UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 2000
Commission file number 000-29937
Prime Equipment, Inc.
a Nevada corporation
Vegas Commerce Center
1350 E. Flamingo Rd., Suite 688
Las Vegas, NV 89119
(702) 595-4951
IRS Tax ID #: 88-0412653
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<PAGE>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements:
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
<PAGE>
TABLE OF CONTENTS
Page Number
INDEPENDENT ACCOUNTANT'S REPORT........................ 1
FINANCIAL STATEMENT:
Balance Sheets.................................... 2
Statement of Operations and Deficit
Accumulated During the Development Stage......... 3
Statement of Changes in Stockholders' Equity...... 4
Statements of Cash Flows.......................... 5
Notes to the Financial Statements................. 6-7
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Stockholders
of Prime Equipment, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheets of Prime
Equipment, Inc. (a development stage company) as of June 30,
2000, and June 30, 1999 and the related statements of
operations, cash flows and changes in stockholders' equity for
the period from December 18, 1998 (date of inception) to June 30,
2000. These financial statements are the responsibility of
Prime Equipment, Inc.'s management. My responsibility is to
express an opinion on these financial statements based on my
audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I 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. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the accompanying financial statements
present fairly, in all material respects, the financial position
of Prime Equipment, Inc. as of June 30, 2000, and June 30, 1999,
and the results of operations, cash flows and changes in
stockholders' equity for the periods then ended as well as the
cumulative period from December 18, 1998. in conformity with
generally accepted accounting principles.
/s/ DAVID COFFEY
David Coffey C.P.A.
Las Vegas, Nevada
July 20, 2000
<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30, June 30,
2000 1999
---------- ----------
ASSETS
Cash $ 4,041 $ 41
Notes receivable 10,000 10,000
Interest receivable 1,017 215
---------- ----------
Total Assets $ 15,058 $ 10,256
========== ==========
LIABILITIES & STOCKHOLDERS'
EQUITY
Accounts payable $ 13,800 $ 400
Note payable 25,000 0
Interest payable 48 0
---------- ----------
Total Liabilities 38,848 400
Stockholders' Equity
Common stock, authorized
50,000,000 shares at $.001
par value, issued and
outstanding 4,021,000 shares
and 200,000 shares,
respectively, after giving
effect to a 20:1 stock split
effective October 22, 1999 4,021 200
Preferred stock, authorized
24,000,000 shares at $.001
par value, none issued or
outstanding 0 0
Additional paid-in capital 21,329 9,900
Deficit accumulated during the
development stage (49,140) (244)
---------- ----------
Total Stockholders' Equity (23,790) 9,856
Total Liabilities and
Stockholders' Equity $ 15,058 $ 10,256
========== ==========
The accompanying notes are an integral part of these financial
statements.
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<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
(With Cumulative Figures From Inception)
From Inception,
Jan. 1, 2000, to Jan. 1, 1999, to Dec. 18, 1998, to
June 30, 2000 June 30, 1999 June 30, 2000
----------------- ----------------- -----------------
Interest $ 400 $ 215 $ 1,017
Expenses
Organizational
expense 0 0 400
Consulting 25,000 0 48,650
Office expenses 0 59 59
Professional fees 0 0 1,000
Interest expense 48 0 48
----------------- ----------------- -----------------
Total expenses 25,048 59 50,157
Net income (loss) (24,648) 156 $ (49,140)
=================
Retained earnings,
beginning of period (24,492) (400)
----------------- -----------------
Deficit accumulated
during the development
stage $ (49,140) $ (244)
================= =================
Earnings (loss) per share
assuming dilution,
after giving effect
to a 20 for 1 stock
split effective
October 22, 1999
Net loss $ (0.01) $ 0.00 $ (0.01)
================= ================= =================
Weighted average
shares outstanding 4,021,000 166,667 3,692,000
================= ================= =================
The accompanying notes are an integral part of these financial
statements.
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<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM December 18, 1998 (Date of Inception) TO
JUNE 30, 2000
Additional
Common Stock Paid-in
Shares Amount Capital Total
----------- ---------- --------- -----------
Balance,
December 18, 1998 --- $ --- $ --- $ ---
Issuance of common
stock for cash
December, 1998 100,000 100 0 100
Less net loss 0 0 0 (400)
----------- ---------- --------- -----------
Balance,
December 31, 1998 100,000 100 0 (300)
Issuance of common
stock for cash
March, 1999 100,000 100 9,900 10,000
Stock split 20 for 1
October 22, 1999 3,800,000 3,800 (3,800) 0
Issuance of common
stock for cash
November, 1999 1,000 1 999 1,000
Issuance of common
stock for cash
December, 1999 20,000 20 19,980 20,000
Less offering costs 0 0 (5,750) (5,750)
Less net loss 0 0 0 (24,092)
----------- ---------- --------- -----------
Balance,
December 31, 1999 4,021,000 4,021 21,329 858
Net income (loss) 0 0 0 (24,648)
----------- ---------- --------- -----------
Balance,
June 30, 2000 4,021,000 $ 4,021 $ 21,329 $ (23,790)
=========== ========== ========= ===========
The accompanying notes are an integral part of these financial
statements.
