-1-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
----------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ------------------ to--------------------
Commission File number 1-7301
----------------------------------------
RENU-U INTERNATIONAL, INC.
----------------------------
(Exact name of registrant as specified in charter)
Delaware 75-1329265
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14251 Chambers Rd Tustin Ca 92780
- --------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
1- 801- 262-5052
----------------------------------------------
Registrant's telephone number, including area code
- ----------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [x ] No [ ] and (2) has
been subject to such filing requirements for the past 90 days. Yes [x ] No []
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
Class Outstanding as of August 3, 1999
------------------ -------------------------------------
Common Stock, $0.001 3,332,041
<PAGE>
<TABLE>
<CAPTION>
INDEX
INDEX
Page
Number
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PART I.
ITEM 1. Financial Statements (unaudited) 3
Balance Sheets
June 30, 1999 and December 31, 1998 4
Statements of Operations
For the three and six months ended
June 30, 1999 and 1998 and the period
from January 1, 1994 to June 30, 1999 5
Statements of Cash Flows
For the six months ended June 30, 1999
and 1998 and the period from January 1,
1994 to June 30, 1999 7
Notes to Financial Statements 8
ITEM 2. Management Discussion and Analysis 11
PART 11
ITEM 6. Exhibits and Reports on Form 8-K 13
Signatures 13
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------
ITEM 1. FINANCIAL STATEMENTS
-----------------------
The accompanying balance sheets of Renu-U International, Inc. and subsidiary
(a development stage company) at June 30, 1999 and December 31 1998, and the
statements of operations for the three and six months ended June 30, 1999 and
1998 and the period from January 1, 1994 to June 30, 1999, the cash flows and
the statement of stockholder' equity for the six months ended June 30, 1999
and 1998, and the period from January 1, 1994 to June 30, 1999, have been
prepared by the Company's management and they do not include all information and
notes to the financial statements necessary for a complete presentation of the
financial position, results of operations, cash flows, and stockholders' equity
in conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature.
Operating results for the quarter ended June 30, 1999, are not necessarily
indicative of the results that can be expected for the year ending December 31,
1999.
<PAGE>
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999, AND DECEMBER 31, 1998
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
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<S> <C> <C>
CURRENT ASSETS
Cash $ - $ 47
Inventory - for resale - 35,040
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Total Current Assets - 35,087
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PROPERTY AND EQUIPMENT
Net of accumulated depreciation 45,000 29,645
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MARKETING RIGHTS - Note 4 - -
----------- -------------
$ 45,000 64,732
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable $ - 89,922
----------- -------------
Notes Payable - Related Parties - 64,820
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Accounts Payable - 152,279
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Accounts Payable - Related Parties - 27,767
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Total Current Liabilities - 334,788
----------- -------------
LONG TERM DEBT AND OTHER CONTINGENCIES
Note 3 and 4 - 44,472
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STOCKHOLDERS' EQUITY
Preferred Stock
1,000,000 shares authorized, at $0.10
par value; none outstanding - -
----------- -------------
Common Stock
100,000,000 shares authorized, at
$0.001 par value; 3,332,041 shares
issued and outstanding at June 30;
332,041 at December 31, 1998 3,332 332
----------- -------------
Capital in Excess of Par Value 804,971 762,971
Accumulated deficit during development
stage - Note 1 (763,303) (1,077,831)
----------- -------------
Total Stockholders' Deficiency 45,000 (314,528)
----------- -------------
$ 45,000 $ 64,732
=========== =============
</TABLE>
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999, AND 1998
AND THE PERIOD FROM JANUARY 1, 1983 TO JUNE 30, 1999
<TABLE>
<CAPTION>
THREE THREE SIX SIX JANUARY 1,
MONTHS MONTHS MONTHS MONTHS 1983 TO
JUNE 30, JUNE 30, JUNE 30, JUNE 30, (NOTE 1)
1999 1998 1999 1998 JUNE 30,
1999
-------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
REVENUES $ 19,083 $ 38,565 $ 26,716 $ 52,877 $ 144,204
COST OF SALES 8,731 13,611 11,846 13,611 51,117
--------- --------- --------- --------- ----------
Gross Profit 10,352 24,954 14,870 39,266 93,087
EXPENSES 29,619 28,879 47,838 108,788 652,835
--------- --------- --------- --------- ----------
Net operating loss (19,267) (3,925) (32,968) (69,522) (559,748)
OTHER INCOME
Gain from transfer of
assets - note 4 347,496 347,496 347,496
---------- --------- -------- --------- ---------
NET GAIN ( LOSS ) $328,229 $ (3,925) $314,528 $(69,522) $(212,252)
========= ========= ========= ========= ==========
GAIN (LOSS) PER
COMMON SHARE
