FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
Of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1999
Commission File Number 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 10
NEWPORT BEACH CA 92660
(Address of principal executive offices)
Registrant's telephone number
including area code (949) 833-8383
Former Address, if changed since last report
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 such shorter period that the
registrant was required to file such reports)
Yes X No
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
2,701,515
(Number of shares of common
stock the registrant had
outstanding as of March 7, 2000)
PART 1
ITEM 1 - FINANCIAL STATEMENTS
The accompanying balance sheets of On-Site Toxic Control, Inc. at
September 30, 1999 and June 30, 1999, the statements of operations and the
statements of cash flows for the three months ended September 30, 1999 and
1998. They do not include all information and notes to the financial
statements necessary for a complete presentation of the financial position,
results of operations and cash flows in conformity with generally accepted
accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations
and financial position have been included and all such adjustments are of a
normal recurring nature.
Operating results for the quarter ended September 30, 1999 are not
necessarily indicative of the results that can be expected for the year ending
June 30, 2000.
ON-SITE TOXIC CONTROL, INC.
Consolidated Balance Sheets
ASSETS
September 30, June 30,
1999 1999
CURRENT ASSETS
Cash & cash equivalents (Note 1 & 4) $ 328,060 $ 324,694
Interest receivable 2,400 600
Note receivable - related party (Note 5) 80,000 80,000
Prepaid expenses (Note 1) 1,800 2,200
TOTAL CURRENT ASSETS $ 412,260 $ 407,494
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related party (Note 5) $ 21,000 $ 21,000
Interest payable 17,429 16,903
Other 131 131
Total Current Liabilities 38,560 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 33,769
Capital in excess of par 3,232,418 3,232,418
Accumulated deficit (2,892,487) (2,896,727)
Total Stockholders' Equity 373,700 369,460
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $412,260 $ 407,494
ON-SITE TOXIC CONTROL, INC.
Statements of Operations
For the Three Months Ended
September 30,
1999 1998
REVENUE
Royalty income $ - $ 12,056
Interest income 7,195 7,576
Total Revenue 7,195 19,632
EXPENSES
General and administrative (990) (12,810)
Interest expense (525) (4,510)
Gain (Loss) on Investment (1,040) (6,429)
Total Expenses (2,555) (23,749)
NET INCOME (LOSS) - Before Taxes $4,640 $ (4,117)
Taxes (Note 2) 400 600
INCOME (LOSS) $ 4,240 $ (4,717)
Loss Per Common Share (Note 1) $ - -
Average Outstanding Shares (Note 1) 2,701,515 2,701,515
ON-SITE TOXIC CONTROL, INC.
Statements of Cash Flows
For the Three months ended September 30, 1999 and 1998
For the Three Months Ended
September 30,
1999 1998
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (Loss) $ 4,240 $ (4,717)
Increase (Decrease)
in Accounts Payable/Interest Payable 526 (12,319)
Increase (Decrease) in
Prepaid expenses / Interest Receivable (1,400) 600
Cash Flows from Operating Activities - (16,436)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in Note Receivable - -
- -
CASH FLOWS FROM
FINANCING ACTIVITIES
Decrease in Notes Payable - -
- -
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,366 (16,436)
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF PERIOD 324,694 485,685
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 328,060 $
CASH PAID DURING THE PERIOD FOR:
Interest $ - $ 10,000
Income Taxes $ - $ -
ON-SITE TOXIC CONTROL, INC.
Notes to the Financial Statements
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., 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 $2,800,000 at 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 Financial Statements
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 that affect 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. ($319,531 at September 30, 1999).
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 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 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. ($652 in fiscal year 2000 to date.)
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.
ITEM 2 - PLAN OF OPERATION
ITEM 2 - 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 $7,195 and $7,576 of interest and
dividend income in the three months ended 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 $(1,040) in 1999 as compared
to a loss in such investments of $(6,429) in 1998.
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, 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 $4,240 for the first three months
1999, compared to a net loss of $4,717 in the three months for 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.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K. None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been below by following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
ON-SITE TOXIC CONTROL, INC.
/s/ Lionel Drage
Lionel Drage, President and Director
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