SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended February 28, 1999
Commission File Number 33-24718-A
PRIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0109088
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Pride House, Watford Metro Centre, Tolpits Lane, Watford, England WD1 8SB
(Address of principal executive offices) (Zip Code)
800 698-6590
(Issuer's telephone number, including area code)
Indicate by (X) whether 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 and (2) has been subject to such filing requirements for the
past 90 days. YES X NO
Common Stock, $.002 par value. 1,995,357 shares outstanding as of February
28, 1999.
<PAGE>
PRIDE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
February 28, November 30,
1999 1998
unaudited
ASSETS
<S> <C> <C>
Cash and cash equivalents ............................................ $ 168,449 54,953
Accounts receivable .................................................. 1,913,546 1,571,983
Property revenue producing vehicles and equipment-net (Note 2) ....... 3,883,420 21,599,835
Investment in affiliate (Note 1) ..................................... 4,048,460 4,048,460
------------- -----------
TOTAL ASSETS ................................................................... $ 10,013,875 27,275,231
============= ===========
LIABILITIES AND SHAREHOLDERS EQUITY
LIABILITIES
Bank line of credit .................................................. 135,554 6,264,245
Accounts payable ..................................................... 603,588 558,314
Accrued liabilities and expenses ..................................... 4,226,981 1,738,304
Bank debt ............................................................ 4,780,920 685,428
Obligations under hire purchase contracts ............................ 1,750,638 15,231,850
Acquisition debt payable 1,686,000 1,686,000
Loans payable ........................................................ 34,610 34,610
Other liabilities 73,107 249,842
------------- -----------
TOTAL LIABILITIES .............................................................. 13,291,398 26,448,593
============= ===========
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES (Note 4) ...................... 0 370,043
------------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS EQUITY
Preferred stock, $.001 par value, 5,000,000 shares authorized, none
issued or outstanding Common stock, $.002 par value, 5,000,000
shares authorized, 1,995,357 shares issued and outstanding
in 1999 and 1998 respectively ........................................ 3,991 3,991
Additional paid-in capital ........................................... 8,332,894 8,332,894
Retained earnings(deficit) ........................................... (12,298,627) (7,903,830)
Deferred financing costs ............................................. (26,984) (44,734)
Accumulated other comprehensive income ............................... 711,203 68,273
------------- -----------
TOTAL SHAREHOLDERS EQUITY ...................................................... (3,277,523) 456,595
------------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY ...................................... 10,013,875 27,275,231
============= ===========
</TABLE>
Page 1
<PAGE>
PRIDE, INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months ended
February 28
1999 1998
$ $
REVENUE
<S> <C> <C>
Contract hire income ...................................... 327,498 2,441,865
Sale of vehicles .......................................... 14,821,987 817,112
Fleet management and other income ......................... 73,107 321,994
---------- -----------
15,222,592 3,580,971
========== ===========
EXPENSES
Cost of sales ............................................. 17,785,035 1,480,587
Depreciation .............................................. 94,712 1,071,956
General and administration expenses ....................... 621,218 489,586
Amortization of goodwill .................................. -- 157,680
Interest and other financing costs ........................ 1,486,467 575,809
---------- -----------
19,987,432 3,775,618
========== ===========
LOSS BEFORE MINORITY INTERESTS ...................................... (4,764,840) (194,647)
Minority interests in net loss of consolidated subsidiaries 370,043 91,232
----------- -----------
LOSS BEFORE PROVISION FOR INCOME TAXES ............................. (4,394,797) (104,779)
Provision for income taxes ................................ -- --
----------- -----------
NET (LOSS) .......................................................... (4,394,797) (104,779)
=========== ===========
LOSS PER COMMON SHARE (Note 5a)
Net Loss before minority interests ........................ $ (2.38) $ (.10)
Minority interests in net loss of subsidiary .............. .18 .05
------------ -----------
$ (2.20) $ (.05)
============ ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING ......................................................... 1,995,357 1,995,357
=========== ===========
</TABLE>
Page 2
<PAGE>
PRIDE,INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months
Ended February 28
1999 1998
<S> <C> <C>
NET LOSS ......................................... (4,394,797) (104,779)
