UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB/A
(Mark one)
XX ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- -------------- EXCHANGE ACT OF 1934
(Fee required) For the fiscal year ended December 31, 1999
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
- --------------- ACT OF 1934
For the transition period from ______________ to _____________
Commission File Number: 0-26760
NORTH AMERICAN RESORTS, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-126065
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(State of incorporation) (IRS Employer ID Number)
15945 Quality Trail N., Scandia, MN 55073
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(Address of principal executive offices)
(651) 433-3522
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(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act
Title of each class Name of each exchange on which registered
Common Stock NASDAQ EXCHANGE
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82,722,447
Preferred Stock
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539,965
Securities registered pursuant to Section 12 (g) of the Exchange Act: None
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
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ___
State issuer's revenues for its most recent year. (0)
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State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. The bid and asked price of the Company's stock as of April 28, 2000 was
$0.001.
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: March 31, 2000 103,293,967 common
stock.
Transitional Small Business Disclosure Format (check one): YES NO X
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TABLE OF CONTENTS
ITEM NUMBER PAGE
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PART 1
1. Description of Business 3
2. Description of Property 4
3. Legal Proceedings 5
4. Submission of matters to a Vote of Shareholders 5
5. Other related matters 5
PART 11
6. Market for Company's Common Stock
and Related Stockholder Matters 7
7. Management's Discussion and Analysis
or Plan of Operation 9
8. Index to Financial Statements 12
9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure 13
PART III
10. Directors, Executive Officers and Control Persons;
Compliance with Section 16(b) of the Exchange Act. 13
11. Executive Compensation 13
12. Security Ownership of Certain Beneficial
Owners and Management 14
13. Certain Relationships and Related Transactions 14
14. Exhibits and Reports on Form 8-K 14
Signatures 14
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Caution Regarding Forward-Looking Information
---------------------------------------------
This annual 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.
ITEM 1 - BUSINESS
(1) General:
North American Resorts, Inc. was incorporated in Colorado in 1985 as Gemini
Ventures, Inc.. The name was changed in1989 to Solomon Trading Company, Ltd.,
and was changed again in 1994 to the Voyageur First, Inc.. The name was changed
to its present name on March 30, 1995 after an asset purchase of North American
Resorts, Inc.. At the time of the purchase the only asset of North American
Resorts, Inc. was its business plan, and the Company issued 166,667 shares of
its preferred stock for North American Resorts, Inc.
The Company became the owner of USA Tourist Service Centers, Inc. as a
result of the asset purchase of North American Resorts, Inc. USA Tourist Service
Centers, Inc., which began business in 1993, was wholly owned by North American
Resorts, Inc. USA Tourist Centers, Inc. holds a license as a Travel Agent, and
operates out of its office in Orlando, Florida. North American Resorts, Inc.
also held an option to purchase 5 time share units at Ocean Landings in Coco
Beach, Florida, which it purchased.
North American Resorts, Inc, was also activated in mid 1995 and sold
memberships. A member was entitled to an annual pass to Cyprus Island animal
preserve and to a vacation at Ocean Landing Resort in Coco Beach, Florida or to
trade in the week vacation to Interval International and select from other
resorts. Interval International is a clearing house for time shares. The Company
does not receive anything from Interval International, and pays nothing to
Interval International. Each member desiring to trade must pay a charge of
$89.00 to Interval International for the service. There is no peak or prime time
because Ocean Landings is well booked, approximately 85% year around.
The Company did not sell time shares, but sold memberships for five years.
The main difference between the two was that the member will not be the owner of
any part of the real estate. However, because the membership is for longer than
three years, the Company had filed its plan with the State of Florida under the
laws that regulate time shares.
The five year membership sold for $5,000 and entitled the member to a one
week vacation each of the five years at Ocean Landings Resort, or may be traded
into Interval International, a world wide trade organization. The memberships
had no relation to any golf memberships, or the memberships to ITEX.
North American Resorts, Inc. ran short of cash in the summer of 1996 and
ceased sales. There was a Plan of Reorganization entered into with American
Clinical Labs, Inc. on September 3, 1996 in an attempt to cure the shortage of
cash to operate. This Agreement was terminated on December 1, 1996 and North
American Resorts, Inc. returned the assets to American Clinical Labs, Inc. and
American Clinical Labs, Inc. returned the its shares to the Company with the
exception of 12,500,000 shares of restricted common stock of the Company in
exchange for funds advanced by American Clinical Labs, Inc.
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(2) Disposition of assets including time shares at Ocean Landings and Cyprus
Island Preserve facilities
In the fourth quarter of 1998 the Company liquidated its holdings in Ocean
Landings and Cyprus Island Preserve, together with its other remaining assets
and ceased operations. The liquidation was conducted in an attempt to settle and
satisfy the Company's outstanding liabilities. The liquidation of assets did not
provide sufficient funds to pay off all of the Company's liabilities. Of the
Ocean Landing Units, a few were sold and the remaining were turned back to Ocean
Landing in partial payment of the Company's debt to Ocean Landing.
REGISTRANT'S OFFICE:
The Company changed its business office on February 1, 2000 to 15945 Quality
Trail North, Scandia, MN 55073. The telephone number is (651) 433-3522. The
Company's present attorney is providing this facility at no cost to the
Registrant. It is anticipated that upon consummation of the acquisition of a
business opportunity, that the Company may incur one or more leases for office
facilities.
