SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO ________
COMMISSION FILE NUMBER: 2-73389
UNICORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 75-1764386
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) (I.R.S. IDENTIFICATION NO.)
502 DIVISION STREET
CARSON CITY, NEVADA 89703
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(775) 883 3711
(281) 933 4874
Indicate by check mark whether the Registrant (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
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF COMMON
STOCK, AS OF JUNE 30, 2000 WAS 10,000,000 SHARES OF THE CLASS A COMMON
STOCK AND 10,000,000 SHARES OF THE CLASS B COMMON STOCK.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
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SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such
as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or the negative of these terms or other
comparable terminology. These statements are only predictions. Actual events
or results may differ materially.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
forward-looking statements. We are under no duty to update any of the
forward-looking statements after the date of this report to conform our prior
statements to actual results.
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<TABLE>
<CAPTION>
INDEX
Page
<S> <C> <C>
PART I FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . 4
ITEM 1. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND PLAN OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . 13
PART II OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 17
ITEM 1. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . 17
ITEM 2. CHANGES IN SECURITIES. . . . . . . . . . . . . . . 17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS 18
ITEM 5. OTHER INFORMATION. . . . . . . . . . . . . . . . . 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . 18
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
INDEX TO EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The following interim consolidated financial statements as of June 30, 2000 and
for the three months and quarter then ended, are unaudited, but in the opinion
of management, have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with those of the annual
unaudited financial statements and in conformity with the instructions provided
in Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
or complete audited financial statements. Such interim financial statements
reflect all adjustments (consisting of normal recurring adjustments and
accruals) which management considered necessary for a fair presentation of the
financial position and the results of operations for the quarters presented.
The results of operations for the quarters presented are not necessarily
indicative of the results to be expected for the year ending January 31, 2000.
The interim consolidated financial statements should be read in connection with
the audited consolidated financial statements for the year ended January 31,
1999 when the registrant's Certified Public Accountants complete the audited
financial statements of the registrant for the years ending January 31, 1999 and
January 31, 2000.
SPECIAL INFORMATION REGARDING FINANCIAL STATEMENTS OF THE REGISTRANT
L. Mychal Jefferson II, the registrant's former Chairman of the Board, President
and Chief Executive Officer has refused to turn over the book and records of the
registrant to its current management. The registrant has filed Plaintiff's
Original Petition and Request for Mandamus Relief in the 113th Judicial District
Court, Harris County, Texas vs. L. Mychal Jefferson II, Defendant. The
registrant expects to gain judgment and relief with this action. In the
alternative, Mr. Jefferson could voluntarily turn over the records to the
registrant.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Forward looking statements made herein are based on current expectations of the
Company that involve a number of risks and uncertainties and should not be
considered as guarantees of future performance. These statements are made under
the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. The factors that could cause actual results to differ materially include
but are not limited to: interruptions or cancellation of existing contracts,
impact of competitive products and pricing, product demand and market acceptance
risks, the presence of competitors with greater financial resources than
Unicorp, Inc., product development and commercialization risks and an inability
to arrange additional debt or equity financing.
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<TABLE>
<CAPTION>
Unicorp, Inc.
(A Development Stage Company)
Balance Sheet
as of June 30, 2000
(unaudited)
<S> <C>
June 30, '00
-------------
ASSETS
Other Assets
Mineral Interest 10,200,000.00
Investment - AZ Capital, Inc. 409,860.00
-------------
TOTAL ASSETS 10,609,860.00
-------------
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
Accounts Payable 63,866.61
-------------
Total Other Current Liabilities 63,866.61
-------------
Total Current Liabilities 63,866.61
-------------
Total Liabilities 63,866.61
Equity
Common Stock - Class A 1,000.00
Common Stock - Class B 1,000.00
Additional Paid-in Capital 13,749,913.00
Retained Earnings -3,199,231.00
Net Income -6,688.61
-------------
Total Equity 10,545,993.39
-------------
TOTAL LIABILITIES & EQUITY 10,609,860.00
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
UNICORP, INC.
