UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ---------- EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF
- ---------- 1934
For the transition period from ______________ to _____________
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Commission File Number: 0-26760
North American Resorts, Inc.
(Exact name of small business issuer as specified in its charter)
Colorado 84-1286065
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(State of incorporation) (IRS Employer ID Number)
15945 Quality Trail North, Scandia, MN 55073
--------------------------------------------
(Address of principal executive offices)
(612) 433-3522
--------------
(Issuer's telephone number)
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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 NO X
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: April 27, 2000: 103,293,967
---------------------------
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
<PAGE>
North American Resorts, Inc.
Form 10-QSB for the Quarter ended June 30, 1997
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 8
Part II - Other Information
Item 1 Legal Proceedings 9
Item 2 Changes in Securities 9
Item 3 Defaults Upon Senior Securities 9
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 9
Item 6 Exhibits and Reports on Form 8-K 9
Signatures 9
2
<PAGE>
<TABLE>
<CAPTION>
Part 1 - Item 1 - Financial Statements
North American Resorts, Inc.
Balance Sheets
June 30, 1997 and 1996
(Unaudited)
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ 31,035
Net current assets of discontinued operations 132,340 1,366,299
----------- -----------
Total current assets 132,340 1,397,334
----------- -----------
Other Assets
Organization costs, net of accumulated amortization
of $5,098 and $2,840, respectively 6,232 8,490
Net other assets of discontinued operations 729,619 1,345,101
----------- -----------
Total other assets 735,851 1,353,591
----------- -----------
Total Assets $ 868,191 $ 2,750,925
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Cash overdraft $ 12,437 $ --
Net current liabilities of discontinued operations 672,493 421,559
----------- -----------
Total current liabilities 684,930 421,559
----------- -----------
Long-term Liabilities
Net other liabilities of discontinued operations -- 881,059
----------- -----------
Total Liabilities 684,930 1,302,618
----------- -----------
Commitments and Contingencies
Shareholders' Equity
Preferred stock - No par value 1,484,728 710,937
Common stock - $0.001 par value 66,172 1,307
Additional paid-in capital 3,378,714 1,517,253
Deficit accumulated during the development stage (4,746,353) (781,190)
----------- -----------
Total shareholders' equity 183,261 1,448,307
----------- -----------
Total Liabilities and Shareholders' Equity $ 868,191 $ 2,750,925
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
<PAGE>
<TABLE>
<CAPTION>
North American Resorts, Inc.
Statements of Operations
Six and Three months ended June 30, 1997 and 1996
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Expenses
Amortization of organization costs 1,133 1,133 567 567
------------ ------------ ------------ ------------
Loss from continuing operations
before income taxes (1,133) (1,133) (567) (567)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Loss from continuing operations (1,133) (1,133) (567) (567)
Discontinued operations,
net of income taxes
Income (Loss) from
discontinued operations (133,094) 224,344 (56,478) 110,414
------------ ------------ ------------ ------------
Net Loss $ (134,227) $ 223,211 $ (57,045) $ 109,847
============ ============ ============ ============
Loss per weighted-average
share of common stock outstanding
From continuing operations nil $ 0.00 nil $ 0.00
From discontinued operations nil 0.17 nil 0.08
------------ ------------ ------------ ------------
Total loss per share nil $ 0.17 nil $ 0.08
============ ============ ============ ============
Weighted-average number of shares
of common stock outstanding 64,289,629 1,306,946 66,141,678 1,306,946
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
4
<PAGE>
<TABLE>
<CAPTION>
North American Resorts, Inc.
Statements of Cash Flows
Six months ended June 30, 1997 and 1996
(Unaudited)
Six months Six months
ended ended
June 30, June 30,
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities $ (87,018) $(471,169)
--------- ---------
Cash Flows from Investing Activities
Purchase of furniture and equipment -- (11,434)
--------- ---------
Cash Flows from Financing Activities
Increase in cash overdraft 8,149 --
Net change in debt -- 56,058
Issuance of stock 78,000 456,500
--------- ---------
Net cash flows from financing activities 86,149 512,558
--------- ---------
Increase (Decrease) in Cash and Cash Equivalents (869) 29,955
Cash and cash equivalents at beginning of period 869 1,080
--------- ---------
Cash and cash equivalents at end of period $ -- $ 31,035
========= =========
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ --
========= =========
Income taxes paid (refunded) $ -- $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
<PAGE>
North American Resorts, Inc.
