SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Amendment No. 2
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended: December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 0-13066
PROCARE INDUSTRIES, LTD.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0932231
------------------------------ ---------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1960 White Birch Drive, Vista, California 92083
----------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (760) 599-8559
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, No Par
Value
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 [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing: The
common shares of registrant are not traded at the present time on any medium.
There is no market in the shares and no shares have been issued.
Indicate the number of shares outstanding of each of registrant's classes of
common stock as of the latest practicable date: As of August 1, 1998, there were
approximately 36,659,919 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the documents incorporated by reference and the Part of this Form
10-KSB into which the document is incorporated: None.
1
<PAGE>
PART I
Item 1. Description of Business
ProCare Industries, Ltd. (the "Company"), was incorporated under the laws of
Colorado on December 30, 1983, primarily for the purpose of developing,
manufacturing and marketing certain electronic testing products and consumer
products. On November 11, 1984, the Company completed an initial public offering
in which 10,336,210 shares of its no par value common stock were sold for net
proceeds of $1,284,303. On March 26, 1986, the Company completed an offering
made to existing shareholders and to the publi in which 2,617,377 units (each
consisting of one common share and one stock purchase warrant) were sold for net
proceeds of approximately $906,000. The unexercised warrants were redeemed by
the Company on September 4, 1986; however, prior to redemption, 2,526,741
warrants were exercised at a strike price of $.60 each, resulting in net
proceeds of approximately $1,515,954. During 1988, the Company conducted a
private offering of units, raising approximately $95,000 in gross proceeds,
which resulted in th issuance of 905,000 common shares and an equal number of
two series of warrants, each of which subsequently expired.
On September 22, 1988, the Company filed a petition for Chapter 11
Reorganization with the United States Bankruptcy Court for the District of
Colorado, listing $1,600,000 in assets and $1,200,000 in liabilities. The
reorganization was unsuccessful, no plan of reorganization was approved by
secured creditors and in February 1990, the Chapter 11 filing was dismissed and
the business activities of the Company ceased. During the reorganization, all
assets of the Company were converted to cash and distributed to secured
creditors. The Company believes that claims of unpaid creditors have become
uncollectible against the Company because of the statute of limitations
applicable to the collection of debt.
In late 1997, Mr. Robert W. Marsik, Allan Bergenfield and Joseph Rizzo, the sole
remaining directors and executive officer adopted a new plan of business on
behalf of the Company and appointed new officers for the purpose of bringing the
plan to bear. The new plan primarily provided for the "clean up" of the Company
so as to provide for the filing of all delinquent reports with the Colorado
Secretary of State, the U.S. Securities and Exchange Commission and the Internal
Revenue Service. Thes initial objectives have been achieved with the filing of
this 10-KSB report. Phase two of the adopted business plan includes attempting
to acquire either a U.S. based or a foreign based corporation that is privately
owned, has assets, revenues and earnings, and wishes to become a publicly owned
corporation. THE COMPANY CURRENTLY HAS NO PROSPECTIVE ACQUISITION CANDIDATES AND
HAS NOT DISCUSSED THIS PLAN WITH POTENTIAL ACQUISITION CANDIDATES.
Item 2. Description of Properties
The principal executive offices of the Company are presently located at 1960
White Birch Drive, Vista, California 92083. The telephone number at this address
is (760) 599-8559. The Company is receiving the use of this space free of charge
from Mr. Marsik.
Item 3. Litigation
No material legal proceedings to which the Company is a party or to which the
property of the Company is subject is pending and no such material proceeding is
known by management of the Company to be contemplated.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period covered by this
report.
2
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
No market for the common stock of the Company existed as of the date of this
report, nor for the last five years. Any market which existed for these shares
ceased when the assets were liquidated to secured creditors in February, 1990.
Outstanding Shares and Shareholders
As of December 31, 1997, the transfer ledgers maintained by the Company's stock
transfer agent indicated that there were 36,659,919 shares of common stock
issued and outstanding held by 2,113 shareholders of record on that date. There
were no shares of preferred stock outstanding on that date.
