UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT TO THE
1934ACT REPORTING REQUIREMENTS
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
Commission File No. 000- 28095
MCCARTHY GRENACHE, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0412635
(State of organization) (I.R.S. Employer Identification No.)
3651 Lindell Road, Suite A, Las Vegas, NV 89103
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 873-7404
Check whether the issuer (1) filed all reports required to be
file by Section 13 or 15(d) of the Exchange Act during the past
12 months and (2) has been subject to such filing requirements
for the past 90 days. No X
There are 5,122,000 shares of common stock outstanding as of June
30, 2000.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Audited financial statements for the period ending September
30, 2000.
INDEPENDENT AUDITORS' REPORT
Board of Directors
McCarthy Grenache, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheets of
McCarthy Grenache, Inc., (a development stage
company) as of September 30, 2000, and September
30, 1999, and the related statements of
operations, cash flows, and changes in
stockholders' equity for the period from December
19, 1997, (date of inception) to September 30,
2000. These statements are the responsibility of
McCarthy Grenache, Inc.'s management. My
responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally
accepted auditing standards. Those standards
require that I plan and perform the audit to
obtain reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes examining, on a
best basis, evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial
statement presentation. I believe that my audit
provides a reasonable basis for my opinion.
In my opinion, the accompanying financial
statements present fairly, in all material
respects, the financial position of McCarthy
Grenache, Inc. as of September 30, 2000, and
September 30, 1999, and the results of operations,
cash flows, and changes in stockholders' equity
for the periods then ended, as well as the
cumulative period from December 19, 1997, in
conformity with generally accepted accounting
principles.
/s/ David Coffey,
Certified Public Accountant
December 7, 2000
McCarthy Grenache, Inc.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<S> <C> <C>
September September
30, 30,
2000 1999
ASSETS
Cash 815 20,065
Total Assets 815 20,065
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable 5,900 400
Total Liabilities 5,900 400
Stockholders' Equity
Common stock, authorized 25,000,000
Shares at $.001 par value, issued and
Outstading 5,122,000 shares and
5,042,000 shares, respectively 5,122 5,122
Additional paid-in capital 26,820 26,820
Deficit accumulated during the
Development stage (37,027) (12,277)
TOTAL STOCKHOLDERS' EQUITY (5,085) (19,665)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 815 20,065
</TABLE>
The accompanying notes are an integral part of these financial
statements.
McCarthy Grenache, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
<TABLE>
<S> <C> <C> <C>
Jan. 1, Jan. 1, 1999 From
2000 to to September Inception
September 30, 1999 Dec. 19, 1997
30, 2000 to September
30, 2000
Income -0- -0- -0-
Expenses
Organization Expense -0- -0- 400
Rent -0- 500 5,600
Professional Fees 5,000 -0- 4,250
Loss on invesment in -0- -0- 6,942
subsidiary
Consulting 18,000 -0- 18,000
Fees and licenses 500 -0- 500
Office expenses -0- 852 1,335
Total expenses 23,500 1,352 37,027
Net loss (23,500) (1,352) (37,027)
Retained earnings,
Beginning of period (13,527) (10,925)
Deficit accumulated during
The development stage (37,027) (12,277)
Earnings (loss) per share
Assuming dilution:
Net loss 0.00 0.00 (0.01)
Weighted average shares
Outstanding 5,122,000 5,050,888 5,069,059
</TABLE>
The accompanying notes are an integral part of these financial
statements.
McCarthy Grenache, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 19, 1997, (Date of Inception) TO
JUNE 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Additional Total
Common Stock paid-in
Shares Amount Capital
Balance, December 19, 1997 --- $ --- $ --- $ ---
Issuance of common stock for
cash December 24, 1997 40,000 40 3,960 4,000
Exchange of stock (page 6, Note
D)
December 26, 1997 4,942,000 4,942 -0- 4,942
Less net loss -0- -0- -0- (4,942)
Balance, December 31, 1997 4,982,000 4,982 3,960 4,000
Issuance of common stock for
cash February, 1998 60,000 60 5,940 6,000
Less offering costs -0- -0- (3,000) (3,000)
Less net loss -0- -0- -0- (5,983)
Balance, December 31, 1998 5,042,000 5,042 6,900 1,017
Issuance of common stock for
cash September 30, 1999 80,000 80 19,920 20,000
Less net loss -0- -0- -0- (2,602)
Balance, December 31, 1999 5,122,000 5,122 26,820 18,415
Less net loss -0- -0- -0- (23,500)
Balance, September 30, 2000 5,122,000 $ 5,122 $ 26,820 $ (5,085)
</TABLE>
The accompanying notes are an integral part of these financial
statements.
