U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] Annual report under 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 No. 000-25619
HAMILTON-McGREGOR INTERNATIONAL, INC.
-------------------------------------------------
(Name of Small Business Issuer in its Charter)
New York, U.S.A. 11-3280448
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
1719 Route 10 W, Suite 119, Parsippany, New Jersey 07054
(Address of Principal Executive Offices)
(973) 292-2833
(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
-------------------------
(Title of Class)
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 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 [ ]
Check here if the 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 the
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this 10-KSB
or any amendment to this Form 10-KSB. [ ]
Revenues for the year ending June 30, 2000 were $2,549,719.
As of June 30, 2000, the Company had approximately 5,586,905
shares of Common Stock issued and outstanding.
HAMILTON McGREGOR INTERNATIONAL, INC.
FORM 10-KSB
for the fiscal year ended June 30, 2000
TABLE OF CONTENTS
Part I
Item 1. Description of Business
Item 2 Description of Property
Item 3 Legal Proceedings
Item 4 Submission of Matters to a Vote of
Security Holders
Part II
Item 5 Market for the Company's Common Equity and
Related Stockholder Matters
Item 6 Management's Discussion and Analysis and
Plan of Operation
Item 7 Financial Statements
Item 8 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
Part III
Item 9 Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section
16(a) of the Exchange Act
Item 10 Executive Compensation
Item 11 Security Ownership of Certain Beneficial
Owners and Management
Item 12 Certain Relationships and Related Transactions
Item 13 Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I
Item 1. Description of Business.
(a) Business Development. Hamilton-McGregor International,
Inc. ("Hamilton" or the "Company"), was incorporated in the State
of New York on August 17, 1995. In December 1995, Hamilton
acquired 100% of the outstanding capital stock (45.5 shares of no
par value common stock) of Prime Contracting Corporation
("Prime"), a New Jersey corporation, from a related entity. The
terms of the acquisition agreement, as modified in March 1996,
called for a payment of $200,000 upon execution and a $1,000,000
interest-bearing note at prime plus one percent, with a principal
payment of $600,000 due on October 27, 1997, and $400,000 on
April 27, 1998. On March 3, 1998, the Company restructured the
promissory note payable for the purchase of Prime as follows:
$200,000 to be paid over 36 months, with interest accruing at
prime plus one percent; plus a 36-month option to purchase
250,000 shares of Hamilton-McGregor stock at $0.05 per share.
The Company recorded a gain in the amount of $772,650 as
additional contributed capital.
(b) Business of Issuer. The Company's business is the
construction of state-of-the-art imaging centers and other
medical facilities. The Company offers a full range of services,
including turnkey design and construction, site analysis,
architectural engineering and on-site project management. Prime
builds free-standing structures and renovates existing facilities
with an emphasis on room renovations for hospitals and private
medical facilities. The Company focuses its construction
emphasis in an area of technology, radiology and non-invasive
analysis, as a true vertical market approach in a unique area
with limited competition. Prime's installations have included
the following: conventional X-Rays, Magnetic Resonance Imaging
("MRI"), Computerized Axial Tomography ("CAT"), Scan Suites,
Radiology/Fluoroscopy, Cardiac Catherization Labs, Laser Network
Systems, Special Procedures, Angiography, Mammography,
Ultrasound, Linear Accelerator, Lithotripsy, Cystography Units,
Nuclear Medicine, Laboratory areas and Operating Rooms. These
are all areas of construction which require high levels of
electrical installation expertise and even higher levels of
quality control, levels that the Company has reached after over
twenty years in the industry.
Businesses competitive with the Company are construction
companies specializing in the medical marketing industry. A key
component in the industry is historical market presence, which in
Prime's case, is more than 20 years. The market traditionally
values the knowledge and reputation within the medical community
as a key determinant to the securing of contracts, which is
usually accomplished through an open-bidding process. The
Company markets only by word-of-mouth and relies on its
long-standing, industry-wide reputation to attract all
incremental business. To this extent, the Company's business is
year-round, and not seasonal.
A listing of projects completed and the clients for which
they were completed is appended to the Company's registration
statement as Exhibit 99.1. This is not a complete listing, as
only projects in the primary state of New Jersey have been
included, and does not include any jobs which are currently
underway. The Company does operate in several other states, but
the greater portion of its business, approximately 65%, is
conducted within New Jersey.
The Company obtains its construction supplies from numerous
suppliers and does not rely on any one vendor for any of its
materials. The Company does not have any major contracts upon
which it is reliant, nor does it have any patents, trademarks,
licenses, franchises, concessions, royalty agreements or labor
contracts. The Company's business is not presently subject to
any federal regulation, but rather is only required to comply
with state and/or local standard manufacturing and construction
codes. As the sites are built, they are inspected for compliance
by state officials from the Department of Health Services, with
such compliance being the responsibility of the agency or
hospital in contract with the Company. As such, the Company has
no requisite government approvals.
During the past two years, the Company has spent no money on
research and development activities.
Employees.
As of the date of this filing, the Company has 7 full-time
employees. When projects are under construction, the Company
hires temporary help sufficient to staff the projects, as and if
necessary.
(i) The Company's performance is substantially dependent on
the performance of its President, Aron Scharf.
(ii) The Company does not carry key person life insurance on
any of its personnel. The loss of the services of any of its
executive officers or other key employees could have a material
adverse effect on the business, results of operations and
financial condition of the Company. The Company's future success
also depends on its ability to retain and attract highly
qualified technical and managerial personnel, if and when the
need for such personnel arises.
(iii) There can be no assurance that the Company will be
able to retain its key managerial and technical personnel or that
it will be able to attract and retain additional highly qualified
technical and managerial personnel in the future. The inability
to attract and retain the technical and managerial personnel
necessary to support the growth of the Company's business, due
to, among other things, a large increase in the wages demanded by
such personnel, could have a material adverse effect upon the
Company's business, results of operations and financial
condition.
Item 2. Description of Property.
The Company presently maintains an office at 1719 Route 10,
Suite 119, Parsippany, New Jersey 07054. The landlord, Northern
New Jersey Management Corporation does not charge the Company for
these offices as the current demands on the space are minimal.
As the Company's business expands and as its demand for office
space increases, the Company will have to pay rent in the amount
of $500 per month. The term of this lease is for a minimum of
three years, the initial term of which expires in January 2002,
with an option to renew for an additional two years.
