SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal quarter ended September 30, 2001
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission file number 33-96882-LA
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CARING PRODUCTS INTERNATIONAL, INC.
(Name of small business issuer in its charter)
____________________
DELAWARE 98-0134875
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization) ____________________
7025 East 1st Avenue, Scottsdale, Arizona 85251
(principal mailing address)
480-945-2232
(Issuer's telephone number, including area code)
____________________
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 par value
Warrants to purchase common stock.
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 requirements for the past 90 days.
Yes X No
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-QSB. / X /
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of September 30, 2001: 120,563 shares of common stock, $.01
par value (the "Common Stock").
Transitional Small Business Disclosure Format (check one):
Yes No X
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DOCUMENTS INCORPORATED BY REFERENCE
Part III - Certain exhibits Included in prior filings made
Listed in response to Item 13(a) under the Securities Act of 1933.
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CARING PRODUCTS INTERNATIONAL, INC
FORM 10-QSB
FOR THE PERIOD ENDED SEPTEMBER 30, 2001
PAGE NUMBER
PART I:
Item 1 Financial Statements
Condensed Consolidated Balance Sheets at March 31, 2001
and September 30, 2001. . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Operations for the three
month and six month periods ended September 30, 2000
and September 30, 2001 (unaudited). . . . . . . . . . . . . . . . 5
Condensed Consolidated Statement of Cash Flows for the three
month and six month periods ended September 30, 2000
and September 30, 2001 (unaudited). . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements. . . . . . . 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . 9
PART II OTHER INFORMATION
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CARING PRODUCTS INTERNATIONAL, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS MARCH 31, SEPTEMBER 30
2001 2001
(UNAUDITED)
------------- -------------
Current Assets
Cash $ 74,873 $ 17,743
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TOTAL ASSETS $ 74,873 $ 17,743
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,545 $ 13,356
------------- -------------
Total liabilities 2,545 13,356
Stockholders' equity
Preferred stock, par value $0.01 per share; authorized
1,000,000; none outstanding
Common stock, par value $0.01 per share; authorized 121 121
100,000,000 shares; 120,563 issued and
outstanding
Additional paid-in capital 19,512,512 19,512,512
Accumulated deficit (19,440,305) (19,508,246)
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Total stockholders' equity 72,328 4,387
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 74,873 $ 17,743
============= =============
See accompanying notes to financial statements
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CARING PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTH PERIODS ENDED SEPTEMBER. 30, 2000 AND 2001
(UNAUDITED)
THREE MONTH SIX MONTH THREE MONTH SIX MONTH
PERIOD PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2001 2001
------------- ------------- ------------- -----------
Revenues
$ - $ - $ - $ -
Operating expenses
General and Administrative - - 10,595 68,193
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Loss from operations - - (10,595) (68,193)
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Other Income - - 15 252
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Loss from continued operations
before discontinued operations - - 10,580 67,941
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Discontinued operations
Loss from operations of
discontinued company $ (73,823) $ (214,049) $ - $ -
============= ============= ============= ===========
Weighted average common shares outstanding 30,563 30,563 120,563 120,563
============= ============= ============= ===========
Net operating loss per common share $ - $ - $ (0.09) $ (0.56)
============= ============= ============= ===========
Loss from discontinued operations
per common share $ (2.41) $ (7.01) $ - $ -
============= ============= ============= ===========
See accompanying notes to financial statements
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CARING PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 2000 AND
2001
(UNAUDITED)
Increase/(decrease) in Cash SEPTEMBER 30, 2000 SEPTEMBER 30, 2001
-------------------- --------------------
Cash flows from operating activities
Net loss from operations $ - $ (67,941)
Net loss from discontinued operations (214,049) -
Adjustments to reconcile net loss to net cash
used in operating activities
Amortization and depreciation 4,854 -
Changes in operating assets and liabilities
Accounts receivable 49,244 -
Inventories 9,335 -
Prepaid expenses 19,995 -
Accounts payable (25,782) 10,811
Accrued liabilities (12,122) -
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Net cash used in operating activities (168,525) (57,130)
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Decrease in Cash (168,525) (57,130)
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Cash at beginning of period 181,763 74,873
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Cash at end of period $ 13,238 $ 17,743
==================== ====================
See accompanying notes to financial statements
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CARING PRODUCTS INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 2001
(1) FINANCIAL STATEMENTS
The unaudited consolidated financial statements and related notes are presented
as permitted by Form 10QSB and do not contain certain information included in
the Company's audited consolidated financial statements and notes for the fiscal
year ended March 31, 2001. The information furnished reflects, in the opinion
of management, all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of the interim periods
presented. The results of operation for the interim periods are not necessarily
indicative of the results to be expected for the entire fiscal year ending March
31, 2002. The accompanying unaudited consolidated financial statements and
related notes should be read in conjunction with the audited consolidated
financial statements and the Form 10-KSB of Caring Products International, Inc.