McCarthy Grenache, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C>
Jan. 1, Jan. 1, From
2000 to 1999 to Inception,
Sept. 30, Sept. 30, Dec. 19, 1997
2000 1999 to Sept. 30,
2000
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES
Net Loss (23,500) (1,352) (37,027)
Non-cash items included in net -0- -0- -0-
loss
Adjustments to reconcile net
loss to cash used by
operating activity 5,500 -0- 5,900
Accounts payable
NET CASH PROVIDED BY
OPERATING ACTIVITIES (18,000) (1,352) (31,127)
CASH FLOWS USED BY
INVESTING ACTIVITIES -0- -0- -0-
NET CASH USED BY
INVESTING ACTIVITIES -0- -0- -0-
CASH FLOWS FROM FINANCING
ACTIVITIES
Sale of common stock -0- 80 5,122
Paid-in capital -0- 19,920 29,820
Less offering costs -0- -0- (3,000)
NET CASH PROVIDED BY
FINANCING ACTIVITIES -0- -0- 31,942
NET INCREASE IN CASH (18,000) 18,648 $ 815
CASH AT BEGINNING OF PERIOD 18,815 1,417
CASH AT END OF PERIOD 815 20,065
</TABLE>
The accompanying notes are an integral part of these financial
statements.
McCarthy Grenache, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 19,
1997, under the laws of the State of Nevada.
The business purpose of the Company is to
produce surgical instruments.
The Company will adopt accounting policies
and procedures based upon the nature of
future transactions.
NOTE B OFFERING COSTS
Offering costs are reported as a reduction in
the amount of paid-in capital received for
sale of the shares.
NOTE C EARNINGS (LOSS) PER SHARE
Basic EPS is determined using net income
divided by the weighted average shares
outstanding during the period. Diluted EPS
is computed by dividing net income by the
weighted average shares outstanding, assuming
all dilutive potential common shares were
issued. Since the Company has no common
shares that are ptentially issuable, such as
stock options, covertible securities or
warrants, basic and diluted EPS are the same.
NOTE D RELATED PARTY TRANSACTIONS - STOCK EXCHANGE
In December of 1997, the Company was formed
by Gregorian Surgical Instruments, Inc. with
McCarthy Grenache, Inc. as a wholly-owned
subsidiary. On December 26, 1997, the stock-
holders of Gregorian Surgical Instruments,
Inc. approved an exchange of all of the
outstanding stock in Gregorian Surgical
Instruments, Inc. for an equal number of
shares of McCarthy Grenache, Inc. At the
time of the exhange there were 4,942,000
Gregorian shares outstanding which resulted
in the issuance of 4,942,000 shares of
McCarthy Grenache, Inc. common stock at a par
value of $.001 per share for a total of
$4,942. The excess of par value over the
value of assets acquired was $4,942. This
transaction was accounted for as a reverse
merger.
McCarthy Grenache, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
(continued)
NOTE D RELATED PARTY TRANSACTIONS - STOCK EXCHANGE
(continued)
Upon the completion of the stock exchange,
Gregorian Surgical Instruments, Inc. became a
wholly-owned subsidiary of McCarthy Grenache,
Inc. The Board of Directors approved the
dissolution of Gregorian Surgical
Instruments, Inc. in December of 1997.
NOTE E COMMON STOCK
In December of 1997, the Company sold 40,000
shares of its common stock at $.10 per share,
for a total of $4,000. In February of 1998,
the Company sold another 60,000 shares of its
common stock at $.10 per share for a total of
$6,000. Then in September of 1999, the
Company sold 80,000 shares of its common
stock at $.25 per share for a total of
$20,000. The proceeds were to be used for
the development of a medical equipment supply
business.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, those expectations reflected in forward-looking
statements contained in this Statement.
Plan of Operation
The Company is engaged in the development of a principally
wholesale medical supplies, surgical instruments, and equipment
supply service. The Company's products are intended to be:
bathroom safety bars for the infirm, canes, colostomy supplies,
crutches, gloves, stethoscopes, nebulizers, oxygen supplies,
walkers, wheel chairs, and wheelchair van modification kits for
the disabled. The Company's products will be marketed to the aged
and the infirm. Management of the Company believes there is a
demand for these products due to the rapid increase in the age of
the population in the US due to better medical care and the baby
boom population reaching retirement age. Management further
believes that the rapid expansion of the Las Vegas area will
create a shortage of the types of products the Company intends to
market.
