U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from to
Commission File No. 0-31507
PRECOM TECHNOLOGY, INC.
(Name of Small Business Issuer in Its Charter)
Florida
(State or Other Jurisdiction of
Incorporation or Organization)
06-1588136
(I.R.S. Employer
Identification No.)
2001 West Main Street, Suite 208, Stamford, CT 06902
(Address of Principal Executive Offices) (Zip Code)
(203) 961-0306
(Issuer's Telephone Number, Including Area Code)
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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 9, 2001, the Company
had 1,940,820 shares of Common Stock outstanding, $0.001 par value.
PRECOM TECHNOLOGY, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
Part I - FINANCIAL INFORMATION
TABLE OF CONTENTS
Page No.
INDEPENDENT ACCOUNTANTS' REVIEW REPORT 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statement of Changes in Stockholders' Equity (Deficit) 4
Statements of Cash Flows 5 - 6
Notes to Financial Statements 7 - 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-12
PART II - OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Signatures 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The accompanying statements should be read in conjunction with the audited
financial statements for the year ended December 31, 2000. In the opinion of
management, all adjustments (consisting only of normal occurring accruals)
considered necessary in order to make the financial statements not misleading,
have been included. Operating results for the three months ended March 31,
2001 are not necessarily indicative of results that may be expected for
the year ending December 31, 2001. The financial statements
are presented on the accrual basis.
PRECOM TECHNOLOGY, INC.
FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
TABLE OF CONTENTS
PAGE NO.
INDEPENDENT ACCOUNTANTS' REVIEW REPORT ............ 1
FINANCIAL STATEMENTS
Balance Sheets.............................. 2
Statements of Operations.................... 3
Statement of Stockholders' (Deficit)........ 4
Statements of Cash Flows.................... 5
Notes to Financial Statements............... 6 - 9
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders
Precom Technology, Inc.
We have reviewed the accompanying balance sheet of Precom Technology, Inc. as of
March 31, 2001 and the related statements of operations and cash flows for the
three months ended March 31, 2001 and 2000 and the statement of stockholders'
(deficit) for the three months ended March 31, 2001 in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountant. All information included in
these financial statements is the representation of the management of Precom
Technology, Inc.
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, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States of
America.
As discussed in Note 6, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements do
not include any adjustments to the financial statements that might be necessary
should the Company be unable to continue as a going concern.
We have audited, in accordance with auditing standards generally accepted in the
United States of America, the balance sheet of Precom Technology, Inc. as of
December 31, 2000, and the related statements of operations, stockholders'
equity and cash flows for the year then ended (not presented herein); and in our
report dated January 30, 2001 we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 2000, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
Moffitt & Company, P.C.
Scottsdale, Arizona
April 11, 2001
PRECOM TECHNOLOGY, INC.
BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
ASSETS
March 31, December 31,
2000 2000
(UNAUDITED) (AUDITED)
----------- ---------
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable
Stock Transfer Agent $ 17,293 $ 17,293
Greenwich Financial Group 59,037 40,200
Legal and accounting fees 17,029 9,278
TOTAL CURRENT LIABILITIES 93,359 66,771
STOCKHOLDERS' (DEFICIT)
Preferred stock, par value $ 0.001 per share
Authorized 10,000,000 shares
Issued and outstanding - 0 - shares 0 0
Common stock, par value $ 0.001 per share
Authorized 50,000,000 shares
Issued and outstanding - 2,120,850 shares 2,121 2,121
Paid in capital in excess of par value of stock 363,242 363,242
Retained earnings (deficit) (458,722) (432,134)
TOTAL STOCKHOLDERS' (DEFICIT) (93,359) (66,771)
TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIT) $ 0 $ 0
See Accompanying Notes and Independent Accountants' Review Report.
F-2
PRECOM TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
Three Months
ENDED MARCH 31,
2001 2000
REVENUE $ 0 $ 0
GENERAL AND ADMINISTRATIVE EXPENSES 26,588 0
NET (LOSS) $ (26,588) $ 0
NET (LOSS) PER COMMON SHARE
Basic and diluted$ (.01) $ .00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic and diluted 2,120,850 1,920,850
See Accompanying Notes and Independent Accountants' Review Report.
F-3
PRECOM TECHNOLOGY, INC.
STATEMENT OF STOCKHOLDERS' (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2001
PREFERRED STOCK COMMON STOCK
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
BALANCE, JANUARY 1, 2001 0 $ 0 2,120,850 $ 2,121
NET (LOSS) FOR THE THREE
MONTHS ENDED MARCH 31, 2001 0 0 0 0
BALANCE, MARCH 31, 2001 0 $ 0 2,120,850 $ 2,121
See Accompanying Notes and Independent Accountants' Review Report.
F-4
Paid in
Capital in
Excess of Retained
Par Value Earnings
of stock (deficit)
-------- ---------
$ 363,242 $ ( 432,134)
0 ( 26,588)
$ 363,242 $ ( 458,722)
See Accompanying Notes and Independent Accountants' Review Report.
F-4
PRECOM TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(UNAUDITED)
Three Months
Ended March 31,
2001 2000
---- ----
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net (loss) $ (26,588) $ 0
Changes in operating assets and liabilities:
Accounts payable 26,588 0
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 0 0
CASH FLOWS FROM INVESTING ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACTIVITIES 0 0
NET INCREASE (DECREASE) IN CASH 0 0
CASH AT BEGINNING OF PERIOD 0 0
CASH AT END OF PERIOD $ 0 $ 0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
INTEREST PAID $ 0 $ 0
TAXES PAID $ 0 $ 0
See Accompanying Notes and Independent Accountants' Review Report.
