U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
Commission File No. 1-15597
LANDSTAR, INC.
(Exact name of registrant as specified in its charter)
Nevada 860914051
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3795 Carey Road
Suite 600,
Victoria, British Columbia, Canada V8Z 6T8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(250) 475-6000
Check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant
was required to file such reports). and (2) has been subject to
such filing requirements for the past 90 days.
Yes [x] No[ ]
State the number of shares outstanding of each of the issuer's class
of common equity, as of the latest practicable date:
Class: Common Stock, $.001 par value
Outstanding at March 31, 2000: 38,036,124 shares
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LandStar Inc.
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at March 31, 2000 1
Consolidated Statement of Operations for the
Three Months Ended March 31, 2000 and 1999 2
Consolidated Statement of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Items 1 through 6 6
SIGNATURES
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<TABLE>
<CAPTION>
LANDSTAR INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2000
(Unaudited)
<S>
ASSETS
<C> <C>
2000
----
CURRENT ASSETS
Cash $ 4,387
Accounts receivable 36,741
Prepaids and deposits 7,767
---------
48,895
---------
FIXED ASSETS
Plant and equipment 716,965
Leasehold improvements 81,920
Office equipment 21,616
Less: Accumulated depreciation (44,007)
----------
776,494
----------
INTANGIBLE ASSET
-technology rights net of $169,660 accumulated amortization 715,708
----------
$1,541,097
==========
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 301,563
Accruals to related parties 168,010
Due to related party 394,910
-----------
864,483
-----------
SHAREHOLDERS EQUITY
Authorized: 100,000,000 common shares with a par value of $.001
Issued: 38,036,124 shares 38,036
Additional paid-in capital 4,453,707
Common share subscriptions, 150,000 shares 37,500
Deficit (3,852,629)
------------
676,614
------------
$ 1,541,097
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
<S> <C> <C>
3 MONTHS 3 MONTHS
2000 1999
-------- --------
REVENUE $ - $ -
-------- --------
OPERATING COSTS AND EXPENSES
Research and development 13,985 -
General and administrative 339,468 576,696
-------- --------
LOSS FROM OPERATIONS 353,453 576,696
-------- --------
NON-OPERATING INCOME AND EXPENSE
Interest 12,178 3,350
Depreciation and amortization 63,000 14,200
------- --------
75,178 17,550
------- --------
NET LOSS $ 428,631 $ 594,246
======= ========
NET LOSS PER COMMON SHARE $ 0.01 $ 0.06
======= ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 37,789,457 9,615,000
========== =========
</TABLE>
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<TABLE>
<CAPTION>
LANDSTAR INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 200O
(Unaudited)
<S> <C> <C>
3 MONTHS 3 MONTHS
2000 1999
-------- --------
OPERATING ACTIVITIES
Net Loss for the Period $ (428,631) $ (594,246)
Add: Non-cash expenses
- depreciation and amortization 63,000 14,200
- shares for finders fees - 65,000
Increase (Decrease) in non-cash
workingcapital items 146,433 (360,306)
--------- ---------
(219,198) (875,352)
--------- ---------
INVESTING ACTIVITIES
Additions to plant and equipment (123,584) (6,304)
--------- ---------
FINANCING ACTIVITIES
Issuance of common stock 193,047 755,500
Advances from related parties 144,080 131,853
--------- ---------
337,127 887,353
--------- ---------
NET INCREASE (DECREASE) IN CASH (5,655) 5,697
CASH, beginning of period 10,042 317
--------- ---------
CASH, end of period $ 4,387 $ 6,014
========= =========
</TABLE>
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LANDSTAR INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT MARCH 31, 2000
NOTE 1. UNAUDITED INFORMATION
The consolidated balance sheet as of March 31, 2000 and the
consolidated statements of operations for the three month periods
ended March 31, 2000 and 1999 were taken from the Company's books
and records without audit. However, in the opionion of management,
such information includes all adjustments (consisting only of normal
recurring accruals) which are necessary to properly reflect the
consolidated financial position of the Company as of March 31, 2000
and the results of operations for the three months ended
March 31, 2000 and 1999.
Certain information and notes included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted, although management believes that the
disclosures are adequate to make the information presented not
misleading. Interim period results are not necessarily indicative of
the results to be achieved for and entire year. These financial
statements should be read in conjunction with the financial statements
and notes to financial statements included in the Company's financial
statements for the year ended December 31, 1999.
NOTE 2. DUE TO RELATED COMPANY
Kentucky Financial Inc. is related to an officer and director of
the Company. Kentucky advances funds and makes payments on behalf
of the Company from time to time. The balance owing to Kentucky
as at March 31, 2000 was $394,910. The balance is due on demand
without interest.
