U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE
SECURITY EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSACTION REPORT PURSUANT SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-9249
UNITED TRANS-WESTERN, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1519286
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3795 Carey Road
Suite 600
Victoria, British Columbia, Canada V8Z 6T8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (250) 475-6000
Check whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.
Yes [x] No [ ]
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date:
Class: Common Stock, $.01 par value
Outstanding at September 30, 1997: 8,859,155 shares
UNITED TRANS-WESTERN, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheet at September 30, 1997 1
Consolidated Statement of Operations for the
Nine Months Ended September 30, 1997 and 1996. 2
Consolidated Statement of Cash Flows for the
Nine Months Ended September 30, 1997 and 1996. 3
Notes to Consolidated Financial Statements 4
Item 2. Management Discussion and Analysis of
Financial Condition and Results of Operations. 5
PART II. OTHER INFORMATION
Items 1 through 6. 6
SIGNATURES 7
UNITED TRANS-WESTERN, INC.
CONSOLIDATED BALANCE SHEET
AS AT SEPTEMBER 30, 1997
(Unaudited)
1997
ASSETS
CURRENT ASSETS
Cash $577
INVESTMENTS - Note 1
Technology 1,000,929
$1,001,506
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 88,626
Accounts payable - Note 2 590,000
Due to Kentucky Financial Inc. - Note 3 411,191
1,089,817
SHAREHOLDERS' EQUITY
Authorized: 50,000,000 common shares with a
par value of $.01
Issued: 8,859,155 shares (1996 - 8,425,944 shares) 88,588
Additional paid-in capital 1,897,686
Deficit (2,074,585)
(88,311)
$1,001,506
UNITED TRANS-WESTERN, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
9 MONTHS 3 MONTHS 9 MONTHS 3 MONTHS
1997 1997 1996 1996
REVENUE $ -- $ -- $ -- $ --
OPERATING COSTS AND EXPENSES
General and
administrative 204,434 17,417 4,445 2,879
INCOME (LOSS) FROM
OPERATIONS (204,434) (17,417) (4,445) (2,879)
NON-OPERATING INCOME AND
EXPENSE
Interest 14,181 4,732
NET INCOME (LOSS) $(204,434) $(17,417) $(18,626) $(7,611)
NET INCOME (LOSS)
PER COMMON SHARE $ 0.02 $ -- $ -- $ --
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 8,859,155 8,859,155 8,425,944 8,425,944
UNITED TRANS-WESTERN, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
9 Months 9 Months
1997 1996
OPERATING ACTIVITIES
Net Loss for the Period $ (204,434) $ (18,626)
Increase (Decrease) in non-cash
working capital items 38,611 17,969
(165,823) (657)
INVESTING ACTIVITIES
-- --
FINANCING ACTIVITIES
Proceeds from Shareholders 160,000 650
NET INCREASE (DECREASE) IN CASH (5,823) (7)
CASH, beginning of period 6,400 60
CASH, end of period $ 577 53
NON CASH INVESTING ACTIVITIES
Acquisition of rubber technology see Note 1
UNITED TRANS-WESTERN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 1997
NOTE 1. INVESTMENTS
During 1977, the Company completed the acquisition of Rebound Rubber
Corp., a Canadian private company. Rebound Rubber Corp. has acquired the
exclusive right to use a new technology developed by the Guangzhou Research
Institute for Utilization of Reclaimed Resources. The agreement with the
Institute anticipates the use of this technology in the recycling and
reactivation of used rubber tires and other products as well as further
developing the technology. The assets and liabilities of Rebound Rubber
Acquisition of technology rights $ 900,000
Acquisition and development costs 100,929
$1,000,929
NOTE 2. ACCOUNT PAYABLE
The Company is indebted to the Guangzhou Research Institute for
Utilization of Reclaimed Resources in the amount of $590,000 being the
balance due from the purchase of technology as described in Note 1.
The amounts due pursuant to the agreements with the Institute are as
follows:
On or before July 13, 1997 $ 300,000
On or before October 13, 1997 290,000
$590,000
The above payments are currently in default.
NOTE 3. RELATED PARTY TRANSACTIONS
Kentucky Financial Inc. is related to an officer and director of the
Company. During the period, the following transactions were contemplated
in Rebound Rubber Corp.:
i) the first payments due to the Guangzhou Research Institute
for Utilization of Reclaimed Resources in the amount of
$310,000 was paid directly by Kentucky Financial Inc.
ii) Kentucky Financial Inc. incurred costs related to the
acquisition and development of the technology rights
and will receive $100,000 as compensation.
Total amount due to Kentucky Financial Inc.
as of September 30, 1997 $ 411,191
UNITED TRANS-WESTERN, INC.
MANAGEMENT DISCUSSION
AS AT SEPTEMBER 30, 1997
During the quarter, the Company completed the acquisition of Rebound
Rubber Corp. which was approved by the board of directors on May 29, 1997.
Through this acquisition, the company has the exclusive use of a unique
scientific process which reactivates recycled rubber powder from used tires
into a rubber compound which can be used to produce new tires and other
vulcanized products. As part of the acquisition, the Company has assumed
the existing liabilities of Rebound Rubber Corp. which includes the balance
due to the Guangzhou Research Institute for Utilization of Reclaimed
Resources.
The Company is actively pursuing opportunities for the establishment of
grinding and reactivation plants in North America and China. Other
opportunities to exploit this technology in other parts of the world are
in preliminary stages of discussion.
During the next 12 months, the Company intends to establish a mixing
facility in China, a chemical mixing plant for the mixing and distribution
of reactivation chemicals, and complete the first two of four reactivation
plants in North America. The total funding required to complete these
projects is $12,000,000 which is intended to be raised entirely by equity.
Working capital requirements are included in the projected cash requirements.
Both the China mixing facility and the reactivation plants are expected to
be in a positive cash flor position shortly after they are in place. The
number of employees of the Company increase to more than 20 in the next
twelve months.
The Company is evolving from a position of negligible assets and
approximately $50,000 of current debt at the year end to a strong set
position which will be equity financed. The rubber recycling industry in
which the Company is involved, will be the basis for a solid year round
business with good cash flows. No additional funding is anticipated for
the continuing operation of the reactivation plants as they are expected to
generate immediate positive cash flows.
UNITED TRANS-WESTERN, INC.
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings.
none
Item 2. Changes in Securities.
none
Item 3. Defaults Upon Senior Securities.
none
Item 4. Submission of Matters to a Vote of Security Holders.
none
Item 5. Other Information.
none
Item 6. Exhibits and Reports of Form 8-K.
none
UNITED TRANS-WESTERN, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
on October 31, 1997
UNITED TRANS-WESTERN, INC.
BY: \s\ D. Elroy Fimrite
D. Elroy Fimrite
President
BY: \s\ Michael C. Pinch
Michael C. Pinch
Vice President and Chief Financial Officer
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