<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDING MARCH 31, 2000
RECYCLING CENTERS OF AMERICA, INC.
(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
COLORADO 84-0703717
(State of Incorporation) (IRS Employer ID No.)
23832 ROCKFIELD BOULEVARD, SUITE 275
LAKE FOREST, CALIFORNIA 92630
(Address of Principal Executive Offices)
(949) 609-0590
(Registrant's Telephone Number)
SECURITIES OUTSTANDING AS OF MARCH 31, 2000
8,243,698 COMMON SHARES $.01 PAR VALUE
<PAGE> 2
PART I ---FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RECYCLING CENTERS OF AMERICA, INC.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
March 31,
2000 1999
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents 8,992 12,944
Accounts receivable, net 192,473 403,873
Inventory 1,441 29,000
---------- ----------
Total Current Assets 202,906 445,817
Equipment, net 136,189 80,735
Loan to Officers/Shareholders 10,565 206,575
Other Assets 2,861 4,225
Brody Acquisition 239,468 --
TOTAL ASSETS 591,989 737,352
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable 271,112 248,831
Contract payable 118,399 145,000
Note payable 127,726 191,039
Taxes payable 31,603 --
Total current liabilities 548,840 584,870
Long-term notes payable -- --
Loans from officers and shareholders 3,285 --
---------- ----------
TOTAL LIABILITIES 552,125 584,870
Common stock; 75,000,000 authorized of $.01 par value,
8,243,698 and 6,395,008 shares issued and outstanding
as of March 31, 2000 and 1999 respectively 3,195,485 2,473,957
Preferred stock 380 380
Retained earnings (2,469,360) (2,030,111)
Net income (686,641) (291,744)
---------- ----------
Total stockholders' equity 39,864 152,482
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 591,989 737,352
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
RECYCLING CENTERS OF AMERICA, INC.
Statements of Operations
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
---------------------------
2000 1999
---------- ----------
<S> <C> <C>
REVENUES
Contract income 302,765 414,853
Cost of sales 232,774 221,696
---------- ----------
Gross Profit 69,991 193,157
OPERATING EXPENSES
Wages and payroll taxes 205,498 94,888
Office expenses 26,675 23,671
Bad debt expense -- 4,000
Professional fees 48,885 134,028
Stock transfer fees 2,652 3,864
Travel expenses 6,045 5,033
Marketing expenses 7,049 921
Depreciation expense 9,250 --
Insurance 12,321 4,231
Auto expense 17,675 3,497
Acquisition Fees -- --
Engineering expenses 84 --
Dues and subscriptions 437 4,019
---------- ----------
Total operating expenses 336,571 278,152
OTHER EXPENSE
Interest expense 1,428 1,229
Other expense 1,622 926
---------- ----------
Total other expense 3,050 2,155
Loss before loss on discontinued operations (269,630) (87,150)
Loss from discontinued operations -- --
NET LOSS (269,630) (87,150)
---------- ----------
LOSS PER SHARE (0.04) (0.02)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,970,284 5,481,118
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE> 4
RECYCLING CENTERS OF AMERICA, INC.
Statements of Operations
<TABLE>
<CAPTION>
For the Nine Months
Ended March 31,
---------------------------
2000 1999
---------- ----------
<S> <C> <C>
REVENUES
Contract income 645,088 651,334
Cost of sales 424,511 319,416
---------- ----------
Gross Profit 220,577 331,918
OPERATING EXPENSES
Wages and payroll taxes 514,511 245,938
Office expenses 80,783 64,617
Bad debt expense -- 4,000
Professional fees 167,965 225,320
Stock transfer fees 6,089 8,550
Travel expenses 13,597 17,757
Marketing expenses 25,586 21,063
Depreciation expense 16,830 3,160
Insurance 21,625 13,653
Auto expense 33,073 6,220
Acquisition Fees 18,589 --
Engineering expenses 415 52
Dues and subscriptions 861 4,969
---------- ----------
Total operating expenses 899,924 615,299
OTHER EXPENSE
Interest expense 2,936 5,134
Other expense 4,358 3,229
---------- ----------
Total other expense 7,294 8,363
Loss before loss on discontinued operations (686,641) (291,744)
Loss from discontinued operations -- --
NET LOSS (686,641) (291,744)
---------- ----------
LOSS PER SHARE (0.10) (0.05)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,970,284 5,481,118
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE> 5
RECYCLING CENTERS OF AMERICA, INC.
Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (269,630) (87,150)
Adjustments to reconcile net
income (loss) to net cash:
Depreciation 9,250 --
Loss on disposition of equipment --
Changes in assets and liabilities:
(Increase) decrease in accounts receivables (131,819) (340,517)
(Increase) decrease in inventory (1,441) --
(Increase) decrease in shareholder loans (4,641) (136,843)
(Increase) decrease in other assets 2,091 --
Increase (decrease) in accounts payable and
other current liabilities 169,065 134,238
-------- --------
Net Cash Provided (Used) by
Operating Activities (227,125) (430,272)
-------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets (6,248) (322)
Wil-Flow Settlement -- --
Brody Acquisition (36,798) --
-------- --------
Net Cash Provided (Used) by
Investing Activities (43,046) (322)
-------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from shareholder loans (149,215) (375,600)
Common stock issued for cash 388,985 711,934
-------- --------
Net Cash Provided (Used) by
Financing Activities 239,770 336,334
NET INCREASE (DECREASE) IN CASH (30,401) (94,260)
CASH AT THE BEGINNING OF PERIOD 39,393 107,204
-------- --------
CASH AT END OF PERIOD 8,992 12,944
-------- --------
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
5
<PAGE> 6
RECYCLING CENTERS OF AMERICA, INC.
Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended March 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (686,641) (291,744)
Adjustments to reconcile net
income (loss) to net cash:
Depreciation 16,830 3,160
Loss on disposition of equipment --
Changes in assets and liabilities:
(Increase) decrease in accounts receivables (33,244) (343,367)
(Increase) decrease in inventory (1,441) --
(Increase) decrease in shareholder loans (10,565) (206,575)
(Increase) decrease in other assets 6,812 (2,934)
Increase (decrease) in accounts payable and
other current liabilities 206,788 115,293
-------- --------
Net Cash Provided (Used) by
Operating Activities (501,461) (726,167)
-------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets (106,799) (3,897)
Wil-Flow Settlement -- --
Brody Acquisition (239,468) --
-------- --------
Net Cash Provided (Used) by
Investing Activities (346,267) (3,897)
-------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from shareholder loans (201,715) (255,500)
Common stock issued for cash 948,477 918,497
-------- --------
Net Cash Provided (Used) by
Financing Activities 746,762 662,997
NET INCREASE (DECREASE) IN CASH (100,966) (67,067)
CASH AT THE BEGINNING OF PERIOD 109,958 80,011
-------- --------
CASH AT END OF PERIOD 8,992 12,944
-------- --------
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
6
<PAGE> 7
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE A - COMPANY BACKGROUND
Recycling Centers of America, Inc. (RCAI), is a Colorado corporation,
originally formed in 1976. RCAI as of June 30, 1998 was comprised of three
companies Aquadynamic Technologies, Inc. (ATI), and its subsidiaries
Aquatek, Inc. and Wil-Flow, Inc. Wil-flow, Inc., on March 8, 1999, became
non operational and the patents on the technology were returned to its
former owner and president as a result of the resolution of a lawsuit
between the parties. On June 1, 1999 ATI acquired Sierra Technologies, Inc.
ATI markets its products and services through its two distinct wholly owned
subsidiaries. Aquateck, Inc. was organized and incorporated in 1995 to
engage in providing comprehensive contract engineering services for
automated process control systems. It's primary emphasis has been focused
toward offering its broad engineering expertise to the domestic and foreign
wastewater treatment industries. Wil-Flow, Inc. became a subsidiary of ATI
in January of 1996 and was a technology company specializing in the design
and fabrication of sludge dewatering equipment for the municipal and
industrial markets.
Sierra's main business is the purchasing, treatment and brokerage of
chemical and petroleum products throughout North America.
7
<PAGE> 8
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Company's significant accounting policies consistently
applied in the preparation of the accompanying consolidated financial
statements follows:
1. Principles of Consolidation
The consolidated financial statements include the accounts of Aquadynamic
Technologies, Inc., its wholly owed subsidiaries Aquatek, Inc. and Wil-Flow,
Inc. and Sierra Technologies, Inc. All material intercompany balances and
transactions including investments in subsidiaries have been eliminated.
2. Using Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. Depreciation and Amortization
Depreciation and amortization are provided in amounts sufficient to relate
the cost of depreciable to operations over their estimated service lives as
defined below.
<TABLE>
<S> <C>
Transportation Equipment 3-5 years
Office Furniture and Fixtures 5-7 years
Machinery and Equipment 3-10 years
</TABLE>
The straight-line method of depreciation is used for substantially all
assets for financial reporting purposes.