The Company at present owns no equipment. Prime, the
subsidiary, leases approximately 3,600 square feet of office
space located at 681 Chestnut Street, Union, New Jersey 07083.
The term of this lease expires on October 31, 2004, with an
annual rent of approximately $18,000.
Item 3. Legal Proceedings.
As of June 30, 1999, the Company was involved with one of
its former Presidents, Stephen Findlay, who was suing to recover
on a claim for bonus and severance pay. The case was being
conducted as an arbitration, with the American Arbitration
Association, commencing June 9, 1998, under the caption Stephen
Findlay vs. Hamilton-McGregor, Inc. The Company cross-complained
against Mr. Findlay and John Schultz (also a former employee) for
breach of their contractual and non-compete agreements with the
Company. Vincent Ludwig, Esq., Counsel for the Company, opined
that the claim had no merit, and that the Company's
cross-complaint for breach of contractual and non-compete
agreements would offset any possible award to Findlay.
Subsequently, on November 12, 1999, the Honorable Barbara
Zucker-Zarrett of the Superior Court of New Jersey dismissed the
case with prejudice, and ordered that Stephen Findlay be
permanently restrained, enjoined and prohibited from asserting
any claims or causes of action against Hamilton McGregor
International, Inc.
On February 22, 2000, Mr. Charles Stephen Ralston, Esq.
awarded the Company $10,000 for legal fees in an arbitration
hearing between Stephen Findlay and Prime Contracting
Corporation.
Except as described herein, to the best knowledge of the
officers and directors of the Company, neither the Company nor
any of its officers or directors is a party to any material legal
proceeding or litigation and such persons know of no other
material legal proceeding or litigation contemplated or
threatened. There are no judgments against the Company or its
officers or directors. None of the officers or directors has
been convicted of a felony or misdemeanor relating to securities
or performance in corporate office.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market For Common Equity and Related Stockholder
Matters.
A. Market Information
The Common Stock of the Company is currently not traded on
any formal or national securities exchange. There is no trading
market for the Company's Common Stock at present and there has
been no trading market to date. Management is presently in
discussions with prospective market makers concerning the
participation of such market makers in the aftermarket for the
Company's securities. The Company anticipates approval for its
securities to trade on the NASD's Over-The-Counter Bulletin Board
("OTC BB").
(i) There is currently no Common Stock which is subject to
outstanding options or warrants to purchase, or securities
convertible into, the Company's Common Stock.
(ii) There are currently 5,586,905 shares of Common Stock of
the Company which are eligible to be sold under Rule 144 under
the Securities Act of 1933 as amended or that the registrant has
agreed to register for sale by security holders.
(iii) There is currently no common equity that is being or
is proposed to be publicly offered by the registrant, the
offering of which could have a material effect on the market
price of the issuer's common equity.
B. Holders
As of the date of this filing, the Company had approximately
21 shareholders of record, all of which have held their shares at
least one year, and in most cases, for more than two years since
the date of issuance. All of these shareholders would be
eligible for transactions under Rule 144, restricted, however, by
the volume limitations of 144(d) with respect to any existing or
former shareholders that are officers, directors or affiliates
(or were at the time of the issuance of the shares).
Applicability of Low-Priced Stock Risk Disclosure
Requirements.
The securities of the Company will be considered low-priced
or "designated" securities under rules promulgated under the
Exchange Act. Penny Stock Regulation Broker-dealer practices in
connection with transactions in "Penny Stocks" are regulated by
certain rules adopted by the Securities and Exchange Commission.
Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the NASDAQ system). The penny
stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information
about penny stocks and the risk associated with the penny stock
market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market
value of each penny stock held in the customer's account. In
addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer must make a
written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may
have the effect of reducing the level of trading activity in the
secondary market for a stock that becomes subject to the penny
stock rules. When the Registration Statement becomes effective
and the Company's securities become registered, the stock will
likely have a trading price of less than $5.00 per share and will
not be traded on any national exchanges. Therefore, the
Company's stock will become subject to the penny stock rules and
investors may find it more difficult to sell their securities,
should they desire to do so.
C. Dividend Policy
The Company has not paid any dividends to date. In
addition, it does not anticipate paying dividends in the
immediate foreseeable future. The Board of Directors of the
Company will review its dividend policy from time to time to
determine the desirability and feasibility of paying dividends
after giving consideration to the Company's earnings, financial
condition, capital requirements and such other factors as the
board may deem relevant.
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual
reports containing audited financial statements and such other
periodic reports as the Company may determine to be appropriate
or as may be required by law. The Company is required to comply
with periodic reporting, proxy solicitation and certain other
requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of
the Company is Alexis Stock Transfer, Inc., 43725 Monterey
Avenue, Suite "A", Palm Desert, California 92260.
Item 6. Management's Discussion and Analysis or Plan of
Operation.
(a) Plan of Operation.
The Company's business is the construction of state-of-the-
art imaging centers and other medical facilities. The Company
offers a full range of services, including turnkey design and
construction services, site analysis, architectural engineering,
and on-site project management.
Except for historical information contained in this
Discussion and Analysis, forward-looking statements set forth
below are subject to certain risks and uncertainties, including
those discussed, that could cause actual results to differ
materially from those projected. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date of this
document. The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of
unanticipated events.
The Company plans to continue its operations in the same
manner in which it has conducted business during the previous two
years. More clients are seeking construction contracts with the
Company as the number of completed jobs rises and the competency
of the Company is ascertained.
Utilizing existing cash and receivables, management believes
that the Company will be able to meet its operating capital
requirements for the next 12 months. The Company, through its
subsidiary Prime, has in place a $200,000 line of credit from NGF
Investment Corp., carrying a 14.5% annual rate of interest, which
the Company uses for operating capital only, and not for
construction loans. At June 30, 2000, the outstanding balance on
the NGF line of credit was $218,036. No current plan is pending
for raising additional capital, as none is currently required,
and there are no expenditures contemplated for research and
development during the next year. The Company does not
anticipate the purchase or sale of any significant plant or
equipment, but does expect to hire additional employees if the
anticipated increase in the volume of business occurs. However,
this will be on a job-by-job basis, and will occur as a result of
increased billings and profit opportunities. Unless an extremely
large contract is secured, the Company should be able to engage
additional employees utilizing existing cash flow to cover the
advances required between time of service and time of collection
from the Clients of the Company.
Fiscal 2000 Compared to Fiscal 1999.
