EXHIBIT 27 RENT USA FIVE YEAR PROJECTIONS
<TABLE>
Rent USA, Inc.
Income Statement
<CAPTION>
YEAR 1 YEAR 2
-------------------------------------------------- -------------------------------------------------
Rent USA Equip Mining Equip USA Rent USA Equip Mining Equip USA
Equip USA Systems Mines Equip USA Systems Mines
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES $16,405,976 $4,100,000 $7,023,500 $5,282,476 $17,837,455 $4,407,500 $7,444,910 $5,985,045
COGS $10,663,703 $2,610,235 $5,351,718 $2,701,750 $11,483,001 $2,806,003 $5,565,786 $3,111,212
Gross Profit $5,742,273 $1,489,765 $1,671,782 $2,580,726 $6,354,454 $1,601,497 $1,879,124 $2,873,833
Gross Margin % 35.0% 36.3% 23.8% 48.9% 35.6% 36.3% 25.2% 48.0%
SG&A $2,563,185 $775,575 $844,241 $943,370 $2,892,397 $831,064 $878,010 $1,183,322
NBIT $3,179,088 $714,190 $827,542 $1,637,356 $3,462,057 $770,433 $1,001,113 $1,690,511
NBIT % 19.4% 17.4% 11.8% 31.0% 19.4% 17.5% 13.4% 28.2%
Interest Expense $107,374 $107,374 $0 $0 $115,427 $115,427 $0 $0
Income Taxes $1,075,100 $212,386 $289,640 $573,075 $1,171,321 $229,252 $350,390 $591,679
Net Income $1,996,614 $394,431 $537,902 $1,064,281 $2,175,310 $425,754 $650,724 $1,098,832
Net Income % 12.2% 9.6% 7.7% 20.1% 12.2% 9.7% 8.7% 18.4%
YEAR 3 YEAR 4
-------------------------------------------------- -------------------------------------------------
Rent USA Equip Mining Equip USA Rent USA Equip Mining Equip USA
Equip USA Systems Mines Equip USA Systems Mines
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES $19,213,217 $4,738,063 $7,891,605 $6,583,550 $20,700,423 $5,093,417 $8,365,101 $7,241,905
COGS $12,159,925 $3,016,453 $5,788,418 $3,355,055 $12,668,549 $3,242,687 $6,135,723 $3,290,139
Gross Profit $7,053,292 $1,721,609 $2,103,187 $3,228,495 $8,031,874 $1,850,730 $2,229,378 $3,951,766
Gross Margin % 36.7% 36.3% 26.7% 49.0% 38.8% 36.3% 26.7% 54.6%
SG&A $3,135,186 $890,715 $913,131 $1,331,340 $3,323,091 $957,519 $949,656 $1,415,916
NBIT $3,918,106 $830,894 $1,190,056 $1,897,156 $4,708,783 $893,211 $1,279,722 $2,535,850
NBIT % 20.4% 17.5% 15.1% 28.8% 22.7% 17.5% 15.3% 35.0%
Interest Expense $124,084 $124,084 $0 $0 $133,390 $133,390 $0 $0
Income Taxes $1,327,908 $247,384 $416,520 $664,004 $1,601,388 $265,937 $447,903 $887,547
Net Income $2,466,114 $459,427 $773,536 $1,233,151 $2,974,005 $493,884 $831,819 $1,648,302
Net Income % 12.8% 9.7% 9.8% 18.7% 14.4% 9.7% 9.9% 22.8%
YEAR 5 FIVE YEAR TOTAL
-------------------------------------------------- -------------------------------------------------
Rent USA Equip Mining Equip USA Rent USA Equip Mining Equip USA
Equip USA Systems Mines Equip USA Systems Mines
NET SALES $22,308,526 $5,475,423 $8,867,007 $7,966,095 $96,465,597 $23,814,403 $39,592,122 $33,059,071
COGS $13,048,140 $3,485,889 $6,503,866 $3,058,385 $58,902,848 $14,040,796 $29,345,510 $15,516,541
Gross Profit $9,260,386 $1,989,535 $2,363,141 $4,907,710 $37,562,749 $ 9,773,607 $10,246,612 $17,542,530
