UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-KSB
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended JUNE 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 33 ACT NO. 33-15246-D
ON-SITE TOXIC CONTROL, INC.
(Exact name of Registrant as specified in its charter)
COLORADO 84-1065435
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4 UPPER NEWPORT PLAZA, SUITE 100, NEWPORT BEACH, CA 92660
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (949) 833-8383
Securities registered pursuant to Section 12(b) of the Act: NONE
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 [ X] NO
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 or any amendment to
this Form 10-K. [ X ]
Revenue for the year ended June 30, 1999: $ 33,260.
As of March 7, 2000 it is unclear as to the aggregate market value of the
voting stock held by non-affiliates of the Registrant. This is due to the
low or almost non-existing trading of the Registrant's Securities.
As of March 7, 2000 the number of shares outstanding of the Registrant's
Common Stock was 2,701,515.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
On-Site Toxic Control (On Site) was organized on June 11, 1987 as
Augusta Financial, Inc. in the State of Colorado. On Site was in the business
of designing, manufacturing, selling and leasing of water and air treatment
equipment but has not been in that line of business for several years.
On Site has an inoperative subsidiary, Oxidation Royalties, Inc.,
which was organized in the State of California on August 15, 1984.
ITEM 2. DESCRIPTION OF PROPERTY
On occasion the Company pays for rent and other office services to
Fletcher Capital Advisors, an affiliate of one of the directors of the Company.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None.
PART II
ITEM 5. MARKET PRICE FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Because this report is being prepared in 2000, the Company has not
been able to obtain any reliable trading history for the period reported.
During the year ended June 30, 1999 there appeared to be little or no trading
in the stock of the Company. As of March 7, 2000, the Company had
approximately 159 shareholders of record.
The Company has not declared any cash dividends on its Common Stock
since inception and its Board of Directors has no present intention of
declaring any dividends.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources / Results of Operations. The Company
has not had an operating business for a number of years and the only assets
that remain are cash and cash investments in mutual funds and money market
funds. The Company is inactive except for the portfolio income (interest
and dividends) that it receives from its invested funds. The Company had
operating capital, primarily cash, in which it received $33,200 and $51,698
of interest and dividend income in 1999 and 1998, respectively. The Company
does have a mutual fund account where investments in specific stocks or
bonds are made. The Company reported a loss of $17,659 in 1998 as compared to
a gain in such investments of $13,911 in 1999.
The Company pays a management fee for advise on its investments,
and on occasion, pays for rents and other office services at the office of the
president in Newport Beach, California. The Company does have a loan
outstanding at the end of the year, June 30, 1999, to Entox, a subsidiary of
the majority owned shareholder of the Company. Other expenses of the Company
are professional, outside services, rent, and officer services.
The Company reported a net income of $7,367 for the fiscal year
1999, compared to a net loss of $10,525 in the previous year.
Plan of Operations. The Company is currently in the process of
looking for business opportunities to acquire or merge with. There is no
guarantee that management will be successful in finding such an opportunity.
The Company is also in the process of bringing all of its periodic reports
current for filing with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS
(a)(1) The following financial statements of the Company and its
subsidiaries have been filed as part of this report (see Item 8 "Financial
Statements and Supplementary Data"):
Independent Auditors' Report
Consolidated Balance Sheets as of June 30, 1999.
Consolidated Statements of Operations for the years ended June 30,
1999 and June 30, 1998.
Consolidated Statements of Stockholders' Equity for the period from
June 30, 1997 to June 30, 1999.
Consolidated Statements of Cash Flows for the years ended June 30,
1999 and June 30, 1998.
Notes to Consolidated Financial Statements.
(2) Schedules are omitted because of the absence of conditions under
which they are required or because the required information is given in the
financial statements or notes thereto.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no principal accountants since 1991. In
February, 2000, the Board of Directors approved the engagement of the firm of
Crouch, Bierwolf & Chisholm as the Certifying Public Accountants for the
Company.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to the Company's
Board of Directors and executive officers at June 30, 1999.
DIRECTORS AND EXECUTIVE OFFICERS
Age Director
Name (2000) Since Position with the
Company
Douglas Fletcher 74 1989 Chairman of the Board
David Fletcher 48 1989 Director, President,
Chief Executive Officer
Stephen R. Levy 61 1987 Director
Douglas Fletcher Mr. Fletcher has been Chairman of the Board of Directors of
the Company since January 1989. He has been a partner of Newport Partners,
Newport Beach, California, a private venture capital investment partnership,
since 1983. From 1962 to 1983, Mr. Fletcher founded and was chairman of the
board, chief executive officer and principal shareholder of Angeles
Corporation, formerly Shareholders Capital Corporation. Mr. Fletcher
also served as chairman of the board and president of Source Capital, Inc., a
New York Stock Exchange listed closed-end investment company, and of seven
open-end mutual funds. He served until 1999 as a director and vice
chairman of the Pacific Horizon group of mutual funds managed by Security
Pacific National Bank and as a director of TIS Mortgage Investment Company
listed on the New York Stock Exchange. He is a chartered financial analyst,
a past president of Los Angeles society of financial analysts and a former
allied member of the New York Stock Exchange. Mr. Fletcher received a B.A.
degree in economics from Princeton University in 1949.
