U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
Commission File No. 1-15597
LANDSTAR, INC.
(Exact name of registrant as specified in its charter)
Nevada 860914051
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3795 Carey Road
Suite 600,
Victoria, British Columbia, Canada V8Z 6T8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(250) 475-6000
Check whether the registrant (1) has filed all reports required
to be filed 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 the past 90 days.
Yes [x] No[ ]
State the number of shares outstanding of each of the issuer's class
of common equity, as of the latest practicable date:
Class: Common Stock, $.001 par value
Outstanding at June 30, 2000: 38,436,124 shares
1
LandStar Inc.
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at June 30, 2000 1
Consolidated Statement of Operations for the
Six Months Ended June 30, 2000 and 1999 2
Consolidated Statement of Cash Flows for the
Six Months Ended June 30, 2000 and 1999 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Items 1 through 6 6
SIGNATURES
2
LANDSTAR INC.
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2000
(Unaudited)
ASSETS
2000
----
CURRENT ASSETS
Cash $ 3,491
Accounts receivable 54,703
Prepaids and deposits 29,082
---------
87,276
---------
FIXED ASSETS
Plant and equipment 810,092
Leasehold improvements 83,024
Office equipment 24,215
Less: Accumulated depreciation (85,000)
----------
832,331
----------
INTANGIBLE ASSET
- -technology rights net of $191,296 accumulated amortization 693,708
----------
$1,613,315
==========
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 372,503
Accruals to related parties 280,639
Due to related party 419,442
-----------
1,072,584
-----------
SHAREHOLDERS EQUITY
Authorized: 100,000,000 common shares with a par value of $.001
Issued: 38,436,124 shares 38,436
Additional paid-in capital 4,532,760
Common share subscriptions 398,571
Deficit (4,429,036)
------------
540,731
------------
$ 1,613,315
============
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3
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
For the
Period from
December 13,
1996(Date of
3 MONTHS 6 MONTHS 3 MONTHS 6 MONTHS incorporation)
2000 2000 1999 1999 to June 30,
-------- -------- -------- -------- 2000
REVENUE $ - $ - $ - $ -
-------- -------- -------- -------- --------------
OPERATING COSTS
AND EXPENSES
Research and
development 51,895 65,880 - - 114,101
General and
administrative 468,034 798,142 354,356 931,052 2,796,297
-------- ------- -------- -------- ---------
LOSS FROM OPERATIONS 519,929 864,022 354,356 931,052 2,910,398
-------- ------- -------- -------- ---------
NON-OPERATING INCOME
AND EXPENSE
Interest 2,838 15,016 294 3,644 1,142,342
Depreciation &
amortization 63,000 126,000 14,200 28,400 276,296
------- -------- -------- -------- ----------
65,838 141,016 14,494 32,044 1,418,638
------- -------- -------- -------- ----------
NET LOSS ($585,767)($1,005,038) (368,850) (963,096) ($4,329,036)
======= ======== ======== ======== ==========
NET LOSS PER
COMMON SHARE $ (0.02) $ (0.03) $ (0.01) $(0.05)
======= ======== ======== ========
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 38,236,000 38,136,000 28,846,000 19,230,000
=========== ========== ========== ==========
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LANDSTAR INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 200O
(Unaudited)
For the Period
From December
13,1996(Date of
incorporation)
6 MONTHS 6 MONTHS to June 30,
2000 1999 2000
-------- -------- ---------------
OPERATING ACTIVITIES
Net Loss for the Period $(1,005,038) $ (963,096) $ (4,329,036)
Add: Non-cash expenses
- depreciation and
amortization 126,000 28,400 276,296
- value of beneficial
conversion feature 1,100,000
- shares for finders
fees - 65,000 65,000
Increase (Decrease)
in non-cash
workingcapital items 7,079 78,326 288,718
--------- --------- ----------
(871,959) (791,370) (2,599,022)
--------- --------- ----------
INVESTING ACTIVITIES
Acquisition of
technoilogy rights (885,004)
Payment to related
party for technology (100,000)
Additions to plant
and equipment (220,414) (172,944) (917,331)
--------- --------- ---------
(220,414) (172,944) (1,902,335)
--------- --------- -----------
FINANCING ACTIVITIES
Proceeds from debenture 400,000
Issuance of common
stock 633,571 755,500 2,872,599
Advances from related
parties 452,251 197,964 1,232,249
--------- --------- ---------
1,085,822 953,464 4,504,848
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH (6,551) (10,850) $ 3,491
=========
CASH, beginning of period 10,042 317
--------- ---------
CASH, end of period $ 3,491 $ (10,533)
========= =========
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LANDSTAR INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT JUNE 30, 2000
NOTE 1. UNAUDITED INFORMATION
The consolidated balance sheet as of June 30, 2000 and the
consolidated statements of operations for the six month periods
ended June 30, 2000 and 1999 were taken from the Company's books
and records without audit. However, in the opionion of management,
such information includes all adjustments (consisting only of normal
recurring accruals) which are necessary to properly reflect the
consolidated financial position of the Company as of June 30, 2000
and the results of operations for the six months ended
June 30, 2000 and 1999.
