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 30,1999
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: 0-13066
ProCare Industries, Ltd.
(Exact name of small business issuer 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, CA 92083
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 760-599-8559
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 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of September 30, 1999 there
were approximately 766,715 common shares outstanding.
<PAGE>
1. PART 1 - FINANCIAL INFORMATION
Item 1. Financial statements
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD
BALANCE SHEET
September 30, December 31,
1999 1998
---- ----
(Unaudited)
<S> <C> <C>
ASSETS ........................................... $ -0- $ -0 -
-----------
TOTAL ASSETS ............................... $ -0- $ -0-
--------- -----------
LIABILITIES ...................................... $ 15,814 $ -0-
--------- -----------
COMMITMENTS AND CONTINGENCIES(2) ................. $ -0- $ -0-
--------- -----------
TOTAL LIABILITIES .......................... $ 15,814 $ -0-
--------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $ 1.00 par value, 5,000,000
shares authorized; none issued ................
Common stock, no par value, 100,000,000 shares
authorized: 766,715, and 36,659,919 shares
issued and outstanding at September 30, 1999
and September 30, 1998(1) .................... $ 20,328 $3,179,795
Additional paid-in capital(1) ................. $ -0- $1,215,028
Accumulated deficit(1) ........................ ($ 36,142) ($4,394,823)
-------- ----------
TOTAL STOCKHOLDERS' EQUITY ................. $ -0- $ -0-
-------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ....................... $ -0- $ -0-
-------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PROCARE INDUSTRIES, LTD.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITIED)
For the three months ended September 30, 1999
and September 30, 1998, respectively
1999 1998
---- ----
<S> <C> <C>
NET SALES ............................... $ -0- $ -0-
COSTS OF SALES .......................... $ -0- $ -0-
GROSS PROFIT ............... $ -0- $ -0-
OPERATING EXPENSES
General and Administrative ...... $ 12,783 $ -0-
TOTAL OPERATING EXPENSES ................ $ 12,783 $ -0-
NET INCOME ON OPERATIONS
BEFORE INCOME TAXES ................. ($ 12,783) $ -0-
INCOME TAXES ............................ $ -0- $ -0-
NET INCOME .............................. ($ 12,783) $ -0-
-------- ---------
INCOME PER AVERAGE COMMON SHARE ......... ($ 0.02) $ -0-
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
STATEMENT OF OPERATIONS
(UNAUDITED)
For the nine months ended September 30, 1999 and September 30, 1998 respectively
1999 1998
---- ----
<S> <C> <C>
NET SALES ............................... $ -0- $ -0-
COSTS OF SALES .......................... $ -0- $ -0-
GROSS PROFIT ............... $ -0- $ -0-
OPERATING EXPENSES
General and Administrative ...... $ 36,142 $ -0-
TOTAL OPERATING EXPENSES ................ $ 36,142 $ -0-
NET INCOME ON OPERATIONS
BEFORE INCOME TAXES ................. ($ 36,142) $ -0-
INCOME TAXES ............................ $ -0- $ -0-
NET INCOME .............................. ($ 36,142) $ -0-
-------- ---------
INCOME PER AVERAGE COMMON SHARE ......... ($ 0.05) $ -0-
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the nine months ended
September 30, 1999 and September 30, 1998, respectively.
1999 1998
---- -----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ......................... ($ 36,142) $ -0-
NET CASH USED IN OPERATING ACTIVITIES .. $ 20,328 $ -0-
CASH FLOWS FROM INVESTING ACTIVITIES ... $ 20,328 $ -0-
CASH FLOWS FROM FINANCING ACTIVITIES ... $ 15,814 $ -0-
NET INCREASE (DECREASE) IN CASH ........ $ -0- $ -0-
CASH, BEGINNING OF PERIOD .............. $ -0- $ -0-
CASH, END OF PERIOD .................... $ -0- $ -0-
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PROCARE INDUSTRIES, LTD.
Notes to Financial Statements
(Unaudited)
PART I ( continued )
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 dismissed the Chapter 11 action and
liquidated all Company assets in March 1990, when the secured creditors rejected
the Plan of Reorganization submitted by management. No operations occurred
between 1990 and July 1, 1998.
Note 1. The accompanying financial statements have been prepared in accordance
with the instructions to Form 10-Q and do not include all information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation of
the current financial condition of registrant have been included, and the
disclosures are adequate to make the information presented not misleading. As
discussed in Note 4, the financial statements as of September 30, 1999 have been
prepared as if the changes approved by shareholders were effective January 1,
1999, as to the quasi-reorganization and June 30, 1999 as to the reverse stock
split.
Note 2. The Company had no operations from 1990 through June 30, 1998. 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. The anticipated acquisition would likely be through
a "reverse merger" process whereby the "owners" of the acquired company would
take control of a majority of the voting stock, Board of Directors and
management of the Company.