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<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(With Cumulative Figures From Inception)
<TABLE>
<CAPTION>
From Inception,
Jan. 1, 2000, to Jan. 1, 1999, to Dec. 18, 1998, to
June 30, 2000 June 30, 1999 June 30, 2000
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net income or (loss) $ (24,648) $ 156 $ (49,140)
Non-cash items included
in net loss 0 0 0
Adjustments to reconcile
net loss to cash used
by operating activity
Note receivable (10,000) (10,000)
Interest receivable (400) (215) (1,017)
Accounts payable (16,000) 0 13,800
----------------- ----------------- -----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (41,048) (10,059) (46,357)
CASH FLOWS USED BY
INVESTING ACTIVITIES 0 0 0
----------------- ----------------- -----------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0
CASH FLOWS FROM FINANCING
ACTIVITIES
Note payable 25,000 0 25,000
Interest payable 48 0 48
Sale of common stock 0 100 4,021
Paid-in capital 0 9,900 27,079
Less offering costs 0 0 (5,750)
----------------- ----------------- -----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 25,048 10,000 50,398
----------------- ----------------- -----------------
NET INCREASE IN CASH (16,000) (59) $ 4,041
=================
CASH AT BEGINNING OF PERIOD 20,041 100
----------------- -----------------
CASH AT END OF
PERIOD $ 4,041 $ 41
================= =================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
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<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 18, 1998, under
the laws of the state of Nevada. The business purpose of
the Company is to start a chain of equipment rental
services.
The Company will adopt accounting policies and procedures
based upon the nature of future transactions.
NOTE B SALE OF COMMON STOCK
In March of 1999, the Company completed the sale of
100,000 shares of its common stock at $.10 per share or
$10,000, 1000 shares of its common stock at $1.00 per
share in November of 1999 and 20,000 shares of the common
stock at $1.00 in December of 1999.
NOTE C NAME CHANGE AND INCREASE IN AUTHORIZED CAPITAL
On October 28, 1999, the Company changed its name from
"Prime Equipment Corp." to "Prime Equipment, Inc." and
increased its authorized capital stock to 74,000,000
shares of $.001 per share par value from 50,000,000
shares of $.001 per share par value. Of the 74,000,000
authorized shares, 50,000,000 are common stock and
24,000,000 are preferred stock.
NOTE D STOCK SPLIT
On October 22, 1999, the Company approved a twenty to one
stock split. Prior to the stock split there were 200,000
shares of common stock outstanding and after the stock
split there were 4,000,000 shares of common stock
outstanding.
NOTE E EARNING (LOSS) PER SHARE
Basic EPS is determined using net income divided by the
weighted average shares outstanding during the period.
Diluted EPS is computed by dividing net income by the
weighted average shares outstanding, assuming all
dilutive potential common shares were issued. Since the
Company has no common shares that are potentially
issuable, such as stock options, convertible securities
or warrants, basic and diluted EPS are the same.
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<PAGE>
PRIME EQUIPMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
(continued)
NOTE F NOTE PAYABLE
On May 23, 2000, the Company received $25,000 cash
disbursement on a Note maturing April 30, 2001 with
simple annual interest at the rate of 10% per annum. The
Note is unsecured. The proceeds were to be used to start
a chain of equipment rental services.
NOTE G SUBSEQUENT EVENTS
On July 20, 2000, the Board of Directors approved a
resolution to increase the authorized number of common
shares from 50,000,000 to 500,000,000 and increase the
number of preferred shares from 24,000,000 to
100,000,000. This resolution is subject to approval by
the shareholders.
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<PAGE>
Item 2. Management's Discussion and Analysis
Forward Looking Statements
--------------------------
This quarterly report on Form 10-QSB contains forward-
looking statements. Such statements consist of any statement
other than a recitation of historical facts and can be identified
by words such as "may," "expect," "anticipate," "estimate,"
"hopes," "believes," "continue," "intends," "seeks,"
"contemplates," "suggests," "envisions" or the negative thereof
or other variations thereon or comparable terminology. These
forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and
uncertainties, including but not limited to: those risks
associated with economic conditions generally and the economy in
those areas where the Company has or expects to have assets and
operations, including, but not restricted to Nevada and
eventually other jurisdictions; competitive and other factors
affecting the Company's operations, markets, products and
services; those risks associated with the ability to obtain
medical supply contracts and the funding of the Company and other
costs associated with the Company's marketing strategies; those
risks associated with the Company's ability to successfully
negotiate with certain business owners; those risks relating to
estimated contract costs, estimated losses on uncompleted
contracts and estimates regarding the percentage of completion of
contracts, risks relating to the ability of Company to raise the
funds necessary to operate and develop business, and risks
relating to changes in interest rates and in the availability,
cost and terms of financing; risks related to the performance of
financial markets; risks related to changes in domestic and
foreign laws, regulations and taxes; risks related to changes in
business strategy or development plans; risks related to any
possible future lawsuits against the Company and the associated
costs, and risks associated with future profitability. Many of
these factors are beyond the Company's control. Actual results
could differ materially from these forward-looking statements.