OTHER COMPREHENSIVE INCOME (Note 5b)
Foreign currency translation adjustments 633,825 57,482
----------- ----------
COMPREHENSIVE (LOSS) ............................. (3,760,972) (47,297)
</TABLE>
=========== ==========
Page 3
<PAGE>
PRIDE,INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months ended
February 28, 1999
1999 1998
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net (loss) ....................................................... (4,394,797) (104,779)
Adjustments to reconcile net (loss) to cash provided by operating
activities:
Minority interests in net loss of subsidiaries ......... (370,043) (91,232)
Depreciation and amortization .......................... 94,712 1,071,957
Amortization of goodwill ............................... -- 157,679
Deferred financing costs ............................... 17,750 17,750
Loss on disposal of fixed assets ....................... 1,474,039 42,193
Changes in assets and liabilities
(increase) decrease in accounts receivable ............. (341,563) 14,297
(increase) in inventories .............................. -- (46,899)
increase in accounts payable, accrued expenses and other
liabilities ............................................ 2,357,216 436,179
----------- -----------
Net cash (utilized) provided from operating activities ........... (1,162,686) 1,497,145
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of revenue producing assets ............................. -- (3,104,557)
Proceeds from sale of fixed assets ............................... 16,147,184 909,207
----------- -----------
Net cash provided (utilized) by investing activities ... 16,147,184 (2,195,350)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank lines of credit ................................... -- 192,237
Reduction in bank line of credit ....................... (6,128,691) --
Increase in bank debt .................................. 4,160,000
Principal payment of long term debt .................... (64,508) (17,882)
Proceeds from hire purchase contract funding ........... -- 3,154,590
Principal repayments of hire purchase funding .......... (13,471,628) (2,748,385)
------------ -----------
Net cash(utilized) provided from financing activities ............ (15,504,827) 580,560
------------ -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH .......................... 633,825 57,482
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............. 113,496 (60,163)
Cash and cash equivalents, beginning of year ........... 54,953 84,227
----------- -----------
CASH AND CASH EQUIVALENTS END OF YEAR ............................ 168,449 24,064
=========== ===========
</TABLE>
Page 4
<PAGE>
PRIDE,INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1-DESCRIPTION OF COMPANY
Pride, Inc. (the "Company"), which is a holding company, was incorporated
as International Sportfest, Inc. in the state of Delaware on September 11,1988.
The Company was a development stage company with no operations though January
13,1994.On the date, the Company acquired, through an exchange of stock, Pride
Management Services Plc ("PMS"), a consolidated group of companies located in
the United Kingdom. Simultaneously with the acquisition, the Company changed its
name from International Sportfest, Inc. to Pride, Inc. and now has its corporate
offices in Watford, England and New York, New York. By acquiring 100% of the
issued and outstanding common stock of Pride Management, PMS became a wholly-
owned subsidiary of the Company. For accounting purposes the acquisition was
treated as a recapitalization of Pride Management with PMS as the acquirer in a
reverse acquisition.
Pursuant to the acquisition, the Company issued an aggregate of 9,000,000
(900,000 shares-post Reverse stock split) shares of its common stock to the
stockholders of PMS in the acquisition. The 9000,0000 (pre-reverse split) shares
represented 89% of the 10,155,350 (pre-reverse split) shares of common stock
outstanding immediately after the acquisition. The common stock, was determined
in arms-length negotiations between management of the company and management of
PMS. None of the stockholders or management of PMS were previously affiliated
with the Company in any manner, The principal basis used in the negotiations to
determine the number of shares to be issued by the Company was the percentage of
stock which would be owned by the new control groups after the issuance thereof,
rather than any traditional valuation formulas. By acquiring 100% of the issued
and outstanding common stock of PMS, PMS became a wholly owned subsidiary of the
Company. For accounting purposes, the acquisition has been treated as a
recapitalization of PMS, with PMS as the acquirer in a reverse acquisition. In
March 1995, pursuant to the terms and conditions of a reorganization, the
Company exchanged all its shares in Pride Management Services Plc for 1,500,000
shares of common stock in Pride Automotive Group, Inc ( a newly formed Delaware
corporation). As a result of this exchange, Pride Automotive Group, Inc ("PAG")
became a majority owned subsidiary of the Company and the parent of PMS.
