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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[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
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______to______
Commission File No. 2-75313
PROCARE AMERICA, INC.
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(FORMERLY KNOWN AS ROYAL EQUITY EXCHANGE, INC.)
(Exact name of registrant as specified in its charter)
NEVADA 84-0871427
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(State or Other Jurisdiction (I.R.S. Employer)
Incorporation or Organization) Identification No.)
12995 SO. CLEVELAND AVENUE, SUITE 109, FT MYERS, FL 33907
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (941) 418.0021
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT;
TITLE OF CLASS COMMON STOCK $0.001 PAR VALUE
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 Registrants knowledge, in a 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]
The aggregate market value of the voting stock held by non-affiliates
as of June 30, 1999 was approximately $778,324.
There were 8,711,485 shares of the Registrants common stock outstanding
as of June 30, 1999.
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INCORPORATION BY REFERENCE
Specified portions of the registrant's Form 8-K filed May 8, 1997 and
the registrant's Form 8-K filed August 14, 1998 are incorporated by reference in
Part III hereof.
FORWARD LOOKING STATEMENTS OR INFORMATION
Certain statements, other than statements of historical fact, included
in this Annual Report, including, without limitation, the statements under
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are, or may be deemed to be, forward-looking statements
that involve significant risks and uncertainties, and accordingly, there is no
assurance that these expectations will be correct. These expectations are based
upon many assumptions that the registrant believes to be reasonable, but such
assumptions ultimately may prove to be materially inaccurate or incomplete, in
whole or in part and, therefore, undue reliance should not be placed on them.
Several factors which could cause actual results to differ materially from those
discussed in such forward-looking statements include, but are not limited to:
pricing policies of competitors, the ability to attract and retain employees in
key positions and uncertainties and changes in general economic conditions. All
subsequent forward-looking statements attributable to the registrant or persons
acting on its behalf are expressly qualified in their entirety.
PART I
ITEM 1. BUSINESS
The Company is a development stage business that is focused on
providing certain medical services, primarily that of a "home health agency"
through its wholly owned operating subsidiary ProCare Home Health, Inc. The
Company provides nursing and assisted nursing services to individual patients in
their homes, and/or nursing and assisted nursing services and staffing by
contractual arrangement with local nursing homes, assisted living facilities and
hospitals. The Company is licensed to provide these services by the Agency for
Health Care Administration, State of Florida. The Company provides these
services on a completely private basis.
ENVIRONMENTAL MATTERS
The Company, when operational, is subject to various federal, state and
local regulations concerning the environment and hazardous waste disposal.
Efforts to maintain compliance with such regulations have not required
expenditures material to the Company's overall operating performance or
financial condition.
EMPLOYEES
As of June 30, 1999, the Company and its wholly owned subsidiary
ProCare Home Health, Inc. had eleven wage or salaried employees.
ITEM 2. PROPERTIES
In May 1997 the Company entered into a three-year lease agreement for
office space at 12995 South Cleveland Avenue, Suite 109, Ft. Myers, Florida,
33907, which serves as the Company's principal operational and executive office.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings pending or to the knowledge of the
Company threatened, that, if determined adversely to the Company would have a
material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Annual Meeting of Shareholders
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At its meeting of August 14, 1998, the Board of Directors established September
16, 1998 as the date of the annual shareholders meeting.
The Board of Directors established August 27, 1998 as the Shareholders of Record
Date.
2
As of the record date there were 6,993,826 shares of ProCare America, Inc.
(formerly known as Royal Equity Exchange, Inc.) Common Stock issued and
outstanding which were entitled to vote at this meeting, of which 5,096,794
shares, or approximately 72% of all shares outstanding, were present at the
meeting (1,240,715 present in person and 3,856,079 present by
nonsolicited-proxy), which represented a quorum.
The Business of the Meeting to be considered and voted upon was:
1) The election of directors
2) To consider and take action on a proposal to approve the audit
firm of Wentzel, Berry & Alvarez, P.A., now known as Wentzel,
Berry, Wentzel and Phillips, P. A.
3) To consider and take action on a proposal to change the name
of the Company from Royal Equity Exchange, Inc.to ProCare
America, Inc.
4) To consider and take action on a proposal to amend the
restrictive legend on all restricted share certificates.
5) Such other business as may properly come before the Meeting.
Election of Directors
---------------------
Six individuals were nominated for election to the Board of Directors.
