U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 for the Quarterly
period ended March 31, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO 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 [ ] NO [X]
Revenues for the quarter ending March 31, 2000 were
$381,889.
As of March 31, 2000, the Company had approximately
5,586,905 shares of Common Stock issued and outstanding.
HAMILTON McGREGOR INTERNATIONAL, INC.
FORM 10-QSB
for the quarter ended March 31, 2000
TABLE OF CONTENTS
Part I. Financial Information
-------
Item 1. Financial Statements (unaudited)
Item 2. Managements Discussion and Analysis or Plan of
Operation
Part II. Other Information
--------
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security holders
Item 5. Other Information
Item 6. Exhibits and reports on form 8-K
SIGNATURES
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<S> <C> <C> <C>
March 31, June 30,
------------- ------------ ------------
2000 1999 1998
------------- ------------ ------------
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents $ 14,186 $ 19,389 $ 21,102
Contracts receivable, net of allowance
for doubtful accounts 206,141 317,234 1,186,610
Other receivables 63,041 20,000 -
Costs and estimated earnings in excess of
billings on uncompleted contracts 189,766 148,293 96,582
Prepaid expenses and other current assets 4,663 18,655 2,648
Current deferred tax assets - - 13,243
Other current assets 10,000 104,419 55,450
---------- ---------- ----------
Total current assets 487,797 627,990 1,375,635
---------- ---------- ----------
Furniture, fixtures, equipment and leasehold
improvements (net of accumulated depreciation) 36,855 65,240 84,089
Deferred tax assets - - 124,070
Other assets - - 3,188
---------- ---------- ----------
TOTAL ASSETS $ 524,652 693,230 $1,586,982
========== ========== ==========
LIABILITIES & STOCKHOLDERS' (DEFICIENCY)
Current Liabilities:
Current portion of note payable
- acquisition $ 113,889 $ 72,222 $ 72,222
Current maturities of long-term debt 6,136 28,728 10,632
Accounts payable and accrued expenses 1,259,056 720,555 671,557
Billings in excess of costs and estimated
earnings on uncompleted contracts 62,945 74,415 812,207
Due to affiliate - 6,153 -
---------- ---------- ----------
Total current liabilities 1,442,026 902,073 1,566,618
---------- ---------- ----------
Note payable - acquisition, net of
current portion - 41,667 91,667
Note payable - related party 145,902 196,280 101,000
Long-term debt - 3,880 15,611
COMMITMENTS AND CONTINGENCIES -
---------- ---------- ----------
TOTAL LIABILITIES 1,587,928 1,143,900 1,774,896
---------- ---------- ----------
Stockholders' (deficiency)
Common stock, $.0001 par value,
15,000,000 shares authorized,
5,586,905 shares issued and outstanding 559 559 498
Additional paid in capital 845,493 845,493 780,650
Retained (deficit) (1,909,328) (1,296,722) (969,062)
---------- ---------- ----------
TOTAL STOCKHOLDERS' (DEFICIENCY) (1,063,276) (450,670) (187,914)
---------- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIENCY) $ 524,652 $ 693,230 $1,586,982
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<S> <C> <C> <C>
For the Nine For the
Months Ended Years Ended
March 31, June 30,
-------------- -------------- --------------
2000 1999 1998
-------------- -------------- --------------
(unaudited)
Contract revenues $ 1,965,546 $ 6,278,599 $ 5,633,716
Costs of revenues earned 1,731,524 4,863,355 4,388,829
-------------- -------------- --------------
Gross profit 234,022 1,415,244 1,244,887
Selling, general and
administrative expenses (includes
depreciation and amortization expense) 831,542 1,558,541 1,356,873
-------------- -------------- --------------
Income (loss) from operations (597,520) (143,297) (111,986)
-------------- -------------- --------------
Other income (expense)
Other income 16,654 - -
Interest income 1,495 - -
Interest expense (33,235) (46,441) 6,139
-------------- -------------- --------------
Income (loss) before provision for
(recovery of) income taxes (612,606) (189,738) (105,847)
Provision for (recovery of) income taxes - 137,922 (42,236)
-------------- -------------- --------------
Net (loss) $ (612,606) $ (327,660) $ (63,611)
============== ============== ==============
Weighted average number of shares of
common stock outstanding 5,131,107 5,131,107 4,977,505
============== ============== ==============
Basic (loss) per share $ (0.12) $ (0.06) $ (0.01)
============== ============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
HAMILTON-MCGREGOR INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<S> <C> <C> <C>
For the Nine For the
Months Ended Years Ended
March 31, June 30,
-------------- -------------- --------------
2000 1999 1998
-------------- -------------- --------------
(unaudited)
Net income (loss) $ (612,606) $ (327,660) $ (63,611)
Adjustments to reconcile excess of
revenue over expenses to net cash
provided by (used in) operating activities:
Depreciation and amortization 28,384 18,081 34,720