Notes to Financial Statements
Note A - Organization and Description of Business
North American Resorts, Inc. (Company ) was initially incorporated as Gemini
Ventures, Inc. on November 1, 1985 under the laws of the State of Colorado. The
Company changed its corporate name to Solomon Trading Company, Limited in July
1989; The Voyageur, Inc. in November 1994; The Voyageur First, Inc. in December
1994 and North American Resorts, Inc. in March 1995, respectively.
From 1995 through 1998, the Company was in the business of selling vacations in
Florida and the sale of time share memberships to the Ocean Landings and Cypress
Island Preserve facilities in Florida which were controlled by the Company and
the operation of Cypress Island Preserve as a tourist destination. During the
fourth quarter of 1998, the Company liquidated its holdings in these ventures
and discontinued all operations.
With the disposition of all operations, the Company became fully dependent upon
the support of its controlling shareholders for the maintenance of its corporate
status and to provide all working capital support for the Company's behalf. The
controlling shareholders intend to continue the funding of necessary expenses to
sustain the corporate entity.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the U. S. Securities and Exchange Commission.
The information presented herein does not include all disclosures required by
generally accepted accounting principles and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 on Form 10-KSB when reviewing the interim
financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
Cash overdraft positions may occur from time to time due to the timing of
making bank deposits and releasing checks, in accordance with the
Company's cash management policies.
6
<PAGE>
North American Resorts, Inc.
Notes to Financial Statements - Continued
Note B - Summary of Significant Accounting Policies - Continued
2. Organization costs
------------------
Organization costs are amortized over a five year period using the
straight line method.
3. Income taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At June 30, 1997 and 1996, respectively, the deferred tax asset and
deferred tax liability accounts, as recorded when material to the
financial statements, are entirely the result of temporary differences.
Temporary differences represent differences in the recognition of assets
and liabilities for tax and financial reporting purposes, primarily
accumulated depreciation and amortization, allowance for doubtful accounts
and vacation accruals.
The Company has net operating loss carryforwards for income tax purposes
of approximately $900,000. If these carryforwards are not utilized, they
will begin to expire in 2010.
Due to the provisions of Internal Revenue Code Section 338, the Company
will have no net operating loss carryforwards available to offset
financial statement or tax return taxable income in future periods as a
result of a 1999 change in control involving 50 percentage points or more
of the issued and outstanding securities of the Company.
4. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of June 30, 1997 and 1996, the Company
has no outstanding warrants and options issued and outstanding. Further,
the Company's convertible preferred stock is considered to be
anti-dilutive due to the Company's net operating loss position at June 30,
1997 and 1996, respectively.
5. Reclassifications
-----------------
Certain amounts in the 1996 financial statements have been reclassified to
present the subsequent effect of the Company's discontinued operations.
7
<PAGE>
North American Resorts, Inc.
Notes to Financial Statements - Continued
Note C - Discontinued Operations
During the fourth quarter of 1999, the Company discontinued all operations
related to its selling vacations in Florida and the sale of time share
memberships to the Ocean Landings and Cypress Island Preserve facilities in
Florida which were controlled by the Company and the operation of Cypress Island
Preserve as a tourist destination.
The results of the Company's operations for the respective periods presented are
reported as a component of discontinued operations in the statements of
operations. Additionally, the respective gain or loss incurred on the sale of
the Company's operations are also presented separately as a component of
discontinued operations.
