<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1933
FOR THE YEAR ENDED DECEMBER 31, 1994
COMMISSION FILE NUMBER 33-14125-D
PRO QUEST, INC.
Colorado 84-1055272
(State of Incorporation) (I.R.S. Employer Identification Number)
1821 WCR 27
BRIGHTON, COLORADO 80601
(303) 659-0018
(Address and telephone number of principal executive offices)
Securities registered pursuant to Section 12(g) of the Act:
None
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 Item 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. [INCLUDED IN ITEM 11
HEREOF.]
The aggregate market value of voting shares held by nonaffiliates of the
registrant as of December 31, 1994 was $ -0-. Trading in the shares of the
registrant was voluntarily suspended in November, 1988. Registrant is unaware
of any private trades of the securities other than as specifically described
herein.
As of December 31, 1994, there were 111,437,450 of the registrant's Common
Shares, par value $.0001 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Pro Quest, Inc. (the "Company") was incorporated under the laws of the
State of Colorado on March 10, 1987. The Company was formed for the purpose of
engaging in sports promotion activities and also for the purpose of evaluating,
structuring and completing the merger with, or acquisition of, one or more
private companies, partnerships or sole proprietorships. In evaluating merger
or acquisition candidates, particular emphasis was placed on businesses engaged
in sports promotion activities or other sports-related activities, though not to
the total exclusion of businesses engaged in other industries.
On July 6, 1987, the Company commenced a public offering of securities
pursuant to a Registration Statement on Form S-18. The offering closed on July
21, 1987, after the sale of 30,000,000 units. Each unit consisted of one Common
Share, par value $.0001 per share, one Class A Warrant, one Class B Warrant and
one Class C Warrant. Each Class A Warrant was exercisable to purchase one
Common Share at $.02 per share commencing October 4, 1987, until October 4,
1988. Each Class B Warrant was exercisable to purchase one Common Share at an
exercise price of $.05 per share commencing October 4, 1987 until April 4, 1989,
and each Class C Warrant was exercisable to purchase one Common Share at an
exercise price of $.10 per share commencing October 4, 1987, until October 4,
1989. The Company reserved the right to extend the exercise periods of the
Warrants and to reduce the exercise price by up to 50% of the initial exercise
price.
Total proceeds from the offering were $300,000. Commissions and offering
expenses payable by the Company totaled $61,914. Net proceeds to the Company
were approximately $238,086.
The Company called the Class A Warrants for redemption in November, 1987.
Of the 30,000,000 Class A Warrants outstanding, 10,587,450 Class A Warrants were
exercised, and the remaining 19,412,4550 Class A Warrants were redeemed. As a
result, the Company received $208,308 in proceeds, net of $3,441 in redemption
expenses. No calls or redemptions have been made of the Class B or Class C
Warrants.
The Company was formed primarily to engage in sports promotion or other
sports-related activities. The Company proposed to establish such activities,
in part, through the merger or acquisition of one or more "target" entities
already engaged in such activities. Such entities were expected to consist of
private companies, partnerships or sole proprietorships.
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For approximately eighteen (18) months following the completion of the
Company's public offering, management evaluated several merger or acquisition
candidates. After preliminary evaluations, management identified several
candidates considered to be worthy of in-depth evaluations, consisting of, among
others, R. S. Specialties, Inc. ("R.S."), M & M Travel, Ltd. ("M&M"), The
Leland Corporation ("Leland"), For Your Eyes Only, Inc. ("FYE"), Actoma
Resources, Ltd. ("Actoma"), and Factory Outlet II dba Martial Arts Supply.
After review of the candidates, the Company entered into letters of intent with
each of them with a view toward completing acquisitions or mergers. However,
none of the efforts were successful and the Company abandoned the prospects.
In August, 1987, the Company acquired 28,000,000 shares of restricted
common stock of International Medical Systems, Inc. ("IMS"). The Company
also loaned $25,000 to IMS in the form of an unsecured debenture, with
interest at 9% per annum. IMS, of which Messrs. Petrucci and Crawford were
officers, directors and shareholders, proposed to engage in sports-medicine
activities following successful completion of a public offering. The Company
abandoned its investment in IMS in 1988. The Company loss with respect to
the investment was reflected in the operating statements of the Company for
the fiscal year ended December 31, 1988.
In January, 1988, the Company formed Pro Quest Marketing Associates, Inc.,
a wholly-owned subsidiary which was expected to engage in certain sales,
marketing and franchising activities relating to products and services which the
Company might have offered. Pro Quest Marketing Associates, Inc. engaged
primarily in organizational activities. It discontinued operation in the July
of 1988.
In May, 1988, the Company entered into a contract with a New Jersey-based
investment banking firm, Financial Resources Corporation ("FRC"), which
provided for such firm to locate, screen and present viable acquisition
candidates to the Company. In connection with the contract, the Company paid an
initial fee of $15,000. Subsequently, additional fees in the amount of $30,000
which were due under the terms of the contract were satisfied by the issuance of
34,000,000 shares of restricted common stock of the Company in exchange for the
outstanding fees plus a payment of $4,000.
In October, 1988 the Company terminated, for cause, the consulting contract
with FRC. Effective September 30, 1994, the 33,150,000 shares of the Company
issued to FRC were repurchased in exchange for cancellation of obligations of
FRC to the Company and a waiver of claims between the parties. The Company will
not receive any of the initial $15,000 payment of fees, however.
On November 18, 1988, the Company entered into an agreement of merger which
provided for a tax-free exchange of 166,000,000
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restricted shares of the Company for all of the outstanding shares of
Kettenbauer Technology Corporation ("Kettenbauer"). Kettenbauer held rights to
a proprietary process to purify toxic waste. The agreement was mutually
rescinded in December of 1988.
