UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
0-13738
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Commission File Number
THE SAINT JAMES COMPANY
-----------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1426581
---------------------- --------------
(State of Incorporation) (I.R.S.Employer
ID No.)
1104 Nueces Street
------------------
Austin, Texas 78701-2128
------------------------
(512) 671-3858
--------------
(Address and Telephone Number of Principal Executive Offices)
Copies to:
Courtneay Draker, Esq
Schroeder, Walthall and Nevill, LLP
1100 Louisiana Street
Suite 4850
Houston, TX 77002
Phone: (713) 654-9100
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 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 ]
The number of shares of Registrant's Common Stock outstanding as of
September 30, 1999, was 999,057.
2
THE SAINT JAMES COMPANY
INDEX
Part 1. Financial Information
Item Page No.
BALANCE SHEETS 3
Nine Months Ended September 30, 1999
and December 31, 1998
STATEMENT OF OPERATIONS 5
Three Months Ended September 30, 1999
Three Months Ended September 30, 1998
Nine Months Ended September 30, 1999
Nine Months Ended September 30, 1998
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY 6
STATEMENT OF CASH FLOWS 8
Three Months Ended September 30, 1999
Three Months Ended September 30, 1998
Nine Months Ended September 30, 1999
Nine Months Ended September 30, 1998
Year Ended December 31, 1998
Year Ended December 31, 1997
January 7, 1993 (Inception) to September 30, 1999
Part 2. Other Information 16
2
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
THE SAINT JAMES COMPANY
Balance Sheet
- --------------------------------------------------------------------------------
Nine Months Ended Year Ended
September 30, 1999 December 31, 1998
- --------------------------------------------------------------------------------
Current Assets $ 0 $ 0
- --------------------------- ----------------------- --------------------------
Total Current Assets 0 0
=========================== ======================= ==========================
Other Assets 0 0
- --------------------------- ----------------------- --------------------------
Total Other Assets 0 0
=========================== ======================= ==========================
Total Assets 0 0
=========================== ======================= ==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------- -----------------------------------------
Nine Months Ended Year Ended
September 30, 1999 December 31, 1998
- --------------------------------------------------------------------------------
CURRENT LIABILITIES
- --------------------------- ----------------------- --------------------------
Accrued Interest Payable 837 1,116
(Note C)
- --------------------------- ----------------------- --------------------------
TOTAL CURRENT
LIABILITIES 837 1,116
=========================== ======================= ==========================
LONG TERM
LIABILITIES
- --------------------------- ----------------------- --------------------------
Interest Payable 7,508 6,392
(Note C)
- --------------------------- ----------------------- --------------------------
Judgments Payable 11,157 11,157
(Note D)
- --------------------------- ----------------------- --------------------------
TOTAL LONG TERM
LIABILITIES 18,665 17,549
=========================== ======================= ==========================
Total Liabilities 19,502 18,665
=========================== ======================= ==========================
STOCKHOLDERS'
EQUITY (NOTE E)
- --------------------------- ----------------------- --------------------------
Common stock, $.001
Par value authorized
50,000,000 shares issued
and outstanding at
December 31, 1998 -
999,057 shares
September 30, 1999 -
999,057 shares $ 999 $ 999
- --------------------------- ----------------------- --------------------------
Additional Paid In
Capital 3,460,568 3,460,568
- --------------------------- ----------------------- --------------------------
SUB-TOTAL 3,461,567 3,461,567
- --------------------------- ----------------------- --------------------------
Retained Earnings
Restricted (11,157) (11,157)
- --------------------------- ----------------------- --------------------------
Retained Earnings
Deficit (3,469,912) (3,469,075)
- --------------------------- ----------------------- --------------------------
Total Retained
Earnings (3,481,069) (3,480,232)
- --------------------------- ----------------------- --------------------------
TOTAL STOCKHOLDERS'
EQUITY (19,502) (18,665)
=========================== ======================= ==========================
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY 0 0
=========================== ======================= ==========================
*See report and footnotes following tables.
