UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 50549
Form 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ____________
Commission file number 333-63063
Integrated Technology Group
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(Name of small business issuer in its charter)
Nevada
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(State or other jurisdiction of incorporation or organization)
87-058319
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(I.R.S. Employer identification No.)
301 West Main Suite 500 Ardmore, OK 73401
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (580) 226-0511
Securities registered under Section 12(b) of the Exchange Act:
Title of each class
None
Securities registered under Section 12(g) of the Exchange Act: Common Stock
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports. Yes ___
No X
----
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by referenced in Part III of this Form
10-KSB or any amendment to this Form 10-KSB [ ]
State issuer's revenues for its most recent fiscal year: $10,953
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
December 15, 2000. $3,250,000
State the number shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:11,125,000
<PAGE>
PART I
Item 1. Business
Background
The registrant was formed as a Nevada corporation on May 8, 1998, and
named The Living Card Corporation. On June 14, 2000, the Company changed its
name to Integrated Technology Group. Upon formation, the Company issued
6,000,000 shares of Common Stock to its founders in exchange for assets and cash
transferred to the Corporation. From its formation and until the later part of
fiscal 2000, the Company engaged in the creation, development and marketing of
unique, educational and low-cost "garden" greeting cards.
In the end of June, 1999, the Company completed a public offering of a
total of 2,000,000 shares of common stock at a price of $.10 per share, or a
total offering of $200,000, pursuant to a registration statement on Form SB-1
filed with the U.S. Securities and Exchange Commission ("SEC"), and declared
effective as of April 22, 1999. The Company received net proceeds of
approximately $168,000 from the offering after offering costs.
In the latter part of fiscal 2000, the registrant determined to end the
greeting card business and changed the Company's purpose to acquiring operating
assets through the issuance of Common Stock.
In July 2000 the Corporation acquired all of the issued and outstanding
shares of Safe Tire Disposal Corp., a Delaware Corporation. In connection with
this acquisition, (i) the Corporation sold the assets of the Company, which
consisted of assets related to the conduct of the Living Card Company, to John
F. Lund and R. Blair Lund in exchange for cancellation of 5,900,000 restricted
common shares of the Company, thus reducing to 2,100,000 the number of common
shares outstanding; (ii) Issued 9,000,000 common shares of the registrant,
constituting 80.89% of the shares of the registrant's shares outstanding after
the close, to the owners of 100% of the outstanding shares of Safe Tire Disposal
Corp., an Oklahoma corporation, in exchange for all of the issued and
outstanding equity securities; and (iii) issued 25,000 shares to James N.
Barber, Trustee in consideration of legal and finders' fees incurred in
connection with the acquisition.
As a result of these transactions the only remaining asset of the
registrant was 100% of the issued and outstanding common stock of Safe Tire
Disposal Corp.
Business
The Company, through Safe Tire Disposal Corp., its wholly owned
subsidiary, operates one plant in Oklahoma and three plants in Texas at which it
recycles tires. ITGI is paid to accept waste tires from tire retailers,
stations, yards and from clean-up jobs with governmental agencies, private
individuals and companies. It has developed a process in which it uses shredders
to reduce the tires to chips or pieces of rubber ranging from 2 inch to 1/2 inch
in diameter. These chips can be used for energy recovery as "Tire Derived Fuel",
or for manufacturing and engineering applications (referred to as Tire Derived
Product). ITGI has effected proprietary improvements in its technology, which it
believes will permit it to increase production by shortening the production
cycle, and thus lower the cost of the end product.
Safe Tire has also developed and patented a "Gasification" process
which is a close-loop method of deriving petro-fuels from ground tire scraps by
thermal degrading them and thereby producing smaller, less complex molecules.