Contract revenues decreased by $3,729,000 or 59.3% from
$6,279,000 to $2,550,000. The decrease in contract revenues was
primarily the result of a delay in the start-up of two major
projects. The UMDNJ project was planned to start the second
quarter of Fiscal 1999, but instead was started the fourth
quarter of Fiscal 2000. The Raritan Bay project, a $2,600,000
contract, was planned to start the fourth quarter of Fiscal 1999,
but has not yet started. The Company has a commitment from
Raritan Bay management to complete the contract.
Cost of revenues decreased by $2,558,000 or 53.2% from
$4,863,000 to $2,275,000. As a percentage of contract revenues,
cost of revenues increased from 77.4% to 89.2%. This increase
was primarily attributable to a decrease in highly profitable
small construction projects.
Operating expenses decreased by $548,000 or 35.1% from
$1,559,000 to $1,011,000. As a percentage of contract revenue,
operating expenses increased from 24.8% to 39.6%. Operating
expenses decreased primarily due to a decrease in salaries
expense and insurance expense.
Income tax expense decreased by $138,000, as no provision
for income tax was made in Fiscal 2000 as a result of the Company
sustaining a net loss.
On August 16, 2000 the Company filed a restructuring plan
for its subsidiary and believes this plan will make the Company
profitable in future periods. This plan includes a reduction of
project managers and administrative personnel. Duties of those
employees whose jobs were eliminated were reassigned to existing
employees.
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate the continuation of the Company as a going concern.
The Company has a working capital deficiency of $993,569 as of
June 30, 2000, and has sustained continued losses from
operations, which raise substantial doubt about the Company's
ability to continue as a going concern.
Fiscal 1999 Compared to Fiscal 1998.
Contract revenues increased by $645,000 or 11.4%, from
$5,634,000 to $6,279,000. The increase in contract revenue was
due to additional volume of contacts.
Cost of Revenues earned increased by $474,000 or 10.8%, from
$4,389,000 to $4,863,000. As a percentage of contract revenues,
costs of revenues earned decreased from 77.9% to 77.4%. The
decrease was attributable to a reduction in subcontractor costs.
Operating expenses increased by $202,000 or 14.9%, from
$1,357,000 to $1,559,000. As a percentage of contract revenue,
operating expenses increased from 24.1% to 24.8%. Operating
expenses increased due primarily to an increase in salaries
expense.
Income tax expense increased by $180,000, from a tax credit
of $42,000 to income tax expense of $138,000. The Company wrote-
off its deferred tax assets (see Note 10 of financial statements)
at the end of fiscal 1999 due to the doubt that the Company will
continue as a going-concern (see Independent Auditors' Report and
Note 3 to the financial statements for further discussion).
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern. The
Company has a working capital deficiency of $274,083 as of June
30, 2000, and has sustained continued losses from operations,
which raise substantial doubt about the Company's ability to
continue as a going concern.
The Company has begun implementation of a restructuring plan
for its subsidiary and believes this plan will make the Company
profitable in future periods. This plan includes a reduction of
project managers and administrative personnel. Duties of those
employees whose jobs were eliminated were reassigned to existing
employees.
Fiscal 1998 Compared to Fiscal 1997.
Contract revenues decreased by $1,755,000 or 23.8%, from
$7,389,000 to $5,634,000. The decrease in contract revenue was
due to management's decision to enter into contracts with a
higher projected profit margin.
Cost of Revenues earned decreased by $1,472,000 or 25.1%,
from $5,861,000 to $4,389,000. As a percentage of contract
revenues, costs of revenues earned decreased from 79.3% to 77.9%.
The decrease was attributable to a reduction of direct labor
costs.
Operating expenses decreased by $248,000 or 15.5%, from
$1,605,000 to $1,357,000. As a percentage of contract revenue,
operating expenses increased from 27.4% to 30.9%. Operating
expenses decreased as a result of salary reductions.
Income tax credits increased by $36,000, from $6,000 to
$42,000. This resulted from an increase in deferred tax assets
due primarily to net operating losses for federal income tax
purposes that will be available to offset income taxes in future
years.
Liquidity and Capital Resources.
During fiscal 2000, the Company's losses from operations
further depleted its cash position resulting in cash used in
excess of cash generated by operating activities in the amount of
$16,000. The Company increased its note payable from a related
party to provide $21,000 in cash from financing activities.
During fiscal 1999, the Company's losses from operations
further depleted its cash position resulting in cash used in
excess of cash generated by operating activities in the amount of
$110,000. The Company increased its note payable from a related
party to provide $97,000 in cash from financing activities.
During fiscal 1998, the Company reported cash used in excess
of cash generated by operating activities of $357,000. The
Company also restructured the promissory note payable for the
acquisition of its subsidiary, from a related party, from
$972,650 to $200,000. The reduction of debt in the amount of
$772,650 was recorded as contributed capital. The Company repaid
its $200,000 line of credit with the bank by obtaining a long-
term note payable from a related party.
During fiscal 1997, the Company generated excess cash of
$204,000 from operations. The Company was able to finance its
operations and accounts receivable through accounts payable
financing from its vendors. The Company also invested $43,000 in
office equipment, machinery and vehicles. The Company financed
these assets in addition to its increase in accounts receivable
with a line of credit from the bank.
Item 7. Financial Statements.
HAMILTON-MCGREGOR INTERNATIONAL, INC.
AND SUBSIDIARY
FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
<PAGE>
HAMILTON-MCGREGOR INTERNATIONAL, INC.