Pride Management Services Plc (PMS) is a holding company of six
subsidiaries engaged in the leasing of motor vehicles primarily on contract hire
to local authorities and selected corporate customers throughout the United
Kingdom.
On November 29,1996, the Company, through PAG's newly formed majority owned
subsidiary, AC Automotive Group Inc. and its wholly owned subsidiary AC Car
Group Limited (registered in the United Kingdom), completed the acquisition of
certain assets of AC Cars Limited and Autokraft Limited. These two companies
were engaged in the manufacture and sale of speciality automobiles. The purchase
price of approximately $6,067,000 was financed with the proceeds of a private
offering of the Company's common stock and by loans. The acquisition was
recorded using the purchase method of accounting.
On February 12,1998, the board of Directors of AC Automotive Group, Inc.
authorized the issuance of 6,130,000 shares of its common stock to Erwood
Holdings, Inc., a company affiliated with Alan Lubinsky, the President and Chief
Executive Officer and director of the Company and AC Automotive Group, Inc. for
aggregate consideration of $6,130. In addition, 441,300 shares were issued to
other unrelated parties for aggregate consideration of $443. Following further
restructure and the forgoing issuance of shares, the ownership of AC Automotive
Group, Inc. by PAG has been reduced to 16%. Due to the change in ownership
percentage, PAG does not believe that it still has the ability to exercise
significant influence over AC Automotive, Inc. Accordingly, consolidation is not
considered appropriate. PAG's investment in AC Automotive Group, Inc. is
therefore being reported under the cost method of accounting.
On December 11,1998, PAG ,though its subsidiary, Pride Management Services
Plc, completed the sale of substantially all its leasing assets, leaving
approximately 13% of its revenue producing vehicles after the sale. The
consideration paid was $14,763,680 against balance sheet value of $17,851,023.
As a condition of sale, hire purchase creditors were paid $14,537,000 in full
and final settlement of the debt outstanding on the leased assets sold against a
balance sheet value of $13,127,303 at an early settlement penalty of $1,409,697.
In addition, the bank was restructured as follows. Upon completion of the sale,
$1,815,000 was repaid to the bank. The balance of $4,449,245 has been converted
into two loans; Loan A for $1,485,000 and Loan B for $2,964,245. Loan A of
$1,485,000 is repayable by July 31,1999, in the event of which Loan B of
$2,964,245 will be forgiven. In the event that Loan A is not repaid by July
31,1999, the full amount outstanding on the two loans is repayable on demand. As
a result of the sale, PAG wrote off its related goodwill, which had a carrying
value of $8,444,147, at November 30,1998.
On February 19,1999, it was announced that PAG had executed a Letter of
Intent to acquire all of the issued and outstanding capital stock of Digital
Mafia Entertainment LLC, in exchange for the issuance of 7,400,000 shares in
Pride Automotive common stock. In addition PAG also announced that it will, at
the same time, sell its ownership of Pride Management Services to the Company
for nominal value. At this time, these sales have not being consummated and the
terms have being re-negotiated in light of the de-listing of PAG's shares as
discussed below, and now 14,800,000 shares will be issued.
On March 12,1999, PAG was notified by NASDAQ that it's securities would be
de-listed from the Nasdaq Small Cap Market effective March 19,1999, since it's
financial condition does not meet the requirements for continual inclusion of
such securities. PAG is in the process of appealing this decision.