The process recovers gas, oil, carbon and steel. The carbon is refined to remove
ash and other waste and can then be palletized or bagged and marketed to
end-users. The gas from the process, which has a heating value as high as 2375
Btu/cubic foot compared to natural gas that averages 1000 Btu/cubic foot, goes
through a condenser to produce oil. The oil, which has the consistency of a
distillate fuel oil, may be marketed to refineries or sold to fuel blenders who
use it to produce other petroleum products, or as a fuel to run oil fired motors
for the production of electricity. The Gasification process produces extra gas
that does not condense into oil that is used to provide thermal energy to heat
the tire chips reducing the operational energy costs. The process produces 500
pounds of carbon, 300 pounds of steel and 2.5 barrels of oil per ton of used
tires.
The Company has developed engineering models of its gasification
process but has not built a plant that produces commercial quantities of
by-products. The Company is seeking financing to fund its first gasification
plant.
The registrant anticipates that its plants are environmentally friendly
and produce virtually zero emissions.
<PAGE>
There are several products that can derive from tire scraps. TDF can be
used to power cement and power plants. The Company presently sells a significant
amount of chips to such users. The Company has established a large demand of TDP
for use as a leachate material in the construction of new landfill cells. Tire
chips can be further reduced into crumb rubber, small rubber material that has
no wire present that is present in chips. Crumb rubber is used in the
manufacture of rubberized asphalt, roofing materials, siding, automotive parts
including hoses and body parts, electrical insulators and floor tiles. Crumb
rubber is also useful as an end product in barns and stables, as a surface for
racing tracks and horse arenas, and as a resilient, safer surface for
playgrounds.
Governmental Regulation
The Company presently derives its revenues principally from tire
shredding operations in Texas and Oklahoma. The laws of both Texas and Oklahoma
require the purchasers of new tires pay a tire disposal fee. Prior to the
beginning of 2000, both Texas and Oklahoma required that dealers charging this
fee forward the fee to state agencies which would then pay various entities a
portion of that fee to dispose of the tires. The Company derived its revenues by
converting the tires to chips approximately two inches square, and received its
revenues from the state as compensation for this conversion.
Effective September 1997, the Waste Tire Program in Texas ceased due to
a sunset provision enacted in prior legislation. While dealers still charges a
disposal fee, Texas law now requires the dealers to arrange for the disposal of
their tires. In Texas, accordingly, the Company now markets its services
directly to sellers of new tires. The change permits the Company to receive a
greater portion of the fee from dealers than the portion previously received
from the state. Also during the period between Septembers, 1997 to 1999 the
Company participated with States abandoned waste tire stockpile clean up
program. The Company received the majority of the projects due to their ability
to market all the tires collected from these dumps to a recycling end use.
Efforts are underway in Texas to enact legislation that ensures waste tires are
directed towards recycling operations through an enforcement program.
In addition to the regulatory environment, the Company's tire recycling
operations must comply with a variety of environmental regulations concerning
the storage and safe keeping of tire chips.
Competition
The Company competes with others engaged in the business of shredding
tires in Texas and Oklahoma. The program in Oklahoma requires that entities
receiving fees from the State of Oklahoma gather tires from throughout the
state. This requirement places a significant financial burden on those gathering
tires in the State of Oklahoma to have the financial resources to conduct
statewide operations and acts as a barrier to entry by other competitors.
The program changes in Texas have placed significant burdens on those
previously conducting tire shredding in that state. Operators in that state have
had to shift to negotiating for disposal fees rather than obtaining fees from
the state. In addition, the amount of the fee received for disposal is subject
in Texas to negotiation with various entities, principally retailers.
While the Company presently generates its revenues by receiving
essentially a tipping fee for disposing of tires, increasingly the issue for
tire disposal is the complete recycling of tires into useful, environmentally
benign products on an economic basis. Management of the Company believes that
its gasification process is such a solution. Others have implemented what
management of the Company believes to be partial solutions, particularly with
the recycling of crumb rubber into mats. These recycling programs, however,
operate, in the opinion of management, on low margins and compete with a variety
of existing products and materials while not disposing of tire chips containing
wire.