(A Development Stage Company)
Profit and Loss - Unaudited
January through June 2000
Jan - Jun '00
-------------
<S> <C>
Ordinary Income/Expense
Expense
Press Costs 320.00
Professional Fees 337.50
Registration Costs 4,435.61
Stock Transfer Expense 947.50
Travel 648.00
-------------
Total Expense 6,688.61
-------------
Net Ordinary Income -6,688.61
-------------
Net Income -6,688.61
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
UNICORP, INC.
(A Development Stage Company)
Profit and Loss - Unaudited
April through June 2000
Apr - Jun '00
-------------
<S> <C>
Ordinary Income/Expense
Expense
Professional Fees 337.50
Registration Costs 3,805.61
Stock Transfer Expense 947.50
-------------
Total Expense 5,090.61
-------------
Net Ordinary Income -5,090.61
-------------
Net Income -5,090.61
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
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<TABLE>
<CAPTION>
UNICORP, INC.
(A Development Stage Company)
Statements of Cash Flows - Unaudited
Increase (Decrease) in Cash and Cash Equivalents
For the Period April 1, 2000 to June 30, 2000
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES ($5,090.61)
------------
Cash Receipts from Net Income $ 5,090.61
------------
Plus: Increase in Accounts Payable $ 0.00
---------------------------------------- ------------
Cash Flows from Other Activities $ 0.00
------------
Net Increase (Decrease) in Cash Position $ 0.00
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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UNICORP, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Organization
Unicorp, Inc. (the "Company") was incorporated on May 8, 1981, under the laws of
the State of Nevada and under the name of TexOil, Inc. for the purpose of
mineral exploration, discovery, production, refining, and transportation. On
October 10, 1988, the Company changed its name to Unicorp, Inc. and continued
operating its oil and gas properties in Whittsitt Oil Company, Inc. (now Martex
Trading Co., Inc.), a Texas corporation. Concurrent with the change of its
name, the Company acquired 90 percent of the outstanding capital stock of Med-X
Systems, Inc., a Texas corporation. The Company owns 100 percent of Texas
Nevada Oil & Gas Company, a Texas corporation. On December 31, 1997, the
Company acquired 100 percent of The Laissez-Faire Group, Inc., a Texas
corporation. On March 1, 1998, the Company gained 871,000 shares of the Class B
Common Stock and 871,000 shares of the Class B Common Stock of AZ Capital, Inc.,
a Texas corporation, through the forfeiture of an Option Agreement whereby AZ
Capital, Inc. was to purchase Whittsitt Oil Company, Inc.
The Company's subsidiaries are inactive and oil and gas operations have been
liquidated, so therefore the subsidiaries have been given no value in the
financial statements, with the exception of the investment in AZ Capital, Inc.
On March 1, 1998, the Company acquired 58,285.71 tons of zeolite, a mineral
product which is an absorbent and has many potential uses, such as oil and gas
well cleanup, shoe and refrigerator freshener, landfill absorption, odor
control, bacteria elimination and other agricultural uses. The Company is now
developing its involvement in the distribution of zeolite.
Principles of Consolidation
The financial statements do not include the accounts any of its subsidiary
companies because such companies have no operating income. Collectively, these
entities are referred to as the Company. All significant intercompany
transactions and accounts will be eliminated in the event of operations.
Method of Accounting
The Company recognizes income and expenses according to the accrual method of
accounting. Expenses are recognized when performance is substantially complete
and income is recognized when earned. Earnings (loss) per share are computed
based on the weighted average method. Stock options currently outstanding were
not used in calculating earnings per share since the effect would be
antidilutive. The fiscal year of the Company ends January 31 of each year. The
financial statements reflect activity from the Company's inception, May 8, 1981.
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Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Nonmonetary Transactions
Nonmonetary transactions are transactions for which no cash was exchanged and
for which shares of common stock were exchanged for assets or services. These
transactions are recorded at fair market value as determined by the board of
directors.