The Company intends to lease a suitable office/warehouse and will
wholesale products directly to retailers, medical and nursing
home facilities through mail order, Internet order and
advertising in the press and various other media. The Company
anticipates being able to broker orders through utilizing
attainable contacts within the medical supplies industry and
matching vendors with end-users via wholesaling. The Company
intends to generate revenue in the future by being listed in the
yellow pages and by developing its web-site for Internet orders
and inquiries. At this time, the Company does not have any
principal business suppliers.
The Company plans to market and promote its wholesale medical
supplies starting in Nevada. The Company has reserved the
Internet site "www.mccarthymedical.com" which is currently under
development and is expected to be operational by March 15, 2000
or shortly thereafter. Since public interest in health is at an
all time high and growing, our presence on the Internet, along
with increased information on the Internet, and the aging of the
baby boom generation, should result in the development of a
vastly improved medical supply industry. Many items such as
wheelchairs, walkers, and mobility equipment for the aged and
infirm are automatically approved by most medical insurance
programs. There is a shortage of ambulatory equipment in the
United States today due to the increasing age of the population.
Website and Ecommerce
The Company is in the process of developing an Internet Website
located on the World Wide Web at www.mccarthymedical.com. The
Website is in the process of being constructed. The Company
anticipates that the Website, once it is constructed, will
promote the Company's medical supplies and equipment.
Marketing
The Company intends to acquire and market medical supplies and
equipment for the aged direct to the retailers from the
manufacturers. The Company intends to rely on a marketing team
and for the prospects of e-commerce to implement the Company's
marketing objectives. The Company also intends to utilize direct
mailing, and e-mail to solicit manufacturers and retailers.
The Company's marketing and licensing strategy is to (i)
establish and expand the sales of the Company's products; (ii)
selectively establish licensed product lines to be marketed and
promoted on the Company's offline developed website; (iii) expand
the number of representatives; and, (iv) acquire or establish
relationships with major manufacturers businesses, companies,
properties or technologies.
The Company will purchase most of its inventory from existing
manufacturers principally in North America and Asia. To date, no
contracts have been executed and the Company does not anticipate
entering into any contracts due to lack of funding. Upon funding,
letters of credit may be sought.
The Company does not anticipate being dependent on one major or a
few major customers. The Company intends to supply to large
nursing facilities and hospitals as well as to major drug store
chains and emergency clinics. However, at this time, the Company
does not have any contracts with any such organizations. Also,
management of the Company expects that the proliferation of web
pages throughout various search engines on the Internet will
attract customers. However, there is no guarantee that the
Company's web-site, when completed, will have a positive impact
on the Company's business.
Competition
The Company's competition varies among its business lines.
Competition in these products and services is primarily centered
on styling, quality, price, brand recognition and service with an
emphasis on the latter. In order for the Company to be
competitive in these marketplaces, the Company must effectively
maintain and promote the quality of its services and its products
among consumers and establish strong marketing relationships with
manufacturers and distributors of products which enhance that
quality image. While the Company believes that it will compete
effectively, the Company competes with a number of manufacturers
and marketers of medical supplies and equipment which have
substantially greater resources than the Company and many of
which have well-recognized brand name contracts and broader and
more established distribution networks. The Company anticipates
being able to utilize its smaller size to attract those seeking
more personalized service and to maintain its ability to adapt
with technological changes over the Internet and in the
marketplace. Further, the Company expects to utilize the Internet
to further attract customers via various search engines upon
completion of various web pages. Specific organizations with whom
the Company intends to compete are A to Z Medical Supply, Medical
Mart and Mobility Plus, all located in Las Vegas, Nevada. As the
Company has not started marketing products, it presently has no
share of this market.
Employees
As of the date of this Registration Statement, the Company has
two part time employees, neither of whom have entered into an
employment arrangement with the Company. The Company's president,
Sean McCarthy, works full-time for the Company. The Company has
no collective bargaining agreements covering any of its
employees, has not experienced any material labor disruption and
is unaware of any efforts or plans to organize its employees. The
Company considers relations with its employees to be good.
Other than the development of its website, the Company has no
intellectual property rights.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action has
been threatened by or against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
No issues of securities and no changes in the existing securities
took place during the period covered by this report. At the end
of the quarter there were 5,122,000 shares of common stock issued
and outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No such matters were submitted during the most current quarter.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
a) The exhibit consisting of the Company's Articles of
Incorporation is attached to the Company's Form 10-SB, filed on
February 29, 2000. This exhibit is incorporated by reference to
that Form.
b) The exhibit consisting of the Company's Bylaws is attached
to the Company's Form 10-SB, filed on February 29, 2000. This
exhibit is incorporated by reference to that Form.
Reports on Form 8-K: None
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
McCarthy Grenache, Inc.
By: /s/ Sean McCarthy
Sean McCarthy, President and CEO
Date: December 20, 2000
