-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BV5EhT4dPqugEqtEAZC4EI0JCvwJPcR/sMYOrqdgaW4gIi+fGZP0LLcNljoGEmyo NV6AtzmicF4z8LNlKKgL5A== 0000803260-99-000006.txt : 19991018 0000803260-99-000006.hdr.sgml : 19991018 ACCESSION NUMBER: 0000803260-99-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19991014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEFAULT PROOF CREDIT CARD SYSTEM INC /FL/ CENTRAL INDEX KEY: 0000803260 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 592686523 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24444 FILM NUMBER: 99728153 BUSINESS ADDRESS: STREET 1: 1545 MILLER ROAD CITY: CORAL GABLES STATE: FL ZIP: 33146 BUSINESS PHONE: 3056661460 MAIL ADDRESS: STREET 1: 1545 MILLER ROAD CITY: CORAL GABLES STATE: FL ZIP: 33146 10QSB 1 DEFAULT PROOF CREDIT CARD SYSTEM QUARTERLY REPORT FORM 10 QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 14(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from_______________to__________________ Commission File Number 017114 ------ DEFAULT PROOF CREDIT CARD SYSTEM, INC. -------------------------------------- (Exact name of small business issuer as specified in its charter Florida 59-2686523 ------- ---------- (State or other jurisdiction (I.R.S. Employer Identification of incorporation) Number) 1545 Miller Road, Coral Gables, Florida 33146-2309 -------------------------------------------------- (Address of principal executive offices) (Zip Code) (305) 666-1460 -------------- Registrant's telephone number, including area code ---------------------------------------------------- (Former name,former address and fiscal year, if changed since last report.) 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 of the past 90 days. Yes X No _ The number of shares outstanding of the registrant common stock is 1,219,351 (as of March 31, 1999). Transitional Small Business Disclosure Format Yes X No _ DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) INDEX Page ---- PART 1 FINANCIAL STATEMENTS ITEM 1. Balance Sheets (unaudited)As of March 31, 1999 4 Statements of Operations (unaudited) For the Three months ended March 31, 1999 5 Statements of Stockholders' Equity (Deficiency in Assets)(unaudited) For the Three months ended March 31, 1999 6 Statements of Cash Flows (unaudited) For the Three months ended March 31, 1999 7 ITEM 2. Management's Discussion and Analysis or Plan of Operations 9 PART II Other Information Other Information 10 Signatures 10 Accountants' Report We have compiled the accompanying balance sheet of Default Proof Credit Card System, Inc. as of March 31, 1999, and the related statements of income, retained earnings, and cash flows for the years then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and accordingly, do not express an opinion or any other form of assurance on them. Management has elected to omit substantially all of the disclosures required by generally accepted accounting principles. If the omitted disclosures were included in the financial statements, they might influence the user's conclusions about the company's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters. Eduardo Garcia & Associates June 28, 1999 DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS - -------------------------------------------------------------------------------- March 31, 1999 (Unaudited) -------------- ASSETS ------ Capitalized Patent Cost $ 3,945 ------------ Total Assets 3,945 ============ LIABILITIES AND DEFICIENCY IN ASSETS ------------------------------------ Current Liabilities - ------------------- Accrued Expenses 26,516 Due to Directors 60,062 ------------ Total Current Liabilities 86,578 Deficiency in Assets - -------------------- Common Stock, $0.01 par value; 2,500,000 authorized shares; 1,219,351 shares issued and outstanding at March 31, 1999 12,194 Additional Paid-In Capital 3,970,660 Deficit accumulated during the development stage (4,065,487) ------------ Total Deficiency in Assets (82,633) ------------ Total Liabilities and Deficiency in Assets $ 3,945 ============ -4- DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- THREE MONTHS ENDED March 31, 1999 (UNAUDITED) -------------- OPERATING EXPENSES Depreciation and Amortization $ - Expired Public Offerring Cost - General & Administrative 19,780 Marketing - Officer Salary - ------------- Total Expenses 19,780 ------------- OTHER INCOME (EXPENSE) Cancellation of Debt - Litigation Settlements - Interest & Other Income - Loss on Marketable Securities - Loss on Sale of Equipment - ------------- Total other income(expense) - ------------- NET GAIN (LOSS) $ (19,780) ------------- NET GAIN (LOSS) PER COMMON SHARE (0.016) ------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 1,219,351 ------------- -5- DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIENCY IN ASSETS) (UNAUDITED) MARCH 31, 1999 - --------------------------------------------------------------------------------
Deficit Common Stock Accumulated ------------------------- Additional During the # of shares par Paid-In Development issued value Capital Stage Total ------ ----- ------- ----- ----- Balance - December 31, 1998 12,043,510 $ 12,044 $3,459,560 $(4,045,707) $(74,103) February 5,1999 Reverse Stock Split 10:1 New Balance 1,204,351 12,044 3,959,560 (4,045,707) (74,103) ----------- ----------- ----------- ------------- ---------- February 5,1999 for Professional Services Rendered(X) 10,000 100 7,400 - 7,500 February 18,1999 for Professional Services Rendered(X) 5,000 50 3,700 - 3,750 Net Loss - - - (19,780) (19,780) ------------ ---------- ----------- ------------- ---------- BALANCE-MARCH 31, 1999 1,219,351 $ 12,194 $3,970,660 $(4,065,487) $(82,633) ------------ ---------- ----------- ------------- ----------