In the event of a consummation of a merger or acquisition with a suitable
candidate, it is highly probable that the Registrant's principal offices will be
relocated to the existing offices of the merger or acquisition candidate.
Further, the Registrant may also have offices at such other places both within
and without the State of Colorado and/or Minnesota as the Board of Directors may
from time to time determine or the future business, subsequent to the
consummation of a merger or acquisition, of the Registrant may require.
All corporate records are currently being maintained in the office of the
Registrant's counsel at 15945 Quality Trail North, Scandia, Minnesota 55073.
ITEM 2 - PROPERTY
(1) Ocean Landing Time Shares Units:
The Company's only property was the 255 weeks of time share owned at Ocean
Landings, a resort located in Coco Beach Florida. The Company paid to Anthony
Arrigoni 166,667 shares of preferred stock to acquire North American Resorts,
Inc., in March 1995. The property was acquired by the exercise of an option to
purchase from 900 North Atlantic Corporation, which has no affiliation, of the
Ocean Landing units, and the Company paid 2,000 preferred shares and $55,000 for
the five time share units in May of 1995.
In the last quarter of 1998 the Company ceased all operations due to its
heavy indebtedness and the Ocean Landing time share units were liquidated along
with other assets in an attempt to settle and satisfy its outstanding
liabilities.
(2) Cyprus Island Lease:
The Company had entered into a lease of an island in the Orlando area,
Cyprus Island. This was liquidated in the fourth quarter of 1998, along with the
other assets of the Company in an attempt to settle and satisfy the Company's
outstanding obligations. The Company ceased operation at this time.
(3) Company's Office Space:
The Company had leased approximately 2,000 square feet of space in a strip
center for it USA Tourist Service Centers, Inc. in Orlando, and had
approximately 3,000 square feet in an office building in Orlando for its North
American Resorts, Inc. facility. These leases were terminated in the fourth
quarter of 1998 when the Company went out of business and liquidated it asset in
an attempt to satisfy and settle its outstanding liabilities.
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ITEM 3 - LEGAL PROCEEDINGS:
(1) On March 3, 1997 Profession Business Owners Self Insures Fund, through its
administrator Professional Business Owners Association, Inc. obtained a
judgement against the Company for $6,191.56, with interest accruing at the
rate of 10%, for unpaid charges incurred by the Company. This judgement has
been satisfied.
(2) On March 16, 1998 the Company entered into a Settlement Agreement with
Alden Equipment Co., Inc. of Florida for services rendered at the Cyprus
Island facility, in the amount of $2,500. This liability has been
satisfied.
(3) Heiniger & Ray, Inc., a Florida Corporation d/b/a Berryman & Henigar, sued
Cyprus Island, Inc. for payments due under a contract with Cyprus Island,
Inc. and for services rendered under said contract. On October 8, 1997 the
parties entered into a Settlement Agreement for payment of the outstanding
debt. The Company was unable to meet the payment as set out in the
Settlement Agreement and a Judgement in the amount of $2,581.56 was entered
on March 24, 1998. Payment of this Judgement was made, including post
Judgement interest at the rate of 10%.
(4) The Company was a named Garnishee in Benjamin B. Reuben vs. Thomas J.
Arriogoni and the Company's records were Subpoenaed in the matter of United
States v. Rasmussen, et al. (See Related Matters).
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
On March 20, 2000, at an Annual Meeting of Shareholders, duly held and
called, the Shareholders adopted the following Resolutions:
1. Amended the Article IV of the Articles of Incorporation to increase the
capital stock of the Company to 300,000,000 shares of common stock.
2. Authorized a Reverse Split of the Company's common stock, consisting of
103,293,967 then outstanding at such ration as may be determined by the
Board of Directors.
3. Elected the following Directors: Gregory Johnson, Robert Heidmann and Paula
Nichols.
4. Ratified and approved the actions of the Board of Directors to the date of
the meeting.
ITEM 5 - RELATED MATTERS
In the first part of 1998 the United States issued an Information Complaint
against William J. Nordvick alleging various criminal actions, some of which
dealt with his dealings with North American Resorts, Inc.
Nordvick was the controlling shareholder of Voyageur First. Inc. which was
before the asset purchase of North American Resorts, Inc., at which time the
Company, Voyageur First, Inc., changed its name to North American Resorts, Inc.
Nordvick was associated with North American Resorts, Inc. for a short period
after the assets purchase on March 30, 1995, as a consultant, to assist in the
transition from Voyageur First to North American. After that he had no
association with North American. In the action brought by the United States
against Nordvick, the Company's records were subpoenaed by the Government.
The action, originally filed in Minnesota is case No. CR 98-75MJD. In this
Information Complaint the Government made various allegations, and those
concerned with North American Resorts, Inc were basically as follows:
1. "In concert with (Howard) Rasmussen and others, Nordvick controlled the
business affairs of North American Resorts, Inc.
2. The basis of part of the Information Complaint was "the object of the
conspiracy was to defraud the United States by impeding and impairing the
internal revenue laws".
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3. As a part of the allegations it was alleged that "the conspiracy agreed to
achieve the object of conspiracy by directly, or by causing or attempting
to cause others to:
*** "create and cause to be created fictitious transactions on the
accounting books and records or Anova and North American Resorts,
thereby hindering the true determination of income and expenses;"
"That on or about March 27, 1997, defendant Nordvick falsely told IRS
Special Agent James Lindquist that:
*** "Rasmussen had no knowledge of what Nordvick was doing with North
American Resorts:"
*** "Rasmussmen was unaware that North American Resorts stock had been
placed in the names of certain of Rasmussens's family members."