Gross Margin % 41.5% 36.3% 26.7% 61.6% 38.9% 41.0% 25.9% 53.1%
SG&A $3,521,861 $1,029,333 $987,642 $1,504,886 $15,435,720 $ 4,484,206 $4,572,680 $6,378,834
NBIT $5,738,525 $960,202 $1,375,499 $3,402,824 $22,127,029 $ 5,289,401 $5,673,932 $11,163,696
NBIT % 25.7% 17.5% 15.5% 42.7% 22.9% 22.2% 14.3% 33.8%
Interest Expense $143,394 $143,394 $0 $0 $623,669 $623,669 $0 $0
Income Taxes $1,958,296 $285,883 $481,424 $1,190,988 $5,930,188 $ 1,117,542 $1,569,357 $3,243,289
Net Income $3,636,835 $530,925 $894,074 $2,211,836 $15,573,172 $ 3,548,190 $4,104,575 $7,920,407
Net Income % 16.3% 9.7% 10.1% 27.8% 16.1% 14.9% 10.4% 24.0%
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
</TABLE>
8
<PAGE>
CASH COLLECTIONS
Rent USA EQUIP MINING
EQUIP USA SYSTEMS Equip USA MINES
Yr 1 $14,995,080 $3,710,500 $6,440,550 $4,844,030
Yr 2 $17,718,643 $4,381,978 $7,409,933 $5,926,732
Yr 3 $19,099,029 $4,710,626 $7,854,529 $6,533,874
Yr 4 $20,576,985 $5,063,923 $8,325,801 $7,187,261
Yr 5 $22,175,053 $5,443,717 $8,825,349 $7,905,987
Total $94,564,789 $23,310,743 $38,856,161 $32,397,885
Assume 11/12 of current year + 1/12 of prior year (net 30 days)
PURCHASES
Rent USA EQUIP MINING
EQUIP USA SYSTEMS Equip USA MINES
Yr 1 COGS $10,663,703 $2,610,235 $5,351,718 $2,701,750
SG&A $2,563,185 $775,575 $844,241 $943,370
Yr Total $13,226,888 $3,385,810 $6,195,958 $3,645,120
Yr 2 COGS $11,483,001 $2,806,003 $5,565,786 $3,111,212
SG&A $2,892,397 $831,064 $878,010 $1,183,322
Yr Total $14,375,398 $3,637,067 $6,443,797 $4,294,534
Yr 3 COGS $12,159,925 $3,016,453 $5,788,418 $3,355,055
SG&A $3,135,186 $890,715 $913,131 $1,331,340
Yr Total $15,295,111 $3,907,168 $6,701,548 $4,686,394
Yr 4 COGS $12,668,549 $3,242,687 $6,135,723 $3,290,139
SG&A $3,323,091 $957,519 $949,656 $1,415,916
Yr Total $15,991,640 $4,200,206 $7,085,379 $4,706,055
Yr 5 COGS $13,048,140 $3,485,889 $6,503,866 $3,058,385
SG&A $3,521,861 $1,029,333 $987,642 $1,504,886
Yr Total $16,570,001 $4,515,221 $7,491,508 $4,563,271
Total $75,459,038 $19,645,472 $33,918,191 $21,895,375
CASH DISBURSEMENTS
Rent USA EQUIP MINING
EQUIP USA SYSTEMS Equip USA MINES
Yr 1 COGS $9,747,646 $2,362,616 $4,907,525 $2,477,505
SG&A $2,563,185 $775,575 $844,241 $943,370
Yr Total $12,310,832 $3,138,191 $5,751,766 $3,420,875
Yr 2 COGS $11,414,934 $2,789,689 $5,548,019 $3,077,227
SG&A $2,892,397 $831,064 $878,010 $1,183,322
Yr Total $14,307,331 $3,620,753 $6,426,029 $4,260,549
Yr 3 COGS $12,103,670 $2,998,916 $5,769,939 $3,334,816
SG&A $3,135,186 $890,715 $913,131 $1,331,340
Yr Total $15,238,856 $3,889,631 $6,683,070 $4,666,155
Yr 4 COGS $12,626,333 $3,223,910 $6,106,896 $3,295,527
SG&A $3,323,091 $957,519 $949,656 $1,415,916
Yr Total $15,949,424 $4,181,429 $7,056,552 $4,711,443
Yr 5 COGS $13,016,634 $3,465,703 $6,473,310 $3,077,621
SG&A $3,521,861 $1,029,333 $987,642 $1,504,886
Yr Total $16,538,495 $4,495,036 $7,460,952 $4,582,507
Total $74,344,938 $19,325,039 $33,378,370 $21,641,529
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
9
<PAGE>
<TABLE>
Rent USA, Inc.