3
THE SAINT JAMES COMPANY
(A Development Stage Company)
Statement of Operations
- --------------------------------------------------------------------------------
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
- ------------------- ------------- ------------- ------------- --------------
REVENUE $ 0 $ 0 $ 0 $ 0
- ------------------- ------------- ------------- ------------- --------------
EXPENSES
- ------------------- ------------- ------------- ------------- --------------
General,
Selling and
Admin. 279 279 837 837
- ------------------- ------------- ------------- ------------- --------------
Judgment 0 0 0 0
- ------------------- ------------- ------------- ------------- --------------
Loss from
Discounted
Operations 0 0 0 0
- ------------------- ------------- ------------- ------------- --------------
Total
Expenses 279 279 837 837
=================== ============= ============= ============= ==============
Net Profit/Loss(-) (279) (279) (837) (837)
- ------------------- ------------- ------------- ------------- --------------
Net Profit/Loss (-)
per Weighted Share
(Note A) (.0002) (.0002) (.0008) (.0008)
- ------------------- ------------- ------------- ------------- --------------
Weighted Average
Number of
Common Shares
Outstanding 999,057 999,057 999,057 999,057
- ------------------- ------------- ------------- ------------- --------------
*See report and footnotes following tables.
4
THE SAINT JAMES COMPANY
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------
COMMON STOCK
- --------------------------------------------------------------------------------
Shares Amount
- ---------------------------- ---------------------- ----------------------
Balance, December 31, 1997 9,977,495 $ 9,977
- ---------------------------- ---------------------- ----------------------
September 21, 1998
Issued Shares in Stock Trade 10,000,000 +10,000
- ---------------------------- ---------------------- ----------------------
November 19, 1998 20:1
Reverse Stock Split (18,978,620) (18,979)
- ---------------------------- ---------------------- ----------------------
November 19, 1998 Shares
Issued from Rounding +182 +1
- ---------------------------- ---------------------- ----------------------
Net Loss Year Ended
December 31, 1998
- ---------------------------- ---------------------- ----------------------
Balance,
December 31, 1998 999,057 999
- ---------------------------- ---------------------- ----------------------
Net Loss,
January 1, 1999 to
September 30, 1999
- ---------------------------- ---------------------- ----------------------
Balance,
September 30, 1999 999,057 999
- ---------------------------- ---------------------- ----------------------
- --------------------------------------------------------------------------------
Additional Paid-In Retained Earnings Retained Earnings
Capital Restricted Deficit
- ---------------------- ------------------ ----------------- -----------------
Balance,
December 31, 1997 $ 3,451,590 ($ 11,157) ($ 3,467,959)
- ---------------------- ------------------ ----------------- -----------------
September 21, 1998
Issued Shares in Stock
Trade (10,000)
- ---------------------- ------------------ ----------------- -----------------
November 19, 1998 20:1
Reverse Stock Split +18,979
- ---------------------- ------------------ ----------------- -----------------
November 19, 1998
Share Issued From
Rounding (1)
- ---------------------- ------------------ ----------------- -----------------
Net Loss Year Ended
December 31, 1998 (1,116)
- ---------------------- ------------------ ----------------- -----------------
Balance December 31,
1999 3,460,568 (11,157) (3,469,075)
- ---------------------- ------------------ ----------------- -----------------
Net Loss,
January 1, 1999
To September 30, 1999 (837)
- ---------------------- ------------------ ----------------- -----------------
Balance,
September 30, 1999 3,460,568 (11,157) (3,469,912)
- ---------------------- ------------------ ----------------- -----------------
*See report and footnotes following tables.