Employees
On December 1, 2000 the Company employed 132 people. Of these people,
118 were engaged in tire gathering and shredding operations. The others were
engaged in management and administrative positions.
<PAGE>
Item 2. Description of Property
Texas Properties
Midlothian, Texas - Approximately twenty-six acres, which contains a processing
plant of 11,000 square feet, a shop building of 1500 square feet and an office
building of 1150 square feet.
San Antonio, Texas - Approximately thirty-seven acres, which contains a
processing plant of 11,000 square feet and an office building of 1150 square
feet.
Odessa, Texas - Approximately twenty acres, which contains a processing plant of
11,000 square feet and an office building of 1150 square feet.
Cleveland, Texas - Approximately twenty-six acres, which contains a processing
plant of 11,000 square feet, a shop building of 800 square feet and an office
building of 1150 square feet.
There is a mortgage, which carries a lien on all properties above.
Oklahoma Property
Choctaw, Oklahoma- Approximately fifteen acres, which contains a processing
plant of 10,000 square feet, a shop building of 9,200 square feet and an office
building of 2000 square feet The land lease agreement provides for five
successive five-year renewal options, each with increased annual lease payments,
and options to purchase the leased land.
There is a mortgage, which carries a lien on the building in Choctaw.
Item 3. Legal Proceedings.
The Company is a defendant in a breach of contract claim filed by a
party who provided services in response to a December 1995 fire at the Company's
Midlothian, Texas facility. The party is seeking from the Company $197,000
relating to services provided as well as for interest and legal fees. In 1997,
the Company filed a motion to abate the lawsuit based on the existence of an
arbitration provision in the party's work order. The district court granted the
motion to abate contingent on the Company's intitation of an arbitration
proceeding. The Company initiated an arbitration proceeding with the American
Arbitration Association ("AAA"). The party subsequently filed a petition in the
United States Bankruptcy Court for liquidation under Chapter 7 of the U.S.
Bankruptcy Code. Following receipt of notice of the bankruptcy filing, the AAA
issued notice that it would close the arbitration proceedings. The party's
bankruptcy case is ongoing and the bankruptcy trustee could reopen the
arbitration proceeding. The ultimate outcome of this claim could have a material
impact on the financial position and future results of operations of the
Company.
Item 4. Submission of Matters to Vote of Security Holders
On June 12, 2000, the holders of 6,000,000 shares of Common Stock of
the 8,000,000 then issued and outstanding executed a written consent amending
the Corporation's Articles of Incorporation changing the Corporation's name to
Integrated Technology Group.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
The Company completed its initial public offering in June 1999. The
Company's stock did not commence trading. On March 16, 2000, the first trade
occurred at a price of $0.16 per share. On June 16, 2000 the Company's Common
Stock began to be traded on OTC Bulletin Board. Prior to that time, there was no
active market in the Company's Common Stock.
The high bid price for the Company's Common Stock in the month of June,
2000, was 4 7/8 and the low bid price was 4 3/8.
As of December 1, 2000, there were approximately 50 holders of record
of the Company's common stock, according to the records provided by the transfer
agent.
In July 2000, the Company agreed to issue 9,000,000 shares of Common
Stock to two affiliates of principals of Safe Tire Disposal Corporation and an
additional 25,000 shares to the registrant's counsel. The issuance of these
shares were exempt from registration under Section 5 of the Securities Act of
1933 pursuant to the exemption provided in Section 4(2) of that act.
Item 6. Management's Discussion and Analysis or Plan of Operation.
In July 2000 founders of the registrant returned to the Company shares
originally issued to them in exchange for the then operating assets of the
Company. Since the Company's formation on May 8, 1998, through June 30, 2000,
the Company remained a development stage company, incurring losses totaling
$280,485. During that time, the Company's revenues totaled $15,073. The
principal expense during that time was selling, general and administrative
expenses which totaled $248,953.
As a consequence of the rescission by the founders, the Company forgave
the related party payables and ceased all operations until the acquisition of
Safe Tire Disposal.
