U.S SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB:
[x] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITY
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSACTION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
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 0f 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 September 30, 2000: 42,627,524 shares
1
LANDSTAR INC.
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at
September 30, 2000 1
Consolidated Statement of Operations
for the Nine Months Ended
September 30, 2000 and 1999 2
Consolidated Statement of Cash Flows
for the Nine Months Ended
September 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
OTHER INFORMATION
PART II
Items 1 through 6 6
SIGNATURES 7
2
LandStar,Inc
Consolidated Balance Sheet
As At September 30, 2000
(Unaudited)
2000
----
ASSETS
CURRENT ASSETS
Cash $ 5,460
Accounts Receivable 10,324
Prepaids and Deposits 26,087
------
41,871
------
FIXED ASSETS
Plant and Equipment 840,038
Leasehold Improvements 83,024
Office Equipment 25,164
Less: Accumulated Depreciation (125,964)
---------
822,262
---------
INTANGIBLE ASSET - technology rights net of
$213,296 accumulated amortization 671,708
---------
$1,535,841
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 271,475
Accruals to related parties 271,717
Due to related party 287,072
---------
830,264
---------
SHAREHOLDERS' EQUITY
Authorized: 100,000,000 common share
with a par value of $.001
Issued: 42,627,524 shares 42,627
Additional paid-in capital 5,576,416
Common share subscriptions,
320,000 shares 72,500
Deficit (4,985,966)
-----------
705,577
-----------
$ 1,535,841
===========
1
3
Consolidated Statement of Operations and
Deficit for the Nine Months ended September 30, 2000
(Unaudited)
3 Months 9 Months 3 Months 9 Months Period
2000 2000 2000 2000 December 13, 1996
------- ------- -------- ------ (date of
incorporation)
to September 30,
2000
---------------
REVENUE $ - $ - $ - $ - $ -
--------- --------- --------- -------- -------------
OPERATING COSTS
AND EXPENSES
Research & Development 23,294 89,174 29,365 29,365 137,395
General & Administrative 468,924 1,267,066 1,177,587 2,108,639 3,265,221
--------- --------- --------- ---------- -----------
LOSS FROM OPERATIONS (492,218) (1,356,240) (1,206,952) (2,138,004) (3,402,616)
--------- --------- --------- ---------- -----------
NON-OPERATING INCOME
AND EXPENSE
Interest 1,712 16,728 726 4,370 1,145,180
Depreciation &
Amortization 63,000 189,000 156,880 185,280 339,296
---------- -------- --------- -------- --------
64,712 205,728 157,606 189,650 1,484,476
---------- -------- --------- ---------- ----------
NET LOSS $(556,930) (1,561,968) (1,364,558) (2,327,654) (4,887,092)
========== ========= ========== =========== ===========
NET LOSS PER
COMMON SHARE $ (0.01) $ (0.04) $ (0.04) $ (0.11)
========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 40,532,000 39,962,000 32,239,000 20,497,000
======================= ========================
2
4
LandStar, Inc.
Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2000
(Unaudited)
9 Months 9 Months Period December 13,1996
2000 2000 (date of incorporation)
-------- -------- to September 30, 2000
-----------------------
OPERATING ACTIVITIES
Net Loss for the Period $(1,561,968) $(2,327,654) $ (4,887,092)
Add: Non cash expenses
- depreciation &
amortization 189,000 185,280 339,296
- value of beneficial
conversion - 1,100,000 1,100,000
- shares for finders fees - 65,000 65,000
Increase (Decrease) in non-cash
working capital items (46,611) 428,382 236,154
-------- ---------- ------------
(1,419,579) (548,992) (3,146,642)
------------ ---------- ------------
INVESTING ACTIVITIES
Acquisition of technology
rights - (238,750) (885,004)
Payment to related party
for technology - - (100,000)
Additions to plant and
equipment (251,309) (645,924) (948,226)
------------ ---------- --------------
(251,309) (884,674) (1,933,230)
------------- ---------- --------------
FINANCING ACTIVITIES
Proceeds from debenture - 284,400 400,000
Issuance of common stock 1,355,347 1,024,000 3,594,375
Advances from related
parties 310,959 126,664 1,090,957
------------- ----------- ---------------
1,666,306 1,435,064 5,085,332
------------- ----------- ---------------
NET INCREASE (DECREASE)
IN CASH (4,582) 1,398 5,460
================
CASH, beginning of period 10,042 326
------------- ------------
CASH, end of period $ 5,460 1,724
============= ============
3
5
Landstar Inc.
