U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event
reported): March 8, 2000
Starfest, Inc.
(Exact name of registrant as specified in its charter)
California 0-27173 95-4442384
-------------- ------------------------ -------------
(state of (Commission File Number) (IRS Employer
incorporation) I.D. Number)
9494 East Redfield Road, #1136
Scottsdale, AZ 85260
480-551-8280
-------------------------------------------------------
(Address and telephone number of registrant's principal
executive offices and principal place of business)
MAS Acquisition XX Corp.
1710 E. Division Street
Evansville, IN 47711
------------------------------------------------------
(Former name or address, if changed since last report)
<PAGE>
Item 1. Changes in Control of Registrant.
(a) Pursuant to a Stock Purchase Agreement (the "Purchase Agreement)
dated March 6, 2000 between MAS Capital, Inc., an Indiana corporation, the
controlling shareholder of MAS Acquisition XX Corp. (MAS XX"), an Indiana
corporation, and Starfest, Inc., a California corporation ("Starfest" or the
"Company"), approximately 96.83 percent (8,250,000 shares) of the outstanding
shares of common stock of MAS Acquisition XX Corp. were exchanged for $100,000
and 150,000 shares of common stock of Starfest in a transaction in which
Starfest became the parent corporation of MAS XX.
The Purchase Agreement was adopted by the unanimous consent of the Board
of Directors of MAS XX on March 7, 2000. The Purchase Agreement was adopted by
the unanimous consent of the Board of Directors of Starfest on March 7, 2000. No
approval of the shareholders of Starfest or MAS XX is required under applicable
state corporation law.
Prior to the merger, MAS XX had 8,519,800 shares of common stock
outstanding, of which 8,250,000 shares were exchanged for 100,000 shares of
common stock of Starfest. By virtue of the exchange, Starfest acquired 96.83
percent of the issued and outstanding shares of common stock of MAS XX.
Prior to the effectiveness of the Purchase Agreement, Starfest had an
aggregate of 23 million shares of common stock, no par value, issued and
outstanding.
Upon effectiveness of the acquisition, Starfest had an aggregate of
23,150,000 shares of common stock outstanding.
The officers of Starfest continue as officers of Starfest subsequent to
the Purchase Agreement. See "Management" below. The officers, directors and
by-laws of Starfest will continue without change.
A copy of the Purchase Agreement is attached hereto as an exhibit. The
foregoing description is modified by such reference.
(b) The following table sets forth certain information regarding
beneficial ownership of the common stock of Starfest as of March 7, 2000 by each
individual who is known to Starfest, as of the date of this filing, to be the
beneficial owner of more than five percent of Starfest's common stock, its only
voting security.
2
<PAGE>
Name and Address Amount and
Of Beneficial Nature of Percent of
Owner Beneficial Ownership(1) Class
---------------- ----------------------- ----------
Thomas J. Kenan 1,360,000 shares (2) 5.9%
212 N.W. 18th St.
Oklahoma City, OK
73103
Gary Bryant 1,310,000 shares (3) 5.7%
---------
(1) Unless otherwise indicated, Starfest believes that all persons
named in the above table have the sole voting and investment
power with respect to all shares of common stock beneficially
owned by them.
(2) 760,000 of these shares are held of record by the Marilyn C.
Kenan Trust, of which trust Marilyn C. Kenan, the spouse of
Thomas J. Kenan, is the trustee and beneficiary. Mr. Kenan
disclaims any beneficial ownership of any of the shares held in
the trust.
(3) 570,000 of these shares are held of record by Suzanne Bryant, Mr.
Bryant's spouse, and 370,000 are held of record by Newport
Capital Corporation, a corporation under the control of Mr.
Bryant. Mr. Bryant disavows any beneficial ownership of any of
the shares held by Mrs. Bryant.
The table below sets forth the ownership, as of the date of this filing,
by all directors and nominees, and each of the named executed officers of
Starfest, and directors and executive officers of Starfest as a group, of the
common stock of Starfest, its only voting security.