Balance Sheet
<CAPTION>
YEAR 1 YEAR 2
------------------------------------------------------ ----------------------------------------------------
Equip Mining Equip Mining Equip USA
Rent USA Equip USA Systems Equip USA Mines Rent USA Equip USA Systems Mines
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash $3,573,806 $2,324,581 $399,144 $850,081 $5,503,760 $2,546,516 $1,032,659 $1,924,585
Accounts Receivable $1,410,896 $389,500 $582,951 $438,446 $1,529,709 $415,023 $617,928 $496,759
Inventories $6,225,324 $6,225,324 $0 $0 $6,692,224 $6,692,224 $0 $0
Prepaid Expenses $0
TOTAL CURRENT ASSETS $11,210,026 $8,939,405 $982,095 $1,288,526 $13,725,693 $9,653,763 $1,650,586 $2,421,344
FIXED ASSETS:
Plant and Equipment $250,000 $250,000 $0 $0 $250,000 $250,000 $0 $0
Less accumulative
depreciation $35,714 $35,714 $0 $0 $71,429 $71,429 $0 $0
NET PLANT AND EQUIPMENT $214,286 $214,286 $0 $0 $178,571 $178,571 $0 $0
TOTAL ASSETS $11,424,312 $9,153,691 $982,095 $1,288,526 $13,904,264 $9,832,334 $1,650,586 $2,421,344
CURRENT LIABILITIES:
Accounts Payable $6,206,698 $5,538,260 $444,193 $224,245 $6,511,340 $5,791,149 $461,960 $258,231
Accrued liabilities $0 $0
TOTAL CURRENT
LIABILITIES $6,206,698 $5,538,260 $444,193 $224,245 $6,511,340 $5,791,149 $461,960 $258,231
LONG-TERM LIABILITIES:
Long-term notes payable $921,000 $921,000 $0 $0 $921,000 $921,000 $0 $0
TOTAL LIABILITIES $7,127,698 $6,459,260 $444,193 $224,245 $7,432,340 $6,712,149 $461,960 $258,231
EQUITY
Shareholder's Equity $2,300,000 $2,300,000 $0 $0 $2,300,000 $2,300,000 $0 $0
Investment in Divisions $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings $1,996,614 $394,431 $537,902 $1,064,281 $4,171,924 $820,185 $1,188,626 $2,163,113
TOTAL EQUITY $4,296,614 $2,694,431 $537,902 $1,064,281 $6,471,924 $3,120,185 $1,188,626 $2,163,113
TOTAL LIABILITIES &
EQUITY $11,424,312 $9,153,691 $982,095 $1,288,526 $13,904,264 $9,832,334 $1,650,586 $2,421,344
YEAR 3 YEAR 4
------------------------------------------------------ ----------------------------------------------------
Equip Mining Equip Mining Equip USA
Rent USA Equip USA Systems Equip USA Mines Rent USA Equip USA Systems Mines
CURRENT ASSETS:
Cash $7,911,941 $2,996,043 $1,787,598 $3,128,299 $10,804,724 $3,479,210 $2,608,943 $4,716,570
Accounts Receivable $1,643,897 $442,459 $655,003 $546,435 $1,767,335 $471,954 $694,303 $601,078
Inventories $7,194,141 $7,194,141 $0 $0 $7,733,702 $7,733,702 $0 $0
Prepaid Expenses $0 $0 $0
TOTAL CURRENT ASSETS $16,749,979 $10,632,644 $2,442,601 $3,674,734 $20,305,760 $11,684,865 $3,303,247 $5,317,648
