UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
[ XX ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 0-27351
LAZARUS INDUSTRIES, INC.
(Exact Name of small business issuer as specified in its charter)
Nevada 87-0445575
(State of Incorporation) (IRS Employer ID Number)
10 West 100 South, Suite 610, Salt Lake City, Utah 84101
(Address of principal executive offices)
(801) 532-7851
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
7,485,417 Shares as of the date of this report.
Transitional Small Business Disclosure Format (check one): YES [ ] NO [X ]
<PAGE>
LAZARUS INDUSTRIES, INC.
Form 10-QSB for the Quarter ended March 31, 2000
Table of Contents
Part I - Financial Information Page
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or
Plan of Operation 13
Part II - Other Information
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Lazarus Industries, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have reviewed the accompanying balance sheet of Lazarus Industries, Inc. (a
development stage company) as of March 31, 2000 and the related statements of
operations, stockholders' equity and cash flows for the periods ended March
31, 2000 and 1999. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which will
be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed financial statements referred to
above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of Lazarus Industries, Inc.
(a development stage company) as of December 31, 1999, and the related
statements of operations, stockholders' equity, and cash flows for the year
then ended (not presented herein) and in our report dated April 10, 2000, we
expressed an unqualified opinion on those financial statements.
/S/ HJ & Associates, LLC
HJ & Associates, LLC
Salt Lake City, Utah
May 9, 2000
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
March 31, December 31,
2000 1999
-------------- -------------
CURRENT ASSETS
Cash $ 33,856 $ 33,891
-------------- -------------
Total Current Assets 33,856 33,891
-------------- -------------
TOTAL ASSETS $ 33,856 $ 33,891
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,746 $ -
Due to related party (Note 3) 2,517 2,443
Accrued liabilities 100 104
-------------- -------------
Total Current Liabilities 4,363 2,547
-------------- -------------
TOTAL LIABILITIES 4,363 2,547
-------------- -------------
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized
of $0.001 par value, 7,485,417 shares issued
and outstanding 7,486 7,486
Additional paid-in capital 285,028 283,428
Deficit accumulated during the development stage (263,021) (259,570)
-------------- -------------
Total Stockholders Equity 29,493 31,344
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 33,856 $ 33,891
============== =============
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
4
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
For the December 31,
Three Months Ended 1985 Through
March 31, March 31,
2000 1999 2000
------------- ------------- -------------
REVENUES $ - $ - $ -
EXPENSES
General and administrative 3,709 2,235 110,264
------------- ------------- -------------
Total Expenses 3,709 2,235 110,264
------------- ------------- -------------
LOSS FROM OPERATIONS (3,709) (2,235) (110,264)
------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest income 332 314 2,453
Interest expense (74) - (296)
Loss from discontinued operations - - (154,914)
------------- ------------- -------------
Total Other Income (Expense) 258 314 (152,757)
------------- ------------- -------------
NET LOSS $ (3,451) $ ( 1,921) $ (263,021)
============= ============= =============
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============= =============
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
5
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on December 31, 1985 through March 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1985 - $ - $ - $ -
Shares issued for cash at $0.002 160,000 160 7,840 (433)
Shares issued through public
offering at $0.01 per share 555,523 556 138,325 -
Capital contributed by shareholders - - 54,077 -
Net loss from inception on
December 31, 1995 through
December 31, 1987 - - - (735)
------------- ------------ ------------- -----------
Balance, December 31, 1987 715,523 716 200,242 (1,168)
Shares issued to public at
$0.01 per share 44,480 44 11,086 -
Shares issued in acquisition
of wholly- owned subsidiary
at $0.001 per share 2,036,800 2,037 - -
Shares issued for finders fee at
$0.001 per share 152,000 152 - -
Shares issued to public at $0.10
per share for cash 3,280 3 325 -
Public offering costs - - (44,059) -
Net loss for the year ended
December 31, 1988 - - - (98,275)
------------- ------------ ------------- -----------
Balance, December 31, 1988 2,952,083 2,952 167,594 (99,443)
Net loss for the year ended
December 31, 1989 - - - (39,018)
------------- ------------ ------------- -----------
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
------------- ------------ ------------- -----------
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on December 31, 1985 through March 31, 2000
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
Assets distributed to shareholders - - (15,632) -
Net loss for the year ended
December 31, 1990 - - - (17,153)
------------- ------------ ------------- -----------
Balance, December 31, 1990 2,952,083 2,952 151,962 (155,614)
Net loss for the year ended
December 31, 1991 - - - (100)
------------- ------------ ------------- -----------
Balance, December 31, 1991 2,952,083 2,952 151,962 (155,714)
Net loss for the year ended
December 31, 1992 - - - (100)
------------- ------------ ------------- -----------
Balance, December 31, 1992 2,952,083 2,952 151,962 (155,814)
Net loss for the year ended
December 31, 1993 - - - (100)
------------- ------------ ------------- -----------
Balance, December 31, 1993 2,952,083 2,952 151,962 (155,914)
Net loss for the year ended