The Company has been inactive since December 31, 1988. For the fiscal year
ended December 31, 1994, the Company had a net operating loss of $1,252 and a
cumulative loss from inception of $594,826. Shareholder deficit as of December
31, 1994, was $114,795.
RECENT DEVELOPMENTS
Effective September 30, 1994, the 33,150,000 shares of the Company
issued to FRC were repurchased in exchange for cancellation of obligations of
FRC to the Company and a waiver of claims between the parties. The Company
will not receive any of the initial $15,000 payment of fees, however.
On November 23, 1994, Stephen G. Petrucci as "Seller" and Randy Sasaki as
"Purchaser" entered into a Stock Purchase Agreement ("Agreement") pursuant to
which the Purchaser will acquire 27,500,000 shares of the Company from Seller.
Other than as specifically described herein, the terms of the Agreement are
confidential.
SUBSEQUENT EVENTS
The transaction has not closed as of March 1, 1997, although the parties
have taken significant steps to complete it. There is no assurance that the
transaction will close, but management believes that it will be successfully
concluded by April 30, 1997. For further discussion, see Item 11 of this
Form 10-K.
The Purchaser has not provided to management any specific plan for his
ownership of the shares of the Company. Management believes that the Purchaser
will seek to require the Company to elect new management. There is no assurance
that by reason of the Purchaser's ownership, the capitalization, ownership,
management or operation of the Company will remain unchanged.
BACKLOG
Backlog is not material to an understanding of the Company's present
business activities. The Company has no business and therefore is not subject
to renegotiation of profits or termination of contracts or subcontracts, either
at the election of the federal government or otherwise.
REGULATION
Compliance with federal, state and local laws does not have a material
effect on the Company's present operations. The Company has not been a party
to any bankruptcy, receivership, reorganization, readjusting or similar
proceeding. The Company has no present operations, is not
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subject to seasonal variation, and is not involved in any industry segment.
EMPLOYEES
The Company has no employees. The president, Mr. Petrucci, from time to
time performs certain legal functions on behalf of the Company at no cost to the
Company. At some future date, the Board of Directors may elect to compensate
Mr. Petrucci for the aforementioned services.
ITEM 2. PROPERTIES
The Company does not maintain a full time office. From 1989 through
August 1994, certain space has been provided by Mr. Petrucci at no cost to
the Company.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any legal proceeding. Certain holders of
accounts payable by the Company may attempt to collect amounts owed to them;
however, management believes that collection of some of those amounts may be
barred by applicable statute(s) of limitations.
Taxes may be payable by the Company and are reflected as an obligation of
the Company in its financial statements. Management knows of no efforts to date
to enforce collection of those taxes; however, there is no assurance that the
taxes will be avoided, forgiven or otherwise compromised or that efforts to
collect them by legal proceedings or levy will not be employed.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON SHARES
AND RELATED SHAREHOLDER MATTERS
Trading in the stock of the Company was voluntarily suspended in November,
1988. Management does not know of any trading or private sales activity of the
stock since that date, other than as specifically described in Item 11 of this
Form 10-K.
Prior to the suspension of trading, the Company's Common Shares were
traded over-the-counter and were listed in the "pink sheets" maintained by
members of the National Association of Securities Dealers, Inc. ("NASD"). At
the time of the suspension of trading, the "High" Bid price per Share never
exceeded $.01, and the "Low" Bid price per Share was $.0025.
5
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The number of record holders of Common Shares as of September 1, 1994 (the
last date obtained by management) was approximately 215.
Holders of Common Shares are entitled to receive such dividends as may be
declared by the Company's Board of Directors. No dividends on the Common
Shares have been paid by the Company nor does the Company anticipate that
dividends can or will be paid in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes certain selected financial data for the last
five (5) fiscal years ended December 31:
FISCAL YEAR ENDED DECEMBER 31
INCOME (LOSS) STATEMENT 1994 1993 1992 1991 1990
- ---------------------------- ---- ---- ---- ---- ----
Revenues $0 0 0 0 0
Cost and Expense 1,252 2,689 10,060 17,351 2,917
Income (Loss) from
Continuing Operations (1,252) (2,689) (10,060) (17,351) (2,917)
Income (Loss from Continuing
Operations per Common Share * * * * *
BALANCE SHEET
Current Assets 0 0 0 0 0
Working Capital 0 0 0 0 0
Total Assets 10,551 10,551 10,551 10,551 10,551
Total Liabilities 125,346 120,580 117,891 107,831 90,480
Shareholders' Equity * * * * *
Dividends Declared/Paid per
Common Share 0 0 0 0 0
* LESS THAN $.01 PER SHARE
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(a) FINANCIAL CONDITION
The Company utilized substantially all of its funds in 1987 and 1988
investigating several merger/acquisition candidates. It currently has no funds
available, without debt or equity financing, to proceed with ongoing internal
operations. It has been inactive since December 31, 1988.
(b) RESULTS OF OPERATIONS
The Company is inactive. It has had no operation(s) since December, 1988.
As of that date, the Company had no Current Assets, and Total Assets (consisting
entirely of office equipment and organization expenses) were $15,754.
For the fiscal year ending December, 1994, the Company had a net loss of
$1,252 which was entirely the result of accruing
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interest on outstanding obligations of the Company and not a result of any
operation(s).
(c) EFFECT OF INFLATION
Inflation and changing prices do not have a significant effect on the
Company since presently it has no sales revenues or business activity.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Opinion of independent certified public F-2
accountant as of December 31, 1994
Balance Sheets, audited, as of December 31, 1994, F-3
and 1993
Consolidated Statements of Operations, audited, for the F-4
years ended December 31, 1994, 1993, and 1992
Consolidated Statement of Stockholders' Equity F-5
(Deficit), audited, for the year ending December 31, 1994.
