cash provided by financing activities 35,000 80,300 115,300
--------- --------- ---------
Increase in cash 2,388 2,447 4,835
--------- --------- ---------
Cash, beginning of period -- 2,388 --
--------- --------- ---------
Cash, end of period $ 2,388 $ 4,835 $ 4,835
========= ========= =========
Interest paid -- -- --
========= ========= =========
Income taxes paid -- -- --
========= ========= =========
NON-CASH TRANSACTIONS
Note issued for purchase of equipment and operating expenses
to related party $ 3,635 $ -- $ 3,635
Note issued for pending patent to related party $ 33,330 $ -- $ 33,330
Reimbursement due for purchase of equipment $ 1,847 $ -- $ 1,847
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
STATEMENTS OF
STOCKHOLDERS' EQUITY
For the Period from inception on June 15, 1998 to June 30, 1999
<TABLE>
<CAPTION>
Common Stock
------------------------ Total
Number Additional Subscriptions Accumulated Stockholders'
of Shares Amount Paid-in Capital Received Deficit Equity
----------- ---------- --------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock in June, 1998:
For cash at $.002 per share 5,000,000 $ 5,000 $ 5,000 $ -- $ -- $ 10,000
Loss for period ending, December 31, 1998 (34,427) (34,427)
---------- ---------- ---------- ---------- ---------- ----------
Balance
December 31, 1998 5,000,000 5,000 5,000 -- (34,427) (24,427)
Six Months Ended June 30, 1999 - Unaudited
Issuance of common stock in March, 1999:
For cash at $.50 per share 76,540 77 38,193 38,270
Subscriptions received in May, 1999:
For cash at $1.00 per share 27,530 27,530
Loss for period ending, June 30, 1999 (99,248) (99,248)
---------- ---------- ---------- ---------- ---------- ----------
Balance
June 30, 1999 5,076,540 $ 5,077 $ 43,193 $ 27,530 $ (133,675) $ (57,875)
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Envirokare Tech, Inc., (hereinafter "the Company", was incorporated in June 1998
under the laws of the State of Nevada. In December 1998, the Company acquired
the property, assets and undertakings of a business manufacturing and developing
a rubber mold technology and rights to a pending patent for the development of a
pallet made of recycled materials. The Company is currently developing marketing
and manufacturing plans for the products acquired. The Company maintains an
office in Las Vegas, Nevada.
The Company is in development stage, and as of June 30, 1999 had not realized
any significant revenues from its planned operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Development Stage Activities
The Company has been in the development stage since its formation in June 1998.
It is primarily engaged in the refinement of manufacturing processes for the
development of pallets made of recycled materials.
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred a net
loss of $34,427 for 1998 and a net loss of $99,248 for the first half of 1999.
At December 31, 1998, current liabilities exceeded current assets by $61,267 and
at June 30, 1999, current liabilities exceeded current assets by $98,232. The
Company, being a development stage enterprise, is currently putting technology
in place which will, if successful, mitigate these factors which raise
substantial doubt about the Company's ability to continue as a going concern.
The Company is currently reviewing its options to raise substantial equity
capital. Management has proceeded as planned in the ongoing development of the
recycled rubber pallet. In depth testing and analysis of compounds, extrusion
method and equipment modifications have been studied and refined. In order to
meet its requisite budge, management has held and continues to hold very strong
negotiations with serious investors, which is expected to close pending test
results.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
Loss Per Share
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighing
them by the amount of time that they were outstanding.
F-6
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
Provision for Taxes
At December 31, 1998 and June 30, 1999, the Company had net operating losses of
approximately $34,427 and $99,248, respectively. No provision for taxes or tax
benefit has been reported in the financial statements, as there is not a
measurable means of assessing future profits of losses.
Use of Estimates
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues, and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimates.
Year 2000 Issues
Like other companies, Envirokare Tech, Inc. could be adversely affected if the
computer systems the Company, its suppliers or customers use do not properly
process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as the "Year
2000" issue. Additionally, this issue could impact non-computer systems and
devices such as production equipment and elevators, etc. At this time, because
of the complexities involved in the issue, management cannot provide assurance
that the Year 2000 issue will not have an impact on the Company's operations.
Reverse Stock Split
During 1999, the Board of Directors authorized a reverse stock split. All
references in the accompanying financial statements to the number of common
shares and per-share amounts for 1998 have been restated to reflect the reverse
stock split.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets. The useful
lives of property, plant and equipment for purposes of computing depreciation
are five and seven years. The following is a summary of property, equipment and
accumulated depreciation.
<TABLE>
<CAPTION>
December Accumulated June Accumulated
31, 1998 Depreciation through 30, 1999 Depreciation through
Cost December 31, 1998 Cost June 30, 1999
<S> <C> <C> <C> <C>
Furniture and Fixtures $1,014 $ 50 $1,014 $ 130
Office Equipment 2,645 99 6,488 345
------------------------------------------------------------------
$3,659 $ 149 $7,502 $ 475
==================================================================
</TABLE>
F-7
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 4 - INTANGIBLE ASSETS
The amortization of patent costs will begin when final patents are granted. If
the Company does not obtain the patent, these costs of acquiring the patent
rights from its originator will be charged to operations.