Dividends
The Company has not declared or paid any dividends on the common stock from
inception to the date of this report, although there are no restrictions on the
payment of dividends. Further, no dividends are contemplated at any time in the
foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following should be reviewed in connection with the financial statements and
management's comments thereon set forth under this and Item 7, below.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Statement of Operations:
Revenues ............................... $ -- $ -- $ --
Operating Expenses ..................... -- -- --
Net Profit (Loss) ...................... -- -- --
Profit (Loss) Per Share ................ * * *
Balance Sheet Data:
Assets: ................................ $ -- $ -- $ --
Liabilities: (1) ....................... -- -- --
Stockholder's Equity (Deficit): ........ -- -- --
</TABLE>
*Negligible in amount.
(1) The Company believes that there were approximately $ 1,200,000 in unpaid
obligations of the Company at the time the bankruptcy reorganization was
dismissed in February 1990. The Company believes none of such claims would be
collectible by creditors as the statute of limitations applicable to collection
of such debt has expired.
Liquidity
The Company has not generated any cash flows from operating or investing
activities since February, 1990. No operating capital was necessary through the
fiscal period covered by this report. Operating capital subsequent to December
31, 1997 used to resurrect the corporate status of the company, establish its
shareholder records and for similar purposes, totaling approximately $ 3,600 was
primarily provided by Mr. Marsik. The Company intends to issue shares of its
common stock to reimburse such advances.
Results of Operations
The Company had no operations from 1988 through December 31, 1997. In August
1998, the Company adopted the business plan set forth under Item 1, above.
The Company utilizes no computer system and does not consider that it is
presently dependent upon any technology which may be affected by "Year 2000"
computer problems. The Company has not devoted any attention or resources to
resolving Year 2000 problems. However, if the Company is successful in acquiring
a private business, such business could have unresolved Year 2000 issues.
However, no such issues are presently known to the Company.
3
<PAGE>
Item 7. Financial Statements
INDEX TO FINANCIAL STATEMENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS:
Balance Sheets as of December 31, 1997 and 1996 F-2
Statements of Operations for the years ended
December 31, 1997, 1996 and 1995 F-3
Statements of Changes in Stockholders' Equity for
the years ended December 312, 1997, 1996 and 1995 F-4
Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995 F-5
NOTES TO FINANCIAL STATEMENTS F-6 - F-7
4
<PAGE>
Harlen & Boettger, LLP
Certified Public Accountants
James C. Harlan III
William C. Boettger
P. Rober Wilkinson
Marshall J. Varanao
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
ProCare Industries, Ltd.:
We have audited the accompanying balance sheets of ProCare Industries, Ltd. (a
development stage company) as of December 31, 1997 and 1996 and the related
statements of operations, changes in stockholders' equity, and cash flows for
the years ended December 31, 1997, 1996 and 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of ProCare Industries, Ltd., as of
December 31, 1997, and 1996, and the results of its operations and its cash
flows for the years ended December 31, 1997, 1996 and 1995 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will be a going concern. As shown in the financial statements, the Company has
not generated revenue from operations and has no equity. These conditions raise
substantial doubt about the Company's ability to be a going concern.
Management's plans in regards to those matters are described in Note C. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Harlan & Boettger, LLP
San Diego, California
July 30, 1998
5415 Oberlin Drive o San Diego, California 92121
Telephone (619) 535-2000 o Facsimile (619) 535-2015
F-1
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
(A Development Stage Company)
BALANCE SHEETS
December 31,
--------------------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS ............................... $ -- $ --
----------- -----------
TOTAL ASSETS ............... $ -- $ --
=========== ===========
LIABILITIES
COMMITMENTS AND CONTINGENCIES
(Note B and C) ..................... -- --
----------- -----------
TOTAL LIABILITIES .......... -- --
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value,
5,000,000 shares authorized;
none issued ........................ -- --
Common stock, no par value,
100,000,000 shares authorized;
36,659,919 shares issued and
outstanding ....................... 3,175,795 3,175,795
Additional paid-in capital ........... 1,215,028 1,215,028
Accumulated deficit .................. (4,390,823) (4,390,823)
----------- -----------
TOTAL STOCKHOLDERS'
EQUITY ..................... -- --
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ...... $ -- $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
See accompanying Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
STATEMENTS OF OPERATIONS
(A Development Stage Company)
For the years ended December 31,
-------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
NET SALES ................... $ -- $ -- $ --
COSTS OF SALES .............. -- -- --
----------- ------------- -------------
GROSS PROFIT ........... -- -- --
----------- ------------- -------------
OPERATING EXPENSES
General and
administrative ........ -- -- --
----------- ------------- -------------
TOTAL OPERATING EXPENSES .... -- -- --
----------- ------------- -------------