"Concealed Involvement -North American Resorts, Inc.
"On or about September 13, 1995, defendant Nordvick caused a
securities registration statement to be filed with the Securities and
Exchange Commission on behalf of North American Resorts, Inc.
identifying the President of North American to be Brian A. Nelson and
the Secretary/Director to be Gary Larvinson, thereby concealing
defendant Nordvick's role in managing the affairs of North American
Resorts, Inc."
"On or about April 15, 1995, pursuant to a Consulting Agreement,
defendant Nordvick caused 96,000 shares of North American Resorts
preferred stock to be issued to V.H.S., Inc., a business entity
controlled by defendant Nordvick."
"On or about June 28, 1995, defendant Nordvick caused 150,000
shares of North American Resorts preferred stock to be issued to T &
B, Inc., a business entity controlled by defendant Nordvick."
"On or about September 1, 1995, pursuant to an Agreement for
service, defendant Nordvick caused 87,000 shares of North American
Resorts preferred stock to be issued to Consortium Group Bank People,
Inc., a business entity controlled by defendant Nordvick."
"On or about November 1, 1995, defendant Nordvick and Raymond
Rasmussen caused all of North American Resorts stock issued to V.H.S.,
Inc., T& B, Inc. and Consortium Group Bank People, Inc., as described
above, to be cancelled and reissued in the names of individuals,
including certain of defendant Nordvick's family members, and certain
of Rasmussen's family members, without their knowledge."
"On or about November 15, 1995, Raymond Rasmussen caused
defendant Nordvick to transfer stock held in the names of Rasmussen's
family members to the names of Raymond Rasmussen and others, and to be
delivered in Canada to the Delta Vancouver Airport Hotel & Marina, to
the attention of "Raymond Rasmussen, (guest)"."
"On or about November 22, 1995, Raymond Rasmussen instructed that
certain of the North American Resorts stock issued in his name, be
transferred to certificates registered in the name of the builder of
Rasmussen" $717,000 house and certain family members of the builder,
in order to pay monies owed to the builder related to the purchase of
this property."
"On or about March 18, 1996, defendant Nordvick caused North
American Resorts to file a Registration Statement with the Securities
and Exchange Commission, falsely representing that its preferred stock
was held in the names of "T & B, Inc.", "V.H.S. ,Inc.", "Consortium
Group" and others."
"On or about December 31, 1995, in the State and District of
Minnesota, in the matter within the jurisdiction of the United States
Securities and Exchange Commission, a department or agency of the
United States, the defendant, William J. Nordvick, knowingly and
willfully made and used a false writing, that is an Annual Report for
North American Resorts, Inc., stating that North American had obtained
artwork by the "purchase of Rochkes, Inc. for $1,000,000 cash and
150,000 shares of preferred stock", knowing the same to be false and
fraudulent, all in violation of Title 18, United States Code, Section
1001."
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4. To the best of the Company's current management, it is understood that Mr.
Nordvick has entered a plea in this matter, in front of the Federal
District Court of Brooklyn, New York, where the matter has been
transferred. The file is currently sealed, and no determination has been
made with respect to the plea.
The Company believes that it has no responsibility or future obligations in
this matter and that the allegations relating to the Company are either
incorrect or immaterial as of the date of this filing.
PART 11
ITEM 6 - MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED MATTERS:
DESCRIPTION OF SECURITIES:
General
The Registrant's Articles of Incorporation, as amended, authorize the
issuance of 300,000,000 shares of common stock of $0.001 par value, with
103,293,947 shares issued and outstanding as of December 31, 1999. There are
currently issued and outstanding 103,293,967 as of April 4, 2000. There are
authorized 50,000,000 shares of Preferred stock of no par value. As of December
31, 1999 there were issued and outstanding 482,815 shares of Preferred stock.
These shares were originally convertible, for two years from date of issue, into
shares of common stock at the ratio of one (10) shares of common stock for each
share of Preferred. The conversion time has run out on these shares and they are
now convertible to common stock at the ratio of one (1) shares of common for
each share of Preferred. The Company has informed the Transfer Agent, Signature
Stock Transfer, Inc. to inform the Preferred shareholders that the Company has
exercised the right to convert these shares to common stock, so that in 2000
there will be no Preferred stock outstanding. There are no outstanding Options
or Warrants.
The Registrant's common stock was trading on the OTC Bulletin Board until
February 2000 at which time it was placed on the Pink sheets for failure to make
the necessary SEC filings in a timely manner. Its trading symbol is NIAR. It is
anticipated that upon bringing the SEC filings up to date that the Company will
be placed back of the OTC Bulletin Board.
The following tables sets forth the range of high and low closing bid prices for
the common stock for the periods as reported by the National Quotation Bureau.
These prices represent inter-dealer prices, without adjustments for retain
mark-ups, mark-downs or commissions and do not necessarily represent actual
transactions.
