UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT TO THE 1934 ACT
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.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________to ___________________
Commission File Number: 000-29983
GLOBAL INDUSTRIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-29983 98-0203485
(State of (Commission (I.R.S. Employer
organization) File Number) Identification No.)
14th Floor, 609 Granville Street, Vancouver, B.C. Canada V6Y 1G5
(Address of principal executive offices)
Registrant's telephone number, including area code (604) 683-8358
Check whether the issuer (1) filed all reports required to be filed 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. Yes X
There are 9,339,346 shares of common stock issued and outstanding as of
September 30, 2000.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Unaudited financial statements for the quarter ended September
30, 2000.
GLOBAL INDUSTRIAL SERVICES INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C>
September30, December31,
ASSETS 2000 1999
CURRENT ASSETS (Unaudited)
Cash and cash equivalents $ 123,424 $ 215
Accounts receivable 1,335,370 -
Prepaid expenses 166,869 11,041
Inventory 47,922 -
Advances to related party - 66,218
----------- ---------
Total Current Assets 1,673,585 77,474
PROPERTY AND EQUIPMENT, NET 3,057,272 -
INVESTMENTS 106,667 -
OTHER ASSETS 32,603 -
GOODWILL, net of accumulated amortization
of $82,138 903,504 -
----------- ----------
TOTAL ASSETS $ 5,773,631 $ 77,474
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 734,698 $1,716
Payable on investments 1,314,300 -
Current potion of long term debt 314,110 -
Deferred revenue 188,989 -
Advances payable - related party 816,670 -
----------- ----------
Total current liabilities 3,368,767 1,716
Long term debt, less current portion 1,233,174 -
----------- ----------
Total liabilities 4,601,941 1,716
----------- ----------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value;
50,000,000
shares authorized; 9,339,346 and
4,020,000
shares issued and outstanding 9,340 4,020
Additional paid-in capital 1,571,065 33,934
Foreign currency translation adjustment (8,659) -
Common stock subscription - 90,000
Accumulated deficit (400,056) (52,196)
----------- ----------
Total Stockholders' Equity 1,171,690 75,758
TOTAL LIABILITIES AND STOCKHOLDERS' ----------- ----------
EQUITY $ 5,773,631 $ 77,474
=========== ==========
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- 1 -
GLOBAL INDUSTRIAL SERVICES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
Revenue $ 1,598,566 $ - $ 3,369,258 $ -
Cost of revenue 944,872 - 1,831,864 -
----------- --------- ------------ ---------
Gross profit 653,694 - 1,537,394 -
General and administrative expense 588,591 1,923 1,606,802 12,861
Impairment expense - - 225,000 -
Interest expense 25,085 - 53,452 -
----------- --------- ------------ ---------
(Loss) income from operations before
income
taxes 40,018 (1,923) (347,860) (12,861)
Provision for income taxes - - - -
----------- --------- ------------ ---------
Net (loss) income $ 40,018 $ (1,923) $ (347,860) $(12,861)
=========== ========= ============ =========
Net loss per common share - basic and $ 0.01 $ (0.00) $ ( 0.05) $ (0.00)
diluted
=========== ========= ============ =========
Weighted average number of common shares
Outstanding - basic and diluted 7,576,464 4,020,000 7,576,464 3,700,000
=========== ========= ============ =========
</TABLE>
- 2 -
GLOBAL INDUSTRIAL SERVICES INC.
