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 June 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 June 30, 1997: 8,858,842 shares
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheet at June 30, 1997 1
Consolidated Statement of Operations for the
Six and Three Months Ended June 30, 1997 and 1996. 2
Consolidated Statement of Cash Flow for the
Six and Three Months Ended June 30, 1997 and 1996. 3
Notes to Consolidated Financial Statements 4
Item 2. Management Discussion and Analysis
or Plan of Operation. 5
PART II. OTHER INFORMATION
Items 1 through 6. 6
SIGNATURES 7
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED TRANS-WESTERN, INC.
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 1997
(Unaudited)
1997
ASSETS
CURRENT ASSETS
Cash $1,376
INVESTMENTS - Note 1
Technology 1,000,929
$1,002,305
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 60,955
Accounts payable - Note 2 590,000
Advances from shareholders 11,053
Due to Kentucky Financial Inc. - Note 3 411,191
1,073,199
SHAREHOLDERS' EQUITY
Authorized: 50,000,000 commons shares
with a par value of $.01
Issued: 8,858,842 shares 88,588
Additional paid-in capital 1,897,686
Deficit (2,057,168)
(70,894)
$1,002,305
UNITED TRANS-WESTERN, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
REVENUE $ -- -- -- --
OPERATING COSTS AND EXPENSES
General and administrative 187,017 4,066 126,899 2,614
INCOME (LOSS) FROM OPERATIONS (187,017) 4,006 (126,899) 2,614
NON-OPERATING INCOME AND EXPENSE
Interest 9,449 4,732
NET INCOME (LOSS) (187,017) (13,515) (126,899) (7,346)
NET INCOME (LOSS) PER COMMON SHARE -- -- -- --
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,858,842 8,425,944 8,858,842 8,425,944
UNITED TRANS-WESTERN, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
OPERATING ACTIVITIES
Net Loss for the Period $(187,017) $(13,515) $(126,899) $(6,169)
Increase (Decrease) in
non-cash working capital
items, 1,022,922 12,887 (33,233) 5,655
835,905 (628) (160,132) (514)
INVESTING ACTIVITIES
Acquisition of
rubber technology (1,000,929) -- -- --
FINANCING ACTIVITIES
Proceeds from
Shareholders 160,000 650 160,000 650
NET INCREASE
(DECREASE) IN CASH (5,024) 22 (132) 136
CASH, beginning of period 6,400 60 6,400 60
CASH, end of period $ 1,376 $ 82 $ 6,268 $ 196
UNITED TRANS-WESTERN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. INVESTMENTS
During the period, 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
Acquisition of technology rights $ 900,000
Acquisition and development costs 100,929
$ 1,000,929
NOTE 2. ACCOUNT PAYABLE
Rebound Rubber Corp. 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
Management has deferred the payment due July 13, 1997 pending
further meetings with the Institute in August.
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 June 30, 1997 $411,191
Item 2. Management's Discussion and Analysis or Plan of Operation.
During the quarter, the registrant completed the acquisition of
Rebound Rubber Corp., which was approved by the board of
directors at its annual meeting on May 29, 1997. Through this
acquisition, the registrant 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. The existing
liabilities of Rebound Rubber Corp. include the balance due
to the Guangzhou Research Institute for Utilization of
Reclaimed Resources for the rights to the technology. See "Note
to Notes to Consolidated Financial Statements."
Management of the registrant is exploring opportunities for the
establishment of grinding and reactivation plants in North
America and China, as well as evaluating possible opportunities
to utilize the technology in other parts of the world. None
of these opportunities have, however, proceeded past the
preliminary stages of discussion.
During the next 12 months, the registrant hopes to establish
a mixing facility in China and at least two of four projected
chemical mixing plants in North America for the mixing and
distribution of reactivation chemicals. The total funding
required to complete these projects is approximately $12,000,000,
which the registrant expects to raise through equity financing.
Working capital requirements for the foreseeable future are
included in the projected cash requirements. Based on current
projections, it is anticipated that both the China mixing facility
and the North American reactivation plants will be generating
positive cash flow shortly after they are put into operation.
The number of employees of the registrant is expected to increase
to more than 20 in the next twelve months.
The registrant is in the process of evolving from a position of
negligible assets and approximately $50,000 of current debt at
the year end to a stronger equity financed asset position.
Management believes that the rubber recycling industry in which
the registrant is involved will be the basis for a solid year
round business with good cash flows.
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.
At the registrant's annual meeting of stockholders
held on May 29, 1997, J.W. Brown, D. Elroy Fimrite,
David A. Pallett and Scott B. Randolph were elected as
directors of the registrant, with 5,879,406 votes cast
for each of said nominees and no votes withheld or cast
against said nominees. Also, the appointment of
Hein + Associates as the registrant's accountants was
ratified, with 5,879,043 votes cast for ratification
and no votes withheld or cast against ratification.
Item 5. Other Information.
none
Item 6. Exhibits and Reports of Form 8-K.
none
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 August 13, 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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,376
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,376
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,002,305
<CURRENT-LIABILITIES> 1,073,199
<BONDS> 0
0
0
<COMMON> 88,588
<OTHER-SE> 1,897,686
<TOTAL-LIABILITY-AND-EQUITY> 1,002,305
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 187,017
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (187,017)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (187,017)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