In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this
quarterly report on Form 10-QSB will, in fact, occur. The
Company's actual results may differ materially as a result
of certain factors, including those set forth in this Form
10-QSB. Potential investors should consider carefully the
previously stated factors, as well as the more detailed
information contained elsewhere in this Form 10-QSB, before
making a decision to invest in the common stock of the Company.
The following is a discussion of the financial condition and
results of operations of the Company as of June 30, 2000. This
discussion and analysis should be read in conjunction with the
accompanying audited Financial Statements of the Company
including the Notes thereto which are included elsewhere in this
Form 10-QSB and the notice regarding forward-looking statements.
PLAN OF OPERATION
The Company plans to engage in the rental equipment
business. Additional funding through private placement will be
necessary to enable the Company to lease a suitable office
warehouse facility in Las Vegas and to enable the Company to
complete its Web Page, www.primeequipmentinc.com, and to
secure contracts with suppliers and users.
The need for rental equipment increases with the need to
provide housing for the increasing population.
The Company intends to raise adequate funds from interested
local parties to provide adequate working capital of up to
$2,250,000 for the next 12 months. This will be used to develop
Internet business, pay professionals and for advertising in the
Yellow Pages and media and purchase the rental equipment. No
product research or development is considered necessary; no plant
is required, nor is there expected to be a drastic change in the
number of employees over the next 12 months.
Revenue
-------
The Company has not received revenues from operations during
the two-year period preceding the filing of this form. The
Company has not yet achieved any revenue from operations to date.
Since the Company is still in the development stage its expenses
were nominal.
Liquidity
---------
The Company will have to raise additional capital in the
next twelve months. As of December 31, 1998, the Company had
nominal working capital and results. In order to satisfy the
liquidity needs of the Company for the following twelve months,
the Company will be primarily dependent upon proceeds from the
sale of the Company's common and/or preferred stock and possible
future cash flow from operations. Since the Company is in its
development stage and has not entered into any contracts,
attracted clientele or otherwise engaged in any activity that
would generate revenue at this time, the Company does not
currently have the revenue necessary to fund future operations of
the Company. If the Company is unable to obtain adequate funds
from the sale of its stock in public offerings, private
placements, or alternative financing arrangements, it may be
necessary to postpone the planned business of the Company or the
Company's ability to obtain Letters of Credit. The Company, under
such circumstances, would resort to using cash flow for internal
growth.
The Company has issued shares of its Common Stock from time
to time in the past to satisfy certain obligations and expects in
the future to also acquire certain services, satisfy indebtedness
and/or make acquisitions utilizing authorized shares of the
capital stock of the Company. If operations and cash flow can be
improved through these efforts, management believes that the
Company's liquidity problems will be resolved and that the
Company can continue to operate. However, no assurance can be
given that management's actions will result in profitable
operations.
The plan of the Company is to raise more financing as soon
as the Company's shares are approved for trading to enable the
Company to enter into purchase and supply contracts. An overall
budget of $2,250,000 for the first year should achieve the
Company's goals. The Company does not anticipate that there will
be a need to drastically increase the number of employees over
the next twelve months.
Potential Uncertainties
-----------------------
As the Company expects eventually to obtain equipment from
overseas manufacturers and such expenditures are generated in
foreign currencies, fluctuations in the value of currencies
relative to the United States dollar could adversely affect the
Company's profitability. Royalty payments, if any, paid by the
Company relating to foreign licensing arrangements would be
converted to U.S. dollars based on the exchange rate at the time
of payment.
PART II - OTHER INFORMATION
(Items 1, 2, 3, 4 and 5 have been omitted as there is no
information to report.)
Item 6. Exhibits and Reports on Form 8-K.
Exhibit No. Description
----------- -------------------------------------------
27.0 Financial Data Schedule
Reports on Form 8-K
------------------------------------------------------------
During the quarter ended June 30, 2000, the Company did not
file any reports on Form 8-K with the Securities and Exchange
Commission.
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.
PRIME EQUIPMENT, INC.
(Registrant)
Date: September 7, 2000 By: /s/ GIOVANNI IACHELLI
--------------------------------
Giovanni Iachelli
Treasurer and duly authorized officer