INCOME TAXES ................ -- -- --
----------- ------------- -------------
NET INCOME .................. $ -- $ -- $ --
=========== ============= =============
INCOME PER AVERAGE
COMMON SHARE ............. $ -- $ -- $ --
=========== ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
Common Stock Additional Total
-------------------- Paid-In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 ................... 36,659,919 3,175,795 1,215,028 $(4,390,823) $ --
---------- --------- --------- ---------- ----------
Balance, December 31, 1995 ................... 36,659,919 3,175,795 1,215,028 (4,390,823) --
---------- --------- --------- ---------- ----------
Balance, December 31, 1996 ................... 36,659,919 3,175,795 1,215,028 (4,390,823) --
---------- --------- --------- ---------- ----------
Balance, December 31, 1997 ................... 36,659,919 3,175,795 1,215,028 $(4,390,823) $ --
========== ========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
For the years ended
December 31,
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................. $ -- $ -- $ --
------- ------- -------
NET CASH USED IN OPERATING ACTIVITIES ......... -- -- --
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES .......... -- -- --
------- ------- -------
NET CASH USED IN INVESTING ACTIVITIES ......... -- -- --
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES .......... -- -- --
------- ------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES ..... -- -- --
------- ------- -------
NET INCREASE (DECREASE) IN CASH ............... -- -- --
CASH AT BEGINNING OF PERIOD ................... -- -- --
------- ------- -------
CASH AT END OF PERIOD ......................... $ -- $ -- $ --
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
PROCARE INDUTRIES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
A. Organization and Summary of Significant Accounting Policies:
Organization
ProCare Industries, Ltd. (the "Company") was incorporated under the laws of
the State of Colorado on December 30, 1983 and became a publicly traded
company on the NASDAQ Market in 1984. In September 1988, the Company filed
a Chapter 11 Bankruptcy petition and subsequently liquidated all its assets
(Note B).
The Company had no operations from 1990 through December 31, 1997. The
Company is a development stage business which intends to attempt to acquire
a United States or foreign based corporation which is privately owned and
wishes to become a public Company.
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 statements and reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all investments with a maturity of three months or
less to be cash equivalents.
Income Taxes
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." A
deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carryforwards.
Deferred tax expense (benefit) results from the net change during the year
of deferred tax assets and liabilities.
B. Chapter 11 Bankruptcy and Liquidation of Assets:
On September 22, 1988, the Company filed a voluntary petition under Chapter
11, Title 11, O.S.C. with the United States Bankruptcy Court for the
District of Colorado, Case Number 88 B 12842 E. Management of the Company,
in conjunction with special legal counsel related to the bankruptcy
proceedings, submitted a reorganization plan to the court during August
1989. Management of the Company operated under the Chapter 11 action until
February 1990. On March 6, 1990, the secured creditors of the Company
rejected the Plan of Reorganization and the Company ceased operations and
was liquidated for the benefit of the secured creditors. Management
believes all liabilities were discharged through the liquidation process.
Management is unaware of any liabilities due as of December 31, 1997 or
1996 as a result of these proceedings.
F-6
<PAGE>
PROCARE INDUSTRIES, LTD.
(A Development State Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
C. Going Concern
The Company has not had operations since February 1990. Management believes
the Company will generate operating capital in future periods as a result
of acquiring an operating company. The ability of the company to become a
going concern is dependent on its success in acquiring an operating company
which will enable it to achieve future profitability and sufficient cash
flows. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
F-7
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company has had no disagreement with its accountant on any matter of
accounting principal or practice, financial statement disclosure or auditing
scope or procedure which would have caused the accountant to make reference in
its report upon the subject matter of the disagreement.
PART III
Item 9. Directors and Executive Officers of the Company
The following table sets forth all directors and executive officers of the
Company, as of September 30, 1998, as well as their ages:
NAME AGE POSITION WITH COMPANY*
Robert W. Marsik 52 Chairman of the Board of Directors, Chief
Executive, Financial and Accounting Officer,
President and Treasurer
Allan Bergenfield 57 Director
Joseph V. Rizzo 67 Director
* No current director has any arrangement or understanding whereby they are or
will be selected as a director or nominee. 9
Officers will hold office until the next annual meeting of shareholders and
until their successors have been duly elected and qualified. The officers are
elected by the Board of Directors at its annual meeting immediately following
the shareholders' annual meeting and hold office until their death or until they
earlier resign or are removed from office. There are no written or other
contracts providing for the election of directors or term of employment of
executive officers, all of whom serve on an "at will" basis.