Basic $0.99 $ (0.01) $ 0.95 $ (0.20)
--------- --------- --------- ---------
AVERAGE
OUTSTANDING
SHARES
Basic 336,290 336,290 336,290 336,290
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND 1998
AND THE PERIOD FROM JANUARY 1, 1983 TO JUNE 30, 1999
<TABLE>
<CAPTION>
SIX SIX
MONTHS MONTHS JANUARY 1, 1983
ENDED ENDED TO
JUNE 30, JUNE 30, (Note 1)
1999 1998 JUNE 30, 1999
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<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $ 314,528 $(69,522) $ (212,252)
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation 2,080 2,592 12,192
Issuance of stock and contribution to capital -
expenses - - 119,602
Deferred income - 10,000 -
Bad debts - - 31,418
Change in inventory 8,918 (26,789) 43,958
Change in deposits - 25,000 -
Change in accounts payable 22,714 26,756 275,542
Gain on transfer of assets and liabilities (347,496) - (347,496)
Loss of equipment - - 11,135
Loss of equipment
Net Cash Used by Operations 744 (31,963) (65,901)
---------- --------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary - - (105,000)
Purchase of equipment - (27,754) (47,780)
---------- --------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock - - 175,000
Proceeds from loans (791) 63,758 43,681
Net Increase (Decrease) in Cash (47) 4,041 -
Cash at Beginning of Period 47 1,695 -
---------- --------- ---------------
Cash at End of Period $ - $ 5,736 $ -
========== ========= ===============
</TABLE>
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the State of Delaware on June
14, 1971. There have been name changes and authorized stock changes resulting in
the present name and the authorized common shares and preferred shares shown in
the balance sheet.
The Company has been involved in various activities over the years and during
the year 1983 discontinued all operations until 1996 when the Company started
developmental work on a device to be used in the physical care field however
during June 1999 the Company transferred the business as part of an acquisition
and reorganization. (Note 5 )
On July 30, 1999 the Company completed a reverse stock split of 30 shares of
outstanding stock for one share. This report has been prepared showing after
stock split shares from inception.
The company is considered to be in the development stage after 1982.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- -------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ----------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
- -------------
On December 31, 1998, the Company had a net operating loss carry forward of
$1,077,831. The tax benefit from the loss carry forward has been fully offset
by a valuation reserve because the use of the future tax benefit is doubtful
since the Company had a substantial change in its stockholders resulting from
the reorganization outlined in note 5. $563,551 of the loss carryforward has
expired and the balance expires starting in the years 2000 through 2019.
Earnings (Loss) Per Share
- ----------------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding, after the stock split.
<PAGE>
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
- ----------------------
The carrying amounts of financial instruments, including all assets and
liabilities shown in the balance sheet, are considered by management to be
their estimated fair values because of the events outlined in note 4. These
values are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.
Estimates and Assumptions
- ---------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets
and liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing these financial statements.
3. LONG TERM DEBT
Long term debt consists of lines of credit from banks amounting to $44,472 with
interest only payments for the coming year. Officers of the Company have
guaranteed the loans.
4. TRANSFER OF COMPANY ASSETS IN EXCHANGE FOR ALL LIABILITIES
During June 1999 the Company transferred all its assets and the business in the
physical care field in exchange for the assumption of all its liabilities as
part of an acquisition and reorganization outlined in note 5, between the
Company and RGB Technology Group, Inc. and Kimrose Holdings. At the report date
$ 175,000 of assumed liabilities had been paid. The remaining balance of
$204,260 will remain as a contingent liability to the Company until they are
paid or satisfied.
5. ACQUISITION OF ALL OUTSTANDING STOCK OF RGB TECHNOLOGY GROUP INC.
On June 8, 1999 the Company acquired all of the outstanding stock of RGB
Technology Group Inc. through a stock for stock exchange in which the
stockholder (Kimrose Holdings) of RGB Technology Group Inc. received 3,000,000,
after stock split, common shares of the Company in exchange for all of the stock
of RGB Technology Group Inc. RGB Technology Group Inc. was organized in the
state of Delaware on April 28, 1999 for the purpose of marketing ColorMax(TM)
lenses and a computer color vision test software. After the completion of the
transaction the outstanding stock of the Company was 3,332,041 common shares of
which 3,000,000 was owned by Kimrose Holdings.
The asset held by RGB Technology Inc. consists of the marketing rights for the
above technology.
<PAGE>
RENU-U INTERNATIONAL, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. ACQUISITION OF ALL OUTSTANDING STOCK OF RGB TECHNOLOGY GROUP INC.