F-5
PRECOM TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Precom Technology, Inc. was organized on September 1, 1996, under the laws of
the State of Florida. The Company is inactive and is seeking a merger candidate.
ACCOUNTING ESTIMATES
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were used.
INCOME TAXES
Provisions for income taxes are based on taxes payable or refundable for the
current year and deferred taxes on temporary differences between the amount of
taxable income and pretax financial income and between the tax basis of assets
and liabilities and their reported amounts in the financial statements. Deferred
tax assets and liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled as prescribed in
FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.
NET (LOSS) PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128 that
requires the reporting of both basic and diluted earnings (loss) per share.
Basic earnings (loss) per share is computed by dividing net income (loss)
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. In accordance with
FASB 128, any anti-dilutive effects on net loss per share are excluded.
NOTE 2 RESTATEMENT OF COMMON STOCK AND PAID IN CAPITAL IN EXCESS OF PAR VALUE OF
STOCK
On February 5, 2001, the Company effected a 1 for 100 reverse stock split on
19,208,522 shares of stock. On March 19, 2001, the Company then had a 10-1
forward stock split on 192,008 shares.
See Accompanying Notes and Independent Accountants' Review Report.
F-6
PRECOM TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
(UNAUDITED)
NOTE 2 RESTATEMENT OF COMMON STOCK AND PAID IN CAPITAL IN EXCESS OF PAR VALUE OF
STOCK (CONTINUED)
The stock splits have been retroactively recorded in the financial statements as
if they occurred at the date of inception.
NOTE 3 INCOME TAXES
Significant components of the Company's deferred tax assets and liabilities are
as follows as of March 31, 2001 and 2000:
2001 2000
---- ----
Deferred tax assets
Net operating losses carryforward $62,000 $56,009
Less valuation allowance 62,000 56,009
Net deferred tax assets $ 0 $ 0
Deferred tax liabilities $ 0 $ 0
A reconciliation of the valuation allowance is as
follows:
2001 2000
---- ----
Balance at beginning of period $57,959 $56,009
Addition for period 4,041 0
Balance at end of period $62,000 $56,009
NOTE 4 NET OPERATING LOSS CARRYFORWARDS
The Company has the following net operating loss carryforwards at December
31, 2000:
TAX YEAR AMOUNT EXPIRATION DATE
-------- ------ ---------------
December 31, 1996 $ 16,703 2016
December 31, 1997 178,200 2017
December 31, 1998 171,241 2018
December 31, 1999 7,249 2019
December 31, 2000 12,396 2020
March 31, 2001 26,588 2021
$ 412,377
Future changes in ownership may limit the ability of the Company to utilize its
net operating loss carryforwards.
See Accompanying Notes and Independent Accountants' Review Report.
F-7
PRECOM TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
(UNAUDITED)
NOTE 5 PREFERRED STOCK
No rights or preferences have been assigned to the preferred stock.
NOTE 6 GOING CONCERN
These financial statements are presented on the basis that the Company is a
going concern. Going concern contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business over a reasonable
length of time. The Company has incurred net losses of $458,722 from inception.
In addition, the Company has abandoned all development activities and has no
assets. These factors raise doubt as to the Company's ability to continue as a
going concern.
Management's plans to eliminate the going concern situation include but are not
limited to seeking a merger candidate.
NOTE 7 BUSINESS COMBINATION
In August 2000, the company merged with Provence Capital Corporation, Inc. and
accounted for the transaction as a pooling of interest. The Company recorded the
merger as follows:
Increase in common stock $ 200
Increase in paid in capital in excess of
par value of stock 6,770
The following unaudited information presents certain
income statement data of the separate companies for the
period preceding the merger:
2000
----
Net sales
Precom Technology, Inc. $ 0
Provence Capital Corporation, Inc. 0
Net (loss)
Precom Technology, Inc. (42,170)
Provence Capital Corporation, Inc. (6,970)
There were no material transactions between Precom Technology, Inc. and Provence
Capital Corporation, Inc. prior to the merger. The effects of conforming
Provence Capital Corporation, Inc.'s accounting policies to those of Precom
Technology, Inc. were not material.
See Accompanying Notes and Independent Accountants' Review Report.
F-8
PRECOM TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001 AND 2000
(UNAUDITED)
NOTE 8 UNAUDITED FINANCIAL INFORMATION
The accompanying financial information as of March 31, 2001 is unaudited. In
management's opinion, such information includes all normal recurring entries
necessary to make the financial information not misleading.
See Accompanying Notes and Independent Accountants' Review Report.
F-9
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Forward-Looking Statements
- --------------------------
Forward-looking statements, based on management's current views and assumptions,
are made throughout the Management's Discussion and Analysis and elsewhere in
this report to stockholders. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results and those presently anticipated or projected. Among the
factors that may affect operating results are the following: success of the
Company's change in focus; competitive environment; and general economic
conditions.
Results of Operations
- ---------------------
The Company had no operations in the first quarter of 2001.
Future Outlook
- --------------
The Company previously explored a merger with an advanced DVD products developer
and marketer. This venture could not be consummated. The Company is now actively
pursuing mergers with companies featuring high technology consumer products in
emerging growth industries.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other information. None.
Item 6. Exhibits and reports on Form 8-K. None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this 10-QSB report to be signed on
its behalf by the undersigned thereunto duly authorized.
Precom Technology, Inc.,
a Florida corporation
By: /s/ Nicholas M. Calapa
-------------------------
Nicholas M. Calapa
President
DATED: May 14, 2001