FIXED ASSETS:
Plant and Equipment $250,000 $250,000 $0 $0 $250,000 $250,000 $0 $0
Less accumulative
depreciation $107,143 $107,143 $0 $0 $142,857 $142,857 $0 $0
NET PLANT AND EQUIPMENT $142,857 $142,857 $0 $0 $107,143 $107,143 $0 $0
TOTAL ASSETS $16,892,836 $10,775,501 $2,442,601 $3,674,734 $20,412,903 $11,792,008 $3,303,247 $5,317,648
CURRENT LIABILITIES:
Accounts Payable $7,033,798 $6,274,889 $480,439 $278,470 $7,579,860 $6,797,514 $509,265 $273,082
Accrued liabilities $0 $0
TOTAL CURRENT
LIABILITIES $7,033,798 $6,274,889 $480,439 $278,470 $7,579,860 $6,797,514 $509,265 $273,082
LONG-TERM LIABILITIES:
Long-term notes payable $921,000 $921,000 $0 $0 $921,000 $921,000 $0 $0
TOTAL LIABILITIES $7,954,798 $7,195,889 $480,439 $278,470 $8,500,860 $7,718,514 $509,265 $273,082
EQUITY
Shareholder's Equity $2,300,000 $2,300,000 $0 $0 $2,300,000 $2,300,000 $0 $0
Investment in Divisions $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings $6,638,038 $1,279,611 $1,962,162 $3,396,265 $9,612,044 $1,773,495 $2,793,982 $5,044,567
TOTAL EQUITY $8,938,038 $3,579,611 $1,962,162 $3,396,265 $11,912,044 $4,073,495 $2,793,982 $5,044,567
TOTAL LIABILITIES &
EQUITY $16,892,836 $10,775,501 $2,442,601 $3,674,734 $20,412,904 $11,792,009 $3,303,247 $5,317,648
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
</TABLE>
10
<PAGE>
YEAR 5
------------------------------------------------------
Equip Mining
Rent USA Equip USA Systems Equip USA Mines
Current Assets:
Cash $14,339,592 $3,998,614 $3,491,915 $6,849,063
Accounts Receivable $1,900,808 $503,660 $735,962 $661,186
Inventories $8,313,729 $8,313,729 $0 $0
Prepaid Expenses $0
TOTAL CURRENT ASSETS $24,554,129 $12,816,004 $4,227,877 $7,510,249
FIXED ASSETS:
Plant and Equipment $250,000 $250,000 $0 $0
Less accumulative
depreciation $178,571 $178,571 $0 $0
NET PLANT AND EQUIPMENT $71,429 $71,429 $0 $0
TOTAL ASSETS $24,625,558 $12,887,433 $4,227,877 $7,510,249
CURRENT LIABILITIES:
Accounts Payable $8,155,679 $7,362,013 $539,821 $253,846
Accrued liabilities $0
TOTAL CURRENT
LIABILITIES $8,155,679 $7,362,013 $539,821 $253,846
LONG-TERM LIABILITIES:
Long-term notes payable $921,000 $921,000 $0 $0
TOTAL LIABILITIES $9,076,679 $8,283,013 $539,821 $253,846
EQUITY
Shareholder's Equity $2,300,000 $2,300,000 $0 $0
Investment in Divisions $0 $0 $0 $0
Retained Earnings $13,248,878 $2,304,420 $3,688,056 $7,256,403
TOTAL EQUITY $15,548,878 $4,604,420 $3,688,056 $7,256,403
TOTAL LIABILITIES &
EQUITY $24,625,558 $12,887,432 $4,227,877 $7,510,249
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
11
<PAGE>
<TABLE>
Rent USA, Inc.