- continued
For reporting purposes, the acquisition is treated as an acquisition of the
Company by RGB Technology Group Inc. (reverse acquisition) and a
recapitalization of RGB Technology Group Inc. with its historical financial
statements being combined with the Company's.
No proforma statements have been included because the merger is considered to be
a reverse acquisition and not a business combination. All material
intercompany accounts and transactions have been eliminated.
6. RELATED PARTY TRANSACTIONS
See notes 4 and 5 for the transfer of assets and the assumption of liabilities
to a related parties as part of an acquisition and reorganization of the
Company.
7. GOING CONCERN
The Company has acquired marketing rights, described above, and in the opinion
of management, will provide a profit to the Company. The Company will need
additional working capital to be successful in this acquisition. The
management of the Company has developed a strategy, which it believes will
accomplish this objective through additional equity funding and long term
financing, which will enable the Company to operate in the future.
ITEM 2. Management Discussion and Analysis
- -----------------------------------------------------
The following narrative of this report contains some "forward looking
statements" which are based upon the plans, goals and objectives of the Company
and its management. Such statements are subject to various risks and
uncertainties. Numerous factors exist within the business world which may
prevent the successful attainment of such plans, goals and objectives.
Consequently, the reader should consider that such risks, uncertainties, and
unknown factors may cause actual results to vary materially from those stated
goals outlined below.
The Company has acquired the marketing rights outlined below, however continued
growth is dependent upon obtaining additional working capital and the
management of the Company has developed a strategy, which it believes will
accomplish this objective through additional equity funding and long term
financing, which will enable the Company to operate in the future.
Acquisition of Marketing Rights
- ----------------------------------
In June 1999, the Company commenced work in the specialty vision care and
optical industry. The Company obtained a long-term license to market, sell, and
distribute the proprietary technologies of the ColorMax (TM) product line in the
United States, Australia, and New Zealand.
The ColorMax (TM) line specializes in aiding and detecting color blindness and
color vision deficiencies which affect approximately 8.0% of males and 0.5% of
females. There are approximately 12 million colorblind and color deficient
people in the United States alone. Because this condition is a genetic disorder
and given the absence of any known cure, the market for color-deficient patients
who need aid and therapy remains a stable and constant one. Currently, there
are few effective aids on the market that address the needs of color blind and
color deficient individuals who live in a modern world in which the interfaces
and tools are becoming more color coded. The needs of these individuals
encompass not only their life style and leisure aspects of their lives, but
occupational and educational spheres as well. The product line includes
ColorMax(TM) Color Vision Enhancement Lenses and ColorMax(TM) Color Test
Software.
Due to the complexity of the technology of the products and the science of color
vision deficiencies, the
Company has determined that distribution through Optometric doctors is the ideal
method. By placing distribution in the optometry offices, higher standards of
quality in color vision tests of our products can be guaranteed.
Currently, the Company distributes the product line to seven Optometric doctor
locations in North America. The Company has commenced an aggressive marketing
plan to expand the number of doctors into the 50 largest North American
metropolitan areas. In the upcoming year, the Company will be selecting the
most qualified doctors in these markets and will conduct site visits, seminars
and training.
In August 1999, the Company conducted ColorMax(TM) Color Vision Seminars in
Australia in the cities of Brisbane, Melbourne, and Sydney in conjunction with
the launch of ColorMax(TM) products in Australia. More than 150 doctors
participated in these seminars and it is expected that Australian sales will
generate sizable revenues for the Company. The company is also negotiating with
potential distributors in other international markets.
<PAGE>
Liquidity and Capital Resources
- ----------------------------------
The Company will need additional working capital to finance its planned
activity.
Results of Operations
- -----------------------
The Company has discontinued the operations in its business in the physical care
field and has started its current business efforts in the optical industry. Its
future operations will consist of marketing, selling, and distributing the
proprietary vision care technology outlined above.
PART 2
ITEM 6. Exhibits and Reports on Form 8-K
See Form 8-K filed July 2, 1999 regarding acquisition and reorganization and
change of accountants.
<PAGE>
- ------
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
RENU-U INTERNATIONAL, INC.
[Registrant]
/s/ Donald H. Hansen
-------------------------
Dated August 27, 1999 By Donald H. Hansen ,
President
/s/ Julie Kim
-------------------------
Dated August 27, 1999 By Julie Kim,
Secretary Treasurer
<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 45000
<DEPRECIATION> 0
<TOTAL-ASSETS> 45000
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<BONDS> 0
0
0
<COMMON> 3332
<OTHER-SE> 41668
<TOTAL-LIABILITY-AND-EQUITY> 45000
<SALES> 19083
<TOTAL-REVENUES> 19083
<CGS> 8731
<TOTAL-COSTS> 29619
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<NET-INCOME> 328229
<EPS-BASIC> .99
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