Inventories
Inventories are stated at the lower of cost (FIFO method) or market, and consist
of finished goods and packaging materials.
Accounts Receivable
Accounts receivable are shown net of the allowance for doubtful accounts. This
amount was determined to be $0 and $0 at June 30, 2000 and December 31, 1999
after writing off all accounts determined to be uncollectible.
Prepaid Expenses
Prepaid expenses consist of the following:
Mining Claims
Mining claims are stated at the lower of cost or market, whichever is lower.
Any costs incurred for improvement of operations or to increase the expected
efficiency of operations related to extraction from the Company's mining claims
are capitalized and charged off to operation over the expected economic life of
the claims.
The Company has adopted SFAS statement #121, which requires a review of any
potential for the impairment of value of any long-lived assets. It is the
policy of the Company to annually review the future economic benefit of all
long-lived assets and to charge off to operations any potential impairment of
value of long-lived assets when applicable.
Sales
Income is recognized in the financial statements (and the customer billed) when
products are shipped.
Income Taxes
The Company uses the asset and liability method as identified in SFAS 109,
Accounting for Income Taxes.
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Property, Plant, and Equipment.
Property, plant, and equipment are valued at cost less depreciation and
amortization. Depreciation and amortization are primarily accounted for on the
straight-line method based on estimated useful lives. Improvements and large
renewals, which extend the life of the asset, are capitalized whereas
maintenance and repairs and small renewals are expensed as incurred.
Estimates.
Financial statements are prepared in conformity with generally accepted
accounting principles, which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities on the date of the financial
statements and affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from the estimates.
Earnings Per Share.
Primary Earnings Per Share are based upon 10,000,000 weighted average shares of
the Class A Common Stock and 10,000,000 weighted average shares of the Class B
Common Stock outstanding. No effect has been given to common stock equivalents
because none are outstanding.
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128: Earnings Per Share, which
is effective for financial statement periods ending after December 15, 1997.
This statement specifies the computation, presentation, and disclosure
requirements for earnings per share for entities with publicly held common stock
or potential common stock.
NOTE 2 - DEVELOPMENT STAGE ENTERPRISE
The Company, as per FASB Statement No. 7, is properly accounted for and reported
as a development stage enterprise. Substantially all of the Company's efforts
since its formation have been devoted to establishing its new business. No
significant revenue has been earned as of the balance sheet date. Operations
have been devoted to raising capital, purchasing zeolite property and
establishing a marketing plan.
Continuation of the development effort is contingent upon the Company raising
sufficient capital from shareholders or other sources. It is management's
intent to raise capital and further develop the marketing of its zeolite
products.
In 1992, the Company ceased active operations; however, the President personally
continued to pay state corporate fees to keep the corporation in good standing.
During its active life, the Company was an oil and gas operator and a medical
insurance claims processor through its wholly owned subsidiaries.
NOTE 3 - COMMON STOCK AND STOCKHOLDERS' EQUITY
Stock of the Company has been issued for cash, mining claims, compensation for
services, and in exchange for other stock.
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Equitable Assets Incorporated is the majority shareholder of the Company and has
direct control over the Company.
NOTE 4 - MINING CLAIMS
On March 1, 1998, the Company purchased 58,285.71 tons of zeolite from Equitable
Assets Incorporated. Equitable Assets Incorporated has since became the
Company's majority shareholder. Equitable Assets Incorporated purchased
1,275,000 tons of zeolite from Texas Arizona Mining Company, which has owned the
claims located in Yavapai County, Arizona since 1972.
NOTE 5 - NOTES PAYABLE
During the quarter ended March 31, 2000, notes payable decreased by $200,000.00
from the previous quarter. The note was issued by the Company on March 1, 1998
and payable in 45 days in conjunction with the purchase of the zeolite from
Equitable Assets Incorporated. In August of 1998, Equitable Assets Incorporated
filed a lawsuit for collection of the note and was awarded a judgment against
the Company on May 25, 1999 for $222,676.18 and attorney fees of $33,401.00.