Consolidated Cash Flow
<CAPTION>
YEAR 1 YEAR 2
------------------------------------------------------ ----------------------------------------------------
Equip Mining Equip Mining Equip USA
Rent USA Equip USA Systems Equip USA Mines Rent USA Equip USA Systems Mines
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CASH BALANCE,
BEGINNING $185,000 $185,000 $0 $0 $3,573,806 $2,324,581 $399,144 $850,081
ADD RECEIPTS:
Collections from
customers $14,995,080 $3,710,500 $6,440,550 $4,844,030 $17,718,643 $4,381,978 $7,409,933 $5,926,732
TOTAL CASH AVAILABLE $15,180,080 $3,895,500 $6,440,550 $4,844,030 $21,292,448 $6,706,558 $7,809,077 $6,776,813
LESS DISBURSEMENTS:
COGS $9,747,646 $2,362,616 $4,907,525 $2,477,505 $11,414,934 $2,789,689 $5,548,019 $3,077,227
SG&A $2,563,185 $775,575 $844,241 $943,370 $2,892,397 $831,064 $878,010 $1,183,322
Income Tax $1,075,100 $212,386 $289,640 $573,075 $1,171,321 $229,252 $350,390 $591,679
Equipment Purchases $0 $0 $0 $0 $0 $0 $0 $0
TOTAL DISBURSEMENTS $13,385,931 $3,350,577 $6,041,405 $3,993,950 $15,478,652 $3,850,005 $6,776,419 $4,852,228
EXCESS (DEFICIENCY)
OF CASH $1,794,149 $544,923 $399,144 $850,081 $5,813,797 $2,856,553 $1,032,659 $1,924,585
FINANCING:
Investment $2,300,000 $2,300,000 $0 $0 $0 $0 $0 $0
Loans (repayment) ($412,969) ($412,969) $0 $0 ($194,610) ($194,610) $0 $0
(Interest) ($107,374) ($107,374) $0 $0 ($115,427) ($115,427) $0 $0
TOTAL FINANCING $1,779,657 $1,779,657 $0 $0 ($310,037) ($310,037) $0 $0
CASH BALANCE, ENDING $3,573,806 $2,324,581 $399,144 $850,081 $5,503,760 $2,546,516 $1,032,659 $1,924,585
YEAR 3 YEAR 4
------------------------------------------------------ ----------------------------------------------------
Equip Mining Equip Mining Equip USA
Rent USA Equip USA Systems Equip USA Mines Rent USA Equip USA Systems Mines
CASH BALANCE,
BEGINNING $5,503,760 $2,546,516 $1,032,659 $1,924,585 $7,911,941 $2,996,043 $1,787,598 $3,128,299
ADD RECEIPTS:
Collections from
customers $19,099,029 $4,710,626 $7,854,529 $6,533,874 $20,576,985 $5,063,923 $8,325,801 $7,187,261
TOTAL CASH AVAILABLE $24,602,788 $7,257,142 $8,887,187 $8,458,459 $28,488,925 $8,059,966 $10,113,398 $10,315,561
LESS DISBURSEMENTS:
COGS $12,103,670 $2,998,916 $5,769,939 $3,334,816 $12,626,333 $3,223,910 $6,106,896 $3,295,527
SG&A $3,135,186 $890,715 $913,131 $1,331,340 $3,323,091 $957,519 $949,656 $1,415,916
Income Tax $1,327,908 $247,384 $416,520 $664,004 $1,601,388 $265,937 $447,903 $887,547
Equipment Purchases $0 $0 $0 $0 $0 $0 $0 $0
TOTAL DISBURSEMENTS $16,566,764 $4,137,014 $7,099,590 $5,330,160 $17,550,812 $4,447,366 $7,504,455 $5,598,990
EXCESS (DEFICIENCY)
OF CASH $8,036,025 $3,120,127 $1,787,598 $3,128,299 $10,938,114 $3,612,600 $2,608,943 $4,716,570
FINANCING:
Investment $0 $0 $0 $0 $0 $0 $0 $0