STATEMENT OF STOCKHOLDERS' EQUITY
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Additional Common Currency
Common Stock Paid-in Stock Translation Accumulated
Shares Amount Capital Subscription Adjustment Deficit Total
s
Balance at
December 31,1998 2,150,000 $ 2,150 $ 17,470 - - $ (14,212) $ 5,408
Capital stock
issued,
pursuant to
offering 1,870,000 1,870 16,464 - - - 18,334
memorandum
For cash - at
$0.01
(net of issuance
costs)
Common stock
subscription - - - 90,000 - - 9,000
Net loss - - - - - (37,984) (37,984)
--------- ------- --------- ---------- --------- --------- ---------
Balance at
December 31,1999 4,020,000 4,020 33,934 90,000 - (52,196) 75,758
Sale of common
stock 135,000 135 122,365 - - - 122,500
Issuance of stock
options - - 125,000 - - - 125,000
Issuance of shares 400,000 400 89,600 (90,000) - - -
Issuance of shares
for acquisitions 4,688,538 4,689 1,056,550 - - - 1,061,239
Issuance of shares
in settlement
of payables 95,808 96 143,616 - - - 143,712
Foreign currency
translation
adjustment - - - - (8,659) - (8,659)
Net loss - - - - - (347,860) (347,860)
--------- ------- --------- ---------- --------- --------- ---------
Balance at
September 30,2000 9,339,346 $ 9,340 $ 1,571,065 $ - $(8,659) $ (400,056) $ 1,171,690
========= ======= ========= ========== ========= ========= =========
</TABLE>
- 3 -
GLOBAL INDUSTRIAL SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
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For the nine months For the nine months
Ended September 30 Ended September 30,
2000 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) income $ ( 347,860) $ (12,861)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 186,403 131
Impairment of investment 225,000 -
Stock-based compensation 125,000 -
Changes in assets and liabilities
Accounts receivable 98,605 (181)
Inventory 53,510 -
Prepaid Expenses ( 130,566) 2,027
Deferred revenue ( 184,544) -
Accounts payable ( 158,785) 1,313
----------- ----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES ( 133,237) ( 9,571)
----------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Property and equipment 54,168 ( 2,500)
Other assets 249 -
Net cash in acquisitions ( 43,051) -
----------- ----------
NET CASH USED IN INVESTING 11,366 ( 2,500)
ACTIVITIES
----------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Sale of common stock 122,500 18,334
Note payable repayments ( 101,648) -
Investments in subsidiaries ( 650,000) -
Advances from related party 882,887 -
------------ ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 253,739 18,334
------------ ----------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH ( 8,659) 6,263
------------ ----------
NET INCREASE IN CASH 123,209 6,263
Cash - beginning 215 -
------------ ----------
Cash - ending $ 123,424 $ 6,263
============ ==========
</TABLE>
- 4 -
GLOBAL INDUSTRIAL SERVICES INC.
Notes to Quarterly Condensed Consolidated Financial
Statement at September 30, 2000
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements included
herein have been prepared by the Company without independent
audit. In the opinion of the Company's management, all
adjustments of a normal and recurring nature necessary to present
fairly the financial position, results of operations and cash
flows for the periods presented have been made. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed consolidated financial
statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the
period ended December 31, 1999 for Global Industrial Services
Inc., Stothert Group, Inc., and AK Drilling, Inc. included in the
Company's Form 8KA filed on September 28, 2000. The results of
operations for the nine-months ended September 30, 2000 are not
necessarily indicative of operating results for the full year.
The accompanying consolidated financial statements include the
accounts of Global Industrial Services Inc. and its wholly owned
subsidiaries. Those subsidiaries are Stothert Group, Inc.
("Stothert") and AK Drilling, Inc. ("AK Drilling").
As reflected in the accompanying financial statements, the
Company has had recurring losses from operations, a negative cash
flow from operations and no established source of revenues.
These matters raise substantial doubt about the Company's ability
to continue as a going concern.
In view of the matters described in the preceding paragraph,
recoverability of a major portion of the recorded asset amounts
shown in the accompanying consolidated balance sheet is dependent
upon continued operations of the Company, which, in turn, is
dependent upon the Company's ability to continue to raise capital
and generate positive cash flows from operations. The
consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded
asset amounts or amounts and classifications of liabilities that
might be necessary should the Company be unable to continue its
existence.
Management plans to take the following steps that it believes
will be sufficient to provide the Company with the ability to
continue in existence:
a) Raise additional capital through the sale of capital stock
b) Acquire operating companies through the issuance of capital
stock and cash
2. Nature of Operations
Global Industrial Services, Inc. (formerly Charger Ventures,
Inc.), ("Global" or the "Company"), was a development stage
company under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 7 for the years ended December 31, 1999
and 1998. In the second quarter of 2000, the Company acquired
two operating entities and is no longer in the development stage.
The Company was incorporated under the laws of the State of
Nevada on July 24, 1998. On March 30, 2000, the Company changed
its name to Global Industrial Services Inc.
3. Acquisitions
During the second quarter of 2000, Global completed the
acquisition of AK Drilling, Inc. and Stothert Group, Inc. Both
acquisitions are recorded using the purchase method of accounting
under the provisions of APB Opinion No. 16.
On April 6, 2000, the Company completed its acquisition of AK
Drilling, Inc., a company engaged in the contract drilling for
minerals and water. According to the terms of this acquisition,
the Company acquired all of the capital stock of AK Drilling,
Inc. for a total consideration of $1,150,000 in cash plus
1,000,000 shares of common stock of the Company valued at $0.64
per share (fair value at the acquisition date). At September 30,
2000, $768,000 of the cash portion of the purchase price remained
unpaid.