David Fletcher Mr. Fletcher has been the President, Chief Executive Officer
and a director of the Company since January 1989. He is responsible for the
overall management of the Company. Since 1983, Mr. Fletcher also has been a
partner in a private venture capital firm of Newport Partners, located in
Newport Beach, California. From 1980 to 1983, Mr. Fletcher was a management
consultant with the accounting and management consulting firm of Touche Ross
& Co. in its Los Angeles office. Mr. Fletcher received a B.A. degree from
Princeton University in 1975 and a M.B.A. degree from Stanford University in
1980.
Stephan R. Levy Mr. Levy has been Secretary-Treasurer and a Director of the
Company since inception. He has been retired since August, 1990. Prior to that
time, he was an officer and director of Tofruzen, Inc., a public company which
manufactured and marketed a non-dairy frozen dessert, novelty food products,
and promotional items. He has previously served as Secretary-Treasurer of two
public companies, Central Oil Corp. and United Venture Capital Fund, Inc.
He attended the University of Texas and graduated in 1961 from the University
of Colorado with a Bachelor of Science in Business. He is a member of the
International Monetary Market, which is a division of the Chicago Mercantile
Exchange and was appointed by the Governor of Colorado as a member of the
Colorado Municipal Bond Supervisory Board.
ITEM 10. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
For the fiscal years ended June 30, 1999 and 1998, no officer or
director was paid any compensation over $10,000 in any fiscal year.
EMPLOYMENT AGREEMENTS AND OTHER COMPENSATION ARRANGEMENTS
None.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
None.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security Ownership of Beneficial Owners of more than five percent of
the Company's Common Stock as of June 30,1 999.
Amount and Nature
Name and Address Of Beneficial Percent of
of Beneficial Owner Ownership Class
Share Realty, N.V. (1) 1,828,213 67.67%
4 Upper Newport Plaza, Suite 100 (1)(2)(3)
Newport Beach, CA
Douglas Fletcher 1,828,213 67.67%
4 Upper Newport Plaza, Suite 100 (1)(2)(3)
Newport Beach, CA
David Fletcher 1,830,213 67.75%
4 Upper Newport Plaza, Suite 100 (1)(2)(3)
Newport Beach, CA
(b) Security Ownership of Management.
The following table shows the amount of the Company's Common Stock owned
beneficially and of record by all directors and by all directors and
officers as a group on June 30,1999:
Amount and Nature
Name and Address Of Beneficial Percent of
of Beneficial Owner Ownership Class
Douglas B. Fletcher 1,828,213 67.67%
4 Upper Newport Plaza, Suite 100 (1)(2)(3)
Newport Beach, CA
David B. Fletcher 1,830,213 67.75%
4 Upper Newport Plaza, Suite 100 (1)(2)(3)
Newport Beach, CA
Stephen R. Levy 20,000 .01%
4 Upper Newport Plaza, Suite 100
Newport Beach, CA
Officers and directors as a group 1,850,213 68.49%
(1) Share Realty is a Netherlands Antilles company. Newport Partners
("Newport"), a private venture capital partnership, shares investment and
voting power over shares owned by Share Realty and may be deemed to have
beneficial ownership of such shares. Douglas B. Fletcher and David B.
Fletcher are partners of Newport and may also be deemed to be beneficial
owners of securities Share Realty owns beneficially or of record.
(2) Includes 97,366 shares of Common Stock that are owned of record by
Entox, Inc. Entox is a wholly- owned subsidiary of Share Realty, N.V., a
Netherlands Antilles company. See Note (1) for further information regarding
the ownership of Share Realty.
(3) Includes 1,730,847 shares of Common Stock that are owned of record by
Share Realty and 97,366 shares that are owned by Entox, Inc. See Notes (1)
and (2).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June, 1999, the Company loaned $80,000 to the brother of the
president/director of the Company on a short term basis. The loan carried an
interest rate of 8%. The loan was repaid subsequent to year end.
The Company has outstanding a line of credit with Entox, Inc., a
subsidiary of the majority shareholder of the Company.
During the fiscal year 1999, the Company paid for rent and other office
services to Fletcher Capital Advisors, an affiliate of one of the directors of
the Company. Total monies paid in 1999 was $10,000.
Also during fiscal year 1998 and 1999, the Company paid investment
counseling fees to Fletcher Capital Advisors. Total fees paid in 1998 was
$4,547 and $4,280 in 1999.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
On-Site Toxic Control, Inc.
