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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2000
[ ] 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: 0-27157
P.D.C. INNOVATIVE INDUSTRIES, INC.
--------------------------------------------------------------------------------
(Name of small business issuer in its charter)
NEVADA 65-0799306
(State of incorporation) (IRS employer Ident. No.)
3701 N.W. 126th Ave, Bay 5, Coral Springs, FL 33065
(address of principal office) (Zip Code)
Registrant's telephone number: (954) 341-0092
Indicate by check mark whether the Registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ ] No [X]
The number of shares outstanding of each of the issuer's classes of
equity as of June 30, 2000: 16,570,121 shares of Common Stock, $.001 par value.
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P.D.C. INNOVATIVE INDUSTRIES, INC.
(A Development Stage Company)
TABLE OF CONTENTS
FORM 10-QSB
For the Quarter Ended June 30, 2000
<TABLE>
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Balance Sheet Page 3
Condensed Statements of Operations Page 4
Condensed Statements of Cash Flows Page 5
Notes to Financial Statements Page 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PART II OTHER INFORMATION
SIGNATURE
EXHIBIT INDEX
</TABLE>
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P.D.C. INNOVATIVE INDUSTRIES, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash $ 16,541
Other receivables 2,257
Inventories 814,153
-----------
Total current assets 832,951
-----------
Property and equipment, net 984,248
Other assets 34,010
-----------
$ 1,851,209
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Loans payable $ 219,500
Shareholder loans 45,887
-----------
Total current liabilities 265,387
-----------
Stockholders' equity:
Common stock 16,070
Additional paid-in capital 2,918,942
Deficit accumulated during development stage (1,349,190)
-----------
1,585,822
-----------
$ 1,851,209
===========
</TABLE>
The accompanying notes are an integral part of
these condensed financial statements.
Page 3
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P.D.C. INNOVATIVE INDUSTRIES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended From Inception to
June 30, June 30, June 30,
--------------------------- --------------------------- ------------------
2000 1999 2000 1999 2000
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Operating expenses:
Salaries and related benefits $ 103,333 $ 109,327 $ 55,216 $ 45,441 $ 459,076
Professional fees and commissions 25,355 32,981 10,300 19,975 215,113
Travel and entertainment 13,637 18,150 7,315 9,210 46,939
Administrative expenses 32,093 15,888 31,367 13,103 103,725
Auto expenses 12,337 11,671 5,144 4,477 58,399
Equipment maintenance 4,757 6,794 4,594 6,794 48,236
Rent 14,607 32,538 11,236 16,386 76,452
Other 42,360 31,400 37,591 (811) 183,915
Depreciation 61,004 5,452 25,500 5,452 157,335
------------ ------------ ------------ ------------ ------------
Total operating expenses 309,483 264,201 188,263 120,027 1,349,190
------------ ------------ ------------ ------------ ------------
Net loss $ (309,483) $ (264,201) $ (188,263) $ (120,027) $ (1,349,190)
============ ============ ============ ============ ============
Net loss per share information:
Basic:
Net loss per share $ (.02) $ (.62) $ (.01) $ (.28) $ (.46)
============ ============ ============ ============ ============
Weighted average number of common shares 14,082,989 426,702 16,070,210 426,702 2,945,996
============ ============ ============ ============ ============
Diluted:
Net loss per share $ (.02) $ (.62) $ (.01) $ (.28) $ (.46)
============ ============ ============ ============ ============
Weighted average number of common shares 14,082,989 426,702 16,070,210 426,702 2,945,996
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of
these condensed financial statements.
Page 4
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P.D.C. INNOVATIVE INDUSTRIES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended From Inception
June 30, to June 30,
----------------------------------- --------------
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (309,483) $ (264,201) $(1,349,190)
Changes in assets and liabilities 12,406 180,355 (524,789)
----------- ----------- -----------
Net cash used in operating activities (297,077) (83,846) (1,873,979)
----------- ----------- -----------
Cash flows from investing activities:
Purchase of equipment (14,669) -- (1,309,879)
----------- ----------- -----------
Net cash used in investing activities (14,669) -- (1,309,879)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from loans 214,500 -- 265,387
Proceeds from sale of stock -- 158,537 2,935,012
----------- ----------- -----------
Net cash provided by financing activities 214,500 158,537 3,200,399
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents (97,246) 74,691 16,541
Cash and cash equivalents, beginning of period 113,787 11,770 --
----------- ----------- -----------
Cash and cash equivalents, end of period $ 16,451 $ 86,461 $ 16,541
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of
these condensed financial statements.