The nominations include, Brent Peterson, and Thomas Unsworth, Donald
Strong, William Strahan, Richard Mohring, Sr., and Joseph Ellis.
Approval of Audit Firm
----------------------
Proposal that the shareholders approve the selection of the audit firm
of Wentzel, Berry & Alvarez, P.A., (now known as Wentzel, Berry,
Wentzel and Phillips, P. A.) which had been approved by the Board of
Directors of the Corporation. The Board of Directors recommended that
the shareholders approve the selection of this firm.
Proposal to Change the Name of the Company
------------------------------------------
Proposal to amend the Articles of Incorporation to change the name of
the Company to ProCare America, Inc. which had been approved by the
Board of Directors of the Corporation. The Board of Directors
recommended that the shareholders approve this proposal.
Proposal to Amend Restrictive Legend on all Restricted Share
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Certificates
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Proposal to amend the restrictive legend on all restricted share
certificates which had been approved by the Board of Directors of the
Corporation. The Board of Directors recommended that the shareholders
approve this proposal.
The amended legend was read verbatim as follows: That the
shareholders meeting shall amend the restrictive legend on all
restricted share certificates to read as follows:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under any state securities laws. Such shares have been
acquired for investment purposes only and not with a view to
the distribution thereof. They may not be sold, offered for
sale, transferred or otherwise disposed of in the absence of
an effective registration statement under the Act or
compliance with the requirements of any applicable state
securities laws, or an opinion of counsel satisfactory to the
corporation that such registration or compliance is not
required."
Motions were made from the floor on the foregoing nominations of
Directors and the Proposals as set forth above and said motions were
seconded from the floor and were hereby adopted and approved.
3
There was no new business proposed at the meeting in accordance with
the Company's Bylaws and, consequently, no new business was acted upon.
Balloting
---------
The Chairman announced that the meeting would now put to a vote (1) the
election of the directors, (2) the proposal to approve the selection of
Wentzel, Berry & Alvarez, P.A. (now known as Wentzel, Berry, Wentzel
and Phillips, P. A.), (3) amend the Articles of Incorporation to change
the name of the Company to ProCare America, Inc., and (4) to amend the
restrictive legend on all restricted share certificates.
The polls were opened to take votes on these items and the Inspector of
the Vote distributed the ballots. The Chairman requested that the
shareholders vote by marking their ballots and returning them to the
Inspector of the Vote. After all shareholders desiring to vote had done
so, the Chairman instructed the Inspector of the Vote to tabulate the
votes.
Voting Results
--------------
The Chairman announced that the Inspector of the Vote had completed the
tabulation of the votes on all matters presented to the meeting and
that all matters had passed by a unanimous vote. There were no votes
against nor any authority withheld nor any abstentions on the matters
presented.
Changes in Registrants Certified Accountant
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It was determined by the Board of Directors that it made more economical sense
to retain the services of a local Certified Accountant in Naples, Florida rather
than continue with the former firm which was located in Minneapolis, Minnesota.
Therefore the Board of Directors, subject to Shareholder Approval, terminated
the relationship with Stirtz, Bernards, Boyden, Surdel and Larter, P.A. of
Minneapolis, Minnesota and retained the Services of Wentzel, Berry and Alvarez,
P.A. (now known as Wentzel, Berry, Wentzel and Phillips, P. A.) of Naples,
Florida.
Change of Name of the Company
- -----------------------------
It was determined by the Board of Directors that the change of name of the
Company from Royal Equity Exchange, Inc. to ProCare America, Inc. was more in
line with the development of the home health care business of the Company.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock (symbol: REEX) was listed on the
Over-the-Counter (OTC) Bulletin Board. In March of 2000 the Company was
de-listed for non-compliance with SEC filing requirements. The shares are now
listed on the "pink sheets" as published by the National Quotation Bureau.
The Company's common stock is not listed on any national stock exchange
or on NASDAQ. The OTC Bulletin Board is a regulated quotation service that
displays real-time quotes, last-sale prices and volume information for
non-listed (over-the-counter) equity securities. The OTC Bulletin Board is a
reporting system for participating market makers, not an issuer listing service,
and should not be confused with the NASDAQ Stock Market. Participating market
makers in the bulletin board system enter quotes and trade reports on a closed
computer network and the information is made publicly available through numerous
websites and other locations. The OTC Bulletin Board is distinct from the "pink
sheets" published by the National Quotation Bureau which also report on
transactions in non-listed equity securities.