Page 5
<PAGE>
PRIDE, INC AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1-DESCRIPTION OF COMPANY (Continued)
In the opinion of management, the accompanying unaudited interim
consolidated condensed financial statements of Pride Inc. and its subsidiaries,
contain all adjustments necessary to present fairly the Company's financial
position as of February 28,1999 and the results of its operations for the three
months ended February 28,1999 and 1998 and cash flows for the three month
periods ended February 28,1999 and 1998.
NOTES 2-FIXED ASSETS
Fixed assets consists of the following:
<TABLE>
<CAPTION>
February 28, November 30,
1999 1998
(unaudited)
$ $
<S> <C> <C>
Building and improvements 784,599 784,599
Revenue producing vehicles 3,716,552 26,954,977
Furniture, fixtures and machinery 576,270 576,270
---------------------------------------------
5,077,421 28,315,846
Less: accumulated depreciation 1,194,001 6,716,011
--------------------------------------------
3,883,420 21,599,835
============================================
</TABLE>
NOTE 3-LIABILITIES
Included in liabilities as of February 28,1999, are amounts in the aggregate of
$1,521,742 which are not due and payable until after February 28,2000. This
amount consists of amounts due to loans payable and equipment notes payable.
Page 6
<PAGE>
NOTE 4-MINORITY INTERESTS IN SUBSIDIARIES
In April 1996, PAG successfully completed an initial public offering of its
common stock, as a result of which the Company's investment in PAG was reduced
to 56.45%.
In November 1996,PAG completed a private placement of 17units, each unit
consisting of a 10% promissory note in the amount of $95,000 and 10,000 shares
of the Company's common stock for the aggregate price of $100,000.The effect of
this placement reduced the Company's investment in PAG to 53,33%.
In August 1998, the Company sold 70,000 shares of PAG common stock for net
proceeds of $235,870, realizing a loss of $57,236.
As a result of this transaction, the Company now holds 1,425,000 shares of
PAG common stock which represents a 50,49% investment.
Due to the fact that PAG has negative equity, the minority interest
liability has been reduced to nil
NOTE 5-NEW ACCOUNTING PRONOUNCEMENTS
(a) Earnings (Loss) per share
The Company has adopted SFAS 128 Earnings Per Share ( SFAS 128 ), which is
effective for periods ending after December 15, 1997 and has changed the method
of calculating earnings(loss) per share. SFAS 128 requires the presentation of
basic and diluted earnings(loss) per share on the face of the income statement.
Prior period earnings(loss) per share data has been restated in accordance with
SFAS 128. Loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
(b) Statement of Comprehensive Income
The Company has adopted SFAS 130 Reporting Comprehensive Income , which is
effective for the years beginning after December 15,1997 and early adoption is
permitted. Comprehensive income consists of net income or loss and other
comprehensive income (income, expenses, gains and losses that bypass the income
statement and are reported directly as a separate component of equity).
Page 7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Pride, Inc. (the "Company") which is a holding company, was incorporated as
International Sportfest, Inc in the State of Delaware on September 11,1998. The
Company was a development stage company with no operations through January 13,
1994.On January 13,1994, the Company acquired Pride Management Services, Plc
("PMS") a consolidated group of operating companies located in the United
Kingdom. Simultaneously with the acquisition, the Company changed its name from
International Sportsfest, Inc to Pride, Inc. and now has its corporate offices
in Watford, England and New York City, New York. The Company also decided to
change its year end from April 30 to November 30, in order to coincide
accounting periods with its new subsidiary.
Pursuant to the acquisition, the Company issued an aggregate of 9,000,000
(900,000 shares-post Reverse stock split) shares of its common stock to the
stockholders of PMS in the acquisition. The 9000,0000 (pre-reverse split) shares
represented 89% of the 10,155,350 (pre-reverse split) shares of common stock
outstanding immediately after the acquisition. The common stock, was determined
in arms-length negotiations between management of the company and management of
PMS. None of the stockholders or management of PMS were previously affiliated
with the Company in any manner, The principal basis used in the negotiations to
determine the number of shares to be issued by the Company was the percentage of
stock which would be owned by the new control groups after the issuance thereof,
rather than any traditional valuation formulas. By acquiring 100% of the issued
and outstanding common stock of PMS, PMS became a wholly owned subsidiary of the
Company. For accounting purposes, the acquisition has been treated as a
recapitalization of PMS, with PMS as the acquirer in a reverse acquisition.