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P.D.C. INNOVATIVE INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six
month periods ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000
2. GOING CONCERN
P.D.C. Innovative Industries, Inc. (PDCI) is currently a development stage
company and our continued existence is dependent upon our ability to resolve our
liquidity problems, principally by obtaining additional debt and/or equity
financing. PDCI has yet to generate and internal cash flow, and until sales of
our product begin, we are totally dependent upon debt and equity funding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
P.D.C. Innovative Industries, Inc. is a developmental stage company, which,
since inception, has been engaged in the research and development of various
products that it plans on bringing to the marketplace during its fiscal year
ending December 31, 2000. It has not yet engaged in any formal marketing or
distribution of its products and therefore has had no revenue from its
operations.
We have incurred net losses applicable to common shareholders since inception
through June 30, 2000 of approximately $1,349,000. We anticipate that losses
from operations will continue for at least the next year, primarily due to an
anticipated increase in marketing and manufacturing expenses associated with the
commercialization of our products. There can be no assurances that once these
products achieve market acceptance, that sufficient revenues will be generated
from their sales to allow us to operate profitably.
RESULTS OF OPERATIONS
The Company's operating expenses for the three and six months ended June 30,
2000, were $309,483 and $188,263 representing an increase of $45,282 and $68,236
for the corresponding periods for 1999. The major reasons for the increases in
costs were an increase in administrative expenses and the costs associated with
becoming a reporting company with the Securities and Exchange Commission.
BALANCE SHEET DATA
Our combined cash and cash equivalents totaled $16,541 as of June 30, 2000. This
is a decrease of $97,246 from $113,787 for the year ended December 31, 1999.
We do not expect to generate a positive internal cash flow for at least the next
twelve (12) months due to the expected increase in spending for research and
development and the costs associated commercializing our initial product.
Property and Equipment was valued at $934,248, net as of June 30, 2000. The
overall decrease of $46,335 from the year ended December 31, 1999 is due
primarily to depreciation recorded for the second quarter.
LIQUIDITY AND CAPITAL RESOURCES
We are currently a development stage company and our continued existence is
dependent upon our ability to resolve our liquidity problems, principally by
obtaining additional debt and/or equity financing. We have yet to generate an
internal cash flow, and until the sale of our product begins, we are totally
dependent upon debt and equity funding. In the event that we are unable to
obtain debt or equity financing or we are unable to obtain such financing on
terms and conditions acceptable to us, we may have to cease or severely curtail
our operations. This would materially impact our ability to continue as a going
concern.
The Company is presently operating by obtaining debt capital and loans from its
shareholders until such time that it is able raise additional equity capital, or
begin the sales of its products and generate an internal cash flow.
At our present "burn rate", which is $55,000 per month, we will be able to
satisfy our cash requirements until November, 2000. Unless we are able to
generate significant revenue from sales of product, it will therefore be
necessary for us to raise additional capital before that date.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
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.
I. Exhibit 27--Financial Data Schedule
II. Reports on Form 8-K
The Company filed a Form 8-K on June 1, 2000 covering the change in the
Registrant's Certified Public Accountant. The Board of Directors approved a
change in accountants effective June 1, 2000, from the firm of Franklin &
Nicholls, CPA's, L.L.C. to the accounting firm of Margolies, Fink & Wichrowski,
Certified Public Accountants. As reported in the Form 8-K, there had been no
disagreements over any accounting issues between the prior accountants and the
management of the Company during the two years ended December 31, 1999 and in
the subsequent period through March 31, 2000.
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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, thereunto duly authorized.
P.D.C. INNOVATIVE INDUSTRIES, INC.
(Registrant)
Date: August 17, 2000 By /s/ David Sowers
------------------------------------
David Sowers, CEO
(Principal Executive Officer)
By /s/ Sandra Sowers
------------------------------------
Sandra Sowers, President and CFO
(Principal Financial Officer)
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