Stockholders of record at June 30, 1999 numbered approximately 809. The Company
has not paid cash dividends on its Common Stock in the past and currently plans
to retain earnings, if any, for business development and expansion.
4
QUARTERLY STOCK PRICES
FIRST SECOND THIRD FOURTH
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Closing Stock Price end of each quarter....... $0.31 $0.31 $0.75 $0.13
ITEM 6. SELECTED FINANCIAL DATA
The following table depicts selected consolidated financial data for
the two-year period ended June 30, 1999 as derived from the consolidated
financial statements of the Company. This table should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's audited consolidated financial statements and
notes thereto appearing elsewhere herein.
AS OF
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CONSOLIDATED BALANCE SHEET DATA 6/30/99 6/30/98
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Working capital deficit......................... $ (227,595) $ (330,913)
Total assets.................................... 42,473 17,241
Long-term debt, including current portion....... 90,849 225,028
Stockholders' equity (deficit).................. (240,954) (323,723)
YEAR ENDED
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CONSOLIDATED STATEMENT OF OPERATIONS DATA 6/30/99 6/30/98
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Net patient services revenue.................... $ 171,970 $ -0-
Other........................................... 324 200
Operating Expenses:
Bad debt expense........................... -0- -0-
Medical Supplies........................... -0- -0-
General & administrative................... 266,295 94,924
Payroll.................................... 387,261 145,401
Consulting fees paid to directors
and stockholders......................... 155,800 266,363
Interest expense........................... 21,326 28,375
Loss on disposal/abandonment of
Fixed assets............................. -0- -0-
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$ 830,682 $ 535,063
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Forgiveness of debt and accrued interest........ 89,652 -0-
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Net Loss $ (568,736) $ (534,863)
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Net loss per common share....................... $ (.07) $ (.11)
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Weighted average number of
Common shares outstanding..................... 7,735,046 5,058,839
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
HISTORICAL EVENTS
Reverse Split of Common Stock; Surrender of Control Shares; Merger
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On December 29, 1995, the Company declared a 40 for 1 reverse split of
the Company's outstanding common stock whereby 1,449,779 shares of common stock
were issued in exchange for 57,991,165 shares of common stock outstanding.
Before and after the exchange, the Company had 500,000,000 authorized shares of
common stock (NOTE: other documents of the Company reflect that this stock split
occurred on March 15, 1996). Subsequent to this stock split, the then control
shareholder of the Company, Robert Slominski, surrendered 900,000 shares of the
Company, leaving 549,779 shares of the Company outstanding.
5
In June 1996 the Company entered into a merger transaction whereby all
of the shares of ProCare America, Inc. were acquired by the Company in exchange
for 3,888,984 shares of the Company (NOTE: other documents of the Company
provided by the previous audit firm reflect the merger as occurring February 7,
1996 with the number of shares in the transaction being 4,056,484).
Approximately 1,300,000 of these shares were issued to Owen L. Stephens who
became Chairman of the Board of Directors, President and Chief Executive Officer
of the Company. Subsequently, Mr. Stephens resigned these positions as discussed
below.
As of May 8, 1997, the Company had issued and outstanding 5,692,913
shares of common stock.
Resignation of Board Members and Election of New Board Members and Officers;
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Resignation of Bookkeeper
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Certain of the shareholders of the Company were not satisfied with the
performance of the Company and sought a change in the Company's board of
directors and management. Responding to pressures from these Company
shareholders, Owen L. Stephens, by letter dated January 29, 1997, tendered his
resignation as a director of the Company, Chairman of the Board, President and
Chief Executive Officer of the Company and all positions with subsidiaries of
the Company; by letter dated January 29, 1997, Maryann Stephens tendered her
resignation as an officer and director of the Company and all positions with
subsidiaries of the Company; and, by letter dated January 30, 1997, Donna Kay
tendered her resignation as a director of the Company and all positions with
subsidiaries of the Company. At a special meeting of the board of directors held
on February 11, 1997, the sole remaining director, William Strahan, accepted the
foregoing resignations. The foregoing former directors, Mr. Stephens, Mrs.
Stephens and Mrs. Kay, have not expressed to the Company, and have not furnished
the Company with a letter describing, any disagreement they may have had with
the Company's operations, policies or practices.
At the February 11, 1997 board meeting, the sole remaining director,
William Strahan, elected Donald Strong to fill the board vacancy created by the
resignation of Owen Stephens, James Karabasz to fill the board vacancy created
by the resignation of Maryann Stephens and Fred Hodgdon to fill the board
vacancy created by the resignation of Donna Kay. Following their election, the
newly constituted board of directors elected Mr. Strahan as Chairman of the
Board, Donald Strong as President and Secretary and James Karabasz as Treasurer.