Equitable Assets Incorporated settled with the Company on March 25, 2000 with
prejudice. Equitable Assets Incorporated can re-instate the judgment if the
settlement is opposed by any third party. Equitable Assets Incorporated assumed
payment of the legal fees and court cost. The Company no longer has any notes
payable.
NOTE 6 - PRIVATE PLACEMENT OF COMMON STOCK OR PREFERRED STOCK
During the quarter ended June 30, 2000, there were no private placements of
common stock, other than the Class A Common shares and the Class B Common shares
of common stock issued to settle the lawsuit with Equitable Assets Incorporated.
The shares issued to Equitable Assets Incorporated are subject to Rule 144 under
the Rule and Regulations promulgated by the United States Securities and
Exchange Commission.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
The Company has a contingent liability regarding its settlement with Equitable
Assets Incorporated. If the settlement is opposed by any third party connected
with the Company as a shareholder or former officer or director, the Equitable
Assets Incorporated re-instate the entire judgment of $222,676.18 and Attorney
fees of $33,401.00 and Court cost.
NOTE 8 - INCOME TAXES
The Company uses the accrual method of a accounting for tax and financial
reporting purposes. At December 31, 1999, the Company had net operating loss
carryforwards for financial and tax reporting purposes of approximately
$3,868,386.33. These carryforward expire through the year 2005, and are further
subject to the provisions of the Internal Revenue Code Section 382. Pursuant to
FASB Statement No. 109, the Company has recognized a deferred tax asset
attributable to the net operating loss carryover, which has been fully offset by
a valuation allowance in the same amount.
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2000 $ 442,083
2001 $ 280,604
2002 $ 238,837
2003 $ 377,905
2004 $ 353,886
2005 $ 91,588
------------
$ 1,784,903
============
Valuation
Allowance $(1,784,903)
The Company is currently investigating certain allegations of improprieties
involving former officers and investment bankers of the Company. The Company
does not believe that the improprieties, if proved true, would have a materially
adverse impact on the Company and may have a positive impact.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND PLAN OF OPERATIONS.
The Company, per FASB Statement No. 7, is properly accounted for and reported as
a development stage enterprise. The Company's efforts since entering its
current business have been devoted primarily to the Company's capitalization,
acquisition of mining properties, the estimate of the packaging and milling
facility acquisitions and product and market development.
The Company has realized no sales in each of its fiscal years ended January 31,
1998 through January 31, 1999. During the development stage the registrant
anticipates that it will develop over a dozen products and market these products
on a mass marketing initiative directly to the consumer in various parts of the
country.
RESULTS OF OPERATIONS
The Company is a development stage enterprise and has incurred losses in each of
its fiscal years ended January 31, 1997, 1998 and 1999 and for the quarters
ended June 30, 2000. This is due to the Company not having proper management of
its properties and the liquidity in order to implement a successful marketing
plan. Current management believes that by the 3rd Quarter of 2000 that the
marketing initiative plan will be fully operational because of the proprietary
nature of the market undertaking.
The Company is relying on its majority shareholder to arrange for the liquidity
in order to facilitate the marketing plan.
For the three months ended June 30, 2000, the Company realized a loss of
($5,090.61).
It is the intent of the Company to hire an in house attorney to keep the Company
in compliance with the relevant security, environment, mineral, and corporate
laws when the Company has the positive income to hire such a professional.
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LIQUIDITY AND FINANCIAL CONDITION
There can be no assurance that the Company's operations will be successful or
profitable. The Company anticipates that it will hire a mining engineer for
operating its property. The Company plans to use the evaluation work of
professional geologists, geophysicists, and engineers in determining whether to
acquire future interest in a specific property, or whether or not to commence
exploration or development work. These estimates are not always scientifically
exact, and in some instances result in the expenditure of substantial amount of
money on a property before it is possible to make a final determination as to
whether or not the property contains economically minable ore bodies. The
economic viability of a property cannot be finally determined until extensive
exploration and development work, plus a detailed economic feasibility study,
has been performed. Also, the market prices for mineralization produced are
subject to fluctuation and uncertainty, which may negatively affect the economic
viability of properties on which expenditures have been made. During the
development stage of the Company, from inception to December 31, 2000, the
Company has accumulated a deficit of $3,868,386.33.