AND SUBSIDIARY
Table of Contents
Page
Independent Auditor's Report 1
Consolidated Balance Sheets,
As of June 30, 2000 and 1999 2
Consolidated Statements of Operations,
For the Years Ended June 30, 2000 and 1999 3
Consolidated Statements of Cash Flows,
For the Years Ended June 30, 2000 and 1999 4
Consolidated Statements of Retained Earnings,
For the Years Ended June 30, 2000 and 1999 5
Notes to Consolidated Financial Statement
For the Years Ended June 30, 2000 and 1999 6 - 11
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Hamilton-McGregor International, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of
Hamilton-McGregor International, Inc. and Subsidiary as of June
30, 2000 and 1999, and the related consolidated statements of
operations, retained earnings (deficit) and cash flows for the
years ended June 30, 2000 and 1999. 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 audits. The financial statements of
Hamilton-McGregor International, Inc. and Subsidiary as of June
30, 1999, were prepared by other auditors whose report, dated
September 27, 1999, expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits 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 consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Hamilton-McGregor International, Inc. and
Subsidiary as of June 30, 2000 and 1999, and the consolidated
results of their operations and their cash flows for the years
ended June 30, 2000 and 1999 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 3 to the financial statements, the Company has suffered
recurring losses from operations and has a working capital
deficiency that 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 3. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ GREEN, HOLMAN, FRENIA & COMPANY, LLP
GREEN, HOLMAN, FRENIA & COMPANY, LLP
Certified Public Accountants
Woodbridge, New Jersey
September 21, 2000
<PAGE>
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets
June 30, 2000 and 1999
ASSETS
<S> <C> <C>
2000 1999
____________________ _________________
Current Assets:
Cash and cash equivalents $ 3,319 $ 19,389
Contracts receivable,
less allowance for
doubtful accounts of
$200,000 and $75,000,
respectively 617,261 317,234
Other receivables 63,000 104,419
Costs and estimated earnings
in excess of billing on
uncompleted contracts 344,286 148,293
Prepaid expenses and other
current assets 25,419 18,655
Due from officer - 20,000
___________________ _________________
Total current assets 1,053,285 627,990
Property and equipment-net 34,092 65,240
__________________ _________________
$ 1,087,377 $ 693,230
================== =================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable and
accrued expenses $ 1,766,069 $ 720,555
Billings in excess of
costs and estimated
earnings on uncompleted
contracts 191,893 74,415
Notes payable-acquisition-
current portion 72,223 72,222
Current maturities of
long-term debt - 28,728
Due to affiliate - 6,153
________________ _________________
Total current liabilities 2,030,185 902,073
________________ _________________
Long-Term Liabilities:
Notes payable-acquisition-net
of current portion 41,667 41,667
Due to related party 24,477 -
Note payable-related party 218,036 196,280
Long term debt - 3,880
________________ _________________
Total long term liabilities 284,180 241,827
________________ _________________
Total liabilities 2,314,365 1,143,900
________________ _________________
Shareholder's equity (deficit):
Common stock, $.0001 par
value, 15,000,000 shares
authorized, 5,586,905
shares issued and
outstanding 559 559
Additional paid in capital 845,493 845,493
Retained earnings (deficit) (2,073,040) (1,296,722)
________________ _________________
Total shareholder's
equity (deficit) (1,226,988) (450,670)
________________ _________________
$ 1,087,377 $ 693,230
================== =================
See independent auditors' report and notes to consolidated financial
statements.
</TABLE>
<PAGE> 2
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Operation
For the Years Ended June 30, 200 and 1999
<S> <C> <C>
2000 1999
________________ _________________
Contract revenues earned $ 2,549,719 $ 6,278,599
Costs of revenues earned 2,274,622 4,863,355
________________ _________________
Gross profit 275,097 1,415,244
Selling, general and
administrative expenses 1,010,945 1,558,541
________________ _________________
Loss from operations (735,848) (143,297)
________________ _________________
Other income (expenses):
Interest income 3,835 -
Interest expense (44,305) (46,441)
________________ _________________
Total other income (expenses) (40,470) (46,441)
________________ _________________
Loss before provision
for income taxes (776,318) (189,738)
(Provision) recovery of income
taxes - (137,922)
________________ _________________
Net loss $ (776,318) $ (327,660)
================ =================
Weighted average number of
shares of common stock
outstanding 5,586,905 5,131,107
================ =================
Basic loss per share $ (0.14) $ (0.06)
================ =================
See independent auditors' report and notes to consolidated financial
statements.
</TABLE>
<PAGE> 3
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the Years Ended June 30, 200 and 1999
<S> <C> <C>
2000 1999
_________________ _________________
Cash flows from operating
activities:
Net loss $ (776,318) $ (327,660)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 31,205 18,081
Provision for doubtful accounts 125,000 35,000
Deferred income taxes - 137,922
(Income) loss on investment
in limited partnership - (1,812)
Changes in operating assets and liabilities:
(Increase) decrease in:
Contract receivable (425,027) 834,376
Costs and estimated earnings
in excess of billing on
uncompleted contracts (195,993) (51,711)
Prepaid expenses and other
current assets 34,655 (64,976)
Increase (decrease) in:
Accounts payable and
accrued expenses 1,062,183 48,389
Billing in excess of costs
and estimated earnings on
uncompleted contracts 117,478 (737,792)
________________ _________________
Net cash used in
operating activities (26,817) (110,183)
________________ _________________
Cash flows from investing activities:
Disposition of furniture,
fixtures and equipment (57) 750
________________ _________________
Net cash provided by (used in)
investing activities (57) 750
________________ _________________
Cash flows from financing activities:
Due from officer 20,000 (20,000)
Due from affiliate 18,323 -
Repayment of note payable
- acquisition (16,667) (50,000)
Proceeds from note payable
- related party 21,756 97,452
Proceeds from long term debt (28,728) 50,000
Repayment of long term debt (3,880) (34,575)
Proceeds from additional paid
in capital - 64,843
________________ _________________
Net cash provided by
financing activities 10,804 107,720
________________ _________________
Net decrease in cash and
cash equivalents (16,070) (1,713)
Cash and cash equivalents
at beginning of year 19,389 21,102
________________ _________________
Cash and cash equivalents at
end of year $ 3,319 $ 19,389
================ =================
See independent auditors' report and notes to consolidated financial
statements.
</TABLE>
<PAGE> 4
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Retained Earnings (Deficit)
For the Years Ended June 30, 2000 and 1999
<S> <C> <C> <C> <C> <C>
Additional
Common Paid-In Retained
# Shares Stock Capital Earnings Total
___________ ___________ ___________ ____________ ___________
Balance as of June 30, 1999 4,977,505 $ 498 $ 780,650 $(969,062) $(187,914)
Additional paid in capital 64,843 64,843
Issuance of common stock 609,400 61 61
Net loss for year ended
June 30, 1999 (327,660) (327,660)
___________ _____________ ___________ ___________ __________
Balance as of June 30, 1999 5,586,905 559 845,493 (1,296,722) (450,670)
Net loss for the year ended
June 30, 2000 (776,318) (776,318)
___________ ____________ __________ ____________ ____________
Balance as of June 30, 2000 5,586,905 $ 559 $ 845,493 $(2,073,040) $(1,226,988)
=========== ============ ========== ============= ============
See independent auditor's report and notes to consolidated financial statements.