In December 1995, PAG consummated a private placement offering of common
stock of 500,000 shares, which reduced Pride's ownership interest to 72.8%. In
April 1996, PAG completed an initial public offering of 592,500 shares of common
stock at $5.00 per share and 2,000,000 redeemable common stock warrants at a
price of $.10 each. The effect of the offering was to reduce Pride's ownership
interest to 56.55%.
In November 1996, PAG completed a private placement of 17 units, each
consisting of a 10% promissory note in the amount of $95,000 and 10,000 shares
of the Company's common stock for the aggregate price of $100,000.The effect of
this placement reduced the Company's investment in PAG to 46.87%.In August 1998,
the Company sold 70,000 shares of PAG common stock for net proceeds of $235,870,
realizing a loss of $57,236.As a result of this transaction, the Company now
holds 1,425,000 shares of PAG common stock which represents a 50.49% investment.
On November 29,1996, the Company, through its newly formed majority owned
subsidiary, AC Automotive Group Inc. and its wholly owned subsidiary AC Car
Group Limited (registered in the United Kingdom), completed the acquisition of
certain assets of AC Cars Limited and Autokraft Limited. These two companies
were engaged in the manufacture and sale of speciality automobiles. The purchase
price of approximately $6,067,000 was financed with the proceeds of a private
offering of the Company's common stock and by loans. The acquisition was
recorded using the purchase method of accounting.
On February 12,1998, the board of Directors of AC Automotive Group, Inc.
authorized the issuance of 6,130,000 shares of its common stock to Erwood
Holdings, Inc., a company affiliated with Alan Lubinsky, the President and Chief
Executive Officer and director of the Company and AC Automotive Group, Inc. for
aggregate consideration of $6,130. In addition, 441,300 shares were issued to
other unrelated parties for aggregate consideration of $443. Following further
restructure and the forgoing issuance of shares, the ownership of AC Automotive
Group, Inc. by the Company has been reduced to 16%. Due to the change in
ownership percentage, PAG does not believe that it still has the ability to
exercise significant influence over AC Automotive, Inc. Accordingly,
consolidation is not considered appropriate. PAG's investment in AC Automotive
Group, Inc. is therefore being reported under the cost method of accounting.
On December 11,1998, PAG, through its subsidiary, Pride Management Services
Plc, completed the sale of a large portion of its leasing assets (see Note
1).Pride Management Services, through its subsidiaries, continues to service the
remaining contract hire agreements.
Page 8
<PAGE>
On February 19,1999, it was announced that PAG had executed a Letter of
Intent to acquire all of the issuance of 7,400,000 shares in Pride Automotive
common stock. In addition, PAG also announced that it will, at the same time,
sell its ownership of Pride Management Services to the Company for nominal
value. At this time, these sales have not being consummated and the terms have
being re-negotiated in light of the de-listing of PAG's shares as discussed
below, and now 14,800,000 shares will be issued.
On March 12,1999, PAG was notified by NASDAQ that it's securities would be
de-listed from the Nasdaq Small Cap Market effective March 19,1999, PAG's
financial condition does not meet the requirements for continual inclusion of
such securities. PAG is in the process of appealing this decision.
The financial information presented herein include:
(i) Consolidated Condensed Balance Sheets as of February 28,1999 and
November 30,1998;
(ii) Consolidated Condensed Statements of Operations for the Three Month
periods Ended February 28,1999 and 1998;
(iii) Consolidated Condensed Statements of Comprehensive income (loss) for
the Three Month Periods Ended February 28,1999 and 1998;
(iv) Consolidated Condensed Statements of Cash Flows for the Three Month
Periods Ended February 28,1999 and 1998.