Consolidated Statements of Cash Flow, audited, for the F-6
years ended December 31, 1994, 1993, and 1992.
Schedules F-15
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no material disagreements with its independent
accountants on any matter of accounting principles or practices or financial
statement disclosure since inception.
7
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are listed below.
Directors hold office until the next annual meeting of shareholders and until a
successor is elected and qualified, or until their resignation. The Company has
provided for the classification of the Board of Directors upon its expansion to
six or more members. At the first annual meeting of shareholders held after
such expansion, three classes of directors, as nearly equal in number as
possible, will be elected to serve until the third, second, and next succeeding
annual meeting, respectively. At subsequent meetings, persons being elected to
fill directorships will hold office for terms expiring at the third succeeding
annual meeting or upon their prior resignation or removal. Executive officers
are elected by the Board of Directors to serve until their resignation or their
earlier removal by the Board.
Name Age Position
---- ---- --------
Stephen G. Petrucci 43 President and Director
Daryl K. MacCarter 48 Vice President, Secretary/
Treasurer and Director
John J. Crawford 45 Director
STEPHEN G. PETRUCCI. Mr. Petrucci has been President and a Director of
the Company since March, 1987. He received a degree of Bachelor of Business
Administration from the University of Notre Dame at South Bend, Indiana in 1973.
He also received a Master of Science degree from Western Michigan University in
1977 and a Juris Doctor degree from the University of Denver, College of Law
1980. Mr. Petrucci has been licensed to practice law in the State of Colorado
since 1981, and is a past member of the American, Colorado and Denver Bar
Associations, the Association of Trial Lawyers of America and the Colorado Trial
Lawyers Association. He has been admitted to practice before the Supreme Court
of the State of Colorado since 1981 and the United States Court of Appeals for
the 10th Circuit since 1983. He is currently in private practice in Denver,
Colorado, concentrating in mergers and acquisitions, contract and general
corporate law.
DARYL K. MACCARTER, M.D. Dr. MacCarter has been Vice President,
Secretary/Treasurer and a director of the Company since March, 1987. He
received a Bachelor of Science degree in Pre-Medicine from Montana State
University in Bozeman, Montana in 1969. He received a Master of Science degree
in Pharmacology/ Physiology from the University of North Dakota, Grand Forks,
North Dakota in 1972 and Doctor of Medicine degree from the University of
Minnesota
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Medical School, Minneapolis, Minnesota in 1975. Dr. MacCarter did
his internal medicine residency at Yale University Affiliated Hospitals,
Waterbury, Connecticut and his Rheumatology fellowship at the University of
Michigan, Ann Arbor, Michigan in 1979 through 1980. He is board certified in
internal medicine and rheumatology and is a Fellow of the American College of
Physicians.
JOHN J. CRAWFORD. Mr. Crawford has served as a director of the Company
since March, 1987. He received a Bachelor of Science degree in Psychology in
1970 from Colorado State University, Fort Collins, Colorado.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid by
the Company during the fiscal year ended December 31, 1994, to all officers and
directors as a group. No officer or director received cash or cash-equivalent
compensation of any kind.
Cash or Cash
Name of Individual Capacity in Equivalent
or Number in Group Which Served Compensation
- ------------------ ------------ -------------
Stephen G. Petrucci President (CEO) $ -0-
All Officers and Officers and $ -0-
directors directors of
the Company
Through 1988, non-management Board members were paid $250 for attendance at
meetings of the Board of Directors. The Company established an Incentive Stock
Option Plan and a Non-Qualified Stock Option Plan, under which an aggregate of
7,000,000 Common Shares have been reserved for issuance. No options have been
issued pursuant to either stock option plan of the Company. No directors have
been paid fees since 1988.
On November 23, 1994, Stephen G. Petrucci as "Seller" and Randy Sasaki as
"Purchaser" entered into a certain Stock Purchase Agreement (the "Agreement"
referred to throughout this Form 10-K). Pursuant to the Agreement, the
Purchaser or his designees will acquire 27,500,000 Common Shares of stock of the
Company (or approximately 20% of the outstanding common shares). The
transaction contemplated by the Agreement has not closed as of March 1,
1997.
The Purchaser has not provided the Company with either Forms 3, 4, or 5 or
any representation(s) regarding Form 5. The filing of those Forms may be
delinquent if the Purchaser under the Agreement has "beneficial ownership" as
defined in those Forms and the Securities Exchange Act of 1934 and Rules and
Regulations promulgated thereunder.
9
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If filing of any of the Forms was required on or after November 23, 1994,
delinquencies may have occurred or currently exist: (i) Form 3 must be filed 10
days after a person becomes an officer, director, or 10% beneficial owner (or
holder) of certain securities; (ii) Form 4 must be filed on or before the tenth
day after the end of the month in which a reporting person acquires or disposes
of the Company's securities; Form 5 must be filed on or before the 45th day
after the Company's fiscal year in accordance with Rule 16a-3(f). The Purchaser
under the Agreement has advised management that he will undertake to make such
filings as soon as reasonably possible and in all events within the time limits
set above AFTER the closing of the transaction(s) contemplated by the Agreement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tabulates holdings of Common Shares of the Company by each
person who, at September 1, 1994, hold of record or is known by management of
the Company to own beneficially more than 5% of the Common Shares of the Company
and, in addition, by all officers and directors of the Company individually and
as a group. The shareholders listed below have sole voting and investment power
except as noted.