and its subsidiaries (the "Company") and notes thereto, for its fiscal year
ended March 31, 2001.
(2) LOSS PER COMMON SHARE
The Company accounts for loss per common share under Statement of Financial
Accounting Standards NO 128, "Earnings Per Share" which established standards
for computing and presenting earnings per share. Basic loss per share is based
on the weighted average number of shares outstanding during each quarter
available to common shareholders. The weighted average shares for computing the
Company's basic loss per share were 120,563 for the three and six months ended
September 30, 2001 and 30,563 for the three and six months ended September 30,
2000. Because of the net loss for the three and six months ended September 30,
2001 and 2000, potentially dilutive common stock issuances were not included in
the calculation of diluted earnings per share as their inclusion would be
anti-dilutive. As of September 30, 2001 and 2000, there were 26,242 and 26,242
shares of potentially issuable common stock post reverse split.
(3) MANAGEMENT PLANS
On March 30, 2001 the Company consummated a private placement of 90,000 shares
of its common stock, to Raymond A Bills, a previously unaffiliated accredited
investor. Mr. Bills paid $250,000 in consideration for the issuance. After
giving effect to the transaction and the 30,0563 previously issued and
outstanding shares of Common Stock, Mr. Bills is the beneficial owner of
approximately 74.6% of the Company's common stock and now has the ability to
exercise control over the Company's affairs.
The operations related to the marketing of various incontinence products ceased
during the fiscal year ended March 31, 2001. The Company has no source of
operating revenues or prospects for the initial development of an operating
business. The Company continues to maintain part-time administrative support
while it reviews its strategic operations. Certain reclassifications have been
made to the September 30, 2000 financial statements to reflect the change in
operations.
(4) STOCKHOLDERS' EQUITY
On March 29, 2001 the Company authorized an increase in the authorized number of
shares of common stock of the Company to 100,000,000. Additionally, the Company
authorized a 100:1 reverse stock split. The increase in authorized shares is
considered to be post reverse split. The Company filed amended articles of
incorporation with the State of Delaware, which was approved on July 12, 2001,
reflecting both of these actions. All references to the number of shares and per
share price have been adjusted retroactively to reflect the effect of the split.
On May 29, 2001, the Company adopted the 2001 Employee Stock Compensation Plan,
which authorized the issuance of up to 5 million shares of common stock of the
Company for stock options. As of September 30, 2001, there were no stock options
issued under this plan.
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(5) GOING CONCERN
There is substantial doubt of the Company's ability to continue as a going
concern. The Company's ability to continue as a going concern is contingent
upon its ability to maintain positive cash flow from and financing activities.
There is no assurance that the Company will be successful in its efforts to
significantly improve its financial condition.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, OF THE COMPANY CONTAINED ELSEWHERE IN
THIS FORM 10-QSB.
OVERVIEW
The Company discontinued all operations related to the production, marketing and
sale of various adult incontinence products in early 2001. On March 30, 2001
the Company consummated a private placement of 90,000 shares of its common stock
to a previously unaffiliated accredited investor for $250,000. In connection
with the transaction, Mr. Bills joined the Company's board of directors.
Concurrently, four of the five members of the Company's board of directors
resigned. Mr. Ian Rice also joined the Board of Directors serving as its
Chairman. The Company has minimal assets and no active business related to
operations, or research and development. The Company intends to seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures into the Company. As of the date hereof, the
Company has not made any arrangements nor entered into any definitive agreements
to acquire or merge a business venture into the Company, employ any consultants
or advisors to identify business venture opportunities or made any formal
arrangements to raise additional funds to support the Company's business
operations.
