SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended March 31, 2000
Commission File Number 0-26813
CENTROCK INCORPORATED
(Exact name of registrant as specified in its charter)
NEVADA 91-1932118
(State of Incorporation) (I.R.S. Employer Identification No.)
157 SOUTH HOWARD STREET, 6th FLOOR
SPOKANE, WASHINGTON 99201
(Address of Principal Executive Offices) (Zip Code)
(509) 252-3939
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at the latest practicable date.
As of March 31, 2000, the registrant had 8,200,000 shares of common stock,
$.001 par value, issued and outstanding.
<PAGE>
CENTROCK INCORPORATED
FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements - Unaudited
Balance Sheets as of December 31, 1999 and March 31, 2000.
Income Statements for the three months ended March 31, 1999
and March 31, 2000, and for the period from Inception
(October
20, 1998) through March 31, 2000.
Statements of Cash Flows for the three months ended March 31,
1999 and March 31, 2000, and for the period from Inception
(October 20, 1998) through March 31, 2000.
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibit and Reports on Form 8-K
Exhibit
Reports on Form 8-K
SIGNATURES
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Centrock Incorporated
(A Development Stage Company)
Unaudited Balance Sheets
As of December 31, 1999 and March 31, 2000
December 31, March 31,
1999 2000
------------ -----------
ASSETS
Cash $ 1,000 $ 200,000
Organization Costs 0 0
Accumulated Amortization 0 0
------------ -----------
Total Assets $ 1,000 $ 200,000
============ ===========
LIABILITIES
Accounts Payable $ 0 $ 0
------------ -----------
STOCKHOLDERS' EQUITY
Common Stock:
Paid-In Capital, Par Value $0.001 per
Share, 75,000,000 Shares Authorized,
3,200,000 & 8,200,000 Shares
Outstanding $ 3,200 $ 8,200
Paid In Capital In Excess of Par Value 2,800 197,800
(Deficit) Accumulated During Development
Stage (5,000) (6,000)
----------- -----------
Total Stockholders' Equity $ 1,000 $ 200,000
----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,000 $ 200,000
=========== ===========
See accompanying notes to financial statements.
<PAGE>
Centrock Incorporated
(A Development Stage Company)
Unaudited Income Statements
For the Three Months Ended March 31, 1999 and
March 31, 2000 and for the Period
From Inception (October 20, 1998) through March 31, 2000
Three Months Three Months Inception
Ended Ended Through
March 31, March 31, March 31,
1999 2000 2000
------------ ------------ -----------
Operating Revenues $ 0 $ 0 $ 0
Operating Expenses 0 1,000 6,000
------------ ------------ -----------
Net Income (Loss) $ 0 $ 1,000 $ 0
============ ============ ===========
Per Share Information:
Basic and Diluted (Loss)
per Common Share $ (0.00) $ (0.00) $ (0.00)
Weighted Average Shares
Outstanding (1) 8,000,000 8,066,667 7,718,718
(1) These figures have been adjusted to reflect the effect of the 2 1/2 to
one forward stock split, effective January 10, 2000, increasing the number of
issued and outstanding shares from 3.2 million to 8.0 million.
See accompanying notes to financial statements.
<PAGE>
Centrock Incorporated
(A Development Stage Company)
Statements of Cash Flows
For the Three Months Ended March 31, 1999 and
March 31, 2000 and for the Period
From Inception (October 20, 1998) through March 31, 2000
Three Months Three Months Inception
Ended Ended Through
March 31, March 31, March 31,
1999 2000 2000
------------ ------------ -----------
Net Income (Loss) $ 0 $ (1,000) $ (6,000)
------------ ------------ -----------
Adjustments to Reconcile Net
Income to Net Cash Provided
From Operating Activities:
Amortization of Start-Up
Costs 0 1,000 6,000
------------ ------------ -----------
Net Cash Provided From (Used In)
Operating Activities 0 0 0
Cash Flows From (Used In)
Investing Activities:
Organization Costs (4,200) (1,000) (6,000)
Cash Flows From (Used In)
Financing Activities:
Common Stock Sold for Cash 0 200,000 206,000
------------ ------------- ------------
Net Increase (Decrease)
in Cash (4,200) 199,000 200,000
Cash at Beginning of Period 4,200 1,000 0
------------- ------------- ------------
Cash at End of Period $ 0 $ 200,000 $ 200,000
============= ============= ============
See accompanying notes to financial statements.
<PAGE>
Centrock Incorporated
(A Development Stage Company)
Notes to Unaudited Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Centrock
Incorporated have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary for a
fair presentation have been included. The results of the interim periods
presented herein are not necessarily indicative of the results to be expected
for any other interim period or the full year. These financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto for the year ended December 31, 1999 included in the Company's
Form 10-KSB Annual Report for the year ended December 31, 1999.
<PAGE>
ITEM II. MANAGEMENT'S PLAN OF OPERATIONS
Liquidity and Capital Resources
The Company remains in the development stage, and, since its inception, has
not yet commenced any operational activities.
With its primary activities consisting of the research and development of its
plan to bottle and distribute a premium bottled water product, the Company's
use of its cash balances have been related to its costs of SEC filings,
including accounting and legal work, and those related to its becoming listed
on the OTC-BB. The Company was able to raise an additional $200,000 in
private equity funds in the first quarter of 2000. While not enough to fund
the entire development costs of setting up a bottling facility and production
and distribution channels for its water product, these funds do help ensure
that the Company will have adequate means to continue its progress and cover
any of its ongoing cost for the foreseeable twelve months.