Common Shares Percentage of
Name and Address Owned Class Owned
---------------- -------------- -------------
Stephen G. Petrucci 69,500,000 48.07%
6227 East Long Place
Englewood, Colorado 80112
Daryl K. MacCarter (1) 500,000 .35%
#2 Mockingbird Lane
Englewood, Colorado 80111
John J. Crawford (1) -0- -0-
Suite 1700
6400 S. Fiddler's Green Circle
Englewood, Colorado 80111
All Directors and 70,000,000 48.42%
Officers as a Group
(three persons)
- --------
(1) Daryl K. MacCarter and John J. Crawford will receive 500,000 and 400,000
shares, respectively, per the settlement of notes payable dated October 23,
1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report F-2
Consolidated Financial Statements:
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statement of Stockholders' Deficit F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
Schedule V Property, Plant and Equipment F-15
Schedule VI Accumulated Depreciation and Amortization of Property,
Plant and Equipment F-15
F-1
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INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND
STOCKHOLDERS OF PRO QUEST, INC. AND SUBSIDIARIES
DENVER, COLORADO
We have audited the accompanying consolidated balance sheets of Pro Quest, Inc.
and subsidiaries (a development stage enterprise) as of December 31, 1994 and
1993, and the related consolidated statements of operations, changes in
stockholders' (deficit), and cash flows for each year in the three year period
ended December 31, 1994, and the schedules listed in the Index. The
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the 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 audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. 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 consolidated financial statements and the schedules referred
to above present fairly, in all material respects, the financial position of Pro
Quest, Inc. and subsidiaries as of December 31, 1994 and 1993, and the results
of its operations and its cash flows for each year in the three year period
ended December 31, 1994 in conformity with generally accepted accounting
principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has suffered recurring losses during its
development stage and has limited capital that raises substantial doubt about
the entity's ability to continue as a going concern.
AJ. ROBBINS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS
DENVER, COLORADO
NOVEMBER 7, 1995
F-2
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PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
---------------------------------------------------
----------------------------------------------------
<TABLE>
<CAPTION>
1994 1993
--------- ---------
ASSETS
------
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT,
at cost, net of depreciation of $2,939 $ 10,351 $ 10,351
OTHER ASSET, organization cost 200 200
--------- ---------
Total Assets $ 10,551 $ 10,551
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
---------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 73,595 $ 73,595
Accrued expenses 19,708 18,456
Accrued salaries and taxes 12,529 12,529
Notes payable to officers/directors 19,514 16,000
--------- ---------
Total Current Liabilities 125,346 120,580
--------- ---------
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' (DEFICIT):
Preferred stock, 20,000,000 shares
authorized, $.10 par value,
no shares issued and outstanding - -
Common stock, 800,000,000 shares
authorized; $.0001 par value, 111,437,450 and
144,587,450 shares issued and outstanding 11,144 14,459
Additional paid-in capital 467,387 469,086
Contributed capital 1,500 -
(Deficit) accumulated during the development stage (594,826) (593,574)
--------- ---------
Total Stockholders' (Deficit) (114,795) (110,029)
--------- ---------
Total Liabilities and Stockholders' (Deficit) $ 10,551 $ 10,551
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-3
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------
<TABLE>
<CAPTION>
FROM INCEPTION
(MARCH 10, 1987)
FOR THE YEARS ENDED DECEMBER 31, TO
------------------------------------------- DECEMBER 31, 1994
1994 1993 1992 -----------------
------------------------------------------- (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Interest $ - $ - $ - $ 10,269
Other - - - 1,718
------------ ------------ ------------ ------------
- - - 11,987
------------ ------------ ------------ ------------
OPERATING EXPENSES:
General and administrative - 1,437 6,642 420,893
Business evaluations - - - 128,759
Bad debt expense - - - 28,295
Depreciation - - - 2,939
Interest 1,252 1,252 3,418 18,127
Write-down obsolete equipment - - - 5,000
Write-off worthless securities - - - 2,800
------------ ------------ ------------ ------------
1,252 2,689 10,060 606,813
------------ ------------ ------------ ------------
NET (LOSS) $ (1,252) $ (2,689) $ (10,060) $ (594,826)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NET (LOSS) PER SHARE $ (*) $ (*) $ (*) $ (*)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted Average Number of
Shares Outstanding 119,611,423 144,587,450 144,587,450 143,540,975
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
*Less than $.01 per share
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-4
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)
---------------------------------
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING
------------------------- PAID-IN CONTRIBUTED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE (DEFICIT)
----------- ----------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, March 10, 1987 - $ - $ - $ - $ - $ -
March 1987, stock issued to
officers/directors, $.0001
per share:
for cash 30,000,000 3,000 51 - - 3,051
for services 21,000,000 2,100 - - - 2,100
March 1987, stock issued for
cash ($.0001 per share) 19,000,000 1,900 100 - - 2,000
July 1987, stock issued for
cash in public offering ($.01
per share) less offering
costs of $61,914 30,000,000 3,000 235,086 - - 238,086
November 1987, stock issued
for exercise of A warrants
($.02 per share) less
expenses of $3,441 10,587,450 1,059 207,249 - - 208,308
Net (loss) for the period
ended December 31, 1987 - - - - (195,651) (195,651)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1987 110,587,450 11,059 442,486 - (195,651) 257,894
July 1988, stock issued for
services ($.0009 per share) 34,000,000 3,400 26,600 - - 30,000
Net (loss) for the year
ended December 31, 1988 - - - - (356,990) (356,990)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1988 144,587,450 14,459 469,086 - (552,641) (69,096)
