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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999
FRC RACING PRODUCTS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
COMMISSION FILE NUMBER: 33-55254-17
NEVADA 87-0434298
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
15004 KELLER LAKE DRIVE, BURNSVILLE, MINNESOTA 55337
(ADDRESS OF PRINCIPLE EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (612) 812-3390
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NONE
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT: NONE
Indicated by check mark whether the issuer (1) filed all reports required by
Section 13 or 15(d) of the Exchange Act 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 at least the past 90 days.
Yes [ ] No [X].
Number of shares outstanding of Issuer's common stock, $.01 par value per share,
as of December 31, 1999: approximately 12,650,060.00.
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FRC RACING PRODUCTS, INC.
FORM 10-QSB
PART I
a. Untimely Nature of this Filing. FRC Racing Products, Inc. (the "Company") has
failed to file this report within the time periods required by the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder. In an
effort to comply with these requirements, the Company is filing all required
reports for the time period ending December 31, 1999 through December 31, 2000
on the same date that this report is filed. It should be noted, however, that
information contained herein is current as of the period for which this report
was intended to cover as if it had been timely filed.
b. Forward Looking Statements. Information provided in this annual report may
contain "forward-looking" information. These cautionary statements are made with
the objective of obtaining the benefits of safe harbor provisions of applicable
legislation. FRC Racing Products, Inc. (the "Company") cautions investors that
any forward looking statements made by the Company are not guarantees of future
performance and actual results may differ materially from those in the forward
looking statements as a result of various factors.
ITEM 1. FINANCIAL STATEMENTS
SHELLEY INTL., CPA
443 E. 10TH AVE.
MESA, AZ 85204
(480) 461-8301
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors/
Review Committee
FRC Racing Products, Inc.
I have reviewed the accompanying balance sheets of FRC Racing Products,
Inc. as of December 31, 1999 and June 30, 1999 and the related statements of
operations, stockholders' equity, and cash flows for the three months and six
months ended December 31, 1999 and 1998. All information included in these
financial statements is the representation of the company's management.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, I do not express such an opinion.
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from this uncertainty.
Shelley Intl., CPA
January 22, 2001
Mesa, AZ
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FRC RACING PRODUCTS, INC.
Balance Sheet
as of December 31, 1999 and June 30, 1999
ASSETS
December 31, June 30,
1999 1999
CURRENT ASSETS
Cash 0 0
--------------------- ---------------------
Total Current Assets 0 0
--------------------- ---------------------
OTHER ASSETS 0 0
--------------------- ---------------------
Total Other Assets 0 0
--------------------- ---------------------
TOTAL ASSETS 0 0
===================== =====================
The accompanying notes are an integral part of these statements
See accountant's review report
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FRC RACING PRODUCTS, INC.
Balance Sheet
as of December 31, 1999 and June 30, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, June 30,
1999 1999
LIABILITIES
Current Liabilities 0 0
------------------------ ---------------------
Total Current Assets 0 0
------------------------ ---------------------
STOCKHOLDERS' EQUITY
Preferred Stock, authorized
200,000 shares, none issued and
outstanding, par value $0.001
Common Stock, authorized 100,000,000
shares of stock, issued and outstanding
12,652,060 shares
shares for December 31, 1999, and
June 30, 1999, par value $0.001 12,653 12,653
Additional Paid In Capital 2,157,421 2,157,421
Retained Earnings (Loss) (2,170,074) (2,170,074)
------------------------ ---------------------
Total Stockholders' Equity 0 0
------------------------ ---------------------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY 0 0
======================== =====================
The accompanying notes are an integral part of these statements
See accountant's review report
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FRC RACING PRODUCTS, INC.
Statement of Operations
for the three months and six months ended December 31, 1999 and 1998
3 mths ended 3 mths ended 6 mths ended 6 mths ended
12/31/99 12/31/98 12/31/99 12/31/98
Revenue
Sales 0 0 0 0
-------------------- -------------------- -------------------- --------------------
Total Revenue 0 0 0 0
-------------------- -------------------- -------------------- --------------------
OPERATING EXPENSES
Legal & Accounting 0 0 0 0
Consulting 0 0 0 0
General and Administrative 0 0 0 0
Loss on Investment 0 0 0 0
-------------------- -------------------- -------------------- --------------------
0
Total Operating Expenses 0 0 0 0
-------------------- -------------------- -------------------- --------------------
Operating Income (Loss) 0 0
Provision for Income Taxes 0 0 0 0
-------------------- -------------------- -------------------- --------------------
Net Income (Loss) 0 0 0 0
==================== ==================== ==================== ====================
Primary and Diluted
Earnings (Loss) per Share a a a a
-------------------- -------------------- -------------------- --------------------
Weighted Average Number of
Common Shares Outstanding 12,652,060 12,652,060 12,652,060 12,652,060
-------------------- -------------------- -------------------- --------------------
a: less than $0.01
The accompanying notes are an integral part of these statements
See accountant's review report
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FRC RACING PRODUCTS, INC.