By:
/s/
Dated:
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ President and Director
(Principal Executive and
Financial Officer)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant
Consolidated Financial Statements:
Consolidated Balance Sheet - June 30, 1999.
Consolidated Statements of Operations - For the years ended June 30,
1999 and June 30, 1998.
Consolidated Statements of Stockholders' Equity - For the period from
June 30, 1997 to June 30, 1999.
Consolidated Statements of Cash Flows - For the years ended June 30,
1999 and June 30, 1998.
Notes to Consolidated Financial Statements
INDEPENDENT AUDITOR'S REPORT
Stockholders and Directors
On-Site Toxic Control, Inc. and subsidiary
Newport Beach, California
We have audited the accompanying consolidated balance sheet of On-Site
Toxic Control, Inc. (a Colorado corporation) and subsidiary as of June 30,
1999 and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years ended June 30, 1999 and 1998.
These consolidated financial statements are the responsibility of the
company's management. Our responsibility is to express and opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of On-Site Toxic Control, Inc. and subsidiary at June 30, 1999, and the
results of its operations and cash flows for the years ended June 30, 1999
and 1998 in conformity with generally accepted accounting principles.
Salt Lake City, UT
March 7, 2000
ON-SITE TOXIC CONTROL, INC.
Consolidated Balance Sheet
ASSETS
June 30,
1999
CURRENT ASSETS
Cash & cash equivalents (Note 1 & 4) $ 324,694
Interest receivable 600
Note receivable - related party (Note 5) 80,000
Prepaid expenses (Note 1) 2,200
TOTAL CURRENT ASSETS $ 407,494
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related party (Note 5) $ 21,000
Interest payable 16,903
Other 131
Total Current Liabilities
38,034
STOCKHOLDERS' EQUITY
Preferred Stock 800,000 shares
authorized at $.0125 par value;
shares issued and outstanding (Note 6) -
Common Stock 6,400,000 shares
authorized at $.0125 par value;
2,701,515 shares issued and outstanding 33,769
Capital in excess of par value 3,232,418
Accumulated deficit (2,896,727)
Total Stockholders' Equity 369,460
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 407,494
ON-SITE TOXIC CONTROL, INC.
Consolidated Statements of Operations
For the Year For the Year
Ended Ended
June 30, June 30,
1999 1998
REVENUE
Royalty income $ 12,056 $ 3,875
Interest income 18,704 44,353
Other 2,500 3,470
Total Revenue 33,260 51,698
EXPENSES
General and administrative (29,760) (24,735)
Interest expense (8,444) (17,130)
Gain (Loss) on Investment 13,911 (17,659)
Total Expenses (24,293) (59,524)
NET INCOME (LOSS) - Before Taxes $8,967 $ (7,826)
Taxes (Note 2) 1,600 2,699
INCOME (LOSS $ 7,367 $ (10,525)
Loss Per Common Share (Note 1) $ - $ -
Average Outstanding Shares (Note 1) 2,701,515 2,701,515
ON-SITE TOXIC CONTROL, INC.
Consolidated Statements of Stockholders' Equity
June 30, 1999
Capital in
Common Common Excess of Accumulated
Shares Stock Par Value
Deficit
Balance at June 30, 1997 2,701,515 $ 33,769
$ 3,232,418 $(2,893,569)
Loss for the Year - - -
(10,525)
Balance, June 30, 1998 2,701,515 33,769 3,232,418 (2,904,094)
Loss for the Year - - -
7,367
Balance,
June 30, 1999 2,701,515 $ 33,769 $ 3,232,418 $(2,896,727)
ON-SITE TOXIC CONTROL, INC.
Consolidated Statements of Cash Flows
For the Year For the Year
Ended Ended
June 30, June 30,
1999 1998
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (Loss) $ 7,637 $(10,525)
Increase (Decrease)
in Accounts Payable/Interest Payable (5,601) (26,943)
Increase (Decrease) in
Prepaid expenses / Interest Receivable 1,000 1,471
Cash Flows from Operating Activities 2,766 (35,997)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in Note Receivable (80,000) -
(80,000) -
CASH FLOWS FROM
FINANCING ACTIVITIES
Decrease in Notes Payable (79,425) (186,678)
(79,425) (186,678)
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (156,659) (222,675)
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF PERIOD 481,353 704,028
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 324,694 $ 481,353
CASH PAID DURING THE PERIOD FOR:
Interest $ 14,045 $ -
Income Taxes $ - $ 4,599
ON-SITE TOXIC CONTROL, INC.
Notes to the Consolidated Financial Statements
June 30, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Organization and Business - On-Site Toxic Control (On Site) was organized
on June 11, 1987 as Augusta Financial, Inc. in the State of Colorado. On Site
was in the business of designing, manufacturing, selling and leasing of water
and air treatment equipment but has not been in that line of business for
several years.