Results of operations
During the quarter, the Company through its subsidiary, completed the sale
of substantially all its leasing assets. 972 vehicles and their related
contracts were disposed of at a book loss of $3,087,343. This accounts for the
large reduction in contract hire income and increase in vehicle sales when
comparing the quarters ending February 28,1999 and February 28,1998
respectively.
In addition to this sale, 25 additional vehicles were disposed of at a loss
of $43,279. During the corresponding quarter in 1998, 37 vehicles were disposed
of on termination of contracts at an average profit of $734 per vehicle.
No new business was written during this quarter in line with the Company's
decision to reduce its leasing and fleet management assets. During the quarter
ended February 28,1998, 96 new contracts were written at an average rental of
$695 per vehicle.
As of February 28, 1999, 132 vehicles were under lease compared to 1540
vehicles as at February 28,1998.
Fleet management income has also reduced substantially due to the reduction
in vehicles being managed. At the end of this quarter, 49 vehicles were subject
to management contracts compared to 217 at the end of the corresponding quarter
in 1998.
Cost of sales has increased substantially as a result of the disposal of
997 vehicles discussed above. This has resulted in a large reduction in
depreciation due to the reduction in the fleet when comparing the quarters ended
February 28,1999 and February 28,1998 respectively.
General and administration have increased by $130,000 when comparing the
quarters ending February 28,1999 and February 28,1998. This is mainly due to the
writing off of doubtful debtors and a provision for professional fees relating
to the Company restructure.
Interest and financing costs increased by $910,000 when comparing the
quarters ended February 28,1999, and February 28,1998, respectively. This
increase is mainly due to a early settlement penalty of $1,410,000 relating to
the settlement of the debt outstanding on the leased assets sold, and a
reduction in the level of Hire purchase obligations and bank line of credit
outstanding when comparing the respective quarters.
As a result of the sale of the leased assets, the intangibles were written
off at November 30,1998.
For the three months ended February 28,1999 and 1998, the Company reported,
after amortization of goodwill of $157,680 (for 1998) and minority interests of
$370,043 (1999) and $91,232 (1998), a loss of $4,394,797 and $104,779 .
Page 9
<PAGE>
Liquidity and Capital Resources
Net cash (utilized) provided from operating activities for the three month
periods ended February 28,1999 and 1998 aggregated $1,162,686 and $1,497,145
respectively. The Company provided cash of $16,147,184 and $909,207 from the
sale of fixed assets for the periods ended February 28,1999 and 1998
respectively. For the three month period ended February 28,1998, $3,104,557 was
utilized to purchase revenue producing assets. Net cash utilized by the Company
from financing activities amounted to $15,514,411 as against net cash provided
of $580,560 for the three month period ended February 28,1999 and 1998
respectively
Due to the losses incurred as a result of the sale of assets described in
note 1 and the continuing trading losses, doubts are raised about the Company's
ability to continue as a going concern.
Management's plans in regard to this matter were described in a press
release issued on February 19,1999, where it was announced that the Company had
executed a Letter of Intent to acquire all the issued and outstanding capital
stock of Digital Mafia Entertainment, LLC, in exchange for the issuance of
7,400,000 shares in Pride Automotive common stock. The amount of shares to be
issued has subsequently being increased to 14,800,000. In addition, PAG also
announced that it will, at the same time, sell its ownership of Pride Management
Services to Pride, Inc., to the Company for nominal value. At this time, these
sales have not being consummated.
Management is also raising capital for the purpose of meeting PAG's
financial obligations until such time as the Contract of Sale described above is
consummated. If this raising of capital is unsuccessful, then the Company will
not have sufficient cash on hand to meet its current obligations. The financial
statements do not include any adjustments that might result from this
uncertainty.
Page 10
<PAGE>
PART II. OTHER INFORMATION
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. None.
ITEM 5. Other Information. None.
ITEM 6. Exhibit and Reports on Form 8-k. None.
Page 11
<PAGE>
SIGNATURES
Pursuant to the requirements 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
Dated: April 16, 1999
Pride, Inc.
by: \s\ Alan Lubinsky
Alan Lubinsky