NOTE 5 - DETAILS OF SHORT-TERM DEBT
Reimbursement due, in the amount of $ 1,847, are monies owing to Timothy Zuch
for gift certificates provided to the Company, which were deducted from the
purchase price of computer equipment.
Short-term notes payable at June 30, 1999 of $76,465 consist of unsecured notes
bearing 10% for Real Morel, 5% for Robert Davidson, and 5% for Red Dawn. On
September 2, 1999 the note payable to Robert Davidson was repaid in full
including accrued interest (See Notes 4 and 7).
<TABLE>
<CAPTION>
Interest as of
Date Description Principal June 30, 1999
- --------- -------------------------- --------- --------------
<S> <C> <C> <C>
8/18/98 Demand promissory note $ 3,635 $ 316
Payable to Real Morel
9/24/98 Demand promissory note 5,000 384
Payable to Real Morel
11/16/98 Demand promissory note 10,000 622
Payable to Real Morel
12/15/98 Demand promissory note 33,330 1,808
Payable to Real Morel
12/16/98 Demand promissory note 10,000 540
Payable to Real Morel
1/19/99 Note payable to 12,500 279
Red Dawn
3/19/99 Note payable to 2,000 28
Robert Davidson -------- --------
Totals as of June 30, 1999 $76,465 $3,977
======== ========
Short-term notes payable at December 31, 1998 of $61,965 consist of unsecured
notes bearing 10% interest from a related party (See Notes 4 and 7).
<CAPTION>
Interest as of
Date Description Principal December 31, 1998
- --------- -------------------------- ---------- ------------------
<C> <C> <C> <C>
8/18/98 Demand promissory note $ 3,635 $ 140
Payable to Real Morel
9/24/98 Demand promissory note 5,000 132
Payable to Real Morel
11/16/98 Demand promissory note 10,000 123
Payable to Real Morel
12/15/98 Demand promissory note 33,330 137
Payable to Real Morel
</TABLE>
F-8
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 5 - DETAILS OF SHORT-TERM DEBT (CONTINUED)
12/16/98 Demand promissory note 10,000 41
Payable to Real Morel ------- ---------
Totals as of June 30, 1999 $61,965 $ 573
======= ========
NOTE 6 - COMMON STOCK
Upon incorporation, 5,000,000 shares of common stock were sold at $.002 per
share, under Regulation D, Rule 504. At year's end, the stock was held by 30
shareholders, none of whom held in excess of ten percent of the stock.
As of June 30, 1999, 5,076,540, shares of common stock were issued and
outstanding and 27,530 common shares were to be issued.
On February 22, 1999, the Board of Directors authorized a 2-for-1 reverse stock
split of the Company's $.001 par value common stock. As a result of the reverse
split, 5,000,000 shares were cancelled and additional paid-in capital was
increased by $5,000. The financial statements have been adjusted to reflect the
reverse stock split as 5,000,000 shares issued at $.002. All references in the
accompanying financial statements to the number of common shares and per-share
amounts for 1998 have been restated to reflect the reverse stock split.
NOTE 7 - RELATED PARTIES
Madelyn Thomas, who received $10,000 in consulting fees under the terms of an
ongoing contract as of December 31, 1998 and an additional $9,000 (with $21,000
more accrued) as of June 30, 1999 (as described in Note 7) is the wife of the
president of the Company, Charles W. Thomas.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company entered into consulting contracts with Susan Westfall and Madelyn
Thomas on November 1, 1998 for the purpose of establishing corporate offices on
behalf of the Company. The terms of Ms. Westfall's contract specify that she
will receive $2,500 per month for the term of the contract, which commences
November 1, 1998 and terminates April 30, 1999. The terms of Mrs. Thomas's
contract specify that she will receive $5,000 per month for the term of the
contract, which commences November 1, 1998 and terminates October 31, 1999. Both
contracts provide indemnification against any and all liability and provide for
reimbursement of expenses up to a specified amount. The may be terminated upon
thirty days written notice by either party. On June 1, 1999, Madelyn Thomas,
served the Company 30 days notice, to terminate her consulting contract, to be
effective at month's end.
The Company entered into a lease for office space for the period of thirty-six
months beginning October 1, 1998. Future annual minimum lease payments for the
term of the lease are as follows for the years ending December 31:
1999 $ 8,862
2000 $ 9,276
2001 $ 7,200
F-9
<PAGE>
ENVIROKARE TECH, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 9 - SUBSEQUENT EVENTS
On April 1, 1999, the Company entered into a lease for office space for the
period of twelve months beginning April 1, 1999. As of July 31, 1999, the
Company and the landlord mutually agreed to cancel the lease without penalty.
The Company has retained Akron Rubber Development Laboratory of Akron, Ohio to
test the composite for creep factor and life expectancy. The Company expects
test results to greatly exceed minimum industry standards. A first production
run of 400 to 500 pallets is expected over the next few months to be integrated
into various potential customers for on site testing purposes.
F-10