Summarized results of operations for the disposed operations for the years ended
December 31, 1997 and 1996, respectively, are as follows:
1997 1996
----------- -----------
Net sales $ 2,530,382 $ 606,937
=========== ===========
Operating income (loss) $ (86,784) $(2,540,077)
=========== ===========
Loss from discontinued operations $ (86,784) $(2,591,618)
====-====== ===========
Note D - Preferred Stock
The Company has 539,965 shares of preferred stock issued and outstanding at
December 31, 1997. The preferred shares are convertible into common shares at
the rate of 10 common shares for each share of preferred. There shares could be
converted to 5,399,650 common shares that would be subject to be sold pursuant
to Rule 144.
Note E - Common Stock Transactions
In April 1998 and April 2000, respectively, the Company amended its Articles of
Incorporation to allow for the issuance of up to 150,000,000 and 300,000,0000
shares of $0.001 par value common stock. The effect of these amendments are
reflected in the accompanying financial statements as of the first day of the
first period presented.
During 1997, the Company issued an aggregate of 10,200,000 of common stock
pursuant to a Registration Statement on Form S-8 for a combination of cash and
professional services valued at approximately $352,000 using the quoted market
value of the Company's common stock on the date of each respective transaction.
The Company received total cash proceeds of approximately $171,000 in these
transactions. The differential between the "fair value" of the services and the
cash received was charged to operations as consulting fees.
During 1997, the Company issued an aggregate 550,000 shares of unregistered,
restricted common stock to various parties involved in assisting the Company
with proposed acquisitions which did not consummate. These transactions were
valued at approximately $55,000, which approximates the "fair value" of the
common stock issued based on the discounted value of the quoted market price of
the Company's common stock on the respective transaction date. These amounts
were charged to operations as consulting fees.
8
<PAGE>
North American Resorts, Inc.
Notes to Financial Statements - Continued
Note E - Common Stock Transactions - Continued
During 1997, the Company sold 16,000,000 shares of restricted, unregistered
common stock to two unrelated individuals for a total of $90,000 cash. The
transaction was valued at $160,000 in the accompanying financial statements
based on the discounted quoted market price of the Company's common stock on the
date of the transaction. The differential between the "fair value" of the stock
sold and the cash proceeds was charged to consulting fees.
(Remainder of this page left blank intentionally.)
9
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) General comments
North American Resorts, Inc. (Company ) was initially incorporated as Gemini
Ventures, Inc. on November 1, 1985 under the laws of the State of Colorado. The
Company changed its corporate name to Solomon Trading Company, Limited in July
1989; The Voyageur, Inc. in November 1994; The Voyageur First, Inc. in December
1994 and North American Resorts, Inc. in March 1995, respectively.
From 1995 through 1998, the Company was in the business of selling vacations in
Florida and the sale of time share memberships to the Ocean Landings and Cypress
Island Preserve facilities in Florida which were controlled by the Company and
the operation of Cypress Island Preserve as a tourist destination. During the
fourth quarter of 1998, the Company liquidated its holdings in these ventures
and discontinued all operations.
With the disposition of all operations, the Company became fully dependent upon
the support of its controlling shareholders for the maintenance of its corporate
status and to provide all working capital support for the Company's behalf. The
controlling shareholders intend to continue the funding of necessary expenses to
sustain the corporate entity.
(3) Results of Operations, Liquidity and Capital Resources
As of the date of this filing, the Company has no operations, assets or
liabilities. Accordingly, the Company is dependent upon management and/or
significant shareholders to provide sufficient working capital to preserve the
integrity of the corporate entity at this time. It is the intent of management
and significant shareholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company is currently seeking a suitable merger or acquisition candidate.
10
<PAGE>
Part II - Other Information
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
The Company has held no regularly scheduled, called or special meetings
of shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K - None
- --------------------------------------------------------------------------------
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
North American Resorts, Inc.
April 27 , 2000 /s/ Gregory Johnson.
-------- ----------------------------
Gregory Johnson
President and Director
11
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<LEGEND>
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<CIK> 0001000686
<NAME> North American Resorts, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 0
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<CURRENT-LIABILITIES> 684930
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0
1484728
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