NOTE 3. COMMITMENTS
The Company leases office space from and entity affiliated with an
officer and director of the Company for $4,750 per month. The
term of the lease is through December, 2004. The Company also leases
d warehouse space used for its pilot plant. The terms of the lease
require monthly payments of $4,726 through September, 2000. Future
minimum lease payments as of March 31, 2000 are as follows:
<TABLE>
<S> <C>
Year ending December 31
-----------------------
2000 $ 71,106
2001 57,000
2002 57,000
2003 57,000
2004 57,000
</TABLE>
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Management Discussion
Management is pleased with the progress made by the company during
the first quarter of 2000. The company filed the 10-SB document on
January 4, 2000 and received an initial comments letter from the
SEC on March 17, 2000. The process of responding to comments
continued in the second quarter with the most recent response being
filed on July 24, 2000. A response to this submission is expected
shortly.
The technical support group was enhanced during the first quarter
with the engagement of Bill Klingensmith of Akron Consulting and
Paul Standley of Zephyr Associates to design and execute a testing
program on the de-vulcanization processes to determine the range of
applications that will be suitable for the company's products.
Testing results achieved through the end of June, have indicated
a de-vulcanization level in the RU material in excess of 90% of
cross-links being severed without significant lowering of the
molecular weight of the compound. The technical team has also made
significant strides in analyzing the proprietary reactive compounds
used by the company with respect to locating domestic sources and
supplies for manufacture of the compound in company facilities in
North America.
The marketing team has also had a very active operation in the
first half of 2000 with significant progress in incorporating
the company's AMR/(Orion) and RU/(Sirius) materials in a variety
of existing and new products. The material that can be produced
with AMR includes a wide range of products which have been
typically heat molded using crumb rubber and variety of
polyurethane binders. With AMR/(Orion) material, these products
can be extruded in some cases using up to 100% AMR at a very
competitive price because of elimination of the polyurethane
binders.
Management has focussed in the early part of 2000 on assembling a
team of experienced managers for various facets of the evolving
business. We believe strongly that in addition to the unique and
valuable technology that the intellectual property assets of the
company through the acquisition of experienced management personnel
is critical to the development of the company. Management expects
to conclude agreements in the third quarter that will put in place
an extremely competent management team.
Management believes that in addition to acquiring feed stocks from
current producers, the company must develop its own processing
systems. The company believes that the preparation of
product for market in addition to being marketed through the
manufacture of products, will involve compounding and the company
is evaluating alternatives in the acquisition of development and
rubber compounding capacity.
The Company currently has no revenues as it is in the development
stage. Monthly cash requirements to continue development and the
recruitment of a full operating management team is approximately
$150,000. It is the intention of the Company to complete at least
one fully operating plant by the end of 2000 with a production
capacity of approximately 50 tons per day of reactivated rubber.
The estimated cost of this production faciltity would be between
$1.5 and $2.5 million. The Company intends to obtain funds by
means of private offerings of equity and debt securities or from
bank or other traditional means of financing.
In conclusion, management feels that the consolidation of test
results, development of management personnel, location and
evaluation of processing systems and the review of potential
acquisitions have resulted in the development of a position where
the company is ready to make significant advances in the latter
half of 2000 and early 2001.
On behalf of the Board,
/s/D.E. Fimrite
-------------------
D. Elroy Fimrite
President
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LANDSTAR INC.
PART II.
OTHER INFORMATION
Item 1 Legal Proceedings
LEGAL PROCEEDINGS
On December 15, 1999, the Company filed a complaint in the
Supreme Court of British Columbia (file no. C996620) against
Walter Brandl, Dr. F. Kui Lim Lu, Peter Lochhead, Pollutec
Resources Inc., GWN Pyrolytic Corp. and Jan Fikkert. Dr. F.
Kui Lim Lu beneficially owns more than five percent of the
outstanding common stock of the Company and is a former director
of Rebound Rubber Corp., a subsidiary of the Company. The
complaint alleges: i) intentional interference by the defendants
with intention to induce the Guangzhou Research Institute to
breach its contracts with the Company, ii) breach of contract
by Dr. Lu, iii) conspiracy by the defendants to convert the
Guangzhou Research Institute contracts or opportunity to their
collective or individual benefit, iv) breach of confidence, v)
intentional interference with business relations, and vi)
defamation. The Company seeks monetary and injunctive relief.
The defendants have filed a statement of defense which denies
each and every item in the statement of claim. The proceedings
are currently progressing through production of documents and
examinations for discovery. No trial date has been determined.
The Company intends to vigorously pursue this matter.
Item 2 Changes in Securities
none
Item 3 Defaults Upon Senior Securities
none
Item 4 Submission of Matters to a Vote of Security Holders
none
Item 5 Other Information
none
Item 6 Exhibits and Reports of Form 8-K
none
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LANDSTAR INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereto duly authorized.
on August 2, 2000
LANDSTAR INC.
BY: /s/ D.E. Fimrite
-----------------
D. Elroy Fimrite
President
BY: /s/ M.C. PINCH
-----------------
Michael C. Pinch
Secretary and Chief Financial Officer
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