(X) Non-cash consideration received consisted of services related to communications relating to investor relations. The shares of stock issued for non-cash services were recorded at the fair market value of the shares at the date of service. -6- DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------- Three Months Ended March 31, 1999 (Unaudited) ----------- CASH FLOWS FROM OPERATING ACTIVITIES - ------------------------------------ Net (Loss) $ (19,780) Adjustments to Reconcile Net (Loss) to Net Cash Used in Operating Activities: Depreciation & Amortization - Loss on Marketable Securities - Expired Public Offering Costs - Cancellation of Stockholder Note Receivable - Stock Issued in lieu of Cash for Professional Services 11,250 Stock Issued in lieu of Cash for Waived Salaries - Loss on Sale of Equipment - Increase in Other Assets - Increase (Decrease) in Accrued Expenses 200 ----------- Total adjustments 11,450 ----------- Net Cash Used By Operating Activities (8,330) ----------- -7- DEFAULT PROOF CREDIT CARD SYSTEM, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------- Three Months Ended March 31, 1999 (Unaudited) ----------- CASH FLOWS FROM INVESTING ACTIVITIES - ------------------------------------ Purchases of Marketable Securities - Purchases of Property & Equipment - Patent License Expenditures - Proceeds from Sale of Equipment - ------------ Net Cash Used By Financing Activities - ------------ CASH FLOWS FROM FINANCING ACTIVITIES - ------------------------------------ Proceeds from Issuance of Stock -Private Offerings - Proceeds from Issuance of Stock -Public Offerings - Proceeds from Issuance of Stock -Exercise of Warrants - Proceeds from Capital Contributions - Advances (to) from shareholder 8,330 ----------- Net Cash Provided By Financing Activities 8,330 ----------- NET CHANGE IN CASH AND CASH EQUIVALENTS - CASH-BEGINNING - ----------- CASH-ENDING - ----------- -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Default Proof Credit Card System, Inc. (the Company) was incorporated on August 14, 1985 under the laws of the State of Florida. For the period from August 14, 1985 (inception) to December 31, 1985, the Company was promoting and marketing the Resource System ( a Registered Servicemark). In 1997, the Company filed for a new patent. The patent pending, as well as the original Resource System, has generated interest and the Company is now engaged in discussions with several financial institutions for licensing or joint venture of this product. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company suffered losses prior to commencement of operations and has a working capital deficiency. Management intends to actively market the Resource System and a new (patent pending) Line of Credit system. The Company is now engaged in discussions with several financial institutions for its development. In the absence of achieving profitable operations, or obtaining debt or equity financing, the Company may not have sufficient funds to continue operations. -9- PART II OTHER INFORMATION Item 1. Legal Proceedings Not Applicable. Item 2. Changes in Securities Not Applicable. Item 3. Defaults upon Senior Securities Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders Not Applicable. Item 5. Other Information Not Applicable. Item 6. Exhibits and reports on Form 8-K (a) Exhibits No. 1 ( 2-1-1999 8-k) (b) Reports on Form 8-K - Reverse Stock Split 10 for 1 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 hereunto duly authorized. DEFAULT PROOF CREDIT CARD SYSTEM, INC. (Registrant) DATE: June 28, 1999 By: /s/ Vincent Cuervo ------------------------------------- Vincent Cuervo, Chairman Chief Executive Officer DATE: June 28, 1999 By: /s/ Pedro P.Llaguno --------------------------------------- Pedro P.Llaguno, Secretary -10- EX-19 2 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8 - K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 1, 1999 DEFAULT PROOF CREDIT CARD SYSTEM, INC. (Exact Name of Registrant as Specified in its Charter) Florida 0-17114 (State or other Jurisdiction of (Commission File No.) Incorporation or Organization) 59-2686523 (I.R.S. Employer Identification Number) 1545 Miller Road Coral Gables, Florida 33146-2309 (Address of Principal (Zip Code) Executive Offices) Registrant's Telephone Number, including Area Code: (305) 666-1460 Item 5. Registrant's Reverse Stock Split of Corporation's Common Stock Shares The Board of Directors of Default Proof Credit Card System, Inc. (OTC-BB:DPRS) on an Extraordinary Meeting held today February 1, 1999, after the casting and tallying of the votes submitted from January 14. 1999 to this date by the Company's shareholders resulting in the approval of the proposed ten-for one reverse split by a 99% of all the votes received, has unanimously voted to implement a ten-for-one reverse split of the Company's Common Stock. The reverse stock split will become effective as of the close of business on February 4, 1999. On February 5, 1999 for each pre-split ten (10) shares of the Company's Common Stock $0.001 par value the holder of record will receive one post-split share of the Company's Common stock $0.01 par value per post split share. The new stock certificates will have a new cusip number 244626 40 4. The new certificates will be issued in the normal course of business whenever the appropriate transfer is requested by the shareholders. Fractional shares resulting from the reverse stock split will be settled in cash at the shares closing price of the shares traded at the close of business of the effective date February 4, 1999. The reverse split will decrease the number of shares outstanding, but not the value of shares held by the shareholders. Shareholders will maintain the same percentage of equity as before the split. The Company will make a news release through the news media, Business Wire, Wall Street Journal, etc., for the general public information. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on its behalf by the undersigned hereunto duly authorized. Default Proof Credit Card System,Inc. (Registrant) Date: February 1, 1999 By: /s/ Vincent Cuervo -------------------------------- Vincent Cuervo,President & CEO -----END PRIVACY-ENHANCED MESSAGE-----