By letter dated February 14, 1997, Richard E. Shield, P.A. a certified
public accountant, stated that he thought because of non-payment of his fees it
was prudent to terminate his present engagement with the Company in light of the
changes in the Company's organization and management. Mr. Shield prepared the
Company's payroll tax returns and W-2's and, according to Mr. Shield's letter,
provided other consultation and accounting services to the Company. In his
letter to the Company, Mr. Shield indicated his willingness on being brought
current on his fee payments to be re-engaged by the Company. Mr. Shield was not
engaged as the Company's principal accountant to audit the Company's financial
statement. The Company's principal accountant was Stirtz, Bernards & Company.
Effective February 4, 1998 the Company entered into a letter of engagement with
Wentzel, Berry & Alvarez P. A. (now known as Wentzel, Berry, Wentzel & Phillips,
P. A.) as the principal audit firm. This action was ratified by the shareholders
on September 16, 1998.
Failure to File Periodic Reports and Provide Audited Financials; Absence of
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Current Information
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Based upon information recently learned by the Company's new directors
and officers, it appears that the prior management of the Company did not file
the periodic reports as required under the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder since November 13, 1991, when
the Company filed the Form 8-K, Current Report, discussed above.
The current board of directors believes that prior management did not
provide the new board with full and current information on the operations and
financial condition of the Company. The board of directors has acted to seek and
obtain updated and complete information on the Company. The current board of
directors and current management have instituted a program to begin the audit
process necessary to bring the Company's reporting current. Representatives of
management and the new audit firm of Wentzel, Berry, Wentzel and Phillips have
met with the previous audit firm to review records. Management is compiling the
data requested by the audit firm to the best of its ability and is providing any
and all assistance to expedite the completion of the audits.
Retention of Management Organization
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At its meeting of February 19, 1997, the board authorized the retention
of a medical management service to manage the day to day affairs of the Company,
under the supervision of the board of directors, pursuant to the terms of an
engagement letter which sets forth the duties to be performed. The long-term
goals to be accomplished by the medical management service were to organize the
books and records of the Company, assist the Company in its fund-raising
efforts, retain competent personnel to provide medical services to patients of
the Company, advise the Company on recommended actions to return the Company to
a fully operational status and explore possible acquirors for the Company should
this be in the best interest of the shareholders. These goals were progressive
and their accomplishment was dependent upon the Company obtaining an adequate
source and level of funding in the immediate future.
6
The principals of this management entity were Brent Peterson, who
previously served for a short period of time as an officer and director of one
of the Company's subsidiaries, and Paul Schryver. While the principals of the
management entity were experienced businessmen, they had not previously provided
management services to a medical provider.
In October 1998, as the Company moved toward operating status, Brent
Peterson, Thomas Unsworth, and Joseph Ellis were appointed by the remaining
Board members to the Board of Directors to fill vacancies on the Board. The
operational officers of the Company were appointed by the Board as follows:
Brent Peterson, Chairman/CEO; Donald Strong, President/COO; Thomas Unsworth,
Vice-President/Treasurer; Joseph Ellis, Vice-President/Secretary. The agreement
with the medical management services company was terminated. The Board reviewed
a proposal by Maryann Stephens, shareholder and former nurse/medical director of
the Company's subsidiary Caring Health. After a trial period it was determined
by management that the parties to the proposal had a conflict of interest and
the proposal was rejected. In December management engaged a healthcare
professional to restructure and restart operational services. It was at this
juncture that management learned that the Company's license had been terminated
by the State of Florida for a non-compliance issue under the previous
management. The process to re-license is a long, detailed procedure and requires
the development of systems, hiring of staff and passing an Agency for Healthcare
Administration audit. The Company administratively dissolved its subsidiary
corporations Caring Health Support Professionals, Inc. and Caring, Inc. The
Company changed the name of its subsidiary ProCare America, Inc., incorporated
in Minnesota to ProCare Pharmacies of America, Inc. The Company then
incorporated ProCare Home Health, Inc. to be its wholly owned operating entity.
All of these changes were initiated and completed to establish a fresh base on
which to re-commence operations. Starting in December the Company focused on
restructuring and rebuilding the systems to qualify for licensing with the State
of Florida. In late March the Company was audited by the State of Florida and
approved for license. On May 20, 1998 the Company was licensed to provide
medical services to patients. The first contracts and patients treated were in
June 1998.