4. Income Taxes
The Company and its wholly owned subsidiaries are organized as a
C-corporations. The Company does not file consolidated tax returns and has
not filed tax returns since 1996.
8
<PAGE> 9
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
There has been no provision for income taxes as current and previous
operations of the Company have resulted in taxable losses. There is no
determinable benefit of these net operating losses which can be carried
forward for 15 years because of the significant losses incurred by the
Companies.
5. Fair Value of Financial Instruments
The carrying amount of cash, accounts and notes receivable, lines of credit,
and other liabilities due in less than one year approximated fair value as
of March 31, 2000 and 1999 due to the relatively short maturity of these
instruments.
The carrying value of long-term liabilities approximated fair value as of
March 31, 2000 and 1999 based on the current rates offered to the Company
for similar debt of the same remaining maturities.
NOTE C - ACCOUNTS RECEIVABLE
All accounts Receivable are trade related. These receivables are current and
collection is fully expected. No reserve for uncollectable accounts is
deemed necessary.
NOTE D - PLANT PROPERTY AND EQUIPMENT
Plant, Property and Equipment consisted of the following at March 31, 2000
and 1999:
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
COMPUTERS AND OFFICE EQUIPMENT $ 74,760 $ 108,299
Transportation Equipment 35,576 18,428
Test Equipment 75,932
--------- ---------
$ 186,268 126,727
Less accumulated depreciation (50,079) (45,992)
--------- ---------
Balance $ 136,189 $ 80,735
</TABLE>
9
<PAGE> 10
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE D - PLANT PROPERTY AND EQUIPMENT, Continued
The increase in Plant, Property and Equipment between years is attributed to
purchase of equipment in conjunction with the Brody acquisition.
Depreciation expense was $7,580 and $3,160 for the nine months ended March
31, 2000 and 1999.
NOTE E - NOTES PAYABLE
Notes payable consisted of the following at March 31, 2000 and 1999:
<TABLE>
<CAPTION>
2000 1999
------- -------
<S> <C> <C>
Note payable to First Union Bank for the
purchase of a vehicle $14,726 $11,039
--------------------
Total $14,726 $11,039
Less long-term portion 0 0
Current Portion $14,726 $11,039
</TABLE>
10
<PAGE> 11
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE F - RELATED PARTY TRANSACTIONS
Certain of the Company's principals and family members of these principals
have loaned money to the Company at various times. The consolidated
long-term loans as of March 31, 2000 and 1999 from related parties are
$116,285 and $180,600 respectively. It is the intent of the Company to
convert these notes into common shares of stock and therefore these loans do
not bear any interest.
Fred Davies, a major shareholder of the Company, is also a major debtor to
the Company. As of March 31, 2000 and 1999 he is owed $118,399 and $145,000
respectively for unpaid portion of his management contract and also for
loans to the Company.
Intercompany loans and transactions occur on a regular basis among the
parent and two wholly owned subsidiaries. No intercompany profits are
recorded.
NOTE G - COMMITMENTS AND CONTINGENCIES
The Company conducts its operations utilizing leased facilities and
equipment under noncancellable operating lease agreements expiring at
various dates through the year 2003. Future minimum lease commitments,
excluding property taxes and insurance, are approximately as follows:
<TABLE>
<CAPTION>
Year ending June 30,
--------------------
<S> <C>
2000 $24,096
2000 63,000
2001 24,096
2002 21,030
2003 2,850
$72,072
</TABLE>
Rent expense for all leased facilities and equipment was approximately
$47,819 and $26,796 for the nine months ended March 31, 2000 and 1999,
respectively.
11
<PAGE> 12
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE G - COMMITMENTS AND CONTINGENCIES, Continued
The Company has no pending lawsuits. Management is not aware of any
potential lawsuits that will have a material adverse effect on the financial
position of the Company.
NOTE H - MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK
The Company maintains its cash balances in more than one financial
institution. At times, the Company's balances exceed the amounts insured by
the Federal Deposit Insurance Corporation. The Company has not experienced
any losses in such accounts and believes it is not exposed to any
significant credit risk on cash and cash equivalents.
The majority of the Sales in 1999 and 1998 are to one customer. At March 31,
2000 and 1999, the largest customer comprised approximately $107,834 and
$350,430 of the Company's accounts receivable. Management believes that
customer acceptance, billing, and collection policies are adequate to
minimize potential risk on trade receivables.
12
<PAGE> 13
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE K - ACQUISITION OF SIERRA TECHNOLOGIES, INC.