The Company does not have any standing audit, nominating or compensation
committees, or any committees performing similar functions. The board will meet
periodically throughout the year as necessity dictates. During the years of
1990, 1991, 1992, 1993, 1994, 1995, 1996 and 1997, the board held only one
meeting, acting by consent as necessity dictated. In 1998 the Board has held
meetings and acted by consent as necessity dictated.
Executive Profiles
Robert W. Marsik was the Founder of ProCare and has been an executive officer
and director of the Company since inception. On May 17, 1993, he was appointed a
director and executive officer of America's Coffee Cup, Inc. On December 18,
1997, he resigned all positions with this entity to pursue other business
interests and has acted as an independent business consultant. Mr. Marsik
graduated in 1970 from the University of Maryland at College Park, Maryland,
with a degree in Business Administration/Marketing.
Allen Bergenfield has been a director of the Company since March 1987. He is the
President and principal owner of Mid Atlantic Manufactures Brokers, Inc. which
is a regional sales and marketing company servicing primarily the Eastern
Seaboard portion of the United States and provides sales, broker and marketing
services for numerous personal care manufacturing companies. He established this
business in 1985 after resigning a position as Senior Vice President of
Marketing for Minnetonka Inc. a manufacturer of health and beauty aids.
5
<PAGE>
Joseph V. Rizzo was a Director for the Company from its inception until his
resignation in 1987. Mr. Rizzo is now retired and resides in San Jose
California. During his executive career he held positions of Vice President and
President of numerous electronic and manufacturing companies, most recently with
D. B. Products and prior to that with Oak-Mitsui Corporation.
Item 10. Executive Compensation
No compensation was paid to the Board of Directors or executive officers of the
Company in their capacities as such to the date of this report, and no cash
compensation is anticipated to be paid at any time in the immediate future to
any member of the board in that capacity.
Employment Agreements: None.
Item 11. Security Ownership of Management and Certain Others
Based upon information which has been made available to the Company by its stock
transfer agent, the following table sets forth, as of August 1, 1998, the shares
of common stock owned by each current director, by directors and executive
officers as a group and by each person known by the Company to own more than 5%
of the outstanding Common Stock:
<TABLE>
<CAPTION>
Name and Address of
Title of Class Beneficial Owner Number of Shares Percent of Class (1)
- -------------- ------------------- ---------------- -------------------
<S> <C> <C> <C>
Common Stock Robert W. Marsik 4,798,500 13.08
1960 White Birch Drive
Vista, California 92083
Common Stock Allan Bergenfield 234,000 .06
12000 Trailridge Drive
Potomac, MD 20854
Directors and Executive 5,032,500(2) 13.14
Officers as a Group
(one in number):
</TABLE>
(1) Based on 36,659,919 shares of common stock issued and outstanding on
December 31, 1997 and August 1, 1998. (2) These shares have been held for more
than 10 years.
Item 12. Certain Transactions
In November 1998, the Company issued 40,000,000 shares of its common stock,
which had no market value, to the three directors of the Company for
approximately $3,600 in expenses advanced on behalf of the Company and for
services provided in connection with reactivation of the Company and
reestablishing the Company as a Colorado corporation in good standing. The
shares were issued as follows: 36,00,000 shares to Robert W. Marsik, and
2,000,000 shares each to Allen Bergenfield and Joseph Rizzo. Following this
issuance, there were 76,659,919 shares issued and outstanding.
6
<PAGE>
PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
The following documents and reports have been filed as a part of this report:
1. Financial Statements:
(a) Independent Auditor's Report
(b) Balance Sheets
(c) Statements of Operations
(d) Statements of Changes in Stockholders' Equity
(e) Statements of Cash Flows
(f) Notes to Financial Statements
2. Financial Statement Schedules: None.
3. Exhibits required by Item 601: None.
4. Reports on Form 8-K: None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PROCARE INDUSTRIES, INC.
Date: March 12, 1999 By: /s/ Robert W. Marsik
---------------- ---------------------------
Robert W. Marsik, President,
Chief Executive, Financial
and Accounting Officer,
Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: March 12, 1999 By: /s/ Robert W. Marsik
---------------- --------------------------
Robert W. Marsik, Director
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 4,390,823
<OTHER-SE> (4,390,823)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
