UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
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[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission File No. 0-30951
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PINECREST SERVICES, INC.
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 67-0695367
------------------------------------ --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3353 South Main Street, Suite 584
Salt Lake City, Utah 84115
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 323-2395
-------------------------------
Indicate by check mark whether the Issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of September 30, 2000
------------------------------------ ------------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK 17,000,000 SHARES
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF REPRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not include
all information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' equity (deficit)
in conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included, and all such
adjustments are of a normal recurring nature. Operating results for the nine
months ended September 30, 2000, are not necessarily indicative of the results
that can be expected for the year ending December 31, 2000.
2
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------------- ----------------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 0 $ 0
---------------------- ---------------------
TOTAL CURRENT ASSETS $ 0 $ 0
====================== =====================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable - related party (Note 4) $ 30,000 $ 30,000
---------------------- ---------------------
TOTAL CURRENT LIABILITIES 30,000 30,000
STOCKHOLDERS' EQUITY
Common Stock $.001 par value:
Authorized - 20,000,000 shares
Issued and outstanding 17,000,000 shares 17,000 17,000
Deficit accumulated during the development stage (47,000) (47,000)
---------------------- ---------------------
TOTAL STOCKHOLDERS' EQUITY (30,000) (30,000)
---------------------- ---------------------
$ 0 $ 0
====================== =====================
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
3/7/86
Three Months Ended Nine Months Ended (Date of
September 30, September 30, inception) to
2000 1999 2000 1999 9/30/00
------------------ ------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0 0
------------------ ------------------ ----------------- ----------------- ------------------
GROSS PROFIT 0 0 0 0 0
General and administrative
expenses 0 0 0 0 47,000
------------------ ------------------ ----------------- ----------------- ------------------
NET LOSS $ 0 $ 0 $ 0 $ 0 $ (47,000)
================== ================== ================= ================= ==================
BASIC AND DILUTED
(LOSS) PER COMMON
SHARE
Net (loss) per weighted
average share $ .00 $ .00 $ .00 $ .00
================== ================== ================= =================
Weighted average number of
common shares used to
compute net income
(loss) per weighted
average share 17,000,000 17,000,000 17,000,000 17,000,000
================== ================== ================= =================
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
3/7/86
Nine Months Ended (Date of
September 30, inception) to
2000 1999 9/30/00
----------------- ----------------- ------------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ 0 $ 0 $ (47,000)
Adjustments to reconcile net (loss) to cash used by
operating activities:
Amortization 0 0 17,000
Accounts payable 0 0 30,000
----------------- ----------------- ------------------
NET CASH USED BY OPERATING ACTIVITIES 0 0 0
INVESTING ACTIVITIES
Organization costs 0 0 (17,000)
----------------- ----------------- ------------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 0 0 (17,000)
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 17,000
----------------- ----------------- ------------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 17,000
----------------- ----------------- ------------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 0 0 0
Cash and cash equivalents at beginning of period 0 0 0
----------------- ----------------- ------------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 0 $ 0 $ 0
================= ================= ==================
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
a. Basis of Presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles
("GAAP") for interim financial information. Accordingly, they
do not include all of the information and footnotes required
by generally accepted auditing principles for complete
financial statements. The unaudited financial statements
should, therefore, be read in conjunction with the financial
statements and notes thereto in the Report on Form 10-SB12G
for the five months ended May 31, 2000. In the opinion of
management, all adjustments (consisting of normal and
recurring adjustments) considered necessary for a fair
presentation, have been included. The results of operations
for the three and nine- month periods ended September 30, 2000
are not necessarily indicative of the results that may be
expected for the entire fiscal year.
b. Organization & Consolidation Policy
Pinecrest Services, Inc. (the Company), a Nevada corporation,
was incorporated on February 10, 1999. On May 11, 2000, the
Company merged with Hystar Aerospace Marketing Corporation of
Nebraska Inc. (Hystar). The Company is the surviving
corporation.
Hystar Aerospace Marketing Corporation of Nebraska was
incorporated March 7, 1986 to lease, sell, and market airships
and the Burkett Mill, a waste milling device, which rights
were acquired from VIP Worldnet, Inc. initially the only
shareholder. The technology to further develop the airship and
the mill by the parent company proved to be prohibitive, and
shortly after the acquisition of the marketing rights further
activity ceased. Hystar has been inactive since that date.
The merger was recorded under the pooling of interests method
of accounting. Each share of the Company remained outstanding
as one fully paid and non-assessable share of capital stock of
the surviving corporation.