On June 1, 1999 the Company purchased Sierra Technologies whose business
includes purchasing, treatment and brokerage of chemical and petroleum
products throughout North America. The net purchase price was $22,299 which
represents the difference between the amount owed to Sierra Technologies,
Inc. vendors and the Accounts Receivable due from its customers. The
President of Sierra Technologies, Inc. entered into a three year employment
with the Company and will hold the title of Chief Executive Officer of
Recycling Centers of America, Inc.
NOTE L - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred significant losses which have result in an
accumulated deficit of $3,156,001 at March 31, 2000 which raises substantial
doubt about the Company's ability to continue as a going concern. The
accompanying financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result from the outcome of this
uncertainty. It is the intent of management to create additional revenues
through its technologies and to rely upon additional equity financing if
required to sustain operations. The management of the Company has committed
to covering the operating expenses of the Company until adequate sales are
generated.
13
<PAGE> 14
Recycling Centers of America, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and 1999
NOTE M - SUBSEQUENT EVENTS
In October 1999, the Company through a Private Placement Memorandum in
accordance with SEC Regulation 504 D, began to raise one million dollars
($1,000,000) in equity capital. The Company is offering common shares at
forty five cents ($.45) per share.
In December 1999, the Company completed an acquisition of the assets of Brody
Special Projects Company at a cost of $300,000. The Company acquired the
international marketing agreements with New Logic and Pall Filtron for the
marketing and sale of their respective technologies.
14
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
MANAGEMENT DISCUSSION AND ANALYSIS
INTERIM FINANCIAL STATEMENTS AS OF
MARCH 31, 2000 AND 1999
THREE MONTH STATEMENT OF OPERATIONS
The Company has incurred net losses of $269,630 for the three months ended March
31, 2000 as compared to a net loss of $87,150 for the three months ended March
31, 1999. These losses can be primarily attributed to significant costs incurred
in fiscal year 1999 from the dissolution of Wil-Flow, Inc. in March 1999. In
addition, expenses have exceeded revenues in the start-up phases of the
operations of Brody and Sierra. In addition, the Company is incurring
significant payroll costs in 2000 in the implementation of its business strategy
of becoming a leader in filtration system technologies.
The Company realized the majority of its revenues for the three months
ending March 31, 2000 and 1999 from Aquatek, Inc., a wholly owned subsidiary
which specializes in automated process control systems for wastewater treatment
applications. The Contract Revenue for the three months ending March 31, 2000
and 1999 has been primarily to Cass Water Engineers. In the three months ending
March 31, 2000 approximately $170,965 of revenues were generated from Sierra in
the sale of chemicals and petroleum based products.
The Cost of Goods sold represents twenty three percent (23%) of sales
for the three months ending March 31, 2000 as compared to forty seven percent
(47%) as of March 31, 1999. The Costs of Goods are not consistent between years
as a result of the varying nature of the projects in any given year and the fact
that the approximately fifty seven percent (57%) of the sales in fiscal year
2000 are from the brokerage of chemicals and petroleum products which have
significantly lower margins than those derived from Engineering Consulting
services provided by Aquatek, Inc. There were no sales of chemicals and
petroleum products in fiscal year 1999.
Operating expenses consist primarily of general and administrative
expenses. For the three months ended March 31, 2000 operating expenses totaled
$336,571 as compared to $278,152 for the three months ended March 31, 1999. This
substantial increase in operating expenses between years of $58,419 can be
primarily attributed to an increase in Wages of $110,610. This substantial
increase in Wages can be attributed to the acquisitions of key personnel from
the acquisition of Sierra and Brody and the hiring of management personnel
because of joint venture with EMRI. This increase is offset by a substantial
decrease in Professional Fees of $85,000. Legal fees decreased substantially
15
<PAGE> 16
in fiscal year 2000 because the Company has not been engaged in any major
litigation or any dissolution matters.
Other significant increases in operating expenses in fiscal year 2000 as
compared to fiscal year 1999, related to the increase in staffing discussed
above, are the increase of auto expenses of approximately $14,000 and the
increase in insurance of approximately $8,000.
There has been no significant increase in interest expense between the
three months ended March 31, 2000 and 1999.
NINE MONTH STATEMENT OF OPERATIONS
The Company has incurred net losses of $686,641 for the nine months
ended March 31, 2000 as compared to a net loss of $291,744 for the nine months
ended March 31, 1999. These losses can be primarily attributed to significant
costs incurred in both years from the dissolution of Wil-Flow, Inc. in March
1999 and the termination of the joint venture with EMRI in October 1999. In
addition, expenses have exceeded revenues in the start-up phases of the
operations of Brody and Sierra. In addition, the Company is incurring
significant payroll costs in 2000 in the implementation of its business strategy
of becoming a leader in filtration system technologies.