On April 26, 2000, the Company completed its acquisition of
Stothert Group, Inc., an engineering firm. According to the
terms of this acquisition, the Company acquired all of the
capital stock of Stothert Group, Inc. for a total consideration
of $814,300 in cash plus 227,000 shares of common stock of the
Company valued at $0.88 per share (fair value at the acquisition
date). At September 30, 2000, $546,300 of the cash portion of
the purchase price remained unpaid.
Goodwill recorded through acquisitions is $985,642 and is being
amortized over five years. Amortization expense recorded in the
statement of operations for the nine months ended September 30,
2000 totals $82,138 and $49,282 for the quarter.
The operations of the acquired entities have been included in the
statement of operations from the dates of acquisition.
Additionally, the Company issued 95,808 shares of stock, valued
at $143,712, to former shareholders of Stothert to settle
accounts payable and accrued expenses.
Proforma information as if the acquisitions had occurred at the
beginning of the periods presented is as follows:
Nine months ended Year ended
September 30, December 31,
2000 1999
Revenue $ 5,250,744 $ 8,061,549
Net loss (85,211) (550,920)
Loss per share (0.01) (0.13)
4. Long Term Debt
Long-term debt consists of the following:
September 30, December 31,
2000 1999
FCB Consolidation $788,705 $-
FCB Trucks 46,145 -
FCB Line 79,840 -
Center Capital 3 284,885 -
Dateline 323,675 -
Foremost Line 10,539 -
Security Bank - Truc 6,471 -
Security Bank - Truc 7,024 -
---------- ----------
Total 1,547,284
Current Portion 314,110 -
---------- ----------
Long-Term Portion $1,233,174 $-
========== ==========
5. Investments
Stothert invested CAD $160,000 in 160,000 non-voting
preferred shares of Lakes Ranch Ltd. on August 30, 1996.
Lakes Ranch Ltd. is owned and controlled by a shareholder of
the Company.
Global exercised an option to acquire 48.4% of Sharpshooter
Resources, Inc., a Texas holding company with investments in
the oil and gas industry. This acquisition was made from a
shareholder for 3.5 million common shares on January 11,
2000. During the quarter, management reviewed the carrying
value of this investment and concluded that the
recoverability of it was uncertain. As such, it has been
fully impaired at September 30, 2000.
6. Stock Option Plans
Under the Stock Plan maintained by the Company, the Company
can grant incentive stock options and non-qualified stock
options to officers, key employees, consultants and
directors of the Company at a price not less than $0.25 per
share.
The maximum number of shares which may be issued under the
plan is 2,000,000.
On January 14, 2000, the Company granted options to purchase
2,000,000 shares of common stock. 500,000 shares are
exercisable at $0.25 per share and 1,500,000 shares are
exercisable at $0.50 per share. The options vested
immediately and expire in three years.
Pursuant to APB 25, the Company has recorded compensation
expense of $125,000 during the period ended September 30,
2000.
A summary of stock option transactions are as follows:
Nine Months Ended
September 30,
2000
Outstanding, beginning -
Granted at an exercise price of $0.25 500,000
Granted at an exercise price of $0.50
per
share 1,500,000
----------
Outstanding, ending 2,000,000
==========
Exercisable, ending 2,000,000
==========
7. Geographic areas and industry segments
The Company currently operates in two principal segments,
engineering services and contract drilling.
The Company's foreign operations are conducted by Global and
Stothert.
For the period ended September 30, 2000:
Revenues from external
customers
Drilling $1,580,558
Engineering 1,662,161
----------
$3,242,719
==========
Interest expense:
Drilling $53,452
Engineering -
$53,452
==========
Depreciation and
amortization:
Drilling $123,750
Engineering 35,100
----------
$158,850
==========
Segment profit (loss)
before taxes:
Drilling $184,359
Engineering 169,468
Corporate (701,687)
----------
$(347,860)
==========
Segment assets:
Drilling $3,752,202
Engineering 1,846,069
Corporate 175,360
----------
$5,773,631
==========
GLOBAL INDUSTRIAL SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Geographic areas and industry segments
The following geographic area data for trade revenues is based on
product or service delivery location and property,
plant, and equipment is based on physical location.