At June 30, 2000, $10,200,000 of the Company's total assets of $10,609,860 were
investments in mineral properties. No additional exploration is required to
substantiate or determine whether these mineral properties contain ore reserves
that are economically recoverable. The realization of these investments is
dependent upon the success of future sales, the ability of the Company to obtain
financing, the Company's success in carrying out its present plans or making
other arrangements for development, and upon future profitable production. The
ultimate outcome of these investments cannot be determined at this time;
accordingly, no provision for any asset impairment that may result, in the event
the Company is not successful in developing or selling its products, has been
made in the Company's financial statements.
The Company currently has no revenues and, as explained above, has an
accumulated deficit. Because it has sustained recurring losses from operations,
the Company cannot assure that it will be able to fully carry out its plans as
budgeted without additional operating capital. In adjusting to smaller cash
resources, the Company has substantially decreased its expenses for office,
personnel and compensation, and consulting expenses.
In the second quarter of fiscal 2000, the Company increased its accounts payable
by $5,090.61. Accordingly, the Company's current liabilities moved from
$1,161,011.33 at December 31, 1999 to $63,866.61 at June 30, 2000. The Company
had no long-term debt at June 30, 2000 or at December 31, 1999.
The Company has estimated that it will need minimal capital resources of
approximately $500,000.00 to meet its estimated expenditures for fiscal 2000 in
order to undertake its marketing plan. Management is currently working on a
plan to raise capital by either a private placement by selling royalty interests
in its mineral property or a direct placement of its Class A Common Stock.
Management intends to meet with experienced financial and investment firms to
negotiate terms and arrangements for capital fund raising. During the fiscal
year ending December 31, 1999, the Company did not raise any funds. The Company
is continuing with the previously described plans and various alternatives to
raise capital. In addition, the Company has an agreement that if the majority
shareholder of the Company sells certain of its assets that the shareholder will
contribute the proceeds to the Company.
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The Board of Directors reasonably believes that the Company is able to engage in
nearly any size operation or scope of mining activity depending on the
circumstances and merits of each proposed operation or mining activity.
Accordingly, the Board has not limited the size of operation or scope of project
which it believes is reasonable for management to consider in achieving the
Company's business plan. Therefore, management has been authorized to consider
and review numerous proposals and, upon satisfactory assessment, to then make a
specific determination as to an estimated range of funding amounts that each
such proposal reasonably might require, not limited to tendering for shares of
other publicly traded companies.
In as much as the Company has not yet determined in detail the specifications of
the project, operation or mining activity that it intends to undertake,
management is not able at this time to provide a detailed listing or exact range
of operation costs, including increases in general and administrative expense,
if any. However, the Company plans to fund any increases in general and
administrative expense principally from joint venture revenues or funds it may
receive or savings it may realize through corporate restructuring or business
combination arrangements. Funds required to finance the Company's exploration
and development of mineral properties are expected to come primarily from the
contributions of its joint venture participants, and from the funds generated
from such joint ventures and other lease or royalty arrangements.
The Company currently is seeking alternate sources of working capital sufficient
to increase the funding of additional general and administrative expenses that
may become necessary as the Company's business plan develops, and to continue
meeting its ongoing payment obligations for its leases to governmental entities.
General and administrative expenses during the first half of fiscal 2000 have
been limited. The officers and directors have not been paid a salary and none
is forecast for the foreseeable future because none will be paid until the
Company has income for such expenditures. Most expenses for the Company has
been paid out of pocket by the officers or directors. In the quarter ended
December 31, 1999, the Company recorded a loss on of $1,598 and the loss in the
period ending December 31, 1999 was $234,678. As a result, during the first
quarter of fiscal 2000 compared to the last quarter of 1999, the net loss
decreased by $232,080 or a loss on an adjusted basis from $0.01 cent per share
for the year ended December 31, 1999 to $0.00025 per share for the three months
ended on June 30, 2000.