Item 7. Financial Statements.
The response to this item is submitted as a separate section of this
Form 10-K. See "Item 13. Exhibits, Financial Statements and Reports on Form
8-K."
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
Effective December 1, 2000, the company named the auditing firm Lane
Gorman Trubitt, LLC, as the Company's auditors. Lane Gorman Trubit, LLC has
acted as Safe Tire Disposal Inc.'s auditor prior to the Company's acquisition of
that entity.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The following table sets forth certain information regarding the
Company's directors and executive officers.
Name Age Position
H. Scott Holden 44 Director, President and
Chief Executive Officer
C. Sue Rushing 40 Director,
Secretary/Treasurer and
Comptroller
Harold H. Holden 66 Director
Jeffrey C. Bruteyn 30 Director
James N. Chatham II 33 Director
Each of the above was appointed as a director and officer of the
Company on July 29, 2000. H. Scott Holden is the son of Harold H. Holden
Biographies
H. Scott Holden, President and Chief Executive Officer, age 44. Mr. Holden is
primarily responsible for all strategic and financial decisions affecting all
phases of Safe Tire's business. Additionally, he oversees regulatory,
governmental and legislative affairs. Mr. Holden designed and oversaw
construction of the Oklahoma and Texas facilities and is singularly responsible
for originating many of the design improvements. On a daily basis, he oversees
operations of the Company ranging from tire collection, processing and end use
marketing activities to preparation of internal financial information and
regulatory compliance.
C. Sue Rushing, Comptroller, age 40. Ms. Rushing is responsible for all internal
financial reporting functions. Prior to joining the Company in February 1990,
Ms. Rushing was the Financial Manager and Comptroller of the Dornick Hills Golf
and Country Club, Ardmore, Oklahoma. Ms. Rushing has a Bachelor of Science
Degree in Accounting from Southeastern Oklahoma State University, Durant,
Oklahoma.
Harold H. Holden, Advisor to the Board, age 64. He currently serves as Chairman
of the Board, President, and Chief Executive Officer of Holden Energy
Corporation, an independent oil and gas company. HEC was established in 1977 and
presently operates in the Mid-Continent area of the United States. HEC has
developed significant reserves and has an established record in the energy
exploration field. HEC also has 100% owned trucking, transporting, and supply
company subsidiaries. Mr. Holden serves in an advisory and consultant capacity
to the Company. He is a graduate of Texas A&M-Kingsville, Kingsville, Texas.
Jeffrey C. Brutyn. Director, age 30. Received a BBA in finance from Baylor
University in 1989. From 1991 to 1993, Mr. Bruteyn was a Senior Vice President
for Investment Capital Resources, Inc. From 1993 to 1994, Mr. Bruteyn was a
Senior Financial Advisor for American Express Financial Advisors. From 1994 to
1997, Mr. Bruteyn was an Investment Banker for First London Securities
Corporation where he worked as a director in the Mergers and Acquisitions
Department. He was also a Senior trader at First London Securities prior to in
1997, becoming the Financial Director for Ameri-First Acceptance Corporation. At
Ameri-First, Mr. Bruteyn was responsible for all in-house funding activities. In
1998, Mr. Bruteyn became president of Ameri-First Securities Corporation before
becoming CEO of Ameri-First Financial Group, Inc.
James N. Chatham II. Director, age 33, Mr. Chatham graduated from Lamar
University with a B.A. in History and a minor in Economics. From there, Mr.
Chatham completed a degree in French and French History from the University de
Strasbourg, France. Upon return from France, Mr. Chatham attended the University
of Houston Law School. After law school, Mr. Chatham joined an investment group
that developed a broadcasting property in College Station, Texas. The station
was sold to a Fox Television Group prior to Mr. Chatham's tenure with Fox. Mr.
Chatham became head of marketing and development for Fox Television in Central
Texas. Mr. Chatham left Fox to become Vice President of Suncreek Media, Inc.