Provision for doubtful accounts (120,000) 35,000 20,000
Deferred income taxes - 137,922 (42,236)
(Income) loss on investment in
limited partnership - (1,812) 96
Changes in operating assets and liabilities:
Contracts receivable (8,907) 834,376 (239,191)
Other receivable (43,041) - -
Costs and estimated earnings in excess
of billings on uncompleted contracts (41,473) (51,711) (64,583)
Prepaid expenses and other
current assets 108,412 (64,976) 100,697
Accounts payable and accrued expenses 538,501 48,389 (423,280)
Billings in excess of costs and
estimated earnings on uncompleted
contracts (11,470) (737,792) 320,576
-------------- -------------- --------------
Net cash provided by (used in)
operating activities 77,800 (110,183) (356,811)
-------------- -------------- --------------
Acquisition of furniture, fixtures,
and equipment - - -
Disposition of furniture, fixtures,
and equipment - 750 -
-------------- -------------- --------------
Net cash provided by (used in)
investing activities - 750 -
-------------- -------------- --------------
Due from officer - (20,000) -
Repayment of note payable - acquisition - (50,000) (62,064)
Proceeds from note payable - related party - 97,452 200,000
Repayment of note payable - related party (50,378) - -
Proceeds from long-term debt - 50,000 -
Repayment of long-term debt (26,472) (34,575) (881,239)
Repayment of line of credit (6,153) - (200,000)
Additional paid in capital - 64,843 776,650
-------------- -------------- --------------
Net cash provided by financing
activities (83,003) 107,720 (166,653)
-------------- -------------- --------------
Net increase (decrease) in cash and
cash equivalents (5,203) (1,713) (523,464)
Cash and cash equivalents at
beginning of year 19,389 21,102 544,567
-------------- -------------- --------------
Cash and cash equivalents at
end of year $ (14,186) $ 19,389 $ 21,103
============== ============== ==============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
HAMILTON-MCGREGOR INTERNATIONAL INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED) AND JUNE 30, 1999 AND 1998
1 - Business
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.
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 June
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 form 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.
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.
Contracts costs included 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, contracts
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 have been computed by dividing the net
(loss) by the weighted average number of common stock shares
outstanding.
3 - Going Concern
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
$954,229 at March 31, 2000 (unaudited) and $274,083 as of
June 30, 1999, 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.
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 Regulation Rules governing the Limited Offer and Sale of
Securities Without Registration Under the securities Act of
1933 (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:
March 31, June 30,
------------- --------------------------
2000 1999 1998
------------- --------------------------
(unaudited)
Billed $ 206,141 $ 282,352 $ 1,099,494
Unbilled - 34,882 87,166
--------- --------- -----------
Total $ 206,141 $ 317,234 $ 1,186,610
--------- --------- -----------
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. Retainage amounts at March 31, 2000, June 30,
1999 and June 30, 1998 are not significant.
6 - Furniture, Fixtures, Equipment and Leasehold Improvements
Furniture, fixture, equipment and leasehold improvements
consist of the following:
Estimated March 31, June 30,
Useful Life- ------------- ------------- -------------
Years 2000 1999 1998
-------------- ------------- ------------- -------------
(unaudited)
Office equipment 5 $ 24,536 $ 24,479 $ 24,479
Vehicles 5 133,828 133,828 142,257
Leasehold improvements 20 50,858 50,858 50,858
------------- ------------- -------------
Total furniture, fixtures,
equipment and leasehold
improvements $ 209,222 $ 209,165 $ 217,594
Less: Accumulated depreciation (172,367) (143,925) (133,505)
------------- -------------- -------------
Net furniture, fixtures,
equipment and leasehold
improvements $ 36,855 $ 65,240 $ 84,089
============= ============== =============
7 - Investment in Limited Partnership
The Company has an investment in Stamford Towers, Limited Partnership
as follows:
March 31, June 30,
------------ ----------- ----------
2000 1999 1998
------------ ----------- ----------
(unaudited)
Limited partnership interest $ - $ - $ 5,000
Aggregate cost $ - $ - $ 5,000
============ =========== ==========
Aggregate market value $ - $ - $ 3,188
Cash balance $ - - -
------------ ----------- ----------
$ - $ - $ 3,188
============ =========== ==========
8 - 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 $146,000 at March 31, 2000
(unaudited), and $196,000 and $101,000 at June 30, 1999 and 1998,
respectively.