Common Stock
Calendar year 1999 Low High
- ------------------ --- ----
First Quarter $0.017 $0.012
Second Quarter $0.019 $0.17
Third Quarter $0.008 $0.008
Fourth Quarter $0.004 $0.004
Calendar Year 1998 Low High
- ------------------ --- ----
First Quarter $0.006 $0.008
Second Quarter $0.005 $0.005
Third Quarter $0.006 $0.006
Fourth Quarter $0.007 $0.007
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COMMON STOCK
Each outstanding share of common stock is fully paid and non-assessable, and the
holders thereof are entitled to one vote per share at all meeting of
shareholders. All shares are equal to each other with regard to liquidation
rights and dividends. The Articles of Incorporation of the Registrant do not
include preemptive rights to purchase any additional shares of common stock and
do not provide for cumulative voting in the election of directors. In the event
of liquidation, dissolution or winding up of the Registrant, holders of common
stock will be entitled to receive on a pro rata basis all of the assets of the
Registrant after satisfaction of all liabilities, subject to the rights of
holders of Preferred stock.
PREFERRED STOCK
As of December 31, 1999 there were 482,815 shares of Preferred stock issued and
outstanding. As of the date of this filing, all Preferred stock has been
converted to common stock on the books of the Company, under the terms and
conditions of said Preferred stock.
Dividends
Holders of the common stock are entitled to share equally in dividends when, as
and if declared by the Board of Directors of the Registrant, out of funds
legally available therefore. No dividend has been paid on common stock since
inception, and none is contemplated in the foreseeable future.
Transfer Agent
The Registrant's Transfer Agent is Signature Stock Transfer, Inc. located at
14675 Midway Road, Suite 221, Dallas, Texas 75244.
SALES OF SECURITIES:
Pursuant to an open Registration Statement on Form S-8, the Company issued
common stock to the following individuals or entities for either cash or
professional services:
January 9, 1997
2,900,000 shares to H. C. Stone & Associates for financial consulting.
2,000,000 shares to Twenty First Century Consulting, Inc. for advertising
services.
1,000,000 shares to Anthony Arrigoni for contracted management services.
March 7, 1997
1,500,000 shares to H.C. Stone & Associates for financial consulting
services.
Apri l2, 1997
1,800,000 shares to H.C. Stone & Associates for financial consulting
services.
1,000,000 shares to First Century Consulting, Inc. for advertising
services.
These transactions were valued at approximately $352,000 using the quoted market
value of the Company's copmmon stock on the date of each respective transaction.
The Company received a total of approximately $171,000 in these transactions.
The difference between the "fair value" of the transactions and the cash
received was charged to operations as "consulting fee expense".
On July 16, 1997, the Company issued 500,000 shares of restricted, unregistered
stock to Leopoldo S. Fernandez for consulting fees related to a proposed
acquisition of real estate in the Dominican Republic which did not consummate.
This transaction was valued at approximately $5,000, which approximated the
"fair value" of the Company's common stock based on discounted value of the
quoted market price of the Company's common stock on the date of the
transaction.
On October 15, 1997 and March 1, 1998, respectively, the Company sold 16,000,000
and 20,000,000 shares of restricted, unregistered common stock to James T.
Callahan and Steve M. Weber for $90,000 and $23,000 cash. These transaction were
valued at $150,000 and $100,000, respectively, using the quoted market value of
the Company's common stock on the date of each respective transaction. The
difference between the "fair value" of the transactions and the cash received
was charged to operations as "consulting fee expense".
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ITEM 7 - MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION:
The current management group intends to actively to seek, investigate and, if
warranted, acquire an interest in one or more business opportunities or
ventures. As of the date hereof, the Registrant has divested itself of all
operating assets and has no business opportunities or ventures under
contemplation for acquisition but proposes to investigate potential
opportunities in the form of investors or entrepreneurs with a concept which has
not yet been placed in operation, or in the form of firms which are developing
companies in need of limited additional funds for expansion into new products or
services, and which are seeking to develop a new product or service. The
Registrant may also seek out established businesses which may be experiencing
financial or operational difficulties and are in need of the limited additional
capital the Registrant could provide. The Registrant anticipates that it will
seek to merge with an existing business. After the merger, the surviving entity
will be the Registrant (North American Resorts, Inc.); however, management from
the acquired entity will in all likelihood operate the Registrant. There is,
however, a remote possibility that the Registrant may seek to acquire and
operate an ongoing business, in which case the existing management might be
retained. Due to the absence of capital available for investment by the
Registrant, the types of businesses seeking to be acquired by the Registrant
will no doubt be smaller and higher risks of businesses. In all likelihood, a
business opportunity will involve the acquisition of or merger with a
corporation which does not need additional cash but which desires to establish a
public trading market for its Common Stock. Accordingly, the Registrant's
ability to acquire any business of substance may be extremely limited.
On February 1, 2000 the Registrant experienced a change in control due a change
in management and the pending issue of 2,000,0000 shares of common stock of the
Registrant to M. D. Price, Jr., Escrow Account.. It is the intent of the current
management to continue seeking a suitable situation for merger or acquisition.
Further, the Registrant is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. 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 Registrant does not propose to restrict its search for investment
opportunities to any particular industry or geographical location and may,
therefore, engage in essentially any business, anywhere, to the extent of its
limited resources.
It is anticipated that business opportunities will be available to the
Registrant and sought by the Registrant from various sources, throughout the
United States and Canada, including its Officers and Directors, professional
advisors such as attorneys, accountants, securities broker(s)/dealer(s), venture
capitalists, members of the financial community, other businesses and others who
may present solicited and unsolicited proposals. The Registrant also anticipates
soliciting proposals through financial periodicals and newspapers. The reason
for this approach is to attract the most favorable business opportunities and
ventures available. Management believes that business opportunities and ventures
will become available to it following the effective date of this Registration
Statement, due to a number of factors, including, among others: a) Management's
willingness to enter into unproven, speculative ventures; b) Management's
contacts and acquaintances; and, c) the Registrant's flexibility with respect to
the manner in which it may structure potential financing and/or acquisitions.