December 31, 1994 - - - (100)
------------- ------------ ------------- -----------
Balance, December 31, 1994 2,952,083 2,952 151,962 (156,014)
Net loss for the year ended
December 31, 1995 - - - (100)
------------- ------------ ------------- -----------
Balance, December 31, 1995 2,952,083 2,952 151,962 (156,114)
Net loss for the year ended
December 31, 1996 - - - (452)
------------- ------------ ------------- -----------
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
------------- ------------ ------------- -----------
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception on December 31, 1985 through March 31, 2000
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
December 2, 1997 shares issued
to officers at $0.03 per share
for services 3,000,000 3,000 87,000 -
Net loss for the year ended
December 31, 1997 - - - (90,669)
------------- ------------ ------------- -----------
Balance, December 31, 1997 5,952,083 5,952 238,962 (247,235)
January 12, 1998 shares issued
for cash at $0.03 per share 1,116,667 1,117 32,382 -
March 10, 1998 shares issued for
cash at $0.03 per share 416,667 417 12,084 -
Net loss for the year ended
December 31, 1998 - - - (5,785)
------------- ------------ ------------- -----------
Balance, December 31, 1998 7,485,417 7,486 283,428 (253,020)
Net loss for the year ended
December 31, 1999 - - - (6,550)
------------- ------------ ------------- -----------
Balance, December 31, 1999 7,485,417 7,486 283,428 (259,570)
Contributed capital for expenses - - 1,600 -
Net loss for the three months
ended March 31, 2000 - - - (3,451)
------------- ------------ ------------- -----------
Balance, March 31, 2000 7,485,417 $ 7,486 $ 285,028 $ (263,021)
============= ============ ============= ===========
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
8
</TABLE>
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
For the December 31,
Three Months Ended 1985 Through
March 31, March 31,
2000 1999 2000
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,451) $ (1,921) $ (263,021)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Stock issued for services - - 90,000
Changes in operating assets and
liabilities:
Increase in accounts payable 1,746 - 4,189
Increase in accrued liabilities 70 - 174
------------- ------------- -------------
Net Cash Used by Operating
Activities (1635) ( 1,921) (168,658)
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Contributed capital for expenses 1,600 - 1,600
Net stock offering proceeds - - 200,914
------------- ------------- -------------
Net Cash Provided by Financing
Activities 1,600 - 202,514
------------- ------------- -------------
NET INCREASE (DECREASE) IN CASH (35) ( 1,921) 33,856
CASH AT BEGINNING OF PERIOD 33,891 40,215 -
------------- ------------- -------------
CASH AT END OF PERIOD $ 33,856 $ 38,294 $ 33,856
============= ============= =============
CASH PAID FOR:
Interest $ - $ - $ 1,400
Income taxes $ - $ - $ -
See Accountants' Review Report and the accompanying notes to the
reviewed financial statement.
9
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Lazarus Industries, Inc. (the "Company") was incorporated under the laws
of the State of Utah on December 31, 1985. The Company was incorporated for
the purpose of engaging in the business of developing, manufacturing and
marketing proprietary medical devices. In 1991, the Company discontinued its
operations, and liquidated its assets leaving the Company dormant until 1996
when the Company began its operations again.
b. Provision for Taxes
At March 31, 2000, the Company had net operating loss carryforwards of
approximately $263,000 that may be offset against future taxable income
through 2020. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the net operating loss carryforwards are offset by a valuation allowance of
the same amount
c. Accounting Method
The financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
d. 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 the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
f. Basic Loss Per Share
The computation of basic income (loss) per share of common stock is
based on the weighted average number of shares issued and outstanding during
the period of the financial statements as follows:
10
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
f. Basic Loss Per Share (Continued)
March 31,
2000 1999
-------------- -------------
Numerator - (loss) $ (3,451) $ (1,921)
Denominator - weighted average number of
shares outstanding 7,485,417 7,485,417
-------------- -------------
Basic loss per share $ (0.00) $ (0.00)
============== =============
g. Change in Accounting Principle
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives as assets or liabilities, measured at fair market value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving offsetting changes
in fair value or cash flows. SFAS No. 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. Management believes
the adoption of this statement will have no material impact on the Company's
financial statements.
h. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
NOTE 2 - DISCONTINUED OPERATIONS
On March 29, 1988, Gaslight, Inc. (Gaslight) consummated an exchange
agreement (the "Exchange Agreement"), with Lazarus and the shareholders of
Lazarus providing for the acquisition of Lazarus as a wholly-owned subsidiary
of Gaslight. Under the terms of the Exchange Agreement, Gaslight was required
to call and convene a meeting of its stockholders for the purpose of
submitting to its stockholders for approval proposals for a 25-to-1 reverse
stock split or share consolidation of the 19,000,000 shares of Gaslight's
common stock issued and outstanding at March 18, 1988; approval of the
Exchange Agreement, amendment of Gaslight's Articles of Incorporation to
change its name to "Lazarus Industries, Inc." and the election of five
designees of Lazarus to the Board of Directors of Gaslight.