There, he was in charge of marketing and international distribution for the
company's television products. Upon leaving Suncreek, he became Director of
Public Relations for Ameri-First Acceptance Corp. In 1998, Mr. Chatham became
Vice President of Ameri-First Securities Corporation until assuming the Vice
Presidency of Ameri-First Financial Group, Inc.
Item 10. Executive Compensation.
The following table sets forth the compensation paid to the Company's
Executive Officers. For services rendered to the Company in all capacities for
the fiscal years ended June 30, 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Annual Compensation All Other
Principal Position Fiscal Year Salary Bonus Compensation
<S> <C> <C>
John F. Lund, President 2000
1999 $36,000
R. Blair Lund, Secretary 2000
1999 4,000
</TABLE>
John F. Lund and R. Blair Lund resigned as directors and officers of
the Company on July 29, 2000.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information regarding the
beneficial ownership as of March 15, 2000, of the Common stock by (a) each
person known by the Company to be a beneficial owner of more than 5% of the
outstanding shares of Common Stock and by each Selling Shareholder, (b) each
director of the Company, (c) each Named Executive Officer, and (d) as directors
and executive officers of the Company as a group. Unless otherwise noted, each
beneficial owner named below has sole investment and voting power with respect
to the Common Stock shown below as beneficially owned by him.
<TABLE>
<CAPTION>
Name and Address of Number of Percent
Beneficial Holder Shares Owned Owned
<S> <C> <C>
H. Scott Holden, 1993 Trust 4,500,000 40.45%
Harold H. Holden, 1995 Trust 4,500,000 40.45%
Officers and Directors as a Group 9,000,000 80.89%
</TABLE>
The address of H. Scott Holden, 1993 Trust and the Harold H. Holden, 1995 Trust
is 301 West Main, Suite 600, Ardmore, OK 73401
Item 12. Certain Relationships and Related Transactions.
During the last fiscal year, the Company did not engage in any
transaction with any director or executive officer, any nominee for election as
a director or any security holder holding in excess of 5% of the Company's
Common Stock whose amount exceeded $60,000.
In connection with the organization of the Company, the Company's then
executive officers and directors, John Lund, President and a director, and Blair
Lund, Secretary and a director, contributed all of the rights to the Living Card
products, and paid an aggregate of $10,000 cash, in exchange for the issuance of
a total of 3,000,000 shares each of the common stock of the Company. In November
1998, John Lund and Blair Lund contributed an additional $10,000 in equity
capital to the Company.
From the date of organization of the Company, John F. Lund, President,
loaned to the Company a total of $85,000, to fund Company operations pending the
receipt of funding from the Company's offering. A substantial portion of these
funds was utilized by the Company to purchase materials and packaging and
materials for the Company's products, and for general and administrative
expenses. Since the completion of the public offering, a total of $85,000 of
such indebtedness has been repaid to Mr. Lund, without interest. A total of
$65,000 was repaid to Mr. Lund prior to the year ended June 30, 1999; the
balance was repaid in July 1999. In addition to the sums described above, the
Company's officers and directors contributed an additional $58,323 to the
Company prior to the completion of the offering, which has been treated as
additional paid in capital.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Copies of the following documents are included as exhibits to this report
pursuant to Item 601 of Regulation S-B.
Exhibit No. SEC Ref. Title of Document Page.
2.01 * 2 Articles of Incorporation, as amended
2.02 * 2 By-Laws
27 ** 27 Financial Data Schedules
* Previously filed with the Securities and Exchange Commission on September 8,
1998, as part of the Company's initial filing on Form SB-1
** The Financial Data Schedule is presented only in the electronic filing with
the Securities and Exchange Commission.
Reports on Form 8-K
During the fiscal year ended June 30, 2000, the Company filed no reports on Form
8-K.
