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: 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
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Commission file number: 0-13066
ProCare Industries, Ltd.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0932231
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(State or other jurisdiction of ( I.R.S. employer
incorporation or organization) identification number)
1960 White Birch Drive, Vista, CA 92083
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(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 June 30, 2000 there were
approximately 1,785,559 common shares outstanding.
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1. PART 1 - FINANCIAL INFORMATION
Item 1. Financial statements
<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
BALANCE SHEET
June 30, December 31,
2000 1999
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(Unaudited)
<S> <C> <C>
ASSETS
CASH .............................................................. $ 622 $ 14,916
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ADVANCES .......................................................... $ 27,700 $ -0-
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TOTAL ASSETS ................................................ $ 28,322 $ 14,916
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LIABILITIES
ACCOUNTS PAYABLE .................................................. $ 17,822 $ 8,752
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ADVANCES .......................................................... $ 75,000 $ 25,000
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COMMITMENTS AND CONTINGENCIES ..................................... $ -0- $ -0-
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TOTAL LIABILITIES ........................................... $ 92,822 $ 33,752
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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: 1,785,559 shares
issued and outstanding at June 30,2000
and December 31, 1999 ......................................... $ 35,936 $ 35,936
Additional paid-in capital ..................................... $ -0- $ -0-
Accumulated deficit ............................................ ($ 100,436) ($ 54,772)
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TOTAL STOCKHOLDERS' EQUITY .................................. ($ 64,500) ($ 18,836)
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ........................................ $ 28,322 $ 14,916
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
STATEMENT OF OPERATIONS
(UNAUDITIED)
For the six months ended June 30, 2000, and June 30, 1999, respectively
2000 1999
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<S> <C> <C>
NET SALES .............................................. $ -0- $ -0-
COSTS OF SALES ......................................... $ -0- $ -0-
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GROSS PROFIT .............................. $ -0- $ -0-
OPERATING EXPENSES
General and Administrative ..................... $ 45,664 $ -0-
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TOTAL OPERATING EXPENSES ............................... $ 45,664 $ -0-
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NET INCOME ON OPERATIONS
BEFORE INCOME TAXES ................................ ( $ 45,664) $ -0-
INCOME TAXES ........................................... $ -0- $ -0-
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NET INCOME ............................................. ( $ 45,664) $ -0-
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INCOME PER AVERAGE COMMON SHARE ........................ ( $ 0.03) $ -0-
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
PROCARE INDUSTRIES, LTD.
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the six months ended June 30, 2000 and June 30, 1999, respectively.
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss .......................................... ($ 45,664) $ -0-
INCREASE IN ACCOUNTS PAYABLE ............................ $ 9,072 $ -0-
INCREASE IN ADVANCES TO OFFICER ......................... ($ 27,700) $ -0-
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NET CASH USED IN OPERATING ACTIVITIES ................... $ 64,294 $ -0-
CASH FLOWS FROM INVESTING ACTIVITIES .................... $ -0- $ -0-
INCREASE IN ADVANCES .................................... $ 50,000 $ -0-
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NET INCREASE (DECREASE) IN CASH ......................... ($ 14,294) $ -0-
CASH, BEGINNING OF PERIOD ............................... $ 14,916 $ -0-
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CASH, END OF PERIOD ..................................... $ 622 $ -0-
======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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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.
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. The
financial statements have been prepared as if the changes discussed in Note 4
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 December 31, 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. The agreement was
revised in June 2000 to reflect the parties original intentions and was extended
for a period of six months. As of June 30, 2000 $57,700 of the contingent fee
obligation has been advanced to Mr. Marsik in anticipation of closing the merger
pending with FastPoint Communications, Inc.
ITEM 2. Management's Plan of Operation. We have no business operations and we
have no revenue. Since late 1997 we have set out to reestablish the Company as
an operating public company. We have sought to locate and acquire, or be
acquired by, another business. The Company is a public-reporting entity with
common stock listed on the NASD OTC Bulletin Board. As of December 17, 1999 we
signed a Letter of Intent describing our mutual intention that ProCare will
acquire all of the outstanding stock, including business and assets of FastPoint
Communications, Inc. which is a privately-held Delaware corporation based in Los
Angeles, California engaged in business as an internet service provider. The
"reverse merger" is expected to be completed in 2000. In the transaction, a
newly formed subsidiary of the Company will be merged into FastPoint and we will
exchange shares equal to approximately 88% of our outstanding stock after the
merger for all the FastPoint stock. A vote of our shareholders will not be
required to complete the transaction. Following the planned transaction the
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Company would be re-named "FastPoint Communications, Inc." and will be the
parent corporation of FastPoint Communication, Inc., a Delaware corporation,
which would be the operating entity. Upon completion of the transaction the
present management of FastPoint will become management and directors of the
Company, and will implement its business plan in the Internet communications
business. On March 8, 2000 the Company and FastPoint entered into an amended
Letter of Intent, which called for a closing to occur on or about May 31, 2000.
As of the date this report is filed, the transaction with FastPoint has not
closed. We tentatively agreed to extend the date by which the transaction must
be completed to September 15, 2000. We do not know whether FastPoint will agree
to complete the transaction. We believe the delay is due primarily to
FastPoint's need to raise additional capitalization to continue to fund its
business development. We do not presently know whether FastPoint will agree to
complete the transaction in a timely manner. If FastPoint elects not to proceed
with the transaction it would forfeit the $75,000 deposit to ProCare and we
would seek another merger transaction.
Year 2000 concerns. As the Company has had no operations from 1990 through
December 31, 1999, 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. FastPoint Communications has confirmed to the satisfaction of
management that their company and all of its computer systems are year 2000
compliant and that they have experienced no operational problems as of March
31,2000 related to the Y2K problem and they anticipate no future problems
related to the Y2K problem.
Liquidity and Capital Resources: ProCare presently has no source of liquidity or
capital, other than the commitment of its President to continue to provide
needed funds. FastPoint has advanced $75,000 to us in accordance with its
obligations under the revised Letter of Intent. This cash was used by ProCare
for ongoing expenses in connection with the planned merger. ProCare must find
additional cash resources to fund our minimal expenses while we attempt to
complete a merger.
PART II - OTHER INFORMATION
Item 1. Litigation: 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: None.
Item 3. Default 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:
(a) Exhibits.
27 Financial Data Schedule.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
three months ended June 30, 2000.
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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 11th day of August,
2000.
PROCARE INDUSTRIES, LTD.
(Registrant)
By /s/ Robert W. Marsik
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Robert W. Marsik, President and Chief Executive Officer
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