Revenues from external
customers:
United States $1,580,558
Canada 1,662,161
----------
$3,242,719
Segment assets: ==========
United States $3,752,202
Canada 2,021,429
----------
$5,773,631
==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF
OPERATIONS
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, in conjunction with those forward-looking statements
contained in this Statement.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
The following discussion should be read in conjunction with the
financial statements of the Company and related notes included
elsewhere in this Report and in the Current Report on Form 8-K
for the Company for the period from inception (July 24, 1998) to
March 31, 2000. All statements contained herein (other than
historical facts) including, but not limited to, statements
regarding the Company's future development plans, the Company's
ability to generate cash from its operations and any losses
related thereto, are based upon current expectations. These
statements are forward looking in nature and involve a number of
risks and uncertainties. Actual results may differ materially
from the anticipated results or other expectations expressed in
the Company's forward looking statements. Generally, the words
"anticipate," "believe," "estimate," "expects," and similar
expressions as they relate to the Company and/or its management,
are intended to identify forward-looking statements. Among the
factors that could cause actual results to differ materially
could be the inability of the Company to obtain additional
financing to meet its capital requirements, needs and general
business and economic conditions as well as technological
developments.
OVERVIEW
The Company has a limited history of operations and no history of
profitability. It was incorporated as Charger Ventures Inc. on
July 24, 1998 and changed its name to Global Industrial Services
Inc. on March 30, 2000. The Company was organized to engage in
any lawful corporate business, including but not limited to the
business of combining and integrating specialized product/service
providers of the industrial services industry sector. Prior to
December 31, 1999, the Company had no operating history other
than organizational matters. In the second quarter of 2000, the
Company acquired two operating entities and is no longer in the
development stage.
The accompanying consolidated financial statements include the
accounts of Global Industrial Services Inc. and its wholly-owned
subsidiaries. Those subsidiaries are Stothert Group, Inc.
("Stothert") and AK Drilling, Inc. ("AK Drilling").
The Company, through its subsidiary Stothert, provides
engineering, construction and project management services for the
pulp and paper industry with particular focus on recausticizing
plants and lime kilns. Stothert provides a full range of
services including feasibility studies, detailed engineering, due
diligence, mill audits, project management services, turnkey
supply and construction, operations and training services, and
project financing. Stothert's business is conducted in
Vancouver, Canada. The Company's subsidiary AK Drilling operates
primarily in the mineral exploration and water drilling industry.
Its offices are located in Ramsay, Montana.
On April 30, 2000, the Company moved its principal place of
business to 14th Floor, 609 Granville St., Vancouver, British
Columbia, V7Y 1G5.
On August 16, 2000 the sole stockholder of Passant Acquisition
Corp. ("Passant"), a Nevada corporation, sold his interest to the
Company for $50,000 in cash consideration and Gregory M. Wilson
resigned as President, Secretary, Treasurer and Sole Director and
Terry Kirby became a Director, President, Secretary, Treasurer.
Pursuant to the Agreement and Plan of Reorganization dated as of
August 16, 2000 between the Company and Passant, all the
outstanding shares of common stock of Passant were exchanged for
the sum of $50,000.00.
As of September 30, 2000 the Company had a total accumulated
deficit of $400,056.
RESULTS OF OPERATIONS
The Company was not operating prior to December 31, 1999 and had
only incurred minimal start-up expenses as of that date.
Therefore, comparing the results of operations for the current
year to the preceding year would not be meaningful. For the nine
months ended September 30, 2000 gross profit was $1,410,855 and
net loss was $347,860 or $0.05 per share. Contributing to the
net loss for the period were general and administrative expenses
of $1,480,263, an impairment expense of $225,000 relating to the
termination of the option on Sharpshooter Resources, Inc. and
interest expense of $53,542 relating to capital lease agreements
and promissory notes entered into by AK Drilling.
The significant increase in general and administrative expenses
at September 30, 2000 reflects the consolidations of Stothert and
AK Drilling.
LIQUIDITY AND CAPITAL RESOURCES
The working capital of the Company at September 30, 2000 is a
direct result of drilling revenues from AK Drilling, fee income
from Stothert and funds raised from the sale of equity shares.
Items contributing to assets at September 30, 2000 include cash
and cash equivalents of $123,424, accounts receivable of
$1,335,370 primarily for fees and services due to AK Drilling and
Stothert, property and equipment of $3,057,272 (primarily
drilling equipment) and goodwill (net of accumulated
amortization) of $903,504 relating to the acquisition of
Stothert.