However, there is no assurance that the Registrant will be able to structure or
finance and/or acquire any business opportunity or venture.
OPERATION OF THE REGISTRANT:
The Registrant intends to search throughout the United States and Canada for a
merger/acquisition candidate, however, because of the lack of capital, the
Registrant believes that the merger/acquisition candidate will be conducting
business within a limited geographical area. In the event of a consummation of a
merger or acquisition with a suitable candidate, it is highly probable that the
Registrant's principal offices will be relocated to the existing office of the
merger or acquisition candidate. Further the Registrant may also have offices at
such other places as the Board of Directors may from time to time determine or
the future business, subsequent to the consummation of a merger or acquisition
of the Registrant may require to the consummation of a merger or acquisition, of
the Registrant may require.
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At the present time, all corporate records will be maintained at 15945 Quality
Trail North, Scandia, Minnesota 55073 and it is anticipated that all reasonably
predictable future shareholder meetings will take place in Minnesota.
The Officers and Directors will personally seek acquisition/merger candidates
and/or orally contact individuals or broker(s)/dealer(s) and advise them of the
availability of the Registrant as an acquisition candidate. The Officers will
review material furnished them by the proposed merger/acquisition candidate and
decide if a merger/acquisition is in the best interests of the Registrant and
its shareholders. The proposed merger/acquisition will then be submitted to all
the Registrant's shareholders, if required.
The Registrant may also employ outside consultants, however, no such consultants
will be engaged until a merger/acquisition candidate has been targeted by the
Registrant. Management believes that it is impossible to consider the specific
criteria that will be used to hire consultants; however, several of the criteria
may include the consultant's relevant experience, the services to be provided,
the term of service required by the Registrant. In prior situations, management
has not used any specific outside consultants and cannot predict the probability
that management will recommend any specific consultant(s) for future use.
SELECTION OF OPPORTUNITIES:
The analysis of new business opportunities will be undertaken by or under the
supervision of the Officers and Directors of the Registrant, none of whom is a
professional business analyst or has any previous training or experience in
business analysis. Inasmuch as the Registrant will have no funds available to it
in its search for business opportunities and ventures, the Registrant will not
be able to expend significant funds on a complete and exhaustive investigation
of such business or opportunity. The Registrant will, however, investigate, to
the extent believed reasonable by Management, such potential business
opportunities or ventures. As a part of the Registrant's investigation, the
Officers and Directors will meet personally with management and key personnel of
the firm sponsoring the business opportunity, may visit and inspect plants and
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and conduct other
reasonable measures, to the extent of the Registrant's limited financial
resources and management and technical expertise.
Prior to making a decision to recommend to shareholders participation in a
business opportunity or venture, the Registrant will generally request that it
be provided with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections with related
assumptions upon which the projections were based; evidence of existing patents,
trademarks or service marks or rights thereto; present and proposed forms of
compensation to management; a description of transactions between the
prospective entity and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risks and competitive
conditions; and, other information deemed relevant.
It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting, and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and costs for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the costs incurred.
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The Registrant will have unlimited flexibility in seeking, analyzing, and
participating in business opportunities. In its efforts, the Registrant will
consider the following kinds of factors:
a) Potential for growth, indicated by new technology, anticipated market
expansion or new products;
b) Competitive position as compared to other firms engaged in similar
activities;
c) Strength of the merger/acquisition candidate's management;
d) Capital requirements and anticipated availability of required funds from
future operations, through the sale of additional securities, through joint
ventures or similar arrangements or from other sources; and
e) Other relevant factors.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Potential investors must recognize that due to
the Registrant's limited capital available for investigation and management's
limited experience in business analysis, the Registrant may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.
Further, the consummation of a merger or acquisition transaction may or may not
involve the sale of shares of common stock currently held by members of
management, directors or significant shareholders. The terms and conditions
related to any potential sale of these shares may or may not be made available
to other minority or non-controlling existing shareholders of the Registrant.
Prior to the consummation of any merger or acquisition, the Registrant will
request the approval of the existing shareholders. Accordingly, all shareholders
will be provided with the pertinent information related to the proposed merger
or acquisition, including audited financial statements, concerning the proposed
target company of the merger or acquisition.
Additionally, the Registrant will be subject to all disclosure and reporting
requirements of The Securities and Exchange Commission, including, but not
limited to, the filing of a Form 8-K Current Report for the disclosure of any
pending merger or acquisition and the dissemination of audited financial
statements of the merger or acquisition candidate upon consummation.
FORM OF ACQUISITION:
The manner in which the Registrant participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Registrant and the promoters of the opportunity, and the relative negotiating
strength of the Registrant and such promoters. The exact form or structure of
the Registrant's participation in a business opportunity or venture will be
dependent upon the needs of the particular situation. The Registrant's
participation may be structured as an asset purchase, a lease, a license, a
joint venture, a partnership, a merger or the acquisition of securities.