Statement of Stockholders' Equity
from June 30, 1996 to December 31, 2000
Preferred Stock Common Stock Paid in Accumulated Total
Shares Amount Shares Amount Capital Deficit Stockholders'
Equity
----------------------------------------------------------------------------------------------------
Balance, June 30, 1996 200,000 200 12,652,060 12,653 2,157,221 (1,643,226) 526,848
Retirement of shares (200,000) (200) 200 -
Retained Earnings (Deficit) (526,848) (526,848)
----------------------------------------------------------------------------------------------------
Balance, June 30, 1997 0 0 12,652,060 12,653 2,157,421 (2,170,074) -
Retained Earnings (Deficit) - -
----------------------------------------------------------------------------------------------------
Balance, June 30, 1998 12,652,060 12,653 2,157,421 (2,170,074) -
Retained Earnings (Deficit) - -
----------------------------------------------------------------------------------------------------
Balance, June 30, 1999 12,652,060 12,653 2,157,421 (2,170,074) -
Sale of Shares 87,000,000 87,000 (69,000) 18,000
Retained Earnings (Deficit) (18,000) (18,000)
----------------------------------------------------------------------------------------------------
Balance June 30, 2000 99,652,060 99,653 2,088,421 (2,188,074) -
----------------------------------------------------------------------------------------------------
Retained Earnings (Deficit) 0
----------------------------------------------------------------------------------------------------
Balance December 31, 2000 99,652,060 99,653 2,088,421 (2,188,074) -
====================================================================================================
The accompanying notes are an integral part of these statements
See accountant's review report
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FRC RACING PRODUCTS, INC.
Statement of Cash Flow
for the six months ended December 31, 1999 and 1998
6 mths ended 6 mths ended
12/31/99 12/31/98
-------------------- -------------------
Cash from Operations
Net Loss 0 0
Loss on Investment
Change in Accounts Payable 0 0
-------------------- -------------------
Cash Provided by Operations 0 0
-------------------- -------------------
Cash Used in Investments 0 0
-------------------- -------------------
Cash from Financing
Sale of Stock 0 0
-------------------- -------------------
Total Cash Provided by Financing 0 0
-------------------- -------------------
Net Change in Cash 0 0
Beginning Cash 0 0
-------------------- -------------------
Ending Cash 0 0
==================== ===================
The accompanying notes are an integral part of these statements
See accountant's review report
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FRC RACING PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1. GENERAL ORGANIZATION AND BUSINESS
FRC Racing Products, Inc. (the Company), was originally incorporated in February
1986, in the State of Utah under the name Highland MFG., Inc. In December 1993,
the Company redomiciled as a Nevada corporation. The Company had no operations
until 1995.
On April 4, 1995, the Company entered into a Stock Exchange Agreement whereby it
issued 8,900,000 shares of its common stock (representing controlling interest
in the Company) in exchange for all of the outstanding shares of capital stock
of FRC Racing Products, Inc., an Iowa corporation. Immediately following, the
Company changed its name from Highland MFG., Inc. to FRC Racing Products, Inc.
The merger transaction resulted in FRC Racing Products, Inc. (Iowa) becoming a
wholly owned subsidiary of the successor FRC Racing Products, Inc. (Nevada). The
Iowa company was incorporated on October 17, 1994, to manufacture and distribute
automotive chassis, parts and related supplies. As of April 4, 1995 the Iowa
company had not commenced operations of its intended business and, as a result,
had no operational history. The transaction was a reverse acquisition whereby
the stockholders of FRC Racing Products, Inc (Iowa) became the controlling
stockholders of FRC Racing Products, Inc. (Nevada). This acquisition was
recorded at the historical cost of the acquired Iowa company.
The parent Nevada company had no operations. All operations were within the Iowa
wholly owned subsidiary. The Iowa subsidiary began operations in the last
quarter of fiscal year ended June 30, 1995. Sales however did not begin until
the first quarter of the next year. Sales were inadequate to handle the mounting
operational expenses of a manufacturing company and the Iowa company closed its
doors shortly after fiscal year ended June 30, 1996. During its operational
period the Iowa subsidiary borrowed funds from three banks in Iowa to purchase
land, building and refurbish the building. The parent company as well as the
officers then guaranteed the $3,000,000 bank loan. These banks foreclosed on the
Iowa company in April 1997. All of the assets were sold at a sheriff's
foreclosure sale and the funds distributed to the creditors and the banks. The
Banks also received a judgment against the parent company for the remainder of
the outstanding loan balance. A company officer counter sued the banks and
received a release from the loan guarantees for the officers, and the parent
company as of May 2000.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company has no assets and no debt as of June 30, 2000. The relevant
accounting policies and procedures are listed below.