RESULTS OF OPERATIONS
The Company recorded no operating revenues during the six and three month
periods ended September, 30, 2001. The Company discontinued all operations
related to the adult incontinence market in early 2001. In the comparable six
and three month periods, the Company generated revenues related to discontinued
operations of $84,400 and $48,150, respectively. The reported cost of goods
sold for the six and three month periods was $9,335 and $4,721, respectively.
General and administrative costs during the six and three month periods ended
September 30, 2001 was $68,193 and $10,595. The reduction in administrative
expenses was attributable to lower legal and administrative costs associated
with public filings and maintaining the Company. The Company generated interest
income of $15 during the three month period ended September 30, 2001 and $252
during the six month period ended September 30, 2001. The reduction in interest
income is attributable to lower cash balances held in the Company's trust
account.
As a result of the above, the Company generated a loss of $10,580 for the three
month period ended September 30, 2001 and a loss of $67,941 for the six month
period. The net loss per share for the three month period ended September 30,
2001 was $.09 and the net loss per share for the six month period ended
September 30, 2001 was $.56.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2001 the Company's principal sources of liquidity included
cash of $17,743. The Company sold all remaining inventory during the prior
fiscal year, and has no source of working capital nor outstanding collectible
receivables to generate working capital to support the Company's continued
operations. The Company's future liquidity will be dependent on the Company's
ability to obtain a merger candidate for the Company, or obtain new sources of
debt or equity. There is no assurance that the Company will be able to generate
the funds needed to offset its current or future obligations on a timely basis.
PLAN OF OPERATIONS
During the next 12 months, the Company will actively seek out and investigate
possible business opportunities with the intent to acquire or merge with one or
more businesses. Because of the Company's lack of financial resources, it may be
necessary for the Company's directors to either advance funds to the company or
to accrue expenses until such time as a successful business consolidation can be
effected. Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible. The Company may also issue
options, warrants or shares of its common stock to consultants who perform
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services for the CompanyAs of the date hereof, the Company has not made any
arrangements or definitive agreements to use outside advisors or consultants or
to raise any capital. If the Company does need to raise capital, most likely the
only method available to the Company would be the private sale of its
securities. Because of the nature of the Company, it is unlikely that it could
make a public sale of its securities or be able to borrow any significant sum
from either a commercial or private lender. There can be no assurance that the
Company will be able to obtain additional funding when and if needed, or that
such funding, if available, can be obtained on terms acceptable to the Company.
The Company does not intend to hire any employees, with the possible exception
of part-time clerical assistance on an as-needed basis. Outside advisors or
consultants will be used only if they can be obtained for minimal cost or on a
deferred payment basis or are willing to accept options, warrants or shares of
the Company's common stock as payment.
OTHER MATTERS
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
FORWARD LOOKING STATEMENTS
This Form 10-QSB and other reports and statements filed by the Company from time
to time with the Securities and Exchange Commission (collectively the "Filings")
contain or may contain forward-looking statements and information that are based
upon beliefs of, and information currently available to, the Company's
management, as well as estimates and assumptions made by the Company's
management.
When used in the Filings, the words "anticipate", "believe", "estimate",
"expect", "future", "intend", "plan" and similar expressions, as they relate to
the Company or the Company's management, identify forward-looking statements.
Such statements reflect the current view of the Company with respect to future
events and are subject to risks, uncertainties and assumptions relating to the
Company's operations and results of operations, competitive factors and pricing
pressures, shifts in market demand, the performance and needs of the industries
which constitute the customers of the Company, the costs of product development
and other risks and uncertainties, including, in addition to any uncertainties
with respect to management of growth, increases in sales, the competitive
environment, hiring and retention of employees, pricing, new product
introductions, product productivity, distribution channels, enforcement of
intellectual property rights, possible volatility of stock price and general
industry growth and economic conditions. Should one or more of these risks or
uncertainties materialize, or should the underlying assumptions prove incorrect,
actual results may differ significantly from those anticipated, believed,
estimated, expected, intended or planned.
PART 111
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS
None
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SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale,
AZ, on November 17, 2001.
CARING PRODUCTS INTERNATIONAL, INC.
By: /s/ Ian Rice
-----------------------------------
Ian Rice, Chairman
In accordance with the requirements of the Exchange Act, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
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/s/ Ian Rice Chairman November 17, 2001
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Ian Rice
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