Items contributing to liabilities at September 30, 2000 include
accounts payable of $734,698, an amount payable on investments of
$1,314,300 relating to cash portions of acquisition costs owing
($768,000 relating to AK Drilling and $546,300 relating to
Stothert), advances of $816,670 from a related party and long
term debt of $1,233,174 consisting of capital lease agreements
and promissory notes entered into by AK Drilling.
During the nine months ended September 30, 2000, the Company
issued 610,000 shares at prices ranging from $0.25 to $1.00 per
share for net proceeds of $250,000.
The Company believes its cash on hand and cash from operations
will be sufficient to maintain its present level of development
efforts over the next three months. However, the Company's
projections of future cash needs and cash flows may differ from
actual results. The Company is presently undertaking a private
placement of equity securities to fund possible future
acquisitions and working capital. The sale of additional equity
securities or convertible debt could result in additional
dilution to our stockholders. The Company can give no assurance
that it will be able to generate adequate funds from operations,
that funds will be available to the Company from debt or equity
financings, or that if available, the Company will be able to
obtain such funds on favorable terms and conditions. The Company
currently has no definitive arrangements with respect to
additional financing.
Business
GBSV was incorporated for the purpose of acquiring companies
engaged in a wide variety of industrial services. These services
include:
* Engineering and technical design
* Build-operate-transfer (BOT); build-own-operate (BOO)
* Drilling services and equipment
* Industrial equipment manufacturing
* Construction
* Mining and mining services
* Cogeneration, power and water
To ensure success, the Company provides a highly respected,
amply experienced and accomplished management team. Key
individuals are in place. Others with suitable qualifications
and background are under consideration.
It is the Company's intention to augment management with an
advisory board made up of experienced professionals from
appropriate disciplines within various industrial sectors. The
Company also intends to incorporate a business-to-business e-
commerce component as a service to maximize economy of operations
and improve efficiencies within its own network of divisions, and
to garner ultimate customer satisfaction.
The Company is positioning a corporate infrastructure to
utilize the best of talents available for the immediate growth
and profitability of all business acquisitions and opportunities.
The synergy of complimentary products and services, as researched
and acquired by the Company, is the foundation for success. The
whole is greater than the sum of its parts.
The Company currently is headquartered in Vancouver, British
Columbia. The Vancouver location provides a tradition of support
for the consulting engineering service business, allows for ease
of access to all global target markets, and benefits from a well-
established venture capital base.
Current and future directors, senior management and other
advisors with their extensive experience in the industrial
services industry, and expertise in financial markets, will
ensure that the Company has immediate credibility and clout in a
very large and lucrative business arena!
Consolidation targets are small to medium-sized private
companies that provide the synergy to support other branches or
divisions of GBSV via their products and/or services.
Duplication will be avoided except where the joining of forces
enhances operations or profitability. The acquired companies
will benefit from more rapid growth, a sustainable competitive
advantage, and optimized use of resources such as materials and
personnel. GBSV is poised to add value to all acquisition
partners by providing coordinated:
* Marketing strategies and market positioning
* Systems and operations strategies
* Financial strategies and services
The Company intends to improve the business focus and
implementation capabilities of all other partners within the
successful family of GBSV market-driven companies.
The industrial services sector is a labyrinth of product
manufacturers, equipment dealers and suppliers, technical and
engineering consulting and design services, and a huge array of
skilled labor sub-contracting firms. The project manager and
quantity surveyor for major industrial applications must contend
with this maze of services to research suitable providers at
reasonable cost estimates. It is a daunting task!
GBSV has recognized the complexity of the marketplace and
offers a simple solution consolidation. This has long been a
formula for success. Natural growth and expansion within many
large industrial corporations has allowed these giants to secure
major international contracts because they have the
diversification in-house. They have the infrastructure in place
they are cost effective and competitive. GBSV is launching a
campaign of acquisitions to achieve the same status.
MARKET ANALYSIS
The industrial product and service providers are abundant.
Project managers, whether from corporate or government sectors,
must wade through numerous supply and contracting options to
procure the right mix of quality and economy. Often, this
research is time consuming and costly in and of itself. The
following quote from an experienced industrial project manager
explains a part of the procurement dilemma.
The business of industry is a mammoth proportion of the
global economy. It includes the manufacture of vehicles,
aircraft, trains, boats, and every other imaginable mode of
transportation; it includes the manufacture of equipment used to
generate power, to build and maintain our pavement
infrastructures, to dry-clean our clothes, to outfit our homes
with time-saving amenities; it includes the management of
forests, lakes, rivers, dams, and all other ecological situations
where man and nature meet; it includes the finding and gathering
of precious earth resources such as metals, minerals and gems; it
includes technologies that affect every aspect of life from air
quality to footwear. Capturing one small piece of the global
marketplace for firms with sound management, sufficient
capitalization, and proactive strategies will be enormously
profitable!