11
<PAGE>
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 2 - DISCONTINUED OPERATIONS (Continued)
In connection with the acquisition of Lazarus, Gaslight issued
2,036,800 post-split shares of its restricted common stock, par value $0.001
to the stockholders of Lazarus in exchange for all the issued and outstanding
capital stock of Lazarus. Consequently, Lazarus became a wholly-owned
subsidiary of Gaslight.
NOTE 3 - RELATED-PARTY TRANSACTIONS
The Company's president has paid out-of-pocket expenses through March
31, 2000 totaling $2,517 (including interest of $296.) The amount is
unsecured, accrues interest at 10% per annum and is due on demand.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management
intends to seek a merger with an existing, operating company. In the interim,
it has committed to meeting the Company's minimal operating expenses.
12
<PAGE>
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the
Company or management as well as assumptions made by and information currently
available to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered
in light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
For the past several years, the Company has had no active business
operations, and has been seeking to acquire an interest in a business with
long-term growth potential. The Company currently has no commitment or
arrangement to participate in a business and cannot now predict what type of
business it may enter into or acquire. It is emphasized that the business
objectives discussed herein are extremely general and are not intended to be
restrictive on the discretion of the Company's management.
The Company is not aware of any trends that have or are reasonably
likely to have a material impact on its liquidity, net sales, revenues, or
income from continuing operations. There have been no events which have
caused material changes from period to period in one or more line items of the
financial statements or any seasonal aspects that have had a material effect
on the financial condition or results of operation.
During the preceding year, the Company has not experienced any material
changes in results of operation. During the quarter ended March 31, 2000, the
Company had $3,709 in general and administrative expenses, as compared to
$2,235 in expenses for the quarter ended March 31, 1999. All of such expenses
were incurred in connection with the Company's efforts to reactivate its
business.
The Company has realized a net loss for the three months ended March 31,
2000 and 1999, of $3,451 and $1,921, respectively; and a net loss since
inception of $263,021.
13
<PAGE>
(3) Liquidity and Capital Resources
The Company has not experienced a material change in financial condition
over the past year. At March 31, 2000, the Company had working capital of
approximately $34,000, which has not changed since December 31, 1999. Working
capital as of both dates consists of short-term investments, and cash and cash
equivalents. The Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity
of the corporate entity during this phase. It is the intent of management and
significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
Although the Company's assets consist of cash and cash equivalents, the
Company has no intent to become, or hold itself out to be, engaged primarily
in the business of investing, reinvesting, or trading in securities.
Accordingly, the Company does not anticipate being required to register
pursuant to the Investment Company Act of 1940, and expects to be limited in
its ability to invest in securities, other than cash equivalents and
government securities, in the aggregate amount of over 40% of its assets.
There can be no assurance that any investment made by the Company will not
result in losses.
The Company has very limited liquid assets, and such assets may not be
sufficient for the Company to meet its operating needs over the next twelve
months. The Company does not anticipate, however, that it will require
substantial revenue, or additional cash assets, until it enters into an
acquisition or reorganization transaction with a business opportunity. The
Company has no material revenues and its needs for capital will in all
likelihood change dramatically if it acquires an interest in a business
opportunity in the next twelve months. The Company's current operating plan
is to (a) cover the administrative and reporting requirements of a public
company; and (b) search for, and investigate, potential businesses, products,
technologies and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the acquisition of
any business, product, technology or company, and there can be no assurance
that the Company will be able to identify any such business, product,
technology or entity suitable for an acquisition or reorganization
transaction. Moreover, there can be no assurance the Company will be
successful in its efforts to enter into consummate an acquisition or
reorganization transaction on terms favorable or beneficial to the Company and
its shareholders, or that it, or its successor, will be able to effectively
manage the business opportunity the Company acquires or becomes engaged in.
14
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults on Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
During the quarter ended March 31, 2000, the Company held no regularly
scheduled, called or special meetings of shareholders during the reporting
period, nor were any matters submitted to a vote of this Company's security
holders.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
None.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
LAZARUS INDUSTRIES, INC.
May 12, 2000 /s/ Jack M. Gertino
_______________________________
Jack M. Gertino
President
LAZARUS INDUSTRIES, INC.
May 12, 2000 /s/ James C. Lewis
________________________________
James C. Lewis
Secretary/Treasurer
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 33,856
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,856
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,856
<CURRENT-LIABILITIES> 4,363
<BONDS> 0
0
0
<COMMON> 7,486
<OTHER-SE> 22,007
<TOTAL-LIABILITY-AND-EQUITY> 33,856
<SALES> 0
<TOTAL-REVENUES> 332
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,709
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74
<INCOME-PRETAX> (3,451)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,451)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,451)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