</TABLE>
<PAGE> 5
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
1. BUSINESS
The Company's business is in the construction of state-of-the-art
imaging centers and other medical facilities. The Company offers
a full range of services, including turnkey design and
construction services, site analysis, architectural engineering,
and on-site project management.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of
Hamilton-McGregor International, Inc. ("Hamilton") and its wholly
owned subsidiary, Prime Contracting Corporation ("Prime"),
collectively the "Company". Hamilton was incorporated in the
State of New York on August 17, 1995. Prime was incorporated in
the State of New Jersey on July 16, 1978. Hamilton acquired all
of the outstanding capital stock (forty-five and one-half {45.5}
shares no par value common stock) of Prime in December 1995. The
Company accounted for the acquisition of Prime in a manner
similar to a pooling of interests due to the stockholders' common
control of both Hamilton and a related entity.
Cash Equivalents
The Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash
equivalents.
Contract Receivables
Amounts recorded as contract receivables represent amounts
receivable from completed construction contracts, whether billed
or unbilled.
Material Inventory
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
Furniture, Fixtures, Equipment and Leasehold Improvements
Property and equipment are stated at cost and are depreciated by
an accelerated method over the estimated useful lives. Leasehold
improvements are amortized over the life of the lease or the
economic useful lives of the improvements, whichever is shorter.
Betterments and large renewals, which extend the life of the
asset, are capitalized whereas maintenance and repairs and small
renewals are expensed as incurred.
Basis of Accounting
The Company's financial statements have been prepared on the
accrual basis of accounting and, accordingly, reflect all
significant receivables, payables and other liabilities.
Revenue and Cost Recognition
Revenues are recognized on the percentage-of-completion method
and are measured by costs incurred to date as compared to
estimated total costs for each contract. Costs and amounts
earned on specific jobs in excess of billings are treated as a
current asset. Billings in excess of costs and estimated
earnings are treated as a current liability.
<PAGE> 6
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cost and profit estimates are reviewed periodically as work
progresses and adjustments, if needed, are reflected in the
period in which the estimates are revised. Provisions for
estimated losses, if any, on uncompleted contracts are made in
the period in which such losses become known and are estimable.
Change-orders, which may result in revisions to costs and income,
are recognized in the period in which the revisions are approved.
Expenses from contract claim settlements are recognized in the
period awarded.
Contract costs include all direct material and labor costs, as
well as subcontractor costs, and those indirect costs related to
contract performance, such as indirect labor and supplies and
overhead costs. Selling, general and administrative costs are
charged to expense as incurred.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
Income Taxes
The Company adopted Financial Accounting Standards Board (FASB)
Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes", for financial statement reporting
purposes, which requires the asset and liability method of
accounting for income taxes. The asset and liability approach
requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities and the effect of future tax planning strategies to
reduce any deferred tax liability.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, contacts
receivables, accounts payable and short-term debt approximate
fair value due to the short maturity of the instruments and the
provision for what management believes to be adequate reserves
for potential losses. It was not practicable to estimate the
fair value of long-term debt because quoted market prices do not
exist and an estimate could not be made through other means
without incurring excessive costs.
(Loss) Per Share
(Loss) per share has been computed by dividing the net (loss) by
the weighting average number of common stock shares outstanding.
3. GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principals, which
contemplate continuation of the Company as a going concern. The
Company has a working capital deficiency of $993,509 as of June
30, 2000, and has sustained continued losses from operations,
which raise substantial doubt about the Company's ability to
continue as a going concern.
<PAGE> 7
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
3. GOING CONCERN (continued)
On August 16, 2000 the Company filed a restructuring plan for its
subsidiary and believes this plan will make the Company
profitable in future periods. This plan includes a reduction of
project managers and administrative personnel. Duties of those
employees whose jobs were eliminated were reassigned to existing
employees.
4. PRIVATE PLACEMENT OFFERING
In August 1995, the Board of Directors of the Company passed a
resolution authorizing the management of the Company to initiate
steps for a private placement of the Company's securities in
order to raise capital. Management was granted authority to
prepare a Private Placement Memorandum pursuant to Regular Rules
governing the Limited Offer and Sale of Securities Without
Registration Under the Securities Act of 1993 (as amended) and to
register the securities in any state jurisdiction that management
felt was required and appropriate. The private offering called
for the Company to offer for sale up to 500,000 shares of the
Company's common stock (the "shares") at $6.00 per share. The
offering closed on March 29, 1996 with the sale of 80,834 shares
of the Company's $0.0001 par value common stock at the offering
price of $6.00 per share that raised an aggregate of $341,811,
net of expenses of $143,189, for the Company.
5. CONTRACTS RECEIVABLE
Contracts receivable from long-term construction contracts and
programs are as follows:
June 30,
2000 1999
____________ ____________
Billed $ 617,261 $ 282,352
Unbilled - 34,882
____________ ____________
Total $ 617,261 $ 317,234
============ ============
Unbilled receivables represent amounts for which billings have
not yet been presented to customers at the balance sheet date.
These amounts are billed and generally collected within one year.
Amounts due upon completion of contracts are retained by
customers until work is completed and customer acceptance is
obtained. Retaining amounts at June 30, 2000 and 1999 are not
significant.
6. FURNITURE, FIXTURES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Furniture, fixtures, equipment and leasehold improvements consist
of the following:
Estimated June 30,
Useful
Life-Years 2000 1999
_____________________________________________
Office equipment 5 $ 24,479 $ 24,479
Vehicles 5 133,883 133,828
Leasehold improvements 20 50,858 50,858
______________ _____________
209,222 209,165
Less: accumulated
depreciation (175,130) (143,925)
______________ _____________
Total furniture, fixtures,
equipment and leasehold
improvements $ 34,092 $ 65,240
<PAGE> 8
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
7. NOTE PAYABLE - RELATED PARTY
At June 30, 1997, there was $200,000 outstanding on a revolving
line of credit with Summit Bank, bearing interest due monthly at
the prime rate plus 1%, which matured on December 31, 1997. The
line of credit, which was used for short-term working capital,
was secured by real property owned by an officer/stockholder and
all business assets of the Company, excluding accounts
receivable. On January 26, 1998, the loan was refinanced with a
long-term note payable to NGF Investment Corp., a related party.
The note bears interest due monthly at 12.5% and matures on
September 15, 2001. The outstanding balance on the note payable
approximates $218,000 and $196,000 as of June 30, 2000 and 1999,
respectively.
8. INCOME TAXES
The Company recognizes deferred tax liabilities and assets for
the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.