MARKET TRENDS
The industrial services industry has been severely
challenged in recent years by robotic automation, the digital
explosion which includes the advent of the Internet and e-
commerce, rising costs of resource materials, increasing labor
rates, and environmental issues, to name a few. During this
period of escalating change, the consumer has developed new
expectations as well. We demand service we want the product to
be the best and we want it now! This attitude permeates
cultures, governments, businesses, academia, and society at
large.
Cost-containment, always an important factor in business
management, is more crucial now than ever. Small companies must
compete with larger ones, who compete with still larger ones all
because the information "super highway" is linking customers with
product and service providers way beyond geographic boundaries.
In today's world, competitiveness declines for those who do not
have a `cyberspace' presence and, unless the business niche is
ultimately exclusive, the small to medium-sized company has very
difficult competition.
Technological advances pose considerable problems for
smaller operations as well. Technology, with its inherent
exponential growth, leaves a great many businesses behind. Those
who survive and thrive in this accelerated business world are
those who likely have proprietary rites, who are passionate about
their endeavors, who are committed to quality service, and who
have the ability to market themselves effectively.
Global Industrial Services Inc. will be a one-stop solutions
provider. Many types of services will be offered within one
corporate infrastructure. This creates a value proposition for
clients and customers who would otherwise wander in a world of
over-specialization and fragmentation the labyrinth spoken of
earlier. GBSV management will develop strategic mechanisms to
streamline operations of the acquired group of companies thus
reducing costs and increasing revenues. Worldwide market
penetration will be achieved through well-orchestrated marketing
and promotional campaigns and proactive use of Internet
opportunities. GBSV will generate interrelated business projects
to involve several acquired partner companies at once. This
formula for success results in the following competitive
advantages:
* Lower production and operational costs
* Greater savings for customers
* Simplification of project management
* Better quality control and quality assurance
* Faster provision of products and/or services
SUBSIDIARIES
Stothert Group Inc. (Incorporated in Vancouver, British Columbia)
The Stothert Group provides general industrial engineering
and management services for the global marketplace. A few sample
projects indicated below demonstrate the diversity of the company
and highlight its capabilities:
* Design of shielded module structures for northern warning
systems
* Risk insurance surveys of coastal fish farms for Lloyd's of
London
* Comprehensive pulp and paper mill operations management from
Canada to Tanzania
* Cement industry in the Philippines, tea plantations in
Uganda, ski resorts in Western Canada, and cogeneration plants in
California
* Environmental impact assessment, ecosystem improvement
planning, land reclamation, and watershed and reservoir
development
In addition to worldwide recognition of Stothert Group's
success as an industrial service provider, GBSV benefits from
this acquisition in other significant ways. The Stothert Group
has well-established credibility with international financial
institutions such as The World Bank, the Asian Development Bank,
the Commonwealth Secretariat, the Commonwealth Development
Corporation, the Canadian International Development Agency and
others. The Stothert Group is also experienced and respected as
an international trade broker. To date, this company has
conducted trade exchanges and performed engineering services in
more than sixty countries.
A.K. Drilling (Incorporated in Ramsay, Montana)
This company provides drilling services to support a variety
of clients in mineral exploration, investigation and remediation
of environmental wells, environmental testing, and other drilling
services throughout North and South America.
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 by
or against the Company has been threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No such matters were submitted during the most recent quarter.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
2 Agreement and Plan of Reorganization is hereby incorporated
by reference to the Forms 8-K and 8-K/A filed with the SEC
on August 21, 2000 and September 28, 2000, respectively.
3.1 Articles of Incorporation for Global Industrial Services,
Inc.
3.2 Bylaws of Global Industrial Services, Inc.
21 Subsidiaries
AK Drilling - Incorporated in Ramsey, Montana
Stothert Group Inc. - Incorporated in Vancouver, British
Columbia
27 Financial Data Schedule
Reports on Form 8-K:
On August 21, 2000 and September 28, 2000, the Company filed a
Form 8-K and 8-K/A, respectively, regarding the merger between
itself and Passant Acquisition Corp.
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.
Global Industrial Services, Inc.
By: /s/ Terry Kirby
Terry Kirby,
President/Secretary/Treasurer
Date: November 20, 2000