The Company is unable to fully determine the impact of future transactions on
its operating capital. Hence, the Company has determined not to incur and does
not have any commitments or plans for material capital expenditures during the
remainder of its current fiscal year for which it does not have a reasonably
available source of payment. It is uncertain what effect this decision may have
with respect to restricting capital expenditures.
On the one hand, if the Company were to continue such restriction, the likely
effect might be adverse to the preservation of its assets and capital base,
thereby narrowing the scope of plans for future operations and constricting
liquidity. On the other hand, if the Company were to discontinue such
restriction without an increase in sustained cash flow, the likely effect of
that might be an increase in accumulated deficits which could be adverse to the
Company's financial condition with respect to liabilities and stockholders'
equity.
Therefore, while the Company continues to seek a joint venture participant and
additional sources of capital for financing operations during the remainder of
its current fiscal year, the Company will continue to carefully monitor its
capital expenditures. The Company will have to rely on funding from private
placements, cash flows and other offerings for future operating and development
costs.
The inability to raise capital could have a material adverse effect on the
Company's business, financial condition, and results of operations.
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PLAN OF OPERATIONS
The Company has new management. The Company has hired a new chief executive
officer, a chief operating officer and a chief financial officer. The Company
is now directing its efforts to obtaining large sales contracts, tightening cost
controls and improving its financial position and the overall management of the
Company. The board of directors will be expanded to include persons with
significant sales management and/or financial management backgrounds, and the
board is currently seeking funding to continue and expand its operations.
Management believes that it can continue to fund its operations through external
financing until revenues reach the level at which the gross profits attained
will sustain and finance the operations.
The Company will develop new retail products in the current quarter: Kat Pause
cat litter, an odor eliminator for cat litter boxes, an odor neutralizer to
counter pet stains, a product which maintains ammonia control in fish aquariums,
an odor eliminator for carpets, an absorbent for cleaning automobile fluid
spills, and an ammonia remover for fresh and salt water fish tanks. There are
some proprietary development plans the Company is not disclosing until it can
protect the development from its competitors. The Company will sell its
products by a direct mass consumer marketing plan.
INFLATION
The Company does not expect inflation to have any material effect on its
revenues, costs or overall operation.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company initiated Court Action against L. Mychal Jefferson II, the
Company's former Chairman of the Board, former President and former Chief
Executive Officer to turn over the books and records of the Company to its
current management.
1. The lawsuit was filed in the 113th Judicial District Court, Harris
County, Texas.
2. The date of the filing was February 10, 2000.
3. Unicorp, Inc. F/K/A Auto Axzpt.com, Inc., Plaintiff vs. L. Mychal
Jefferson II, Defendant are the parties of the lawsuit.
4. L. Mychal Jefferson II resigned from the Board of Directors of the
Company and as an officer and has consistently ignored requests to turn
over the records of the Company to the Company. L. Mychal Jefferson II
is contractually obligated to turn over the records to Management
of the Company.
5. Plaintiff filed its Original Petition and Request for Mandamus Relief.
6. L. Mychal Jefferson's deposition has been taken and document requests are
outstanding.
In another matter, on March 25, 2000 the Company settled a judgment that
Equitable Assets Incorporated secured against the Company on May 25, 1999 in the
190th Judicial District Court of Harris County, Texas in the amount of
$222,676.18 plus court cost and attorney's fees.
(SEE NOTE 7 COMMITMENTS AND CONTINGENCIES)
ITEM 2. CHANGES IN SECURITIES.
On March 6, 2000, the capital structure of the Company was modified. The
Company now is authorized to issue three classes of stock. The Company has
authorized 100,000,000 shares of Class A Common Stock, par value $.0001.