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2000
<PAGE>
C O N T E N T S
Independent Auditors' Report.............................................. 3
Balance Sheet............................................................. 4
Statements of Operations.................................................. 5
Statements of Stockholders' Equity (Deficit).............................. 6
Statements of Cash Flows.................................................. 7
Notes to the Financial Statements......................................... 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Integrated Technology Group
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Integrated Technology Group
(formerly Living Card Company, Inc.) (a development stage company) as of June
30, 2000 and the related statements of operations, stockholders' equity
(deficit) and cash flows for the year ended June 30, 2000, and from inception on
May 8, 1998 through June 30, 1999 and 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based onour audits.
We conducted our audits 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 audits provide 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 Integrated Technology Group
(formerly Living Card Company, Inc. (a development stage company) as of June 30,
2000 and the results of its operations and its cash flows for the year ended
June 30, 2000, and from inception on May 8, 1998 through June 30, 1999 and 2000
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 5 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note . The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
September 8, 2000
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Balance Sheet
ASSETS
<TABLE>
<CAPTION>
June 30,
2000
-------------
<S> <C>
CURRENT ASSETS
Cash $ 6,938
Accounts receivable - net (Note 2) -
Inventory - net (Note 2) 19,257
-----------------
Total Current Assets 26,195
-----------------
FIXED ASSETS (Note 2) 2,610
-----------------
TOTAL ASSETS $ 28,805
=================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accrued interest $ 2,125
Accounts payable 8,090
Accounts payable - related party (Note 3) 51,500
-----------------
Total Current Liabilities 61,715
-----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: $0.01 par value, 5,000,000 shares authorized
no shares issued and outstanding -
Common stock: $0.001 par value, 20,000,000 shares authorized;
8,000,000 shares issued and outstanding 8,000
Additional paid-in capital 239,575
Deficit accumulated during the development stage (280,485)
-----------------
Total Stockholders' Equity (Deficit) (32,910)
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 28,805
=================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the May 8, 1998
Year Ended Through
June 30, June 30,
--------------------------------------
2000 1999 2000
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
OPERATING COSTS
Selling, general and administrative - - -
------------------ ------------------ ------------------
Total Operating Costs - - -
------------------ ------------------ ------------------
OPERATING LOSS - - -
------------------ ------------------ ------------------
OPERATING LOSS BEFORE LOSS FROM
DISCONTINUED OPERATIONS - - -
------------------ ------------------ ------------------
LOSS FROM DISCONTINUED
OPERATIONS (Note 6) (121,849) (158,636) (280,485)
------------------ ------------------ ------------------
NET LOSS $ (121,849) $ (158,636) $ (280,485)
================== ================== ==================
BASIC LOSS PER SHARE
Continuing operations $ (0.00) $ (0.00)
Discontinued operations (0.02) (0.02)
------------------ ------------------
Total Loss Per Share $ (0.02) $ (0.02)
================== ==================
BASIC WEIGHTED AVERAGE SHARES 8,000,000 8,000,000
================== ==================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Additional Stock During the
--------------------------------- Paid-in Subscription Development
Shares Amount Capital Receivable Stage
--------------- ---------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Balance at inception on
May 8, 1998 - $ - $ - $ - $ -
Issuance of 6,000,000 shares
of common stock for cash at
approximately $0.001 per share 6,000,000 6,000 (1,000) - -
Contributed capital - - 5,006 - -
Net loss for the year ended
June 30, 1998 - - - - (11,820)
--------------- ---------------- --------------- --------------- -----------------
Balance, June 30, 1998 6,000,000 6,000 4,006 - (11,820)
Issuance of 2,000,000 shares
of common stock for cash at
$0.10 per share 2,000,000 2,000 198,000 (85,000) -
Stock offering costs - - (30,754) - -
Contributed capital - - 68,323 - -
Net loss for the year ended
June 30, 1999 - - - - (146,816)
--------------- ---------------- --------------- --------------- -----------------
Balance, June 30, 1999 8,000,000 8,000 239,575 (85,000 ) (158,636)
Receipt of stock subscription - - - 85,000 -
Net loss for the year ended