Notes to Consolidated Financial Statements
As at September 30, 2000
NOTE 1. UNAUDITED INFORMATION
The consolidated balance sheet as of September 30, 2000 and the
consolidated statements of operations for the nine month periods ended
September 30, 2000 and 1999 were taken from the Company's books and
records without audit. However, in the opinion 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 September 30, 2000 and the
results of operations for the nine months ended September 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 financial
statements 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 September 30, 2000 was $287,072. The balance is due on demand
without interest.
NOTE 3. COMMITMENTS
The Company leases office space from an 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 at a monthly rate of $4,693.
Future minimum lease payments as of September 30, 2000 are as follows:
Year ending December 31
- -----------------------
2000 $ 28,329
2001 57,000
2002 57,000
2003 57,000
2004 57,000
4
6
LandStar, Inc.
Management Discussion
As at September 30, 2000
The events of this quarter reflect the beginning of the transition
from a Company under development to an operating entity. In prior
periods, the Company has established the credentials of the technology
through independent testing and has built a pilot plant to demonstrate
the viability of the technology. This facility also serves as a
platform for refinement and enhancement of the rubber activation
manufacture process. The evolving operations require centralized
direction and this requirement has been addressed by the Company
through selection of Nashville, Tennessee as head office.
Competent management, effective strategy and adequate resources must
compliment viable technology in order to build a viable business.
Marginal participants with a high rate of business failure have
characterized the rubber recycling industry. Company management
has designed a strategy to neutralize the effects of these failures
and accelerate the growth of the Company through prudent acquisition
of discounted infrastructure and resources.
The Comapny has expanded the management team with engagement of Mike
Elles-VP Business Development, Bill Klingensmith-VP Market Development,
Paul Standley-VP Technology, Bob Phillips-VP Operations and
Dan McVicker-VP General Counsel. The Company is confident that
accumulation of this array of competence is unique in the world of
rubber recycling. We believe that the ability to attract this caliber
of management talent is an attestation to the veracity of the technology
and an expression of faith in the integrity of the technology
implementation strategy.
The Company was also successful during the quarter in achieving
effectiveness of full reporting status under the Securities Act of 1933.
While this process extended longer than anticipated, the Company is
pleased that the result of the review process is a public document
that clearly reflects the evolution of the Company and forms a solid
foundation for future filings by the Company. In preparation for
pending corporate developments, the Company has commenced restructuring
of the Board of Directors. The addition of Mr. Carl Buccellato
significantly enhances the public company administration depth of
experience. Mr. Buccellato has been a leading participant in a number
of prominent public companies and currently serves as a director and
mentor of several pubcos. The appointment of Mr. Dan McVicker to the
board provides a solid source of legal guidance, enhances the Company's
ability to understand and adhere to securities regulations and assists
the Company in addressing potential corporate liability issues.
The Company concluded the quarter with participation in the review
and registration ceremony of the Guangzhou Research Institute for
Utilization of Reclaimed Resources' new "penetrating" devulcanization
technology "RU" rubber, held in Guangzhou, P.R. China. This unique
technology achieves a very high level of devulcanization while maintaining
a significant level of chemical, physical and dynamic properties.
The Company intends to evolve through strategic acquisition and
development in three core areas of business activities: 1) Production
of activated rubber materials in sheet, powder and compound forms,
2) Production of value added products from crumb rubber, fine powders,
fiber and steel, and 3) Production of processing systems and equipment
for rubber reduction and manufacture. The Company is confident that
significant advancement of these core business activities will occur
as the Company moves through the last quarter of 2000.
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
$200,000. It is the intention of the Company to continue development
as described above. Financing of acquisitions or plant expansions
will be by means of private offerings of equity and debt securities
or from bank or other traditional means of financing.
5
7
LANDSTAR INC.
PART II,
OTHER INFORMATION
Item 1. 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.
Vaughn Interior Concepts Inc. has filed a claim against the Company
(Case No. 00-1407) in connection with a sub contract in Dayton, Ohio.
The Company is prepared to proceed to trial to resolve the dispute
if a settlement is not reached. The total amount of the claim is
approximately $45,000.
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
6
7
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 November 16, 2000
LANDSTAR INC.
By: /s/ D.E. Fimrite
----------------
D.Elroy Fimrite
President
By: /s/ Phil Pimlott
----------------
Phil Pimlott
Executive Vice President
8