Name and Address
of Amount and Nature
of Percent of
Owner Beneficial Ownership Class
---------------- -------------------- ----------
Michael Huemmer 760,000 shares 3.3%
9494 E. Redfield
Road, #1136
Scottsdale, AZ 85260
3
<PAGE>
Janet Alexander 100,000 shares 0.4%
120 E. Andreas Road,
Suite C
Palm Springs, CA 92262
Officers and Directors 860,000 shares 3.7%
as a Group (2 persons)
There are no agreements between or among any of the shareholders that
would restrict the issuance of shares in a manner that would cause any change in
control of Starfest. There are no voting trusts, pooling arrangements or similar
agreements in the place between or among any of the shareholders, nor do the
shareholders anticipate the implementation of such an agreement in the near
future.
A change in control could occur in the future, however, should the
shareholders of Starfest and Concierge, Inc., a Nevada corporation, approve an
agreement of merger entered into between Starfest and Concierge on January 26,
2000. The proposed merger will be submitted to the shareholders of each of
Starfest and Concierge pursuant to a Form S-4 Prospectus-Proxy Statement to be
filed with the Commission as soon as the necessary audited financial statements
of Concierge are prepared. It is expected that these financial statements will
be available within 60 days.
Pursuant to the agreement of merger between Starfest and
Concierge,
o Starfest will be the surviving corporation,
o The shareholders of Concierge will receive pro rata for their
shares of common stock of Concierge, 86,000,000 shares of common
stock of Starfest in the merger, and all shares of capital stock
of Concierge will be cancelled,
o The officers and directors of Concierge will become the officers
and directors of Starfest, and
o The name of Starfest will be changed to "Concierge Technologies,
Inc."
4
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) The consideration exchanged pursuant to the Purchase
Agreement was negotiated between representatives of the shareholders of MAS XX
and the management of Starfest.
In evaluating Starfest as a candidate for the proposed
acquisition, MAS XX used criteria such as the value of the assets of Starfest
and of Concierge, Inc., Starfest's present stock price as set forth on the OTC
Bulletin Board, Concierge's anticipated operations, and Starfest's and
Concierge's business names and reputations. The shareholders of MAS XX
determined that the consideration for the exchange was reasonable.
(b) Starfest was incorporated under the laws of the State of
California on August 18, 1993. It was originally named "Fanfest, Inc." On August
29, 1995 its name was changed to "Starfest, Inc."
Description of Business and Properties.
--------------------------------------
Starfest's initial business was the production and promotion of
theme events involving numerous artists and performers and designed to attract
mass audiences of fans drawn by the theme. In 1994 and 1995 it produced
"Fanfest," which was held at the Fairplex at the Los Angeles County Fairgrounds,
and which won the Airplay International Award as the "Country Music Event of the
Year." In 1995 the event won the Country Music Associations of America's award
as the "Best Country Event of the Year." In 1996 the event was renamed
"Starfest" and was again held in Los Angeles.
The events all lost money. In 1997 the event was planned but was
cancelled before being held. The company was essentially dormant in 1998 with
its activities being limited to dealing with creditors and to attempting to
raise capital for the resumption of business.
In 1999 Starfest turned control of the company over to
individuals involved in the adult Internet entertainment business. Under this
new direction the company bought three websites found on the Internet through
www.starfest.com with the front-page title of adultstars.com. Starfest also
----------------
purchased and paid for twelve websites on the Internet, but the written transfer
of the websites was never obtained, and the right to obtain the transfer of
those websites have been sold and transferred to unrelated third parties.
5
<PAGE>
Stockholders owning a majority of the outstanding stock of Starfest regained
control of the management of the company and, on December 31, 1999, pursuant to
the written consent of persons holding a majority of the outstanding shares of
common stock of the company, Starfest sold all the assets of the company
associated with the adult entertainment business for $10,000 and applied this
and its other cash assets to the payment of outstanding liabilities.
On January 18, 2000, Starfest and Concierge executed a letter of
intent to submit to their stockholders a proposal to merge. An agreement of
merger was executed on January 26, 2000. Starfest will be the surviving
corporation of the merger, but the business and management of the merged
companies will be that of Concierge. Pending approval of the merger, Starfest
has no business or significant assets.
Starfest's present management consists of two persons, Michael
Huemmer, president, and Barbara Alexander, secretary.
Course of Business for Starfest Should the Merger Not Occur.
-----------------------------------------------------------
Should the stockholders of the two companies not approve the
merger, Starfest will seek another partner. Its sole "asset" is its status as a
public company whose stock trades on the OTC Bulletin Board.
Legal Proceedings.