5
THE SAINT JAMES COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
-----------------------
- --------------------------------------------------------------------------------
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
- ----------------- --------------- ------------- ------------- -------------
Cash Flows from
Operating
Activities (279) (279) (837) (837)
- ----------------- --------------- ------------- ------------- -------------
Net Loss
Adjustment
To
Reconcile
Net Cash
Provided by
Operating
Activities 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Changes in Assets
and Liabilities
- ----------------- --------------- ------------- ------------- -------------
Increase in
Current and
Long-Term
Liabilities +279 +279 +837 +837
- ----------------- --------------- ------------- ------------- -------------
Net Cash Used in
Operating
Activities 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Cash Flows From
Investing
Activities 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Cash Flows From
Financing
Activities
- ----------------- --------------- ------------- ------------- -------------
Issuance of
Common
Stock 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Net Increase
(Decrease) in
Cash 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Cash, Beginning
of Period 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
Cash, End of
Period 0 0 0 0
- ----------------- --------------- ------------- ------------- -------------
*See report and footnotes following tables.
6
- -----------------------------------------------------------------------
Year Ended Year Ended January 7, 1993
December 31, December 31, (Inception) to
1998 1997 September 30, 1999
- ----------------------- ------------ ------------ ------------------
Cash Flows From
Operation Activities
- ----------------------- ------------ ------------ ------------------
Net Loss ($1,116) (1,275) (3,481,069)
- ----------------------- ------------ ------------ ------------------
Adjustment to
Reconcile Net
Loss to Net
Cash Provided
By Operating
Activities 0 0 0
- ----------------------- ------------ ------------ ------------------
Changes in Assets and
Liabilities
- ----------------------- ------------ ------------ ------------------
Increase In
Current and
Long-Term
Liabilities +1,116 +1,275 +19,502
- ----------------------- ------------ ------------ ------------------
Net Cash Used in
Operating Activities 0 0 (3,461,567)
- ----------------------- ------------ ------------ ------------------
Cash Flows From
Investing Activities 0 0 0
- ----------------------- ------------ ------------ ------------------
Cash Flows From
Financing Activities
- ----------------------- ------------ ------------ ------------------
Issuance of
Common Stock 0 0 3,461,567
- ----------------------- ------------ ------------ ------------------
Net Increase (Decrease)
in Cash 0 0 0
- ----------------------- ------------ ------------ ------------------
Cash, Beginning of
Period 0 0 0
- ----------------------- ------------ ------------ ------------------
Cash, End of Period 0 0 0
- ----------------------- ------------ ------------ ------------------
*See report and footnotes following tables.
7
THE SAINT JAMES COMPANY
Notes to Financial Statements
Note A: Summary of Significant Accounting Policies
Nature of Operations
` --------------------
The principal purpose of the company is to design, manufacture, sell and
service equipment and systems for the treatment of contaminated insoluble
organic solid materials. The Company has developed and marketed ozone
technologies.
Property, Plant and Equipment
-----------------------------
Property, plant and equipment have been recorded at cost and/or development
cost. Components which were no longer used in testing and marketing processes
were removed from property, plant and equipment and written off as a loss.
Depreciation
------------
Depreciation was computed on the straight line method for financial
statement purposes and the accelerated method for income tax purposes over the
estimated useful lives of the assets.
Research and Development Costs
------------------------------
Research and development costs were expensed as incurred.
Income Taxes
------------
No provision for income taxes, either accrued or deferred, have been
reported in the financial statements because the Company has incurred only net
operating losses.
Earnings (losses) Per Share
---------------------------
The weighted average of shares outstanding method is used in calculating
earnings (losses) per share.
Note B: Organization of Company
Chem-Waste Corporation was incorporated on January 10, 1984, under the laws
of the State of North Carolina. The charter authorized 20,000,000 share of
common stock with a par value of $1.00 per share.
On July 19, 1984, the name of the Company was changed to Radiation Disposal
Systems, Inc., by amendment to the Charter of Incorporation in the State of
North Carolina.
On September, 13, 1984, the Company was authorized by amendment to the
Articles of Incorporation 1,500,000 preferred stock, nonvoting, noncumulative,
$.50 par value per share, 10% noncumulative dividend, callable at 105% of par
value, and convertible into common stock on a share for share basis. The
amendment of articles granted the issuance of warrants.
On October 9, 1984, the Company was authorized by amendment to the Articles
of Incorporation to change the par value of the common stock from $1.00 per
share to $.001 per share.