Loans (repayment) $0 $0 $0 $0 $0 $0 $0 $0
(Interest) ($124,084) ($124,084) $0 $0 ($133,390) ($133,390) $0 $0
TOTAL FINANCING ($124,084) ($124,084) $0 $0 ($133,390) ($133,390) $0 $0
CASH BALANCE, ENDING $7,911,941 $2,996,043 $1,787,598 $3,128,299 $10,804,724 $3,479,210 $2,608,943 $4,716,570
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
12
</TABLE>
<PAGE>
YEAR 5
------------------------------------------------------
Equip Mining
Rent USA Equip USA Systems Equip USA Mines
CASH BALANCE,
BEGINNING $10,804,724 $3,479,210 $2,608,943 $4,716,570
ADD RECEIPTS:
Collections from
customers $22,175,053 $5,443,717 $8,825,349 $7,905,987
TOTAL CASH AVAILABLE $32,979,777 $8,922,927 $11,434,292 $12,622,558
LESS DISBURSEMENTS:
COGS $13,016,634 $3,465,703 $6,473,310 $3,077,621
SG&A $3,521,861 $1,029,333 $987,642 $1,504,886
Income Tax $1,958,296 $285,883 $481,424 $1,190,988
Equipment Purchases $0 $0 $0 $0
TOTAL DISBURSEMENTS $18,496,791 $4,780,918 $7,942,377 $5,773,495
EXCESS (DEFICIENCY) $14,482,986 $4,142,009 $3,491,915 $6,849,063
OF CASH
FINANCING:
Investment $0 $0 $0 $0
Loans (repayment) $0 $0 $0 $0
(Interest) ($143,394) ($143,394) $0 $0
TOTAL FINANCING ($143,394) ($143,394) $0 $0
CASH BALANCE, ENDING $14,339,592 $3,998,614 $3,491,915 $6,849,063
These forecasts should be read in conjunction with the
Attached Summary of Significant Assumptions
13
<PAGE>
Rent USA, Inc.
And Subsidiaries
Summary of Significant Assumptions
And
Notes to Prospective Financial Statements
The financial forecasts which appear herein above present to the best of
management's knowledge and belief the Company's financial position, results of
operations and cash flows for the forecast periods. Accordingly, the forecast
reflects its judgment as of the date of this filing of the expected conditions
and its expected course of action. The assumptions disclosed herein are those
that management believes are significant to the forecast. There usually will be
differences between forecasted and actual results because events and
circumstances frequently do not occur as expected and those differences may be
material.
The projected amounts of sales and net income are based upon the hypothetical
assumption that the Company operated Equip USA, Equip Mining Systems and Equip
USA Mines for an entire year. Such projections reflect to the best of
management's knowledge and belief the operating results that would be obtained,
given that hypothetical assumption.
None of the forecasts which are contained herein were examined by the Company's
auditor, John Spurgeon, CPA and as a result, he can assume no responsibility for
them. They are purely management's belief as to what will occur in the event the
Company is able to complete all of the acquisitions which it presently intends
to undertake.