Net (loss) for the year
ended December 31, 1989 - - - - (7,916) (7,916)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1989 144,587,450 14,459 469,086 - (560,557) (77,012)
Net (loss) for the year
ended December 31, 1990 - - - - (2,917) (2,917)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1990 144,587,450 14,459 469,086 - (563,474) (79,929)
Net (Loss) for the year
ended December 31, 1991 - - - - (17,351) (17,351)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1991 144,587,450 14,459 469,086 - (580,825) (97,280)
Net (loss) for the year
ended December 31 1992 - - - - (10,060) (10,060)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1992 144,587,450 14,459 469,086 - (590,885) (107,340)
Net (loss) for the year
ended December 31, 1993 - - - - (2,689) (2,689)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31, 1993 144,587,450 14,459 469,086 - (593,574) (110,029)
Redemption of common
stock ($.0001 per share) (25,969,091) (2,597) (917) - - (3,514)
Contribution of common
stock ($.0002 per share) (7,180,909) (718) (782) 1,500 - -
Net (loss) for the year
ended December 31, 1994 - - - - (1,252) (1,252)
----------- ----------- ---------- ----------- ----------- -------------
Balance, December 31,1994 111,437,450 $ 11,144 $ 467,387 $ 1,500 $ (594,826) $ (114,795)
----------- ----------- ---------- ----------- ----------- -------------
----------- ----------- ---------- ----------- ----------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-5
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
FROM INCEPTION
(MARCH 10, 1987)
FOR THE YEARS ENDED DECEMBER 31, TO
------------------------------------------- DECEMBER 31, 1994
1994 1993 1992 -----------------
------------- -------------- ------------ (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net (loss) $ (1,252) $ (2,689) $(10,060) $ (594,826)
Noncash expenses included in net (loss):
Depreciation - - - 2,939
Stock issued for services - - - 32,100
Write off equipment - - - 5,000
Write off worthless securities - - - 2,800
Bad debt expense - - - 26,045
Changes in:
Other current assets - - - (1,045)
Accounts payable - 1,437 7,974 73,595
Accrued expenses 1,252 1,252 2,086 34,390
---------- ---------- -------- ----------
Cash (Used) in
Operating Activities - - - (419,002)
---------- ---------- -------- ----------
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Purchase of furniture and fixtures - - - (18,693)
Investment in subsidiary - - - (2,800)
Organization costs - - - (200)
Issuance of note receivable - - - (25,000)
Advances to officer - - - (51,750)
---------- ---------- -------- ----------
Cash (Used) in
Investing Activities - - - (98,443)
---------- ---------- -------- ----------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Proceeds from sale of
stock to insiders - - - 5,051
Proceeds from sale of
stock to public - - - 238,086
Proceeds from exercise
of A warrants - - - 208,308
Issuance of short-term debt - - - 66,000
---------- ---------- -------- ----------
Cash Provided BY
Financing Activities - - - 517,445
---------- ---------- -------- ----------
NET INCREASE (DECREASE)
IN CASH - - - -
CASH, beginning of year - - - -
---------- ---------- -------- ----------
CASH, end of year $ - $ - $ - $ -
---------- ---------- -------- ----------
---------- ---------- -------- ----------
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Notes payable and accrued interest of $51,685 were assumed by the president
for repayment of advances during 1988. Common Stock was redeemed for $3,514
in notes payable during 1994.
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-6
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND ACTIVITY
Pro Quest, Inc. (a development stage company) (the Company) was incorporated
under the laws of Colorado on March 10, 1987, initially under the name Pro
Image, Inc. The Company is in the development stage as defined in Financial
Accounting Standards Board Statement No. 7. The Company completed a public
registration of its common stock and warrants to purchase common stock on
Form S-18 during July 1987.
The Company's primary activities after the conclusion of its public offering
was to investigate various business acquisition opportunities. Accordingly,
the Company expanded its operations and evaluated a number of businesses.
Principally all of the operating expenses after September 30, 1987 related to
the investigation process, but because none of the businesses ultimately
proved viable for the Company, none of the costs incurred were capitalized.
The Company has been inactive since 1988.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
SUBSIDIARIES
A wholly-owned subsidiary company, Pro Journey, Ltd., (PJL) was formed in
December 1987; however, its operations did not commence until January 1988.
Activities of that company were never developed beyond attempting a merger
with an existing travel agency, M & M Travel, Inc. During the second quarter
of 1988, management of the Company made the decision to sell all of the
outstanding common stock to the merger candidate for $100 plus partial
reimbursement of costs expended by the Company of approximately $4,800.
Transactions for PJL have been included in operations through the date of
sale.
The Company formed another wholly-owned subsidiary, Island Optics
International, Inc.; however, it has had no activity since its inception on
September 23, 1987.
On January 1, 1988 the Company formed a wholly-owned subsidiary, Pro Quest
Marketing Associates, Inc. (PQM) to develop the Company's marketing potential
and locate merger and acquisition opportunities for the Company. PQM was
unsuccessful in its marketing efforts, therefore, operations were terminated in
July 1988 and PQM has remained inactive.
F-7
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FURNITURE AND FIXTURES
Furniture and fixtures are stated at cost and depreciation is provided using the
straight-line method over a seven-year useful life. The furniture and fixtures
have been used rent-free by a related company that is controlled by the
president of Pro Quest from January 1989 to September 1994. Depreciation
expense has not been recorded during 1989, 1990, 1991, 1992, 1993 or 1994,
because the furniture and fixtures were not used by the Company.
In 1989, the Company wrote down the value of the assets by $5,000 to account
for the obsolete telephone system and office equipment.
In 1989, an officer of the Company, received equipment as settlement of accrued
interest of $403.