Authorization to Borrow Funds with Convertible Features
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The management service retained by the Company to manage the Company's
day to day operations has advised the board that significant funds would be
required by the Company to return it to full operational status. Specifically,
the management service estimated that, until accounts receivable begin to flow
into the Company, the Company's short term cash needs are approximately $90,000
and, to bring the Company to fully operational status, approximately $500,000 in
cash would be required. After consideration of this recommendation, the board
determined, at its meeting held on February 11, 1997, that the Company should
seek to borrow $750,000 in short term loans thereby providing a cushion of
approximately $160,000 beyond the amount recommended by the management service,
assuming funds can be raised on a timely basis. Accordingly, at this meeting,
the board authorized the Company to borrow up to $750,000 from investors for a
term of one year at an interest rate of 10 % per annum. At the option of the
investor, the loans may be converted into common stock of the Company at the
conversion rate of $0.50 per share, exercisable prior to the loan maturity date.
Further, each loan carries warrants entitling the lender to purchase, within one
year after the loan is advanced, a number of shares of common stock equal to the
original principal amount of the loan at a warrant price of $0.75 per share and,
from months 12 to 24, a number of shares of common stock equal to the original
principal amount of the loan at a warrant price of $1.00 per share. The proceeds
of these loans will be used to pay accounts payable that are now due and any
remaining loan proceeds will be used to fund the Company's operations. There can
be no assurance that the Company's efforts to raise funds will be successful or,
if successful, that the Company will return to a fully operational status or
that these activities will be successful or profitable.
RESULTS OF OPERATIONS
Operating Income
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For the year ended June 30, 1999 the net patient services revenue
totaled $171,970. Other revenue totaled $324.
7
Current Operations
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The Company was licensed to commence providing medical services in late
May 1998 and began serving patients in June 1998. The primary focus of
management has been to raise sufficient working capital to maintain operations
and grow the Company. Although the Company raised $515,000 in fiscal year 1999
and from February 11,1997 an aggregate amount of $722,000 from the sale of short
term notes to private investors as approved by the Board, management believes
that because of the timing of the receipt of funds did not allow for completely
implementing the growth model. Nonetheless, in management's opinion, the Company
has been very successful in marketing it's service and acquiring staffing
contracts with local hospitals, assisted living facilities, and nursing homes.
Another component of the operational model is the development of relationships
with referring physicians to provide home care to private patients. The
difficulty has been, management believes, having sufficient capital on a timely
basis to hire the personnel required to service these contracts. In addition
there has not been adequate funding to implement the pharmacy operation or to
pursue a certification program to acquire a Medicare provider number.
Accounts Payable and Receivable: Assets of the Company
- ------------------------------------------------------
As of June 30, 1999, the Company had accounts payable of $96,052, notes
payable to others of $90,849, accrued payroll taxes of $91,263 and accrued
interest of $5,263. As of June 30, 1999 total accruals and notes payable totaled
$256,427. Accounts receivable as of June 30, 1999 were $10,454 and total assets
of the company were $42,473.
Overview and Outlook for 2000
- -----------------------------
Management anticipates that year 2000 will be very challenging for the
Company. In Southwest Florida, the Company's market, the healthcare industry
suffers, first, from a shortage of skilled personnel. Second there is
significant regulation on both the State and Federal level which in recent years
has undergone numerous changes leading to regulatory burdens and future
uncertainty. Third, the healthcare industry in Southwest Florida is a highly
competitive business in both employee recruitment and business acquisition. To
effectively compete one goal of management will be to adequately capitalize the
Company. The Company has staffing contracts, which if fully implemented, have
the potential to generate operational profits in fiscal 2000. However, it is
possible that unanticipated expenses could deminish or negate any such gains. As
part of its plan management intends to carefully evaluate its medical services
model and target those areas that provide the most efficiencies and profit
performance. Management expects to continuously monitor and review all
operations with a view to improving financial returns. Despite any efforts made
by management, it may not be possible to adequately capitalize the Company to
secure and retain adequate skilled personnel, to increase income while
maintaining or reducing expenses, or otherwise make the Company profitable.
Additionally, even if the Company is successful in obtaining adequate capital,
there is no assurance that the Company can be operated competitively. As an
alternative to continuing operating independently, management will explore other
courses of action such as strategic alliances or possibly, even a sale of the
business
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The following consolidated financial statements of the Company and its
Independent Accountants' Opinion are set forth in Part IV, Item 14, of this
Report:
(i) Consolidated Balance Sheets-as of June 30, 1999 and June 1998.