As set forth above, the Registrant may acquire its participation in a business
opportunity through the issuance of Common Stock or other securities in the
Registrant. Although the terms of any such transaction cannot be predicted, it
should be noted that, in certain circumstances, the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1976, as amended, may depend
upon the issuance to the shareholders of the acquired company of at least 80.0%
of the Common Stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, all prior shareholders may, in such circumstances, retain 20.0% or
less of the total issued and outstanding Common Stock. If such a transaction
were available to the Registrant, it will be necessary to obtain shareholder
approval to effectuate a reverse stock split or to authorize additional shares
of Common Stock prior to completing such acquisition. This could result in
substantial additional dilution to the equity of those who were shareholders of
the Registrant prior to such reorganization. Further, extreme caution should be
exercised by any investor relying upon any tax benefits in light of any existing
tax laws or any proposed changes thereto. It is possible that no tax benefits
will exist at all. Prospective investors, if any, should consult their own
legal, financial and other business advisors.
11
<PAGE>
In conjunction with a merger with or acquisition of a privately-owned company,
there exists a probability that a change in control will occur upon the
consummation of the merger or acquisition. In order to make such a transaction
feasible, it is highly probable that management will offer a controlling
interest in the Registrant to any identified merger or acquisition candidate.
The present management and the current shareholders of the Registrant may not
have control of a majority of the voting shares of the Registrant following a
reorganization transaction. As part of such a transaction, all or a majority of
the Registrant's Directors may resign and new Directors may be appointed without
any vote by shareholders.
Present shareholders have not agreed to vote their respective shares of Common
Stock in accordance with the vote of the majority of all non-affiliated future
shareholders of the Registrant with respect to any business combination.
NOT AN "INVESTMENT ADVISOR":
The Registrant is not an "investment advisor" under the Federal Investment
Advisers Act of 1940, which classification would involve a number of negative
considerations. Accordingly, the Registrant will not furnish or distribute
advise, counsel, publications, writings, analysis or reports to anyone relating
to the purchase or sale of any securities within the language, meaning and
intent of Section 2(a)(11) of the Investment Advisers Act of 1940, 15USC
80b2(a)(11).
NOT AN "INVESTMENT COMPANY":
The Registrant may become involved in a business opportunity through purchasing
or exchanging the securities of such business. The Registrant does not intend,
however, to engage primarily in such activities and is not registered as an
"investment company" under the Federal Investment Company Act of 1940. The
Registrant believes such registration is not required.
The Registrant must conduct its activities so as to avoid becoming inadvertently
classified as a transient "investment company" under the Federal Investment
Company Act of 1940, which classification would affect the Registrant adversely
in a number of respects. Section 3(a) of the Investment Company Act provides the
definition of an "investment company" which excludes an entity which does not
engage primarily in the business of investing, reinvesting or trading in
securities, or which does not engage in the business of investing, owning,
holding or trading "investment securities" (defined as "all securities other
than United States government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty (40.0%) of the value of its
total assets (excluding government securities, cash or cash items). The
Registrant intends to implement its business plan in a manner which will result
in the availability of this exemption from the definition of "investment
company". The Registrant proposes to engage solely in seeking an interest in one
or more business opportunities or ventures.
Effective January 14, 1981, the U. S. Securities and Exchange Commission adopted
Rule 3a-2 which deems that an issuer is not engaged in the business of
investing, reinvesting, owning, holding or trading in securities for purposes of
Section 3(a)(1), cited above, if, during a period of time not exceeding one
year, the issuer has a bona fide intent to be engaged primarily, or as soon as
reasonably possible (in any event by the termination of a one year period of
time), in a business other that of investing, reinvesting, owning, holding or
trading in securities and such intent is evidenced by the Registrant's business
activities and appropriate resolution of the Registrant's Board of Directors
duly adopted and duly recorded in the minute book of the Registrant. The Rule
3a-2 "safe harbor" may not be relied on more than a single time. The Registrant
expects to have invested or committed all, or substantially all, of the proceeds
of this public offering in the investigation and/or acquisition of a business
opportunity acquisition within a year after completion of the offering and
thereafter to not encounter the possibility of being classified as a transient
investment company.
12
<PAGE>
ITEM 8 - INDEX TO FININCIAL STATEMENT:
The required accompanying financial statements begin on page F-1 of this
document.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
The Accounting firm of Gary A. La Palme, the independent auditors of the
Company, were dismissed effective as of March 1, 2000. During the fiscal years
ended December 31, 1996 and 1995, there have been no disagreements with Mr.
LaPalme on any matter of events. Mr. LaPalme's report on the financial
statements for the fiscal year ended December 31, 1996 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principals.
The Company engaged the accounting firm of S. W. Hatfield, CPA as independent
auditors for the Company, effective as of March 1, 2000 for the fiscal years
ended December 31, 1997, 1998, and 1999 and for subsequent periods. The
engagement of S. W. Hatfield & Associates was approved by the Company's Board of
Directors. During the fiscal years ended December 31, 1997, 1998 and 1999 and
the interim period subsequent to December 31, 1999 there were no consultants
with S. W. Hatfield & Associates on any matter of accounting principles to a
specific transaction, either completed or proposed, or the type of audit opinion
that might be rendered on the Company's financial condition.
ITEM 10 - OFFICERS AND DIRECTORS:
The current officers and directors of Registrant are as follows:
Name Position
---- --------
Gregory Johnson President and Chief Executive Officer
Robert Heidmann Vice President
Paula Nichols Secretary and Chief Financial Officer
During the year 1997 and up to February 1, 2000 the officers and directors were
as follows:
Anthony Arrigoni President
R. J. Randall Vice President
Deborah Walters Secretary/Treasurer
On February 1, 2000 the above officers and directors resigned and the current
directors and officers were elected.