INCOME TAXES
Prior to January 1, 1993, income taxes were provided on all revenue and expense
items, regardless of the period in which such items are recognized for tax
purposes, except for those items representing a permanent difference between
pre-tax accounting income and taxable income. No income tax benefit was
recorded for financial accounting purposes until realized. Effective January
1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109
Accounting for Income Taxes (FAS 109). Under this method, deferred income taxes
are recorded to reflect the tax consequences in future years of temporary
differences between the tax basis of the assets and liabilities and their
financial amounts at year-end. The Company provides a valuation allowance to
reduce deferred tax assets to their net realizable value. For financial
reporting, the start-up costs are expensed as incurred; for tax purposes they
are capitalized and will be amortized over a period of five years commencing in
the month when operations begin. The adoption of FAS 109 did not have a
material effect on the Company's consolidated financial statements, therefore,
there was no cumulative effect on this change in accounting for income taxes
during prior periods.
CASH EQUIVALENTS
For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments with a maturity of three months or less to be
cash equivalents.
LOSS PER SHARE
Net loss per share is calculated by dividing the net loss by the weighted
average number of common shares outstanding. Shares issued to insiders are
considered outstanding since inception.
F-8
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTEE COMPANY
In August 1987, the Company acquired a 28% interest in International Medical
Systems, Inc. (IMS) for $2,800, represented by 28,000,000 shares of
restricted common stock. IMS is a development stage company and presently
inactive. At December 1987, the investment was carried on a cost basis
because IMS planned to issue stock to the public pursuant to the filing of a
registration statement on Form S-18, which should have reduced the percentage
to be held by the Company to below 20 percent. During 1987, the Company
loaned IMS $25,000 at 9% interest per annum. The note, originally due by
May 1, 1988, was extended to May 1, 1989, and was classified as Noncurrent at
December 31, 1987. No provision for loss on collectibility was provided at
December 31, 1987 for any amounts advanced including accrued interest, since
the Company felt it would be successful in raising funds for the investee
company during 1989. IMS did not successfully complete its public offering,
therefore, during 1988 the Company wrote off its $2,800 investment in IMS and
$28,295 in note receivable and accrued interest from IMS.
ORGANIZATION COSTS
Organization costs will be amortized over a period of five years commencing in
the month when operations begin.
NOTE 2 - GOING CONCERN BASIS
The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has a net working
capital deficiency of $85,050 and an equity deficit of $69,096 at December 31,
1988. The Company has terminated several agreements for cause, although there
are presently no actions at law in which the Company is defendant, it is
possible that one or more of the parties to the agreements may seek legal action
against the Company for the balance of the agreements (see Note 7). The
Company's continuation as a going concern is dependent upon its ability to merge
with another company, to generate sufficient cash flow to meet its obligations
on a timely basis, to obtain financing as may be required, and to ultimately
obtain profitable operations. The financial statements do not include any
adjustments relating to the recoverability and classification of asset amounts
that might be necessary should the Company be unable to continue as a going
concern.
NOTE 3 - PUBLIC OFFERING
In July 1987 the Company completed a public offering of 30,000,000 units at $.01
per unit. Each unit consisted of one common share and three warrants (A, B, and
C). The net proceeds after offering costs were $238,086. Each warrant is
separately detachable and transferable from the common shares, and may be
converted into common shares for prices ranging from $.02 to $.10 per share,
with option periods from 12 to 24 months, respectively. As of December 31,
1987, all of the A warrants were redeemed or exercised. The exercise of the A
warrants resulted in the Company receiving net proceeds of $208,308 after
expenses.
F-9
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 4 - STOCK OPTION PLANS
Effective April 1, 1987, the Company adopted an incentive stock option plan (ISO
Plan) for Company executives and key employees which provides that 2,000,000
shares of common stock will be reserved for issuance to employees at an exercise
price of not less than the fair market value at the date of grant of the option
unless such employees own 10% or more of the outstanding shares of the Company,
in which case the exercise price shall be 110% of the fair market value. All
shares granted shall be granted within 10 years from the date of the ISO Plan
approval. All options granted must be exercised within five years of the date
granted. No optionee may be granted more than $100,000 (aggregate fair market
value) in common shares unless provided for in accordance with Internal Revenue
Code Regulations.
Also effective on the same date as the above plan, the Company adopted a
nonqualified stock option plan under which the Company has reserved 5,000,000
shares of common stock for issuance. The exercise price at the date of grant
may be a minimum of 25% to a maximum of 100% of the fair market value of the
underlying stock. There are restrictions on the number of shares which may be
exercised during the first five years from the date of grant. To date no
options have been granted under either of the above plans.
NOTE 5 - RELATED PARTY TRANSACTIONS
In addition to transactions discussed throughout the notes, the following are
additional related party transactions:
OFFICE RENTALS
The Company maintained its offices in space leased by Pro Phase, a firm of which
the Company's president is the sole owner. During 1988 and 1987 total sublease
rentals of $12,496 and $800, respectively, were paid. There is no long-term
commitment for sublease space on behalf of the Company. No rent payments were
made after 1988.
DEBENTURE
In March 1987, the Company issued an unsecured debenture in the amount of
$10,000 to an officer/director of the Company. The debenture was paid in full
in 1987 with accrued interest at 9% per annum.
F-10
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 5 - RELATED PARTY TRANSACTIONS (CONTINUED)
On March 30, 1988 the Company obtained two bank notes payable totaling $50,000
with 10.5% interest due on May 7, 1988. The president of the Company assumed
the notes and accrued interest totalling $51,750 during July 1988 as repayment
of advances made to the president by the Company.
BUSINESS EVALUATION EXPENSES
During 1988 and 1987, a director of the Company received $10,000 and $11,000,
respectively, for consulting services related to business evaluations.
During 1988, the president of the Company received $16,000 for legal services
related to business evaluations.
EMPLOYMENT AGREEMENT
On May 1, 1987, the Company entered into a one-year employment agreement with
the president for monthly salary of $1,500 expiring in April 1988. The
agreement was extended through September 1988. During 1988 and 1987, the
president was paid $9,000 and $17,000, respectively, under this agreement and
$4,500 was recorded as accrued salary at December 31, 1988 for amounts not paid.