-----------------
Neither Starfest nor its property is a party to, or the subject
of, pending legal proceedings.
Market for Starfest's Common Stock and Related Stockholder Matters.
------------------------------------------------------------------
Starfest's Common Stock presently trades on the OTC Bulletin
Board. The high and low bid and asked prices, as reported by the OTC Bulletin
Board, are as follows for 1998 and 1999. The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
6
<PAGE>
High Low
---- ---
1998:
1st Qtr. 0.02 0.005
2nd Qtr. 0.01 0.005
3rd Qtr. 0.03 0.005
4th Qtr. 0.021 0.01
1999:
1st Qtr. 0.1000 0.0050
2nd Qtr. 0.5938 0.0200
3rd Qtr. 0.2000 0.0600
4th Qtr. 0.1050 0.0450
Description of Concierge's Business
-----------------------------------
Overview
--------
Concierge was incorporated on September 20, 1996, in the State of
Nevada. Its principal office is at 6033 W. Century Boulevard, Suite 1278, Los
Angeles, California 90045. Its telephone number is (310) 645-1582.
Concierge'S Plan of Operation
-----------------------------
Concierge has developed a "unified messaging" product - the Personal
Communications Attendent ("PCA(TM)). It proposes to market this product
commencing in April 2000.
Description of the PCA(TM)
--------------------------
Concierge's PCA provides a means by which any user of Internet e-mail
can have e-mail and fax messages spoken to him or her over any touch-tone
telephone or wireless phone in the world.
The PCA(TM) responds to the user's voice commands to read, verbalize and
manage e-mail traffic stored on a personal computer. The PCA (TM) is "trained"
to respond only to the voice commands and personal voice password of the
individual user, thus guaranteeing that each user's personal messages cannot be
accessed by anyone else. Responding to spoken instructions, the PCA (TM) can
verbalize e-mail with fax and voice-mail capabilities over the phone and save or
delete those messages as directed by the user. Even more exciting, the user, by
voice command, over the telephone, can dictate e-mail messages to respond to the
e-mail messages accessed by telephone.
7
<PAGE>
The Market
----------
As of early 1999, there were estimated to be over 250 million e-mail
users worldwide, a number which is growing rapidly. As to the domestic market,
last year there were more than 40 million e-mail users in the U.S. churning out
more than 150 million messages a day. By 2003 that could reach more than 200
million users, creating 7 billion messages a day. A substantial majority of this
group are potential users of Concierge's current products and products planned
for release.
Distribution Methods
--------------------
Concierge plans an aggressive, direct-mail and Internet-marketing
campaign to introduce and promote the PCA (TM).
Production Costs
----------------
The PCA (TM) will be manufactured and produced for Concierge by Xetel
Corp. A service order fulfillment contract is being negotiated at this time with
an unaffiliated third party corporation. Emerald Solutions, Inc. will provide
project management, program design and program coding services to implement
products designed by Concierge.
The e-mail version will retail at $39.95. With a $19.95 upgrade, the pro
version monitors and collects fax, voice mail and e-mail messages. There will be
no monthly service fee. No device other than an ordinary telephone is needed to
access the PCA(TM). The PCA (TM) also includes an auto pager that notifies the
user by phone or pager when new e-mail is received.
Considering directing product costs including royalties, Concierge
projects a gross profit margin of approximately 80 to 90 percent of direct
sales.
Concierge is in the process of "nationalizing" the product to
accommodate several foreign languages, including Japanese, Korean, German, Latin
American Spanish, French and Brazilian Portuguese.
Governmental Approval of Principal Products
-------------------------------------------
No governmental approval is required in the U.S. for Concierge's
products.
8
<PAGE>
Government Regulations
----------------------
There are no governmental regulations in the U.S. that apply to
Concierge's products.
Properties.
----------
Concierge subleases approximately 150 square feet of office space at
Suite 1278, 6033 W. Century Boulevard, Los Angeles, California 90045. The space
is deemed adequate for the present time, but additional space will be needed
commencing in April 2000. Concierge has not yet identified the additional space
it will lease, but ample space is available in the vicinity of its present space
and elsewhere in the Los Angeles area.
Dependence on Major Customers and Suppliers
-------------------------------------------
Concierge does not anticipate that it will be dependent on any major
customers or suppliers.