ITEM 11 - EXECUTIVE COMPENSATION:
None of the current officers or directors receives or has received any
compensation or salary from the Registrant. The Registrant does not anticipate
entering into Employment Agreements with any of its current officers or
directors in the near future. Directors do not receive compensation for their
services as directors and are not reimbursed for expenses incurred in attending
Board meetings.
During the year 1997 the Company's Officers and Directors received no
compensation as the Company was short on cash, and they were conserving it in an
attempt to have the Company survive.
13
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Number of
Name Shares owned Class Percent
---- ------------ ------- -------
Anthony Arrigoni Directly 1,677,000 } Common }
Indirectly (Diane C. Arrigoni) 1,677,000 } }
} 4.26%(1997)
Anthony Arrigoni 165,000 Preferred }
Now convertible into 165,000 Common }
The shares owned by Mr. Arrigoni represent in 2000, 3.42%.
James T. Callahan & Steve M Weber 29,000,000 Common 27.93%
(As Joint Tenants)
Cede & Co., New York (in street name) 52,577,418 Common 50.64%
American Clinical Labs 12,500,000 Common 12.04%
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
None
ITEM 14 - EXHIBITS AND REPORTS ON FROM 8-K
(a) The following documents are filed as Exhibits to this Registration.
Exhibit "16.1" Letter from Gary LaPalme, CPA
Exhibit "27", Financial Document Schedule
(b) Reports on Form 8-K; None
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
NORTH AMERICAN RESORTS, INC.
By /s/ Gregory Johnson Dated: May 2, 2000
---------------------------------
Gregory Johnson, President
By /s/ Puala Nichols Dated: May 2, 2000
---------------------------------
Paula Nichols, Secretary
14
<PAGE>
NORTH AMERICAN
RESORTS, INC.
Financial Statements
and
Auditor's Report
December 31, 1999 and 1998
S. W. HATFIELD, CPA
certified public accountants
Use our past to assist your future sm
<PAGE>
NORTH AMERICAN RESORTS, INC.
CONTENTS
Page
----
Reports of Independent Certified Public Accountants F-3
Financial Statements
Balance Sheets
as of December 31, 1999 and 1998 F-4
Statements of Operations and Comprehensive Income
for the years ended December 31, 1999 and 1998 F-5
Statement of Changes in Stockholders' Equity
for the years ended December 31, 1999 and 1998 F-6
Statements of Cash Flows
for the years ended December 31, 1999 and 1998 F-7
Notes to Financial Statements F-8
F-2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Stockholders
North American Resorts, Inc.
We have audited the accompanying balance sheets of North American Resorts, Inc.
(a Colorado corporation ) as of December 31, 1999 and 1998 and the related
statements of operations and comprehensive income, changes in stockholders'
equity and cash flows for each of the years then ended, respectively. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of North American Resorts, Inc as
of December 31, 1999 and 1998 and the related statements of operations, changes
in stockholders' equity and cash flows for each of the years then ended,
respectively, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company's lack of operating assets makes it fully
dependent upon the majority shareholder's continuing support to provide all
nominal working capital support on the Company's behalf. This situation raises a
substantial doubt about the Company's ability to continue as a going concern.
The majority shareholder intends to continue the funding of nominal necessary
expenses to sustain the corporate entity. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
S. W. HATFIELD, CPA
Dallas, Texas
April 26, 2000
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-3
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN RESORTS, INC.
BALANCE SHEETS
December 31, 1999 and 1998
ASSETS
------
1999 1998
----------- -----------
<S> <C> <C>
Current assets
Cash on hand and in bank $ -- $ --
----------- -----------
Other assets
Organization costs, net of accumulated
amortization of approximately $10,763
and $8,497, respectively 567 2,833
----------- -----------
TOTAL ASSETS $ 567 $ 2,833
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
Accounts payable - trade $ -- $ --
----------- -----------
Commitments and contingencies
Stockholders' equity
Preferred stock - No par value
50,000,000 shares authorized
482,815 shares issued and
outstanding, respectively 1,471,583 1,741,583
Common stock - $0.001 par value
300,000,000 shares authorized
103,293,947 shares issued and
outstanding, respectively 103,294 103,294
Additional paid-in capital 3,620,237 3,620,237
Accumulated deficit (5,194,547) (5,192,281)
----------- -----------
Total stockholders' equity 567 2,833
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,833 $ 945,580
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN RESORTS, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Years ended December 31, 1999 and 1998
1998 1997
------------- -------------
<S> <C> <C>
Net revenues $ -- $ --
Operating expenses
Amortization of organization costs 2,266 2,266
------------- -------------
Loss from continuing operations before income taxes (2,266) (2,266)
Income tax benefit (expense) -- --
------------- -------------
Loss from continuing operations (2,266) (2,266)
------------- -------------
Discontinued operations, net of income taxes
Income (Loss) from discontinued operations,
net of income taxes of $-0- and $-0-, respectively -- (455,974)
Income (Loss) on disposition, net of income
taxes of $-0- and $-0-, respectively -- (35,131)
------------- -------------
Income (loss) from discontinued operations -- (491,105)
------------- -------------
Net Income (Loss) (2,266) (493,371)
Other comprehensive income -- --
------------- -------------
Comprehensive Income (Loss) $ (2,266) $ (493,371)
============= =============
Earnings (Loss) per weighted-average
share of common stock outstanding
From continuing operations nil nil
From discontinued operations nil nil
------------- -------------
Total earnings (loss) per share nil nil