Under this method, deferred tax liabilities and assets are
determined based on the differences between the financial
statement carrying amounts and tax basis of assets and
liabilities using enacted rates in effect in the years in which
the differences are expected to reverse.
The Company has elected not to record a provision for a tax
benefit from its substantial carryover net-operating loss of
approximately $1,100,000, as of June 30, 2000 and wrote-off the
deferred tax asset from the year ended June 30, 1999 in the
amount of $137,922 due to the doubt that the Company will
continue as a going concern and that this asset will be utilized.
The deferred tax provision (benefit) for the years ended June 30,
2000 and 1999 is $0 and $137,922, respectively.
9. RELATED PARTY TRANSACTION
Acquisition
In December 1995, Hamilton-McGregor International, Inc. acquired
one hundred percent (100%) of the outstanding shares (forty-five
and one-half {45.5} shares of no par value common stock) of Prime
Contracting Corporation ("Prime"), a New Jersey Corporation, from
a related entity. Prime is a full service contractor that
provides turnkey design and construction services. The terms of
the agreement, as modified in March 1996, called for a payment of
two hundred thousand dollars ($200,000) and a one million dollar
($1,000,000) note bearing interest at prime plus one percent (1%)
and required a principal payment of six hundred thousand dollars
($600,000) on October 27, 1997 and four hundred thousand dollars
($400,000) on April 27, 1998.
The extinguishments of Prime's accounts payable to its former
parent aggregating approximately $358,000, in conjunction with
the modification agreement, has been treated as a contribution of
additional paid-in capital. The Company accounted for the
business combination in a manner similar to a pooling of
interests due to the stockholder's common control of both
Hamilton and the related party.
On March 3, 1998 the Company restructured the promissory note
payable for the sale of Prime Contracting Corp. as follows:
$200,000 in cash payable over 26 months, plus interest calculated
at prime plus 1% and a 36 month option to repurchase 250,000
shares of the related party stock at $0.05. The Company recorded
the gain in the amount of $772,650 as contributed capital.
<PAGE> 9
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
9. RELATED PARTY TRANSACTION (continued)
Acquisition (continued)
The Company's outstanding balance on the note payable amounts to
$113,889 and $113,889 as of June 30, 2000 and 1999, respectively.
10. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company is obligated under a five year operating lease for a
facility located at 681 Chestnut Street, Union, New Jersey 07083.
The lease expires October 31, 2004 and calls for a fixed annual
rental of $18,000 and payment of all real estate taxes and
utilities. Rent expense for the years ended June 30, 2000 and
1999 was $20,072 and $24,786, respectively.
Minimum Operating Lease Commitments are as follows:
June 30,
2001 27,797
2002 29,437
2003 31,174
2004 33,013
____________
Total minimum lease commitments 121,421
============
11. CONDENSED FINANCIAL STATEMENTS
On April 20, 2000, Prime Contracting Corporation filed Chapter 11
reorganization. The following is the condensed balance sheet and
statement of operations as of the date of reorganization and
fiscal year end June 30, 2000.
CONDENSED BALANCE SHEET
ASSETS:
Current assets $ 989,822
Property and equipment-net 34,092
Other assets 196,268
___________
Total assets $1,220,182
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 626,740
Long-term liabilities subject to compromise 1,637,086
Other liabilities 38,860
Stockholders equity (deficit) (1,082,504)
___________
Total liabilities and stockholders' equity $1,220,182
===========
<PAGE> 10
HAMILTON-MCGREGOR INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 2000 and 1999
11. CONDENSED FINANCIAL STATEMENTS (continued)
CONDENSED STATEMENT OF OPERATIONS
Contract Revenues $ 2,549,719
Less: cost of revenues 2,153,123
______________
Gross profit 396,596
Less: selling and administrative
expenses 1,300,191
______________
Loss from operations (903,595)
Other expenses (30,771)
______________
Net loss $ (934,366)
==============
12. PETITION FOR RELIEF UNDER CHAPTER 11
On April 20, 2000, Hamilton (the "Debtor") filed petitions for
relief under Chapter 11 of the federal bankruptcy laws in the
United States Bankruptcy Court for New Jersey. Under Chapter 11,
certain claims against the Debtor in existence prior to the
filing of the petitions for relief under the federal bankruptcy
laws are stayed while the Debtor continues business operations as
Debtor-in-possession. These claims are reflected in the June 30,
2000 condensed balance sheet as "liabilities subject to
compromise". Additional claims (liabilities subject to
compromise) may arise subsequent to the filing date resulting
from rejection of executory contracts, including leases, and
allowed claims for contingencies and other disputed amounts.
Claims secured against the Debtor's assets ("secured claims")
also are stayed, although the holders of such claims have the
right to move the court for relief from the stay. Secured claims
are secured primarily by liens on the Debtor's property, plant,
and equipment.
13. SUBSEQUENT EVENTS
On August 1, 2000 the Company's Board of Directors approved a
resolution to authorize the issuance of 600,000 shares of
restricted common stock. The resolution calls for 500,000 shares
to be issued for consulting services for the ensuing one year
period along with 100,000 shares to be issued as a credit against
legal services.
<PAGE> 11
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
On September 8, 2000, the Company was informed by its
auditors, Vincent J. Batyr & Co., that the firm would no longer
be representing the Registrant as its accountants. Vincent J.
Batyr & Co. have previously reported on the consolidated
financial statements for the Company. There have been no
disagreements with Vincent J. Batyr & Co. on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements
if not resolved to the satisfaction of Vincent J. Batyr & Co.
would have caused them to make reference thereto in their report
on the consolidated financial statements for any years for which
an audit was undertaken.
The Company has engaged the accounting firm of Green,
Holman, Frenia & Company, LLP of Woodbridge, New Jersey ("GHF &
Co.") as its new independent accountants as of September 8, 2000.
The appointment of the new auditors has been ratified by the
Company's Board of Directors.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act.
(a) Directors and Executive Officers:
Aron D. Scharf, 49, was appointed as President and Chairman
of the Board of Directors of the Company on June 30, 1997. Mr.
Scharf was a co-founder of Modern Medical Modalities Corp.