The accompanying financial statements present the financial
condition and results of operations of Hystar from its
inception through the merger date and of the surviving entity,
the Company, as of the merger date.
c. Recognition of Revenue
The Company recognizes income and expense on the accrual basis
of accounting.
d. Net Loss Per Common Share
Basic and diluted loss per common share is computed by
dividing net loss available to common shareholders by the
weighted average number of common shares outstanding during
the periods presented.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less to be cash equivalents.
6
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2000
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
f. Provision for Income Taxes
The Company records the income tax effect of transactions in
the same year that the transactions enter into the
determination of income, regardless of when the transactions
are recognized for tax purposes. Tax credits are recorded in
the year realized. Since the Company has not yet realized
income as of the date of this report, no provision for income
taxes has been made.
In February, 1992, the Financial Accounting Standards Board
adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, which supersedes substantially
all existing authoritative literature for accounting for
income taxes and requires deferred tax balances to be adjusted
to reflect the tax rates in effect when those amounts are
expected to become payable or refundable. The Statement was
applied in the Company's financial statements for the fiscal
year commencing January 1, 1993.
No provision for income taxes have been recorded due to net
operating loss carryforwards totaling approximately $47,000
that will be offset against future taxable income. These NOL
carryforwards begin to expire in the year 2001. No tax benefit
has been reported in the financial statements because the
Company believes there is a 50% or greater chance the
carryforwards will expire unused.
g. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statement
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
h. Dividend Policy
The Company has not yet adopted any policy regarding payment
of dividends.
i. Organization Costs
The Company amortized its organization costs over a five year
period.
NOTE 2: GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has no assets
and has had recurring operating losses for the past several years and
is dependent upon financing to continue operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty. It is management's plan to find an
operating company to merge with, thus creating necessary operating
revenue.
7
<PAGE>
PINECREST SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
September 30, 2000
NOTE 3: CAPITALIZATION
In 1986, the Company issued 17,000,000 shares of common stock for the
marketing rights to a waste milling device. The value of this issuance
was $17,000.
NOTE 4: RELATED PARTY TRANSACTIONS
During the year ended December 31, 1999, the Company incurred $30,000
of professional fees payable to Mutual Ventures Corp. An officer of the
Company is also an employee of Mutual Ventures Corp.
NOTE 5: DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and searching for a
business operation with which to merge, or assets to acquire, in order
to generate significant operations.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations
In this report references to "Pinecrest," "we," "us," and "our" refer
to Pinecrest Services, Inc.
Forward Looking Statements
This form 10-QSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within Pinecrest's control. These
factors include but are not limited to economic conditions generally and in the
market which Pinecrest may participate; competition within Pinecrest's chosen
market and failure by Pinecrest to successfully develop business relationships.
Plan of Operations
Since inception, we have had no revenues and have experienced losses.
We have financed our operations primarily through the sale of our common stock
or by loans from shareholders. As of September 30, 2000, we had no cash on hand
and total current liabilities of $30,000. The $30,000 note payable is for legal
and accounting fees incurred during 1999 which were paid on our behalf by Mutual
Ventures Corporation, a related party. We have no material commitments for the
next twelve months. We believe that our current cash needs for at least the next
twelve months can be met by loans from our directors, officers and shareholders.
These loans will be repaid when monies become available.
Our management intends to actively pursue business opportunities during
the next twelve months. All risks inherent in new and inexperienced enterprises
are inherent in our business. We have not made a formal study of the economic
potential of any business. At the present, we have not identified any assets or
business opportunities for acquisition.
Based on current economic and regulatory conditions, management
believes that it is possible, if not probable, for a company like ours, without
many assets or liabilities, to negotiate a merger or acquisition with a viable
private company. The opportunity arises principally because of the high legal
and accounting fees and the length of time associated with the registration
process of "going public". However, should any of these conditions change, it is
very possible that there would be little or no economic value for anyone taking
over control of Pinecrest.
Potential investors must recognize that because of our limited capital
available for investigation and management's limited experience in business
analysis we may not discover or adequately evaluate adverse facts about the
business opportunity to be acquired. Also, we intend to concentrate our
acquisition efforts on properties or businesses that we believe to be
undervalued or that we believe may realize a substantial benefit from being
publicly owned. Investors should expect that any acquisition candidate may have
little or no operating history, or a history of losses or low profitability.
It is emphasized that our management may effect transactions having a
potentially adverse impact upon our shareholders pursuant to the authority and
discretion of our management to complete acquisitions without submitting any
proposal to the stockholders for their consideration.
Should a merger or acquisition prove unsuccessful, it is possible that
we may decide not to pursue further acquisition activities and management may
abandon its activities and our shares would become worthless.
9
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PINECREST SERVICES, INC.
Dated: October 27, 2000 /s/ April Marino
------------------------------------
April Marino, President and Director
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