June 30, 2000 - - - - (121,849)
--------------- ---------------- --------------- --------------- -----------------
Balance, June 30, 2000 8,000,000 $ 8,000 $ 239,575 $ - $ (280,485)
=============== ================ =============== =============== =================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
6
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
May 8, 1998
For the Through
Year Ended June 30,
June 30, ----------------------------------------
2000 1999 2000
------------------ ------------------ -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (121,849) $ (158,636) $ (280,485)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 574 - 575
Inventory evaluation adjustment 19,258 - 19,258
Allowance for bad debt (3,030) 5,949 2,919
Increase in accounts payable and accounts
payable - related party 13,869 47,846 61,715
(Increase) decrease in accounts receivable 6,666 (9,585) (2,920)
(Increase) in inventory - (38,515) (38,515)
------------------ ------------------ -------------------
Net Cash Used by Operating Activities (84,512) (152,941) (237,453)
------------------ ------------------ -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (3,184) - (3,184)
------------------ ------------------ -------------------
Net Cash Used by Investing Activities (3,184) - (3,184)
------------------ ------------------ -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Receipt of subscription receivable 85,000 - 85,000
Payment on note payable - related party - (90,000) (90,000)
Note payable - related party - 90,000 90,000
Common stock issued for cash - 120,000 120,000
Additional capital contributed - 73,329 73,329
Stock offering costs - (30,754) (30,754)
------------------ ------------------ -------------------
Net Cash Provided by Financing Activities 85,000 162,575 247,575
------------------ ------------------ -------------------
NET (DECREASE) INCREASE IN CASH (2,696) 9,634 6,938
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 9,634 - -
------------------ ------------------ -------------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 6,938 $ 9,634 $ 6,938
================== ================== ===================
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
7
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
NOTE 1 - NATURE OF ORGANIZATION
The financial statements presented are those of Integrated
Technology Group (formerly Living Card Company, Inc.) (a
development stage company) (The Company). The Company was
organized under the laws of the State of Nevada on May 8, 1998, as
Living Card Company, Inc. On June 14, 2000, the Company changed
its name to Integrated Technology Group. The Company was organized
to manufacture, merchandise, sell and distribute at wholesale and
retail, a specialized line of greeting cards and other related
products.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The financial statements are prepared using the accrual method of
accounting. The Company has elected a June 30 year end.
b. Provision for Taxes
At June 30, 2000, the Company had net operating loss carryforwards
of approximately $ 275,000 that may be offset against future
taxable income from the year 2000 through 2020. No tax benefit has
been reported in the financial statements because the Company
believes that there is a 50% chance or greater the net operating
loss carryforwards will expire unused. Therefore, the potential
tax benefits of the loss carryforwards are offset by a valuation
allowance of the same amount.
c. 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 reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
e. Basic Loss Per Share
The computation of basic loss per share of common stock is based
on the weighted average number of shares outstanding during the
period of the financial statements.
8
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Accounts Receivable
Accounts receivable are shown net of an allowance for doubtful
accounts of $ 2,920 as of June 30, 2000.
g. Inventory
The inventory is carried at its lower of cost or market value
using the average cost method. At June 30, 2000, inventory was as
follows:
June 30,
2000
Raw materials and supplies $ 13,460
Finished goods 25,055
Less: allowance for obsolete inventory (19,258)
-----------------
Total $ 19,257
=================
h. Fixed Assets
During the year, office equipment was purchased for $3,184.
Depreciation on equipment for the year was $574, leaving a net
balance at June 30, 2000 of $2,610. Equipment is depreciated over
a 5-year life using the straight-lien method of depreciation.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the year ended June 30, 2000, accrued officer salaries
amounted to $9,000, and the officers have loaned the Company
$42,500, bearing interest at an imputed rate of 10.00%. Accrued
interest of $2,125 was due at June 30, 2000.
NOTE 4 - PREFERRED STOCK
Shares of Preferred Stock may be issued in one or more series as
may from time to time be determined by the board of directors.