Accounting Basis
The basis is generally accepted accounting principles.
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Earnings per Share
The basic earnings (loss) per share is calculated by dividing the Company's net
income (adjusted for certain dividends when paid) by the weighted average number
of common shares during the year. The diluted earnings (loss) per share is
calculated by dividing the Company's net income (loss) (adjusted for certain
dividends and certain interest when expensed) by the diluted weighted average
number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted average number of shares
adjusted as of the first of the year for any potentially dilutive debt or
equity.
Dividends
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
Income Taxes
The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Wholly Owned Subsidiary-Equity Method
Due to the demise of the wholly owned subsidiary. Its numbers are accounted for
on the equity method and shown as a single line item on the balance sheet and
income statement in the periods applicable.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However the Company has no current source of revenue, nor operations. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek a suitable merger
candidate which would supply the needed cash flow.
NOTE 4. STOCKHOLDERS' EQUITY
Preferred Stock
During fiscal year June 30, 1996 the Company authorized 200,000 shares of
preferred stock to be given to the current officers. This transaction was
rescinded in the fall of 1996. Currently no preferred stock is outstanding. The
Company does not anticipate the utilization of preferred stock in the near
future.
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Common Stock
During the year ended June 30, 1996 the parent company FRC Racing Products, Inc.
(NV) used its common stock to purchase goods and services for its Iowa
subsidiary. The Company also sold stock and invested 100% of the funds received
in the Iowa subsidiary. A total of $1,970,074 was raised for the Iowa subsidiary
selling 2,752,060 shares of common stock.
During the fiscal year ended June 30, 2000 the Company, sold stock for $18,000
in exchange for 87,000,000 shares of common stock.
NOTE 5. RELATED PARTY TRANSACTIONS
The Company currently neither owns nor leases any real or personal property.
Most office services are provided without charge by the president who lives in
Minnesota. Such costs are immaterial to the financial statements and
accordingly, have not been reflected therein.
NOTE 6. PROVISION FOR INCOME TAXES
As of June 30, 2000 the Company had a federal net operating loss carryforward
(NOL) of $2,188,074. Nevada has no state corporate income taxes. This federal
NOL in the future could be utilized to cover taxable operating income of the
same amount, thus creating a future net tax benefit of $328,211 at the minimum
federal corporate tax rate of 15%. Because of the non-operational nature of the
Company at present, there is substantial doubt as to the Company's ability to
fully utilize this tax benefit. Therefore, the Company has established a
valuation account which in effect, negates the tax benefit.
Net change in Deferred Tax Benefit 328,211
Current Taxes Payable 0
-----------
Provision for Income Taxes before
valuation account 328,211
Valuation account (328,211)
-----------
Net Provision for Income Taxes 0
-----------
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The federal NOL is due to expire 15 years from the date of its creation. The
chart below shows the year of creation, the amount of each year's NOL and the
year of expiration if not utilized.
Year Created Amount Year to Expire
------------ ------ --------------
1993 0 2008
1994 2,000 2009
1995 35,144 2010
1996 1,606,082 2011
1997 526,848 2012
1998 0 2013
1999 0 2014
2000 18,000 2015
---------
Total NOL Carryforward 2,188,074
---------
NOTE 7. REVENUE AND EXPENSES
The Company currently has no operations and no revenue.
NOTE 8. SUBSEQUENT EVENTS
In the fall of 2000 the shareholders approved a name change to Results
Technology Group, Corp. and also a 22 to 1 reverse stock split. This is all to
happen sometime in the first quarter of calendar year 2001. Neither of these
items has occurred as of the report date. The statements herein do not reflect
the effect of the reverse stock split. The reverse stock split would have the
effect of reducing the outstanding common stock shares from 99,652,060 shares to
approximately 4,529,639 shares.
ITEM 2. PLAN OF OPERATION
The Company currently has no operations, assets or employees. The Company,
operating through one or more of its primary shareholders, may investigate
potential business ventures that, in the opinion of such parties, may provide a
source of eventual profit to the Company. This involvement may take many forms,
such as the acquisition of an existing business or the acquisition of assets to
establish subsidiary businesses.
As an unfunded venture, the Company will be extremely limited in its attempts to
locate potential business situations for investigation. Management anticipates
that due to its lack of funds, and the limited amount of its resources, the
Company may be restricted to participation in only one potential business
venture. This lack of diversification should be considered a substantial risk
because it will not permit the Company to offset potential losses from one
venture against gains from another. The Company is unable to predict at this
time the costs of locating a suitable business opportunity.