============= =============
Weighted-average number of
common shares outstanding 103,293,947 100,553,051
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN RESORTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31, 1999 and 1998
Preferred Stock Common Stock Additional Treasury
--------------- ------------ paid-in stock Accumulated
Shares Amount Shares Amount capital at cost deficit
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1998 539,965 $ 1,484,728 82,722,447 $ 82,723 $ 3,527,663 $ -- $(4,698,910)
Issuance of common stock
for cash -- -- 20,000,000 20,000 80,000 -- --
Conversion of preferred stock
to common at a 10 for 1 ratio (57,150) (13,145) 571,500 571 12,574 -- --
Net loss for the year -- -- -- -- -- -- (493,371)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balances at December 31, 1998 482,815 1,471,583 103,293,947 103,294 3,620,237 -- (5,192,281)
Net loss for the year -- -- -- -- -- -- (2,266)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balances at December 31, 1999 482,815 $ 1,471,583 103,293,947 $ 103,294 $ 3,620,237 $ -- $(5,194,547)
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
Total
-----------
Balances at January 1, 1998 $ 396,204
Issuance of common stock
for cash 100,000
Conversion of preferred stock
to common at a 10 for 1 ratio --
Net loss for the year (493,371)
-----------
Balances at December 31, 1998 2,833
Net loss for the year (2,266)
-----------
Balances at December 31, 1999 $ 567
===========
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
NORTH AMERICAN RESORTS, INC.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1999 and 1998
1999 1998
---------- ---------
Cash flows from operating activities
Net income (loss) for the period $ (2,266) $(493,371)
Adjustments to reconcile net loss to net
cash provided by operating activities
Loss on disposition of discontinued operations -- 35,131
Depreciation and amortization 2,266 15,415
Consulting and other expenses paid with
issuance of preferred and common stock -- 77,000
Change in net assets and liabilities
of discontinued operations -- 348,749
---------- ---------
Net cash provided by (used in) operating activities -- (17,076)
---------- ---------
Cash flows from investing activities -- --
---------- ---------
Cash flows from financing activities
Increase in cash overdraft -- (5,924)
Proceeds from sale of common stock -- 23,000
---------- ---------
Net cash provided by (used in) financing activities -- 17,076
---------- ---------
Increase (Decrease) in Cash -- --
Cash at beginning of period -- --
---------- ---------
Cash at end of period $ -- $ --
========== =========
Supplemental disclosure of interest
and income taxes paid
Interest paid for the period $ -- $ 1,947
========== =========
Income taxes paid for the period $ -- $ --
========== =========
The accompanying notes are an integral part of these financial statements.
F-7
<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.
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.
2. Income taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At December 31, 1999 and 1998, 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.
F-8
<PAGE>
NORTH AMERICAN RESORTS, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
3. 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 December 31, 1999 and 1998, 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 December
31, 1999 and 1998, respectively.
NOTE C - DISCONTINUED OPERATIONS
During the fourth quarter of 1998, 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, 1999 and 1998, respectively, are as follows:
1999 1998
--------- ---------
Net sales $ - $ 648,457
========= =========
Operating income (loss) $ - $(455,974)
========= =========
Loss from discontinued operations $ - $(455,974)
========= =========
NOTE D - PREFERRED STOCK
The Company has 482,815 shares of preferred stock issued and outstanding at
December 31, 1999. 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 4,828,150 common shares that would be subject to be sold pursuant
to Rule 144.
F-9
<PAGE>
NORTH AMERICAN RESORTS, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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 the latest of these
amendments are reflected in the accompanying financial statements as of the
first day of the first period presented.
During February 1998, the Company sold 20,000,000 shares of restricted,
unregistered common stock to two unrelated individuals for a total of $23,000
cash. The transaction was valued at $100,000 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.
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.
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.
F-10
GARY A. LaPALME, C.P.A.
CERTIFIED PUBLIC ACCOUNTANTS
MAPLE GROVE EXECUTIVE CENTRE
7200 Hemlock Lane, Suite 110
Maple Grove, MN 55369
---------------------
(612)424-5330
FAX (612)424-2601
MEMEBER
MINNESOTA SOCIETY OF C.P.A.'S
AMERICAN INSTITUTE OF C.P.A.'S
May 1, 2000
U.S. Securities and Exchange Commisssion
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen,
On May 1, 2000 this firm reviewed Item 9 - Changes in Registrants's Certifying
Public Accountant of the Form 10-KSB to be filed by North American Resorts, Inc.
(SEC File #0-26760) during May 2000.
We have no disagreements with the statements made within Item 9 of the
referenced Form 10-KSB.
Sincerely,
/s/ Gary A. LaPalme
- ---------------------------
Gary A. LaPalme, C.P.A
Certified Public Accountants
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001000686
<NAME> North American Resorts, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
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<TOTAL-ASSETS> 567
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
1471583
<COMMON> 103294
<OTHER-SE> (1574310)
<TOTAL-LIABILITY-AND-EQUITY> 567
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 2266
<OTHER-EXPENSES> 0
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<INCOME-TAX> 0
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</TABLE>