(ii) Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity (Deficit) for the year's ended June 30,
1999 and June 30, 1998.
(iii) Notes to the Consolidated Financial Statements; and
Unqualified Opinion of Independent Accountants dated April 27,
2001, except for Note 13, as to which date is December 12,
2001.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
There have been no disagreements between management and the previous
and current accounting firms as regards any accounting issues or financial
disclosure matters.
8
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Brent Peterson Chairman of the Board/CEO/Director
Thomas Unsworth President/COO/Director
William Strahan Vice-President/Treasurer/Director
Joseph Ellis Vice-President/Secretary/Director
Donald Strong Director
ITEM 11. EXECUTIVE COMPENSATION
Current Officers Annual Compensation
---------------- -------------------
Brent Peterson - Chairman/CEO $84,000.00 (1)
(1) Does not include reimbursement for health insurance premiums.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Total (2)
- ------------------------ ---------------------- ------------
Gerald Hansen................... 460,156 5.85%
Owen & Maryann Stephens......... 1,175,000 14.95%
All beneficial owners
As a group................. 1,635,156 20.80%
(1) Except as other wise indicated, the persons named in the table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them. The information shown above is based upon
information furnished to the company by the named persons. Information
relating to beneficial ownership of shares is based upon "beneficial
ownership" concepts set forth in the rules promulgated by the
Securities Exchange Act of 1934, as amended. Under such rules a person
is deemed to be a "beneficial owner" of a security if that person has
or shares "voting power" which includes the power to vote or to direct
the voting of such security, or "investment power", which includes the
power to dispose or to direct the disposition of such security. A
person is also deemed to be a beneficial owner of any security of which
that person has the right to acquire beneficial ownership within 60
days. Under the rules, more than one person may be determined to be a
beneficial owner of the same securities.
(2) In calculating the percentage ownership for a given individual or
group, the number of shares of the company's common stock outstanding
includes unissued shares subject to options, warrants, rights or
conversion privileges exercisable within 60 days by such individual or
group, but unissued shares are not deemed outstanding in calculating
the percentage ownership for other persons or groups.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing in the Company's Form 8-K filed May 8, 1997
under the caption "Granting of Options" is incorporated herein by reference.
9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a) (1) Financial Statements.
CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of ProCare America,
Inc. (formerly known as Royal Equity Exchange, Inc.) and subsidiaries
and Report of Independent Accountants are attached as pages F1 through
F26 to this report:
(i) Independent Auditors' Report dated April 27, 2001,
except for Note 13, as to which date is December 12,
2001.
(ii) Consolidated Balance Sheets for the years ended June
30, 1999 and June 30, 1998 and the period from
September 22, 1993 (inception) to June 30, 1999;
(iii) Consolidated Statements of Operations for the years
ended June 30, 1999, and June 30, 1998 and the period
from September 22, 1993 (inception) to June 30, 1999;
(iv) Consolidated Statements of Stockholders Equity
(Deficit) for the years ended June 30, 1999, and June
30, 1998 and the period from September 22, 1993
(inception) to June 30, 1999;
(v) Consolidated Statements of Cash Flows for the years
ended June 30, 1999, and June 30, 1998 and the period
from September 22, 1993 (inception) to June 30, 1999;
(vi) Notes to the Consolidated Financial Statements.
(b) Reports on Form 8-K:
Form 8-K current report filed May 8, 1997.
Form 8-K current report filed August 14, 1998
10
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.
ProCare America, Inc.
(formerly known as Royal Equity Exchange, Inc.)
(Registrant)
By /s/Brent Peterson
-------------------------------------
Chairman of the Board/CEO, Director
Date: June 30, 1999
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 capacities and on the dates indicated.
Signature Title Date
By /s/Brent Peterson Chairman of the Board/CEO June 30, 1999
------------------------------- Director
Brent Peterson
By: /s/Thomas Unsworth President/COO/Director June 30, 1999
-------------------------------
Thomas Unsworth
By: /s/William Strahan Vice-President/Treasurer June 30, 1999
------------------------------- Director
William Strahan
By: /s/Joseph Ellis Vice-President/Secretary June 30, 1999
------------------------------- Director
Joseph Ellis
By: /s/Donald Strong Director June 30, 1999
-------------------------------
Donald Strong
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