Note 3. Income taxes have not been provided for in that the registrant has had
no tax liability since inception. Registrant has not declared or paid a dividend
on its common stock since inception.
Note 4. The Stockholders Equity section reflects the approval by shareholders on
July 6, 1999 of: (A) a quasi-reorganization to eliminate the accumulated deficit
and paid in capital which accumulated from inception of the Company through
December 31, 1998 effective January 1, 1999, and (B) a 1 for 100 reverse split
of the common stock, effective July 8, 1999.
Note 5. In July 1999 the Company, through the Board of Directors, entered into
an agreement with Robert Marsik, its President, whereby Mr. Marsik agreed to
serve as President and to continue to fund the expenses of the Company and the
expenses associated with an acquisition, if one occurs, for the next twelve
months or until an acquisition transaction, if earlier, for a contingent fee of
$150,000. The contingent fee shall be payable to Marsik only if an acquisition
or reverse merger occurs, and only if the funds are available.
ITEM 2. Management's Plan of Operation. Management intends to locate and
acquire, or be acquired by, another business. Management believes that a
significant number of private businesses would be interested in a business
combination with the Company, primarily in order to become a public-reporting
entity with a market for its securities. The Company is a public-reporting
entity with common stock listed on the NASD OTC Bulletin Board.
Year 2000 concerns. Since the Company has had no operations from 1990 through
June 1998 there are no historical records currently maintained on computer files
and the Company currently owns no computer equipment. Therefore, the year 2000
concerns that may impact other businesses should have little or no impact on the
Company. However, the year 2000 concerns may have an impact on any business the
Company may acquire in the future and management intends to research this issue
as part of the "due diligence" related to any potential acquisition.
6
<PAGE>
Liquidity and Capital Resources: The Company presently has no source of
liquidity or capital, other than the commitment of its President to continue to
provide needed funds.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: There is no pending litigation in which the Company
is presently a party to and management is not aware of any litigation which may
arise in the future.
Item 2. Changes in Securities and Use of Proceeds:
(a) During the second quarter shareholders approved a 1 for 100 reverse stock
split of the common stock which became effective July 8, 1999.
(c) Effective January 29, 1999 the Company issued 40,000,000 shares of its
common stock to three members of the Board of Directors for costs incurred in
1998 by those Directors in "cleaning up" the Company and submitting the
appropriate filings to the SEC so that the Company is in compliance with
reporting obligations under Security Exchange Act of 1934, as amended. The
Company relied upon Section 4(2) of the Securities Act of 1933 in issuing the
shares without registration.
Item 3. Default Upon Senior Securities: None.
Item 4. Submission of Matters to a Vote of Security Holders: At a special
meeting of shareholders on July 6, 1999 shareholders considered several matters
submitted by Proxy Statement to shareholders of record as of June 17, 1999. The
matters were: (a) a 1 for 100 reverse split of the common stock, (b) elimination
of paid in capital and deficit accumulated prior to December 31, 1998 (a
"quasi-reorganization"), (c) election of three Directors, and (d) approval to
change the name of the Company upon completion of a reverse merger or
acquisition. All of these issues pertained to "cleaning up" the Company to
accommodate an acquisition of an operating business. At the shareholders'
meeting the Board of Directors, Robert Marsik, Allan Bergenfield and Joseph
Rizzo was re-elected and the other three matters were approved. All of these
issues were approved by more than a majority of outstanding shares. Now that
these steps have been taken, management will actively seek a suitable
acquisition partner. There are now approximately 766,715 shares outstanding.
Item 5. Other Information: On March 9, 1999 an unaffiliated broker/dealer
obtained clearance from NASD for the common stock of the Company to trade on the
OTC electronic Bulletin Board. The trading symbol PCRF was established.
Item 6. Exhibits and Reports of Form 8-K:
(a) Exhibits.
27 Financial Data Schedule.
(b) Reports on Form 8-K. The following reports on Form 8-K were filed during the
third quarter:
1. On July 8, 1999 the Company filed a Report on Form 8-K advising the
agency that Shareholders had approved a 1 for 100 reverse split of the
common stock and a quasi-reorganization to eliminate its paid-in
capital and the deficit incurred prior to December 31, 1998. The
Company had 76,659,919 common shares outstanding prior to the reverse
split and approximately 766,660 common shares issued and outstanding
following the reverse split.
7
<PAGE>
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 this 25th day of October,
1999.
PROCARE INDUSTRIES, LTD.
(Registrant)
By /s/ Robert W. Marsik
--------------------------------------------------------
Robert W. Marsik, President and Chief Executive Officer
*******
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 15,814
<BONDS> 0
0
0
<COMMON> 20,328
<OTHER-SE> 0
<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> (36,142)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