There are no current plans for product research and development. There are
no current plans to purchase or sell any significant amount of fixed assets.
There are no current plans to increase the number of employees.
Results of Operations.
During the period from October 20, 1998 (date of inception) through March 31,
2000, the Company has engaged in no significant operations, other than
organizational activities, raising initial capital, registering its
securities under the Securities and Exchange Act of 1934, as amended, and the
pursuit of development of its original business plan.
Since its inception, management of the Company has pursued the potential of
the Company's development of its premium bottled water product based
primarily on the following factors; 1) the interest in bottled water has been
increasing for the past several years, with the increase between 1996 to 1997
increasing by nearly 10%; 2) the Spokane aquifer provides a vast, unlimited
source of pure, clean water from the mountains of north Idaho; the founders'
past involvement in the sale and distribution of beverages.
Over this time, the Company has initiated preliminary discussions with
potential distributors, wholesalers, retailers, and sources for its products,
it had no firm commitments or contracts for products and was largely unable
to initiate firm negotiations until such a time as the Company had raised
sufficient funding and had further developed its product. Management's
estimate for total setup for a water source and production facility was
estimated to be in the $250,000 to $500,000 range, depending upon the level
of self-production versus outside purchasing. Management had originally
anticipated initial implementation of its business plan to begin within the
middle of 2000.
To date, management has been unsuccessful in raising the capital to fund
the setup of the bottling facility. The bottled water industry is highly
competitive with respect to price, packaging, advertising, and shelf-space
devoted by retailers, and as a result, it is more difficult than expected for
new companies entering the market. In addition, after much contention and
debate, the County Commissioners of Kootenai County, Idaho, recently voted to
allow Burlington Northern Railroad to build a large, regional refueling
facility on top of the aquifer "upstream" from the Company's potential source
for its water. There is a low, but certainly business-threatening
possibility of contamination from this facility. Further, there are numerous
well-established competitors, including national, regional, and area
companies, possessing substantially greater financial, marketing, and other
resources than the Company. This competitive environment, the potential of
contamination risk from the railroad's refueling facility, along with the
fact the Company does not have an operating history, and management's opinion
based on discussions with others within the industry seems to be the most
dominant reasons the Company has been unable to raise the capital it
requires.
Centrock effectively became a "Reporting Company" as defined by the U.S.
Securities and Exchange Commission (the "SEC") as of September 30, 1999 and
was listed on the NASDAQ Over-the-Counter Electronic Bulletin Board ("OTC-
BB") on or about February 8, 2000. Centrock has been unable to raise the
capital required to execute its business plan and during March of 2000, a
company, Huading Financial Network ("HFN") contacted Centrock regarding a
proposed merger. HFN was interested in merging with a publicly listed OTC-BB
company.
Due to the uncertainty of the possible contamination of the aquifer due to
the Burlington Northern facility, the very competitive nature of the market
for bottled water, and the total amount of capital needed to start such an
operation, the Company's Board has opted to move forward with a vote of its
shareholders with respect to the proposed transaction with HFN and has filed
the PRE-14A and DEF-14A Proxy materials with the SEC, as required. These
should be reviewed by anyone requiring more details by accessing the
materials on the SEC's web-site.
Forward-Looking Information.
The Private Securities Litigation Reform Act of 1995 provides a "safe-harbor"
for forward-looking statements. This Form 10-QSB, the Company's Form 10-KSB,
any other Form 10-QSB, or any Form 8-KSB of the Company or any other written
or oral statements made by or on behalf of the Company may include forward-
looking statements which reflect the Company's current views with respect to
future events and financial performance. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual
results to differ materially from such statements. This document contains
certain forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 concerning, among other things, the
Company's prospects, developments, and business strategies for its
operations, all of which are subject to certain risks, uncertainties, and
assumptions. The words "believe", "expect", "anticipate", "project" and
similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements,
each of which speaks only as of the date the statement was made. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
Not applicable.
ITEM 2. Changes in Securities and Use of Proceeds.
On January 10, 2000, the Company's Board of Directors approved a
2 1/2 to one forward split of issued and outstanding shares.
On February 28, 2000, the Company sold 200,000 of its Common
Shares
in a private transaction for $200,000.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
A Special Meeting of the Shareholders has been scheduled for May
16
at 1:30 PST to vote upon the proposed merger with HFN, as
discussed
herein, and other related items.
The Company has filed the requisite PRE-14A and DEF-14A proxy
materials for this meeting with the SEC. Readers are encouraged
to
review these materials at the SEC's web-site for more detailed
information on the proposed merger and related events.
ITEM 5. Information required in lieu of Form 8-K: None
ITEM 6. Exhibits and Reports on 8-K:
a) Exhibit #27.1, "Financial Data Schedule"
b) No reports on Form 8-K were filed during the
fiscal quarter ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Centrock Incorporated
Dated: May 12, 2000 /s/ Christopher George
----------------------
Christopher George
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
INTERIM FINANCIAL STATEMENTS FOR FIRST QUARTER 2000 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH CENTROCK INCORPORATED.
</LEGEND>
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