SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995,
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 33-55254-17
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FRC RACING PRODUCTS, INC.
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(Exact name of small business issuer in its charter)
Nevada 87-0434298
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 NORTH INDUSTRIAL PARKWAY
WEST UNION, IOWA 52175
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code (319) 422-6244
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding as of June 18, 1996
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$.01 PAR VALUE CLASS A COMMON STOCK 12,652,060 SHARES
Transitional Small Business Disclosure Format; Yes No X
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Ridihalgh, Fuelling, Snitker, Weber & Co., P.C.
To the Board of Directors
FRC Racing Products, Inc.
West Union, IA 52175
We have compiled the accompanying balance sheet of FRC Racing, Inc, (a
corporation) as of September 30, 1995 and the related statement of income and
for the three months then ended, in accordance with Statements and Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures and the
statement of cash flows required by generally accepted accounting principles.
If the omitted disclosures and statement of cash flows were included in the
financial statements, they might influence the user's conclusions about the
Company's financial position, results of operations, and cash flows.
Accordingly, these financial statements are not designed for those who are not
informed about such matters.
/s/ Ridihalgh, Fuelling, Snitker, Weber & Co., P.C.
July 10, 1996
UNAUDITED - SEE ACCOMPANYING ACCOUNTANT'S REPORT
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FRC RACING PRODUCTS, INC.
BALANCE SHEET
SEPTEMBER 30, 1995
ASSETS
CURRENT ASSETS
Cash $ 495,143
Accounts Receivable, Trade 51,917
Inventory 190,281
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Total Current Assets 737,341
FIXED ASSETS
Property, Plant and Equipment 1,709,445
Accumulated Depreciation (59,887)
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Total Property, Plant and Equipment 1,649,558
INTANGIBLE ASSETS
Organizational Costs 68,832
Accumulated Amortization (18,736)
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Total Intangible Assets 50,096
OTHER ASSETS
Prepaid Insurance 2,408
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TOTAL ASSETS $2,439,403
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UNAUDITED - SEE ACCOMPANYING ACCOUNTANT'S REPORT
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FRC RACING PRODUCTS, INC.
BALANCE SHEET
SEPTEMBER 30, 1996
LIABILITIES
CURRENT LIABILITIES
Accounts Payable $304,176
Accrued Payable 30,337
Accrued Payroll Taxes 23,760
Interest Payable 7,020
Accrued Taxes 5,169
Note Payable 32,454
Current Portion of Long Term Debt 7,579
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Total Current Liabilities 410,495
LONG TERM DEBT
Note Payable 1,575,000
Less Current Portion (7,579)
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Total Long Term Debt 1,567,421
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Total Liabilities 1,977,916
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STOCKHOLDER'S EQUITY
Capital Stock 9,900
Additional Paid in Capital 787,067
Retained Earnings (37,144)
Total Income or (Loss) (298,336)
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Total Stockholder's Equity 461,487
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Total Liabilities and Stockholder's Equity 2,439,403
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UNAUDITED - SEE ACCOMPANYING ACCOUNTANT'S REPORT
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FRC RACING PRODUCTS, INC.
STATEMENT OF INCOME
SEPTEMBER 30, 1995
Sales $ 81,868
Cost of Sales 80,591
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Gross Profit (Loss) 1,277
Expenses:
Selling Expenses 108,571
General and Administration 139,789
Depreciation 47,837
Amortization 4,434
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Total Expenses 300,631
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Income before Provision for Income Taxes (299,354)
Provision for Income Taxes -0-
Miscellaneous Income 1,018
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Net Income $ (298,336)
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UNAUDITED - SEE ACCOMPANYING ACCOUNTANT'S REPORT
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
CASH REQUIREMENTS
With the Company's current plan of operations, it will need to raise
additional capital in order to allow it to purchase the level of inventory
required to service the Company's dealer network created as its distribution
channels. Once sufficiently capitalized, the Company is expected to operate
without additional operating capital needs as the cash flow should allow it to
continue to grow and gain a significant share of the market. However, there is
no assurances that the Company can raise additional capital or that operating
revenues will be sufficient to meet operating expenses. With the Company's mix
of manufactured parts as well as parts purchased from other manufacturers, the
Company's dealer network is predicted by Management to continue to grow as the
Company's reputation is recognized.
RESEARCH AND DEVELOPMENT
The racing industry thrives on new product development and innovation as
they continue to find ways to win. The Company has created a research and
development team to attempt to stay on the leading edge of technology and
performance. It is anticipated that the Company will continue to perform
additional research and development throughout the year as the Company strives
to be an industry leader. The Company's main focus will be on the race car
chassis and how it can be improved to perform at the optimum level of
performance for every type of track on which the Company's target market
competes. This dictates that the Company continually test and refine its
product on the track through the Company's test car programs, facilitating the
feedback necessary to make such improvements. The Company anticipates continued
costs related to its planned design and manufacturing of the Company's own line
of non-specific bolt-on parts which will compliment the Company's chassis.
EXPECTED PURCHASE OF EQUIPMENT OR PLANTS
It is expected that the Company will have need for additional equipment to
produce the chassis and parts to supply to its dealer network as the Company's
market share grows. FRC has identified the equipment necessary to produce the
quantity of parts at the quality expected. It is anticipated that once sales of
non-specific bolt-on parts reaches a higher volume it will become cost effective
for the Company to purchase the necessary capital equipment. Management
believes that the equipment can either be purchased through additional loan
proceeds or can be leased through a leasing company.
EXPECTED CHANGES IN THE NUMBER OF EMPLOYEES
The Company expects to continue to add additional employees as demand for
its products and sales continues to increase. As both a manufacturer and
distributor of parts, the increase will likely come in terms of production
personnel. The Company does not expect any changes in the number of
administrative personnel over the next twelve months. The number of new
employees
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will vary directly with the growth of the Company's dealer network and the gain
in market share. Accordingly, it is difficult to predict with any degree of
accuracy the specific number of employees the Company will need in the next
twelve months.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As of September 30, 1995, to the knowledge of the Company, its officers and
directors, neither the Company nor any of its officers and directors, are a
party to any material legal proceeding or litigation which would impact the
operations of the Company.
ITEM 2. CHANGES IN SECURITIES.
There have been no material modifications to the to the instruments
defining the rights of the holders of any class of registered securities; nor
have the rights evidenced by any class of registered securities have been
materially limited or qualified by the issuance or modification of any other
class of securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There has not been any material default in the payment of principal,
interest, a sinking or purchase fund installment, or any other material default
not cured within 30 days, with respect to any indebtedness of the Company
exceeding 5 percent of the total assets of the Company. Nor are there any
material arrearages in the payment of dividends or any other material
delinquency not cured within 30 days.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There was no stockholders' meeting held during the quarter ended September
30, 1995.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
Financial Statements - June 30, 1995, 1994 and 1993
REPORTS ON FORM 8-K.
There was one report on Form 8-K filed during the fiscal year ending June
30, 1995.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: July 11, 1996
FRC Racing Products, Inc.
By: /s/ Brent A. Johnson
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Brent A. Johnson, Chief Executive Officer
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