("MMM") in 1989, and served as consultant to and business manager
of MMM until 1992. He returned to MMM in 1996. He was
responsible for financial projections and planning, cash flow
analysis and consultation. He was appointed to the Board of
Directors of RF Management Company in 1998. Mr. Scharf received
both a B.A. in Business and a B.S. in Industrial Engineering from
Rutgers College, in New Brunswick, New Jersey. He went on to
earn his Masters in Operations Research from Rutgers University
and an MBA from Fairleigh Dickenson University. From 1974-1982,
he was employed by Johnson and Johnson Domestic Operating Company
as a financial planner, financial forecaster and marketing
analyst. When he left J&J, Mr. Scharf opened MicroAge Computers,
a retail computer store and founded Sunrise Multi-Marketing, a
sales and leasing company specializing in computer equipment. He
served as president of Fidelity Telecom Group from 1993 until his
return to MMM in 1996.
Otto Von Eilbergh, 45, has been Vice-President and a
Director of the Company since 1997. Mr. Von Eilbergh has been
associated with Prime Contracting Corporation, the Company's
wholly-owned subsidiary, since 1985, and has been President of
Prime since 1997. Prior to that time, he was a Senior Electrical
Estimator for commercial construction with Devon Electric Company
in Rockaway, New Jersey, responsible for all time and material
billings and overall invoicing (1984 to 1985). From 1971 to 1984
he worked with various fuel oil companies, serving as purchasing
agent, dispatcher, salesman, credit management, and ultimately
was responsible for the construction of 5 Texaco stations in
Northwest New Jersey for Contex Fuel Company.
Wayne P. Miller, 50, has been Vice-President, Secretary and
a Director of the Company since January, 1998. Mr. Miller has
been associated with RF Management Corporation since its
inception in 1995. Prior to that, Mr. Miller consulted to and
was employed by Modern Medical Modalities Corp., from 1989 to
1995, and then by its wholly-owned subsidiary, Medical Marketing
& Management, Inc., from 1991 to 1995, in the capacity as
National Marketing/Sales Director with direct responsibility for
contracting with third-party payors and development of new
business. Mr. Miller has been associated with The Physicians
Network since 1991, which provides turnkey medical billing
systems to billing companies, hospitals and physicians. From
1991 to 1995, Mr. Miller provided billing and computerization
consulting services to physicians and hospitals. Prior to that,
Mr. Miller was under contract to Healthnet as vice-president of
billing from 1990 to 1991. At Healthnet, Mr. Miller was
responsible for the centralization of billing, collections and
computerization of a $50,000,000 multi-state medical group with
offices in New York, New Jersey and Maryland. From 1986 to 1990,
Mr. Miller was vice-president of Marketing with HealthCare
Technologies, a company specializing in total turnkey physician
billing solutions. From 1983 to 1986, Mr. Miller was contracted
by the Health Corp. of the Archdiocese Newark as vice-president
of PrimeMark, to start a hospital-based collection agency for
three hospitals and create a physician fee-for-service billing
company for the hospital-based physicians. Mr. Miller also
worked with the physicians in assisting them to go
fee-for-service. Prior to 1983, Mr. Miller held various
management positions in billing and collections.
During the past five years, none of the officers or
directors of the Company has been subject to a bankruptcy
petition, criminal conviction, or any order, judgment or decree,
not subsequently reversed, suspended or vacated of any court of
competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any
type of business, securities or banking activities, or found to
be guilty of any securities laws infractions.
(b) There are no significant employees who are not
described as executives above, and there are no family
relationships among directors, executive officers or any nominees
to these positions.
Item 10. Executive Compensation.
<TABLE>
Annual compensation Long term compensation
Awards payouts
<S> <C> <C> <C> <C> <C> <C>
Name and Year Salary($) Bonus($) Other Restricted All
Principal annual stock awards other
position compensation compen-
(Medical) sation($)
--------------------------------------------------------------------------------
Otto Von 2000 0 0 0 0 0
Eilbergh (1) 1999 123,421 0 6,483.96 0 0
1998 123,421 0 6,483.96 0 0
Aron Scharf 2000 0 0 0 0 0
1999 29,000 0 6,483.96 0 0
1998 75,000 0 6,483.96 0 0
Wayne P. 2000 0 0 0 0 0
Miller (2) 1999 4,000 0 0 0 0
1998 4,000 0 0 0 0
(1) As of June 30, 2000, Mr. Eilbergh is no longer employed by the
Company.
(2) No direct cash compensation was paid to Wayne P. Miller for
services rendered to the Company. However, the Company did accrue
non-cash compensation in the amount of $1,000 per quarter for the
years ended June 30, 1999 and 1998, as and for the fair value of
services rendered to the Company by Mr. Miller.
</TABLE>
The existing directors of the Company currently serve on a
non-compensated basis. The above compensation table reflects all
compensation awarded to, earned by or paid to the executive
officers and directors of the Company by any person and for all
services rendered to the Company.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security ownership of certain beneficial owners. The
table below identifies any individual (including any "group") who
is known to the Company to be the beneficial owner of more than
five percent of any class of the small business issuer's voting
securities:
<TABLE>
<S> <C> <C> <C>
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
Owner ownership(1)
Common RF Management(2) 2,905,400 52.00
1719 Route 10
Suite 119,
Parsippany NJ
Common R. Findlay 874,000 15.64
29 Oak Knoll Road
Mendham, NJ 07945
Common A. Milleren 450,000 8.05
45 Lexington Ave
Oyster Bay, NY 11771
(1) Unless otherwise indicated, the Company believes that
all persons named in the above table have sole voting and
investment power with respect to all shares of common stock
beneficially owned by them.
(2) As of its most recent public filing, RF Management had
a total of 3,460,833 shares issued and outstanding, with
beneficial ownership as follows:
1) Roger Findlay owns 354,000 shares, of RF Management.
2) Oak Knoll Management Corp. owns 644,000. Alice
Findlay, wife of Roger Findlay, is the sole
stockholder, officer and director of Oak Knoll
Management. Roger Findlay has no other relationship
with Oak Knoll Management and disclaims any beneficial
ownership of Oak Knoll Management's shares.
3) Aron Scharf owns 210,000 shares of RF Management.
4) Jan Goldberg owns 120,000 shares of RF Management.
5) Gregory C. Maccia owns 120,000 shares of RF
Management.
6) Wayne P. Miller owns 40,000 shares of RF Management.
</TABLE>
(b) Security ownership of management. The table below sets
for the ownership by all directors and nominees, and each of the
named executive officers of the Company, and directors and
executive officers of the registrant as a group.