8
In January 1985, the Company conducted a public offering of 2,700,000
common shares for $1.25 per share. The underwriter was given warrants which are
exercisable over a four year period beginning June 1986, to purchase 270,000
common stock shares at $1.50 per share.
In June 1987, 100,000 preferred stock shares were converted to common stock
shares on a share for share basis.
In August 1987, 550,000 preferred stock shares were converted to common
stock shares on a share for share basis.
On July 1, 1988, the articles were amended for denial of presumptive
rights, "The Shareholders of the Corporation shall have no presumptive rights to
acquire additional or treasury shares of the Corporation."
In July and September 1988, the warrants were exercised at $1.50 per share
for common stock.
On July 14, 1990, the Articles of Incorporation of the Company were amended
by adding a new Article designed as Article X, to read as follows:
Article X
To the fullest extent permitted by the North Carolina
Business Corporation Act as it exists or may hereafter be
amended, a director of the Company shall not be personally
liable to the Company, its shareholders or otherwise for
monetary damages for breach of his duty as a director. Any
repeal or modification of this Article X shall be
prospective only and shall not adversely affect any
limitation on the personal liability of a director of the
Company existing at the time of such repeal of modification.
On September 21, 1998, 10,000,000 shares of Radiation Disposal Systems,
Inc., were traded for 1,000,000 authorized shares of Asset Technology
International, Inc. The shares of Technology International, Inc., were canceled.
At the time of the stock exchange, Technology International, Inc., had no
assets, liabilities or capital. The company was completely dormant.
On October 13, 1998, The Saint James Company was incorporated under the
laws of the State of Delaware. The purpose of the Corporation shall be to engage
in any lawful activities.
In November 1998, Radiation Disposal Systems, Inc., exchanged all of its
outstanding shares with The Saint James Company. The effect is to change the
name of Radiation Disposal Systems, Inc., into The Saint James Company, and to
change the domicile from the State of North Carolina to the State of Delaware.
On November 19, 1998, Radiation Disposal Systems, Inc., was granted an
increase from 20,000,000 common shares par value
$.001 authorized to 50,000,000 common shares when authorized par value $.001.
On November 19, 1998, the Articles of Incorporation were amended to allow
for a 20-1 reverse split of the common stock for Radiation Disposal Systems,
Inc.
9
Note C: Accrued Interest Payable and Interest Payable
The Company has two judgments against it (See Note D) that require interest
to be paid on those judgments. The accrued interest payable represents the
current year or period interest owed. The interest payable represents interest
owed from prior years that has not been paid.
Note D: Judgments Payable (Litigation)
Thomas Publishing Company holds a consent judgment dated May 5, 1995. The
date of the interest as stated in the judgment is to start December 13, 1993.
Sum of Judgment, 18% per annum $ 3,265.00
Interest prior to December 13, 1993 $ 1,450.00
Collection cost, 8% per annum $ 1,178.78
-------------------------------------------------------------
Total - Judgment #1 $ 5,893.78
McKinney & Moore, Inc., on February 13, 1993, received a judgment against
the Company.
Judgment, 10% per annum $ 3,802.00
Attorney's fees, 10% per annum $ 1,250.00
Prejudgment, 10% per annum $ 211.00
Total - Judgment #2 $ 5,263.00
-------------------------------------------------------------
Total of judgments #1 and #2 $11,156.78
Note E: Capital Stock
December 31, 1998 and September 20, 1999
Preferred Stock, $.01 par value per share, 500,000 shares authorized. No
shares issued and outstanding.
Common Stock, authorized 50,000,000 shares with par value of $.001 per
share, 999,057 common shares issued and outstanding.
Note F: Retained Earnings Restricted
Retained earnings restricted represents the total judgments held against
the Company. See Note D.
Note H: Going Concern
As shown on the financial statements, the Company has incurred losses of
over $3,461,567 from inception to September 30,1999. The ability of the Company
to continue as a going concern is dependent upon the success of the plan to
raise capital by a merger with another profitable company. The financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company had no sales for the nine months ending September 30, 1999, nor
for fiscal years 1998 or 1997.