The Company realized the majority of its revenues for the nine months
ending March 31, 2000 and 1999 from Aquatek, Inc., a wholly owned subsidiary
which specializes in automated process control systems for wastewater treatment
applications. The Contract Revenue for the nine months ending March 31, 2000 and
1999 has been primarily to Cass Water Engineers. In 2000 approximately $293,225
of revenues were generated from Sierra in the sales of chemicals and petroleum
based products.
The Cost of Goods sold represents thirty four percent (34%) of sales
for the nine months ending March 31, 2000 as compared to fifty one percent (51%)
as of March 31, 1999. The Costs of Goods are not consistent between years as
a result of the varying nature of the projects in any given year and the fact
that the approximately forty five percent (45%) of the sales in fiscal year
2000 are from the brokerage of chemicals and petroleum products which have
significantly lower margins than those derived from Engineering Consulting
services provided by Aquatek, Inc. There were no sales of chemicals and
petroleum products in fiscal year 1999.
Operating expenses consist primarily of general and administrative
expenses. For the nine months ended March 31, 2000 operating expenses totaled
$899,924 as compared to $615,299 for the nine months ended March 31, 1999. This
substantial increase in operating expenses between years of approximately
$284,000 can be primarily attributed to an increase in Wages of $268,573 and
other administrative expenses. This substantial increase in Wages can be
attributed to the acquisitions of key personnel from the acquisition of Sierra
and Brody and the hiring of management personnel because of joint
16
<PAGE> 17
venture with EMRI. This increase is offset by a substantial decrease in
Professional Fees of $57,000. Legal fees decreased substantially in fiscal year
2000 because the Company has not been engaged in any major litigation or any
dissolution matters.
Other significant increases in operating expenses in fiscal year 2000 as
compared to fiscal year 1999, related to the increase in staffing discussed
above, are the increase of office expenses of approximately $16,000, the
increase in insurance of approximately $8,000 and the one time cost relating to
the acquisition of Sierra of $18,589.
There has been no significant increase in interest expense between the
nine months ended March 31, 2000 and 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000 the Company had cash and cash equivalents of $8,992 as
compared to cash and cash equivalents of $12,944 as of March 31, 1999. At March
31, 2000, the Company had a working capital deficiency (total current
liabilities in excess of total current assets) of $345,934 as compared to a
working capital deficit (total current liabilities in excess of total current
assets) of $139,053 as of March 31, 1999. The significant decrease in working
capital in 2000 is due to the acquisition of Sierra and Brody and the continued
losses from operations.
The principal use of cash for the three months ended March 31, 2000 and 1999 was
to fund the net loss from operations. The Company raised a total of $965,307 and
$913,763 in the nine months ended March 31, 2000 and 1999 respectively from the
issuance of common stock to fund the loss from operations.
The management of the Company has committed to covering the operating expenses
of the Company until adequate sales are generated. In October 1999. The Company
through a Private Placement Memorandum in accordance with SEC Regulation 504 D,
began to raise one million dollars in equity capital.
17
<PAGE> 18
PART II --- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Nothing to Report.
ITEM 2. CHANGES IN SECURITIES.
Nothing to Report
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Nothing to Report
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Nothing to Report
ITEM 5. OTHER INFORMATION.
Nothing to Report
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
There were no reports on Form 8-K filed during the quarter.
18
<PAGE> 19
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Recycling Centers of America, Inc.
Date May 18, 2000 /s/ MICHAEL DAVIES
--------------------- ----------------------------------------
Michael Davies, CFO
Date May 18, 2000 /s/ BRUCE SELK
--------------------- ----------------------------------------
Bruce Selk, President
19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AS OF MARCH 31, 2000 AND STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,992
<SECURITIES> 0
<RECEIVABLES> 192,473
<ALLOWANCES> 0
<INVENTORY> 1,441
<CURRENT-ASSETS> 202,906
<PP&E> 145,439
<DEPRECIATION> 9,250
<TOTAL-ASSETS> 591,989
<CURRENT-LIABILITIES> 548,840
<BONDS> 0
0
380
<COMMON> 3,195,485
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 591,989
<SALES> 302,765
<TOTAL-REVENUES> 302,765
<CGS> 232,774
<TOTAL-COSTS> 336,571
<OTHER-EXPENSES> 1,622
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,428
<INCOME-PRETAX> (269,630)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (269,630)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