Certain information and notes included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted, although management believes that the
disclosures are adequate to make the information presented not
misleading. Interim period results are not necessarily indicative of
the results to be achieved for and entire year. These financial
statements should be read in conjunction with the financial statements
and notes to financial statements included in the Company's Form 10-SB
for the year ended December 31, 1999.
NOTE 2. DUE TO RELATED COMPANY
Kentucky Financial Inc. is related to an officer and director of the
Company. Kentucky advances funds and makes payments on behalf of the
Company from time to time. The balance owing to Kentucky as at
June 30, 2000 was $419,442. The balance is due on demand without
interest.
NOTE 3. COMMITMENTS
The Company leases office space from and entity affiliated with an
officer and director of the Company for $4,750 per month. The
term of the lease is through December, 2004. The Company also leases
warehouse space used for its pilot plant. The terms of the lease
require monthly payments of $4,726 through September, 2000. Future
minimum lease payments as of June 30, 2000 are as follows:
Year ending December 31
-----------------------
2000 $ 42,678
2001 57,000
2002 57,000
2003 57,000
2004 57,000
Page 4
6
Management Discussion
During the second quarter, management met with the technical team
on several occasions to advance the testing and product development
program. This was discussed in detail in the first quarter report.
In addition, the Company is investigating opportunities in various
locations in the United States for the establishment of a full
production facility. No decision for a specific location has
been made to date.
In anticipation of the establishment of a full production facility,
the Company has hired Bob Phillips as a full time operations manager.
Mr. Phillips is currently located at the Dayton facility, but will
potentially relocate to wherever the new facility is established.
Mr. Phillips has 25 years experience in the automotive and rubber
industry and has successfully set up and managed numerous plants
throughout the United States.
Several meetings with companies involved in large corporate financing
has also occurred during this quarter. The Company's prime objective
in securing these funds is to acquire regionally based production
facilities, however, several other corporate-wide initiatives would
also be addressed.
The Company has responded to all comments related to the 10-SB
document and is currently awaiting a reply from the SEC.
The Company currently has no revenues as it is in the development
stage. Monthly cash requirements to continue development and the
recruitment of a full operating management team is approximately
$150,000. It is the intention of the Company to complete at least
one fully operating plant by the end of 2000 with a production
capacity of approximately 50 tons per day of reactivated rubber.
The estimated cost of this production faciltity would be between
$1.5 and $2.5 million. The Company intends to obtain funds by
means of private offerings of equity and debt securities or from
bank or other traditional means of financing.
On behalf of the Board,
/s/D.E. Fimrite
- -------------------
D. Elroy Fimrite
President
7
LANDSTAR INC.
PART II.
OTHER INFORMATION
Item 1 Legal Proceedings
LEGAL PROCEEDINGS
On December 15, 1999, the Company filed a complaint in the
Supreme Court of British Columbia (file no. C996620) against
Walter Brandl, Dr. F. Kui Lim Lu, Peter Lochhead, Pollutec
Resources Inc., GWN Pyrolytic Corp. and Jan Fikkert. Dr. F.
Kui Lim Lu beneficially owns more than five percent of the
outstanding common stock of the Company and is a former director
of Rebound Rubber Corp., a subsidiary of the Company. The
complaint alleges: i) intentional interference by the defendants
with intention to induce the Guangzhou Research Institute to
breach its contracts with the Company, ii) breach of contract
by Dr. Lu, iii) conspiracy by the defendants to convert the
Guangzhou Research Institute contracts or opportunity to their
collective or individual benefit, iv) breach of confidence, v)
intentional interference with business relations, and vi)
defamation. The Company seeks monetary and injunctive relief.
The defendants have filed a statement of defense which denies
each and every item in the statement of claim. The proceedings
are currently progressing through production of documents and
examinations for discovery. A trial date of February 12, 2001
has been determined. The Company intends to vigorously
pursue this matter.
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 of Form 8-K
none
Page 5
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LANDSTAR INC.
SIGNATURE
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 thereto duly authorized.
on August 22, 2000
LANDSTAR INC.
BY: /s/ D.E. Fimrite
-----------------
D. Elroy Fimrite
President
BY: /s/ M.C. PINCH
-----------------
Michael C. Pinch
Secretary and Chief Financial Officer
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