The Company has been inactive since 1988 and did not extend the agreement beyond
September 1988.
STOCK ISSUED FOR SERVICES
During 1987, the president of the Company received 21,000,000 shares of common
stock for services rendered on behalf of the Company valued at $2,100.
ADVANCES
During 1988 and 1987 the president received $7,988 and $43,176, respectively,
from the Company as noninterest bearing advances. The balance of $51,750 was
repaid during July 1988 by assumption of notes payable.
NOTES PAYABLE
During September 1994, the Company redeemed 25,969,091 shares of its common
stock for notes payable of approximately $3,514 which are non interest bearing
and due on demand.
CONTRIBUTED CAPITAL
During September 1994, a stockholder contributed 7,180,909 shares of the
Company's common stock to the Company. The Company subsequently cancelled the
shares.
NOTE 6 - INCOME TAXES
There is no income tax provision or benefit at December 31, 1987 through
1994. Substantially all of the expenses incurred by the Company are not
currently deductible for income tax purposes. For tax purposes, such
expenses are considered to be start-up expenses are all deferred and
amortized over a five-year period commencing with the month in which the
Company begins operations. Accordingly, the Company has no net operating loss
carryforward at December 31, 1987 through 1994.
F-11
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 7 - COMMITMENTS AND CONTINGENCIES, AND SUBSEQUENT EVENTS
NOTES PAYABLE
The vice president and a director of the Company loaned $6,000 and $10,000,
respectively, to the Company on June 30, 1988 with interest at 9%. Both notes
are due on demand. Accrued interest at December 31, 1988 is $270 and $450,
respectively at December 31, 1989 is $407 and $1,350, respectively, at December
31, 1990 is $947 and $2,250, respectively and at December 31, 1991 is $1,487 and
$3,150, respectively. The Company did not accrue interest on the notes after
1991. On October 23, 1995 the Company negotiated for settlement of the notes
including accrued interest of $7,487 and $13,150, respectively, for 400,000 and
500,000 shares its of common stock, respectively.
On October 6, 1995 the Company signed a $30,000 note payable to its accounting
firm for services performed during a continuous engagement from 1991 through
1995. The note is unsecured and due upon demand after April 1, 1995 with
interest accruing at 12% per year. The note balance consists of prior accounts
payable balance of $21,472 and fees incurred after 1994 of $8,528.
ACCOUNTS PAYABLE
The Company has negotiated the settlement of accounts payable of $16,017
including $752 of interest to its former accounting firm for 400,000 shares of
its common stock on October 23, 1995.
The Company, under a provision of Colorado state law which allows a company to
write off its debt after six continuous years of no collection activities by its
creditors, has written off accounts payable of $36,898 on September 30, 1995.
During October 1987 the Company entered into a one-year consulting agreement
with an unrelated entity for marketing services by its only employee on a
half-time basis for compensation of $3,750 per month. During 1987, $11,250
was paid for such services in addition to $23,000 for severance of the
employee from a previous employer. During 1988 $18,750 was paid under this
agreement. In May 1988 this agreement was terminated by agreement of the
parties.
During March 1988 the Company entered into a 21-month employment agreement with
an individual for compensation of $4,583 per month. During 1988, $18,333 was
paid under this agreement. The agreement was terminated in May 1988.
ADDITIONAL SECURITIES FILINGS REQUIRED
The Company will be required to file additional amendments to its initial
registration statement pursuant to any merger. Acquisition or exercise of stock
purchase warrants could involve substantial costs and expenses on behalf of the
Company.
F-12
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 7 - COMMITMENTS AND CONTINGENCIES, AND SUBSEQUENT EVENTS (CONTINUED)
TERMINATION OF AGREEMENTS
During the course of the Company's existence, it had entered into several
significant agreements involving services to be performed on behalf of the
Company and/or Pro Quest Marketing Associates, Inc. The majority of these
agreements were terminated during 1988 by the Company prior to their
termination, for a variety of reasons, but in all cases, for cause. Although
there are presently no actions at law in which the Company is defendant, it
is possible that one or more of the parties to these agreements may seek
legal action against the Company for the balance of the agreements. The
Company is unable to quantify the amount, if any, which others may feel is
due and payable as a result of the early termination of the agreements,
however, the unpaid balance of the agreements exceeds $100,000.
The Company's previous public relations firm filed a complaint relative to the
payment of $2,500 incurred under a services contract between the two companies.
The Company was not given proper notice of this filing and a judgment in the sum
of $2,500 was subsequently entered. Management believes that this judgment will
be eventually concluded in the favor of Pro Quest.
LETTERS OF INTENT
None of the businesses for which several letters of intent were entered into
during 1988 and 1987, proved to be viable merger candidates, and all funds spent
on developing those opportunities during 1988 and 1987 were expensed as
incurred.
In October 1988, the Company entered into a letter of intent with Fred. J.
Villari which provided for the taxable exchange of his majority interest in
Actoma Resources, Ltd., a Vancouver public company, for an eventual controlling
interest in the Company. Upon entering into a binding agreement with the
hereinafter described Kettenbauer Technology Corporation, the Company rescinded
this letter of intent.
Another letter of intent was entered into in October 1988 with Factory Outlet II
dba Martial Arts Supply. This letter of intent was also rescinded by the
Company upon the signing of a binding agreement with Kettenbauer Technology
Corporation.