Historically, the Company has had few sales of machines and equipment
utilizing the application of waste and water treatment technologies ("Ozone
Technologies"), and, to date, the Company has been unsuccessful in marketing
machines and equipment that utilize the Ozone Technologies.
The Company has not been able to generate sales of its products, and
consequently, the Company has incurred and continues to incur substantial
losses. The Company experienced a net loss of $279 for the three months ended
September 30, 1999, the same amount as the three months ended September 30, 1998
and an overall loss of $1,115.67 for the year ended December 31, 1998.
LIQUIDITY
The Company had no significant cash change during the three months ending
September 30, 1999, compared to the same period for 1998 or the year ended
December 31, 1998. At the period ending September 30, 1998, the Company had $0
available cash, at the year ended December 31, 1998, $0, and for the period
ending September 30, 1999, $0.
Management of the Company does not foresee significant commitments which
will result in identifiable expenses in the Company's immediate future.
The Company has, to date, generated no significant revenues. Because the
Company has no remaining funds, Management is operating the Company on a
severely curtailed basis. Without capital infusion, through a merger of change
of the course of business, the Company will have insufficient funds to cover
operational expenses for the remainder of the fiscal year. Operational expenses
were the cause of the net income (loss) for the year ended December 31, 1998, of
$1,115.67.
CAPITAL RESOURCES
Subsequent to September 30, 1995, and as of September 30, 1999, the Company
has had no significant expenditures for the purchase of materials, machinery and
other testing equipment.
RESULTS OF OPERATIONS
Management does not know of any significant revenues or expenses that the
Company will incur during the remainder of the 1999 fiscal year. Management does
not expect the Company to sale waste disposal systems during the remainder of
the 1999 fiscal year.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At this time, Management does not know the business path for the Company
for the next 12 months. Based on the lack of sales during the past three years,
management does not believe that the waste disposal system is marketable.
Management does not foresee any changes in the marketplace that would create
demand for the waste disposal system. Management is currently considering
various restructuring techniques to maximize shareholder profits, including a
possible sale of the corporation or a merger, if a suitable merger candidate is
found. At this point, the Company's future business remains uncertain and
Management cannot make adequate disclosures about market risk until the
necessary business decisions are made.
11
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the Company is a
party or of which any of the Company's property is the subject. However, the
Company does have two outstanding judgments.
Thomas Publishing Co. filed a lawsuit against the Company for collection of
a past due account in the total of $3,265, in the District Court of Western
North Carolina. On May 5, 1995, the Company settled the lawsuit by signing a
Consent Judgment providing that Thomas Publishing Co. have and recover Judgment
against the Company in the sum of $3,265, plus interest at 18% per annum and
collection cost of $1,179 plus interest of 8% per annum from the date of
Judgment until paid in full, and court costs. Because the Company did not have
the financial resources to pay this Judgment, it was not paid as of September
30, 1999.
McKinney & Moore, Inc., filed a lawsuit against the Company for collection
of a past due account in the total of $3,802, in the District Court of Henderson
County, Texas. On February 25, 1983, McKinney & Moore, Inc., received a judgment
to recover the debt, attorney fees of $1,250, prejudgment interest of $211, plus
interest at 10% per annum from the date of Judgment until paid in full. Because
the Company did not have the financial resources to pay this Judgment, it was
not paid as of September 30, 1999.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS ON SENIOR SECURITIES
None.
Item 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
Articles of Incorporation 1
- ------------------------------------------ ------------------------------
Bylaws 2
- ------------------------------------------ ------------------------------
Report of Certified Independent Accountant 3
- ------------------------------------------ ------------------------------
Financial Statements and Notes 4
- ------------------------------------------ ------------------------------
Financial Data Schedule 27
- ------------------------------------------ ------------------------------
Item 7. SUBSEQUENT EVENTS
None.
12
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.
The Saint James Company
/s/ Wayne Gronquist January 05, 2000
- ------------------------------ -----------------------
Wayne Gronquist Date
Director, President, Secretary
13