The Company may chose to enter into a venture involving the acquisition of, or
merger with, a company which does not need substantial additional capital but
desires to establish a public trading market for its securities. Such a company
may desire to consolidate its operations with the Company through a merger,
reorganization, asset acquisition, or other combination. In the event of such a
merger, the Company may be required to issue significant additional shares, and
it may be anticipated that control over the Company's affairs may be transferred
to others.
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It is likely that the investigation and selection of business opportunities will
be complex, time-consuming and extremely risky. In addition to the severe
limitations placed upon the Company by virtue of its unfunded status, the
Company will also be limited, in its investigation of possible acquisitions, by
the reporting requirements of the Securities Exchange Act of 1934, pursuant to
which certain information must be furnished in connection with any significant
acquisitions. The Company would be required to furnish, with respect to any
significant acquisition, certified financial statements for the acquired
company, covering one, two or three years (depending upon the relative size of
the acquisition). Consequently, acquisition prospects that do not have the
requisite certified financial statements, or are unable to obtain them, may be
inappropriate for acquisition under the present reporting requirements of the
1934 Act.
The Company expects to encounter intense competition in its efforts to locate
suitable business opportunities in which to engage. The primary competition for
desirable investments may come from other small companies organized and funded
for similar purposes, from small business development corporations and from
public and private venture capital organizations. As the Company is limited in
its resources, it can fairly be said that all of the competing entities will
have significantly greater experience, resources, facilities, contacts and
managerial expertise than the Company and will, consequently, be in a better
position than the Company to obtain access to, and to engage in, business
opportunities. Due to its lack of funds, the Company may not be in a position to
compete with larger and more experienced entities for business opportunities
that are low-risk.
PART II. OTHER INFORMATION
ITEM. 1 LEGAL PROCEEDINGS
A. OUTSTANDING JUDGMENT. In September of 1995, the Company guaranteed
the repayment of a $3,000,000 line of credit from Farmers Savings Bank in West
Union, Iowa (the "Bank Loan") on behalf of the Company's wholly owned
subsidiary, FRC Racing Products, Inc., an Iowa corporation ("FRC Iowa"). FRC
Iowa was unable to generate revenue or obtain sufficient additional financing or
equity to fully implement its plan of operations. Consequently, FRC Iowa became
delinquent with its trade vendors and lenders. Pressure from these creditors
forced FRC Iowa to curtail operations and to subsequently default on the Bank
Loan. In April of 1996, Farmers Saving Bank (and two other participating
banks--Union Planters Bank of Waterloo, Iowa and First National Bank of West
Union Iowa--the "Banks") obtained default judgments against the Company and FRC
Iowa in the approximate amount of $2,300,000 (the "Bank Judgment"). In order to
partially satisfy the Bank Judgment, the Banks seized and sold all or
substantially all of the assets of FRC Iowa and/or the Company through a
sheriff's foreclosure sale. As of the period covered by this report, the Company
remained liable for the majority of the balance remaining under the Bank
Judgment. To the best of its knowledge, the Company is not aware of any
liability for any of FRC Iowa's other outstanding obligations.
B. ADMINISTRATIVE DISSOLUTION OF FRC IOWA. On September 13, 1996, FRC
Iowa was administratively dissolved by the Iowa Secretary of State for failure
to file its annual corporate reports. Iowa law provides that a corporation must
apply to the Secretary of State for reinstatement within two years after the
effective date of dissolution. As FRC Iowa has failed to apply for reinstatement
within this period, its corporate existence permanently ceased on September 14,
1998. Under such circumstances, Iowa law provides that its assets, if any,
should be distributed to creditors and then to shareholders. It is the belief of
the Company that FRC Iowa has no assets for distribution.
As of the date of this filing, to the knowledge of the Company, its officers and
directors, neither the Company nor any of its officers and directors, is a party
to any other material legal proceeding or
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litigation. Further, such parties are not aware of any anticipated governmental
proceedings against the Company.
ITEM 2. CHANGES IN SECURITIES
a. Changes in Securities. There have been no material modifications 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
been materially limited or qualified by the issuance or modification of any
other class of securities.
b. Recent Sales of Unregistered Securities. There have been no recent sales of
unregistered securities by the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
This response relates to senior securities of the Company. With respect to
these, the Company was not aware of 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
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS.
(a) Exhibits - 3.1 Articles of Incorporation.
3.2 Restated Articles of Incorporation.
3.3 Bylaws.
(b) None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this 10-QSB report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: December 12, 2000 FRC RACING PRODUCTS, INC.
By:
/s/ Todd A. Duckson
----------------------------------------
Todd A. Duckson, Chief Executive Officer
and Chief Financial Officer
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In accordance with the Securities and Exchange Act of 1934, this report
has been signed below by the following person on behalf of the Registrant and in
the capacities and on the date indicated.
Dated: December 12, 2000 By:
/s/ Todd A. Duckson
----------------------------------------
Todd A. Duckson, Chief Executive Officer
and Chief Financial Officer
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