In November 1988, the Company entered into a letter of intent with Kettenbauer
Technology Corporation which holds rights to a proprietary process to purify
toxic waste, to acquire all of its outstanding stock for 20,000,000 shares of
the Company's favor of the Kettenbauer principals. This letter of intent was
superseded on November 18, 1988 by the execution of a binding agreement and plan
of merger with Kettenbauer. This agreement provided for a partially
antidilutive, tax-free exchange of all of the Kettenbauer outstanding common
shares for 166,000,000 restricted common shares of the Company. The Company
mutually rescinded this letter of intent in December 1988.
The Company and its subsidiaries have been inactive since December 31, 1988.
There are currently no active letters of intent outstanding.
F-13
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------
NOTE 7 - COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS (CONTINUED)
INVESTMENT BANKING CONTRACT
In May 1988, the Company entered into a contract with a New Jersey based
investment banking firm, Financial Resources Corporation (FRC) which provided
for such firm to locate, screen and present viable acquisition candidates to the
Company.
In connection with the agreement, the Company paid an initial fee of $15,000.
During 1988, additional fees in the amount of $30,000 which were due under the
terms of the contract were satisfied by the issuance of 34,000,000 shares of the
Company's common stock in exchange for the outstanding fees plus a payment of
$4,000.
In October 1988 the Company terminated, for cause, the consulting agreement.
The $4,000 due on the shares issued above was never paid and, in the opinion of
management, there were misrepresentations and nonperformance on behalf of the
investment banking firm. Demand has been made for the return of the shares plus
the retainer of $15,000. At December 31, 1988, the balance due under the terms
of the agreement totaled $87,500. Effective September 30, 1994, 33,150,000
shares of the Company issued hereunder were repurchased in exchange for
cancellation of obligations and waiver of claims.
DELINQUENT PAYROLL TAXES
Taxes may be payable by the Company and are reflected as an obligation of the
Company in its financial statements. Management knows of no efforts to date to
enforce collection of those taxes; however, there is no assurance that the taxes
will be avoided, forgiven or otherwise compromised or that efforts to collect
them by legal proceedings or levy will not be employed.
F-14
<PAGE>
PRO QUEST, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
---------------------------
PROPERTY, PLANT AND EQUIPMENT
SCHEDULE V
<TABLE>
<CAPTION>
COLUMN A FOR THE YEAR ENDED DECEMBER 31, 1994
- -------- ---------------------------------------------------
Property, Plant and Equipment COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Schedule V ---------- --------- ------------ -------------- ----------
BALANCE AT OTHER CHANGES BALANCE
BEGINNING ADDITIONS ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE OF PERIOD
- -------------- ---------- --------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C>
Furniture and fixtures $ 13,290 $ - $ - $ - $ 13,290
---------- --------- ------------ -------------- ----------
$ 13,290 $ - $ - $ - $ 13,290
---------- --------- ------------ -------------- ----------
---------- --------- ------------ -------------- ----------
<CAPTION>
COLUMN A FOR THE YEAR ENDED DECEMBER 31, 1993
- -------- ---------------------------------------------------
Property, Plant and Equipment COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Schedule V ---------- --------- ------------ -------------- ----------
BALANCE AT OTHER CHANGES BALANCE
BEGINNING ADDITIONS ADD (DEDUCT) AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE OF PERIOD
- -------------- ---------- --------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C>
Furniture and fixtures $ 13,290 $ - $ - $ - $ 13,290
---------- --------- ------------ -------------- ----------
$ 13,290 $ - $ - $ - $ 13,290
---------- --------- ------------ -------------- ----------
---------- --------- ------------ -------------- ----------
</TABLE>
ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
SCHEDULE VI
<TABLE>
<CAPTION>
COLUMN A FOR THE YEAR ENDED DECEMBER 31, 1994
- -------- ---------------------------------------------------
Property, Plant and Equipment COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Schedule VI ---------- --------- ------------ -------------- ----------
ADDITIONS
BALANCE CHARGED TO OTHER CHANGES BALANCE
BEGINNING COSTS AND ADD (DEDUCT) AT END
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS DESCRIBE OF PERIOD
- ----------- ---------- --------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C>
Accumulated Depreciation and
Amortization of
Furniture and fixtures $ 2,939 $ - $ - $ - $ 2,939
---------- --------- ------------ -------------- ----------
$ 2,939 $ - $ - $ - $ 2,939
---------- --------- ------------ -------------- ----------
---------- --------- ------------ -------------- ----------
<CAPTION>
COLUMN A FOR THE YEAR ENDED DECEMBER 31, 1993
- -------- ---------------------------------------------------
Property, Plant and Equipment COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Schedule VI ---------- --------- ------------ -------------- ----------
ADDITIONS
BALANCE AT CHARGED TO OTHER CHANGES BALANCE
BEGINNING COSTS AND ADD (DEDUCT) AT END
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS DESCRIBE OF PERIOD
- ----------- ---------- --------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C>
Accumulated Depreciation and
Amortization of
Furniture and fixtures $ 2,939 $ - $ - $ - $ 2,939
---------- --------- ------------ -------------- ----------
$ 2,939 $ - $ - $ - $ 2,939
---------- --------- ------------ -------------- ----------
---------- --------- ------------ -------------- ----------
</TABLE>
F-15
<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.
PRO QUEST, INC.
Date: March 31, 1997 By: /s/ STEPHEN G. PETRUCCI
------------------------
Stephen G. Petrucci
President (CEO)
Date: March 31, 1997 By: /s/ DARYL K. MAC CARTER
-------------------------
Daryl K. MacCarter
Secretary/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 capacity and on the dates indicated.
Signature Title Date
- --------- ------ -----
/s/ STEPHEN G. PETRUCCI
- ------------------------ President March 31, 1997
Stephen G. Petrucci (Principal Executive
Officer) & Director
/s/ DARYL K. MacCARTER
- ------------------------ Vice President, March 31, 1997
Daryl K. MacCarter Secretary/Treasurer
& Director