9 - Long-Term Debt
Long-term debt consists of the following:
March 31, June 30,
------------- ------------- --------------
2000 1999 1998
------------- -------------- -------------
(unaudited)
Notes payable $ 6,136 $ 32,608 $ 26,243
Less: Amounts due in one year 6,136 28,728 10,632
------------- -------------- -------------
Total long-term debt $ - $ 3,880 $ 15,611
============= ============== =============
10 - 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 rated in effect in
the years in which the differences are expected to reverse.
The Company has recorded total income tax expenses (credits) of
$137,922 and ($42,236), for the years ended June 30, 1999 and 1998,
respectively. The Company has a net operating loss (NOL)
carryforward for federal income tax purposes of $997,329 at June 30,
1999 available to offset income taxes in future years through 2014.
Components of income (loss) before income taxes (recovery), and net
income (loss) are as follows:
June 30,
-------------- -------------
1999 1998
-------------- -------------
Income (loss) before (recovery of)
income taxes $ (189,738) $ (105,847)
Provision for (recovery of) income
taxes 137,922 (42,236)
-------------- --------------
Net income (loss) $ (327,660) $ (63,611)
============== ==============
The following is a reconciliation of the U.S. federal statutory tax
rate and the apparent tax rate:
1999 1998
------------- -------------
U.S. Federal tax (34.0%) (34.0%)
Expense (benefit) from
graduated rates (10.0%) 10.0%
State taxes, net of federal
tax benefit (6.0%) (6.0%)
Valuation allowance (22.7%) (10.0%)
------------- -------------
Effective tax rate (72.7%) (40.0%)
============= =============
The tax effects of temporary differences and carryforwards which give
rise to significant portions of deferred tax assets and liabilities
are as follows:
June 30, 1999 June 30, 1998
--------------------- ---------------------
Current Non-current Current Non-current
-------- ----------- -------- -----------
Deferred income tax assets:
Net operating loss
carryforwards 18,000 281,199 15,000 248,141
Doubtful Accounts 22,500 - 9,000 -
Depreciation - 9,851 2,487 -
Valuation Reserve (40,500) (291,050) (13,244) (124,071)
-------- -------- -------- --------
Total deferred income
tax assets - - 13,243 124,070
-------- -------- -------- --------
Net deferred income
tax assets - - 13,243 124,070
======== ======== ======== ========
The Company has recorded current and deferred provision for
(recovery of) income taxes as follows:
June 30,
-------------- -------------
1999 1998
-------------- -------------
Current $ 609 $ -
Deferred 137,313 (42,236)
-------------- -------------
Total $ 137,922 $ (42,236)
============== =============
11 - Related Party Transactions
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 ($200,000) and a one million dollar
($1,000,000) note bearing interest at prime plus one percent
(1%) and require 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
extinguishment 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 to 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 36 months, plus
interest calculated at prime plus 1% and a 36 month option
to purchase 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.
The Company's outstanding balance on the note payable
amounts to $113,889 at March 31, 2000 (unaudited) and June
30, 1999 and $163,889 at June 30, 1998.
12 - 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, 1999 and calls
for a fixed annual rental of $18,000, payment of all real
estate taxes and utilities and contains a renewal provision
for an additional five-year term. Rent expense for the
years ended June 30, 1999, and 1998 was $24,786 and $23,404,
respectively.
Minimum Operating Lease Commitments are as follows:
June 30,
2000 26,248
2001 27,797
2002 29,437
2003 31,174
2004 33,013
-------
Total minimum lease commitments 147,669
-------
Employment contract
In November 1994, Prime entered into an employment agreement
with its president to receive gross revenue bonuses at the
end of any of the first five bonus years beginning October
1994. The gross revenue bonus advanced in accordance with
the agreement is amortized over the ten year contract term.
In addition, a special bonus was paid to the same party, and
was amortized over a 12 month period beginning January 1,
1995.
In December 1997, the employment contract was terminated,
resulting in a charge to operations in the amount of
$145,725 for the balance of prepaid compensation.
ITEM 2. 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 12.5% annual rate of interest, which
the Company uses for operating capital only, and not for
construction loans. At March 31, 2000, the outstanding balance
on the NGF line of credit was $146,000. 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.
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 $954,229 as of March
31, 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.
Liquidity and Capital Resources.
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.
PART II
ITEM 1. LEGAL PROCEEDINGS
As of March 31, 2000, 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.
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 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
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: September 1, 2000 By: /s/ Aron D. Scharf
Aron D. Scharf, President
Chairman, Treasurer
Date: September 1, 2000 By: /s/ Wayne P. Miller
Wayne P. Miller,
Director
Date: September 1, 2000 By: /s/ Otto Van Eilbergh
Otto Van Eilbergh,
Director