<TABLE>
<S> <C> <C> <C>
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
Owner ownership(1)
Common RF Management 2,905,400 52.0
1719 Route 10 W (affiliate)
Suite 119,
Parsippany NJ
Common Aron D. Scharf 150,000 2.7
1719 Route 10 W
Suite 119,
Parsippany, NJ
Common Otto Von Eilbergh 50,000 0.009
1719 Route 10 W
Suite 119,
Parsippany, NJ
Common Wayne P. Miller 40,000 0.007
1719 Route 10 W
Suite 119,
Parsippany, NJ
Common All Officers and 240,000 4.3
Directors as a
Group
(1) Unless otherwise indicated, the Company believes that
all persons named in the above table have sole voting and
investment power with respect to all shares of common stock
beneficially owned by them.
There are no agreements between or among any of the
shareholders which would restrict the issuance of shares in a
manner that would cause any change of control of the Company.
</TABLE>
Item 12. Certain Relationships and Related Transactions.
On February 18, 1999, the Company issued shares of stock to
compensate RF Management, Inc. for its services for the 1998
calendar year, and James Morse for services provided during the
latter half of 1998. 439,400 shares were issued to RF Management
and 120,000 shares were issued to Morse, under Rule 505 of
Regulation D, which will be restricted as to future resale for a
minimum of one year from the date of issuance. The Company
evaluated this issuance at $0.10 per share for RF Management and
for Morse, based upon the par value of the issued and outstanding
shares, the fact that the Company lost money during its two
preceding years and the restriction against transfer imposed by
the private placement exemption utilized for the issuance.
James Morse reviewed the Company's history and its needs for
coming into compliance with various regulatory filings for
purposes of trading in the over-the-counter marketplace. Mr.
Morse recommended the filing of the Form 10SB, and identified
suitable professionals for the preparation of the required
filings. Morse received a payment of $10,000 plus the 120,000
shares of restricted common stock in consideration of his
services provided. Based upon a market value for the services
and the historical gross profit earned by the company in 1998,
the value of the shares is being recorded at $0.05 per share, or
a total non-cash compensation to Morse of $6,000. These shares
were not due until completion of the consulting services, which
occurred in the first quarter of 1999.
RF Management provides general operational supervision of
the Company on a day-to-day basis, but only if and when contracts
are being negotiated or are under construction. The services of
RF Management were valued at no more than $25,000 for the periods
involved. In compensation for these services, the Company issued
439,400 shares in February, 1999, which, due to their restrictive
legending and the uncertainty of any trading market developing,
were valued at $0.05 per share. Therefore, $24,470 is being
recorded in the Company's books for fees paid by stock issuance
to RF Management.
R.F. MANAGEMENT CORP.
R.F. Management Corp. is the controlling shareholder of the
Company by virtue of its 52% ownership interest in the Company's
common stock. R.F. Management Corp. is engaged in the business
of administering and managing free-standing outpatient centers
owed by radiologists who perform diagnostic services at such
Centers. It was incorporated in the State of New York in August,
1994 and its executive offices are located at 1719 Route 10 W,
Suite 119, Parsippany, New Jersey 07054. R.F. Management is a
12(g) reporting company, and its information can be found within
the EDGAR System under Commission File Number 0-26488.
The Company offers a full range of administrative services,
including contract negotiations, site selection, equipment
procurement, construction, office personnel, office management,
patient scheduling, patient billing, cash collections, personnel
management and marketing. The company can provide either a full
or limited range of administrative services at the Centers,
depending upon the needs of the Centers' owners.
On January 1, 1997, R.F. Management acquired 52% of the
outstanding capital stock of Hamilton-McGregor in a private
transaction with Roger Findlay, a related party, for a total
purchase price of $750,000. As part of the purchase price, R.F.
Management issued an installment note in the sum of $600,000,
without interest, payable in four annual installments on the
anniversary date of the agreement.
On March 3, 1998, Hamilton-McGregor restructured the
promissory note payable for the acquisition of Prime Contracting
Corp. to Modern Medical Modalities Corp., a related party, as
follows: $200,000 in cash, payable over 36 months, plus interest
calculated at prime plus one percent and a 36-month option to
purchase 250,000 shares of Hamilton-McGregor stock at $0.05 per
share. Hamilton-McGregor recorded this transaction as additional
contributed capital in the amount of $772,650. Aron Scharf and
Wayne Miller, both officers and directors of Hamilton, have pre-
existing relationships with Modern Medical Modalities Corp. which
facilitated Hamilton's negotiation and structuring of the
acquisition of Prime Contracting Corp. Both Mr. Scharf and Mr.
Miller were, at one time, consultants to Modern Medical
Modalities Corp.
Wayne P. Miller, President of R.F. Management, and on salary
from R.F. Management, is also the Vice President, Secretary and a
Director of Hamilton-McGregor. For his services at Hamilton-
McGregor, Mr. Miller shall accrue, beginning on July 1, 1999,
compensation from the Company in the amount of $1000 per quarter.
Aron Scharf, President of Hamilton-McGregor, is also a director
on the board of R.F. Management, but receives no compensation for
that position.
Other than the transactions with R.F. Management, and
private placement conducted in 1995, the Company has had not
dealings with any promoters during the preceding 5 years, has not
acquired any assets from any promoters, nor given any discounts
on stock issuances to promoters.
A note is due from the Company to NGF Investment Corp., of
which Aron Scharf, a director of the Company, owns 20%. The only
possibly-conflicting interest of Scharf in the transaction on
behalf of NGF would be to achieve a market rate of interest for
the repayment of the loan. However, Scharf is not the
controlling shareholder of NGF and did not negotiate the
original terms of the transaction for either the Company or NGF.
The Company has not acquired any assets other than in the
ordinary course of business during the preceding 5 years, and no
single asset has had a value in excess of $50,000.
Item 13. Exhibits and Reports on Form 8-K.
On October 6, 2000, the Company filed a report on Form 8-K
indicating an Item 4 Change in Registrant's Certifying
Accountant. See Part II, Item 8, herein.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
HAMILTON-MCGREGOR INTERNATIONAL, INC.
(Registrant)
Date: October 13, 2000 By: /s/ Aron D. Scharf
Aron D. Scharf, President
Chairman, Treasurer
Date: October 13, 2000 By: /s/ Wayne P. Miller
Wayne P. Miller,
Director
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.
Date: October 13, 2000 By: /s/ Aron D. Scharf
Aron D. Scharf, President
Chairman, Treasurer
Date: October 13, 2000 By: /s/ Wayne P. Miller
Wayne P. Miller,
Director