Holders of the Class A Common Shares shall have the authority to elect one-third
(1/3) of the Board of Directors and shall be entitled to receive two-thirds
(2/3) of any cash dividends of this corporation with the exception being any
share distribution and then the dividend shall be distributed share for share or
otherwise at the discretion of the Board of Directors. The Class A Common
Shares capitalization account shall be entitled to accrue and receive two-thirds
(2/3) of any earnings or two-thirds of any losses.
The Company has authorized 100,000,000 shares of Class B Common Stock, par value
$.0001. Holders of the Class B Common shares shall have the authority to elect
two-thirds (2/3) of the Board of Directors and shall be entitled to receive
one-third (1/3) of any cash dividends of this corporation with the exception
being any share distribution and then the dividend shall be distributed share
for share or otherwise at the discretion of the Board of Directors. The Class B
Common Shares capitalization account shall be entitled to accrue and receive
one-third (1/3) of any earnings or one-third (1/3) of any losses.
The Company has authorized 100,000,000 shares of Preferred Class with each share
having a par value of $.0001. The Board of Directors is authorized, without
action by the holders of either Class of Common Stock, to provide for the
issuance of preferred shares in one or more series, to establish the number of
shares in each series and to fix the value, conversion privileges, dividend
rates, redemption rights, sinking fund provisions and liquidation rights which
shall be superior to any class of the Common Stock.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
During the quarter ended June 30 , 2000, there was no material default in the
payment of principal, interest, sinking or purchase fund installments, or any
other material default not cured within 30 days, with respect to any
indebtedness of the Company exceeding five percent of the total assets of the
Company, nor was there any material arrearage in the payment of dividends with
respect to any class of preferred stock of the Company which is registered or
which ranks prior to any class of registered securities, or with respect to any
class of preferred stock of any significant subsidiary of the Company (The
Company currently has no dividend policy). The Company settled a lawsuit with
Equitable Assets Incorporated on March 25, 2000 whereby Equitable Assets
Incorporated, in part, exchanged its Series A, $100, 8 1/2% Callable Preferred
for Class A Common Stock and Class B Common Stock of the Company. The Company
has no Preferred Stock outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
During the quarter ended June 30 , 2000, no matters were submitted to a vote of
security-holders.
ITEM 5. OTHER INFORMATION.
No reports were filed on Form 8-K during the quarter ended June 30, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a)(1) The following financial statements are included in Part I, Item 1:
Balance Sheets - March 31, 2000 and January 31, 1999. . . . . . . Page 5
Statements of Stockholders' Equity (Deficit) - period
ended March 31, 2000 - period ended January 31,1999 . . . . . . . Page 6
Statements of Operations - three months period ended on March
31, 2000 - twelve months period ended on December 31, 1999. . . . Page 7
Statements of Cash Flows - three months period ended on March
31, 2000 - twelve months period ended on December 31, 1999. . . . Page 7
Notes to Consolidated Financial Statements. . . . . . . . . . . . Pages 8 - 12
(3) The following exhibits are included for the three months and quarters
ended March 31 , 2000 and January 31, 1999:
Exhibit 1 - Computation of Earnings (Loss) Per Share
Exhibit 27 - Financial Data Schedule
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All other exhibits are omitted since the required information is included in the
financial statements or notes thereto, or since the required information is
either not present, not present in sufficient amount or is not applicable.
(b) No reports were filed on Form 8-K during the quarter ended June 30, 2000.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNICORP, INC.
Date: August 11, 2000 By: /s/ Louis G. Mehr, President
-------------------------------------
Louis G. Mehr, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Company and in their
capacities and on the dates indicated.
/s/ Louis G. Mehr President, Chief Executive August 11, 2000
----------------------- Officer and Director
Louis G. Mehr (Principal Executive Officer)
/s/ John Marrou Chief Financial Office August 11, 2000
------------------------ (Principal Accounting Officer)
John Marrou
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
11 Computation of Earnings (Loss) Per Share
27 Financial Data Schedule
21
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