1. Summary of Significant Assumptions
a. Intended Acquisitions - The financial forecasts assume the Company will
acquire Equip USA Mines and will be able to complete its launch of Equip Mining
Systems. The funds required to operate Equip USA Mines and Equip Mining Systems
are expected to be derived from the proceeds of a rights offering to
shareholders of Senior Care Industries, Inc. which will be registered by the
filing of a Form SB-2. The Company expects to raise a maximum of approximately
$2,300,000.00 from that rights offering.
The rights offering is expected to be completed during the first six months of
2001 and the capital obtained from that offering will immediately be infused
into the Company and used to complete operate Equip USA Mines and Equip Mining
Systems.
b. Sales - The Company assumes that sales will increase approximately 8% per
annum over the five year period of the projections. Based upon management's
study of the market for its equipment and on the study of the needs for crushed
rock in the Western area serviced by Equip USA Mines presently, it believes that
a forecast of an 8% increase in business per annum is justified. The sales
forecast depends upon the Company being able to complete its anticipated
acquisition of Equip USA Mines and the launch of Equip Mining Systems by mid
2001.
c. Cost of Sales - The principal components of the cost to produce the Company's
forecasted revenue is the purchase of equipment for resale, labor,
transportation, equipment maintenance and mine overhead at Equip USA Mines.
d. Selling, General and Administrative Overhead - The principal cost of selling
relate to sales person salaries and commissions, transportation costs, and
advertising. Generally, each of these costs varies according to the amount of
product sold and accordingly, have been estimated based upon estimated sales
volume. General and administrative overhead are fixed costs which have been
estimated based upon Management's experience plus known increases and
adjustments for anticipated inflation based upon recent inflationary trends.
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e. Interest - The Company presently has various equity lines of credit and
intends to develop additional lines of credit which will carry interest at a
rate ranging from 9.5% to 12% interest over the period of the forecasts. Due to
the Company's business of selling new and used equipment, there will always be a
borrowing component for flooring of equipment held for resale.
f. Income Taxes - The income tax provisions are based upon the current statutory
rates in effect for corporations. Because the Company may expand its operations
into other states than where it operates presently, such as Nevada, where there
is no state income tax to states where there may be a state income tax, the
total tax provision in relation to income before taxes may change during the
forecast period of five years.
2. Summary of Significant Accounting Principles
The following are the significant accounting policies the Company uses in the
preparation of its financial statements:
Former Development Stage Company
Effective this year, the Company began its planned operations and generates
significant revenues and is no longer in the development stage as defined under
Financial Accounting Standards Board Statement No. 7.
Use of estimates
The preparation of the forecasts were made in conformity with generally accepted
accounting principles requiring management to make certain estimates and
assumptions that directly affect the results of reported assets, liabilities,
revenue, and expenses. Actual results may differ from these estimates.
Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with an original maturity of three months or less to be
cash equivalents.
Revenue Recognition
Revenues are recognized as earned as time passes from rights to use assets
(rentals) which extend continuously over time based on contractual prices
established in advance.
Accounts Receivable
Management of the Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required. If amounts become
uncollectible, they will be charged to operations when that determination is
made.
Bad Debt Expense
There was no bad debt expense either for 2000 or 1999.
Property and Equipment
Property and Equipment are valued at cost. Maintenance and repair costs are
charged to expenses as incurred.
Depreciation
Depreciation is computed on the straight- line method based on the estimated
useful lives of the assets. Depreciation expense was $398,464 and $0 for 2000
and 1999, respectively.
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Income Taxes
Income Taxes The Company accounts income taxes in accordance with Financial
Accounting standards Board Statement No. 109 "Accounting For Income Taxes" (SFAS
No. 109). SFAS No. 109 requires a company to recognize deferred tax liabilities
and assets for the expected future income tax consequences of events that have
been recognized in the Company's financial statements. Under this method,
deferred tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax bases of assets
and liabilities using the enacted tax rates in effect in the years in which the
temporary differences are expected to reverse.
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