Each series shall be distinctly designated. All shares of any one
series of the Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends
thereon, if any, shall be cumulative, if made cumulative. The
powers, preferences, participating, optional and other rights of
each such series and the qualifications, limitations, or
restrictions thereof, if any, may differ from those of any and all
other series at any time outstanding.
9
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant operations to date, nor does it have an
established source of revenues sufficient to allow it to continue
as a going concern. It is the intent of management to discontinue
the greeting card business, and complete a reverse merger with an
existing operating company.
10
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
NOTE 6 - DISCONTINUED OPERATIONS
In July 2000, officers of the Company returned their shares in the
Company for which they received all of the assets of the Company
and forgave the related party payables and as a result ceased all
operations. The following is a summary of the loss from
discontinued operations resulting from the elimination of the
operations. The financial statements have been retroactively
restated to reflect this event. No tax benefit has been attributed
to the discontinued operations.
<TABLE>
<CAPTION>
From
Inception on
May 8, 1998
Through
June 30,
June 30, -------------------------------------
2000 1999 2000
------------------ ------------------ -----------------
<S> <C> <C> <C>
REVENUES
Sales $ 10,953 $ 4,120 $ 15,073
Sales returns (13,406) - (13,406)
------------------ ------------------ -----------------
Net Sales (2,453) - 1,667
------------------ ------------------ -----------------
COST OF SALES (NET) 3,052 2,828 5,880
------------------ ------------------ -----------------
GROSS MARGIN (5,505) 1,292 (4,213)
------------------ ------------------ -----------------
EXPENSES
Inventory evaluation adjustment 19,258 - 19,258
Bad debt expense 957 5,949 6,906
Selling, general and administrative 94,822 154,131 248,953
------------------ ------------------ -----------------
Total Expenses 115,037 160,080 275,117
------------------ ------------------ -----------------
OPERATING LOSS (120,542) (158,788) (279,330)
------------------ ------------------ -----------------
OTHER INCOME
Interest expense (2,125) - (2,125)
Interest income 818 152 970
------------------ ------------------ -----------------
Total Other Income (1,307) 152 (1,155)
------------------ ------------------ -----------------
NET LOSS $ (121,849) $ (158,636) $ (280,485)
================== ================== =================
BASIC LOSS PER SHARE $ (0.02) $ (0.02)
================== ==================
BASIC WEIGHTED AVERAGE SHARES 8,000,000 8,000,000
================== ==================
</TABLE>
11
<PAGE>
INTEGRATED TECHNOLOGY GROUP
(Formerly Living Card Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
NOTE 6 - DISCONTINUED OPERATIONS (Continued)
The Company would have recognized a net gain on disposition of
assets of $32,910 had the discontinued operations been effective
June 30, 2000. This represents the net liabilities in excess of
assets.
NOTE 7 - SUBSEQUENT EVENTS
The Company has entered into an agreement with the officers of the
Company to sell the assets of the Company to the officers in
exchange for 5,900,000 shares of the Company held by the officers
(Note 6).
The Company completed a plan of reorganization with Safe Tire
Disposal Corp. by issuing 9,025,000 shares of common stock for the
reverse acquisition.
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, the Registrant has caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
REGISTRANT:
INTEGRATED TECHNOLOGY GROUP
Dated December 15, 2000
/s/ H. Scott Holden
----------------------------------
H. Scott Holden
President and
Chief Executive Officer
/s/ C. Sue Rushing
-----------------------------------
C. Sue Rushing, Principal Financial
and Accounting Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ H. Scott Holden Director December 15, 2000
---------------------------
H. Scott Holden
/s/C. Sue Rushing Director December 15, 2000
---------------------------
C. Sue Rushing
/s/ Harold H. Holden Director December 15, 2000
---------------------------
Harold H. Holden
Director December 15, 2000
---------------------------
Jeffrey C. Bruteyn
Director December 15, 2000
---------------------------
James N. Chatham II