On Site has an inoperative subsidiary, Oxidation Royalties, Inc., which
was organized in the State of California on August 15, 1984.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with maturities of three months or less to be cash equivalents.
Prepaid Expenses - The Company had prepaid California state taxes of
$2,200 as of June 30, 1999.
Loss Per Common Share -Earnings (loss) per share are computed based on
the weighted average method.
Consolidated Financial Statements - The consolidated financial statements
include the accounts of On Site and its subsidiary. Collectively, these
entities are referred to as the Company. All significant intercompany
transactions and accounts have been eliminated.
NOTE 2 -INCOME TAXES
The Company adopted Statement of Financial Standards No. 109 "Accounting
for Income taxes" in the fiscal year ended June 30, 1999 and was applied
retroactively.
Statement of Financial Accounting Standards No. 109 " Accounting for
Income Taxes" requires an asset and liability approach for financial
accounting and reporting for income tax purposes. This statement recognizes
(a) the amount of taxes payable or refundable for the current year and (b)
deferred tax liabilities and assets for future tax consequences of events
that have been recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the
recognition of accounting transactions for tax and financial reporting
purposes. There were no temporary differences at June 30, 1999 and earlier
years; accordingly, no deferred tax liabilities have been recognized for all
years.
The Company has cumulative net operating loss carryforwards of
approximately $2,800,000at December 31, 1999. No effect has been shown in
the financial statements for the net operating loss carryforwards as the
likelihood of future tax benefit from such net operating loss carryforwards
is not presently determinable. Accordingly, the potential tax benefits of
the net operating loss carryforwards, estimated based upon current tax
rates at December 31, 1999 have been offset by valuation reserves in the same
amount. The net operating losses begin to expire in 2007.
ON-SITE TOXIC CONTROL, INC.
Notes to the Consolidated Financial Statements
June 30, 1999
NOTE 3 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions thataffect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements
and revenues and expenses during the reporting period. In these financial
statements, assets, liabilities and earnings involve extensive reliance on
management's estimates. Actual results could differ from those estimates.
NOTE 4 - CONCENTRATION OF RISK
As of June 30, 1999, the Company had cash funds invested in several bank
accounts and money market funds which exceeded the FDIC insured limits of
deposits. The Company had $319,673 invested in mutual funds and money market
funds that were exposed to such losses.
NOTE 5 - RELATED PARTY TRANSACTIONS
In June, 1999, the Company loaned $80,000 to the brother of the
president/director of the Company on a short term basis. The loan carried an
interest rate of 8%. The loan was repaid subsequent to year end.
The Company has a loan with Entox, Inc., a subsidiary of the majority
shareholder of the Company. The board of directors approved this loan to a
convertible debt as of June 30, 1999.
During the fiscal year 1999, the Company paid for rent and other office
services to Fletcher Capital Advisors, an affiliate of one of the directors
of the Company. Total paid in 1999 was $10,000.
Also during fiscal year 1998 and 1999, the Company paid investment
counseling fees to Fletcher Capital Advisors. Total fees paid in 1998 was
$4,547 and $4,280 in 1999.
NOTE 6 - CAPITAL STOCK / PREFERRED STOCK
On Site is authorized to issue both common stock and preferred stock per
its Articles of Incorporation. The preferred stock characteristics are to be
set by the board of directors, giving different characteristics of dividends,
liquidation preferences, voting rights, etc. As of June 30, 1999, there were
no classes of preferred stock outstanding.
NOTE 7 - SUBSEQUENT EVENT
Subsequent to year end, the Company announced its intention to hold a
stockholders' meeting to change the domicile from Colorado to Nevada, change
the par value of common stock to $.001, increase the authorized shares, and
authorize the board of directors to effect a reverse split of its common stock.
We hereby consent to the use of our audit report of On-Site Toxic Control,
Inc. dated March 7, 2000 for the year ended June 30, 1999 in the Form 10KSB
Annual Report for the year 1999.
s/s Crouch, Bierwolf & Chisholm
Salt Lake City, UT
March 7, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> JUN-30-1999
<CASH> 324,694
<SECURITIES> 0
<RECEIVABLES> 806,00
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 407,496
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 407,494
<CURRENT-LIABILITIES> 38,034
<BONDS> 0
0
0
<COMMON> 32,66187
<OTHER-SE> (2896727)
<TOTAL-LIABILITY-AND-EQUITY> 407,494
<SALES> 0
<TOTAL-REVENUES> 33,260
<CGS> 0
<TOTAL-COSTS> 24293
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8444
<INCOME-PRETAX> 8967
<INCOME-TAX> 1600
<INCOME-CONTINUING> 7367
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7367
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