Seasonality
-----------
There should be no seasonal aspect to Concierge's business other than
increased sales anticipated in the fourth calendar quarter associated with the
year-end holidays.
Research and Development
------------------------
Concierge expended approximately $188,663 on research and development in
1998 and $50,431 in 1999. It anticipates that it will expend approximately
$150,000 on research and development in 2000 and approximately $200,000 in 2001.
Environmental Controls
----------------------
Concierge is subject to no environmental controls or restrictions that
require the outlay of capital or the obtaining of a permit in order to engage in
business operations.
Your 2000 Computer Problem
--------------------------
Concierge has determined that it does not face material costs, problems
or uncertainties about the year 2000 computer problem. This problem affects many
companies and organizations and stems from the fact that many existing computer
programs use only two digits to identify a year in the date field and do not
consider the impact of the year 2000. Concierge presently uses off-the-shelf and
easily replaceable software programs and has determined that all software is
year 2000 compliant.
9
<PAGE>
Number of Employees.
-------------------
On March 1, 2000 Concierge employed two persons full-time and two
persons part-time.
Venue of Sales.
--------------
Concierge anticipates that some of its initial sales will be
attributable to exports to English-speaking countries.
Patents, Trademarks, Copyrights and Intellectual Property.
---------------------------------------------------------
Concierge has trademarked its Personal Communications Attendant.
It has no patents on the product; the underlying technology is the subject of
patents, and Concierge is required to pay royalty of approximately $0.50 a PCA
unit to each of two unaffiliated patent holders, Lexicus, a subsidiary of
Motorola, and Fonix.
Legal Proceedings.
-----------------
Neither Concierge nor any of its property is a party to, or the subject
of, any material pending legal proceedings other than ordinary, routine
litigation incidental to its business.
Financial Condition
-------------------
As of March 8, 2000, Concierge had cash assets of approximately $500,000
acquired through the sale of its common stock in an offering exempt from
registration pursuant to the provisions of the Commission's Regulation D, Rule
506.
Liquidity
---------
Concierge expects to improve its liquidity through anticipated sales of
its PCA (TM) commencing in April 2000.
Capital Resources
-----------------
Should the need arise during the next twelve months for additional
capital, Concierge believes that several of its existing shareholders will
provide equity capital to meet this need.
10
<PAGE>
PENNY STOCK REGULATIONS
There is no way to predict a price range within which Starfest's common
stock will trade after the proposed merger with Concierge. It presently trades
on the OTC Bulletin Board at a price less than $5 a share and is subject to the
rules governing "penny stocks."
A "penny stock" is any stock that:
sells for less than $5 a share.
is not listed on an exchange or authorized for quotation on The
Nasdaq Stock Market, and
is not a stock of a "substantial issuer." Starfest is not now a
"substantial issuer" and cannot become one until it has net
tangible assets of at least $5 million, which it does not now
have and will not have solely as a result of the proposed merger
with Concierge.
There are statutes and regulations of the Securities and Exchange
Commission (the "Commission") that impose a strict regimen on brokers that
recommend penny stocks.
The Penny Stock Suitability Rule
--------------------------------
Before a broker-dealer can recommend and sell a penny stock to a new
customer who is not an institutional accredited investor, the broker-dealer must
obtain from the customer information concerning the person's financial
situation, investment experience and investment objectives. Then, the
broker-dealer must "reasonably determine" (1) that transactions in penny stocks
are suitable for the person and (2) that the person, or his advisor, is capable
of evaluating the risks in penny stocks.
After making this determination, the broker-dealer must furnish the
customer with a written statement setting forth the basis for this suitability
determination. The customer must sign and date a copy of the written statement
and return it to the broker-dealer.
Finally the broker-dealer must also obtain from the customer a written
agreement to purchase the penny stock, identifying the stock and the number of
shares to be purchased.
11
<PAGE>
The above exercise delays a proposed transaction. It causes many
broker-dealer firms to adopt a policy of not allowing their representatives to
recommend penny stocks to their customers.
The Penny stock Suitability Rule, described above, and the Penny Stock
Disclosure Rule, described below, do not apply to the following:
transactions not recommended by the broker-dealer,
sales to institutional accredited investors,
sales to "established customers" of the broker-dealer - persons
who either have had an account with the broker-dealer for at
least a year or who have effected three purchases of penny stocks
with the broker-dealer on three different days involving three
different issuers, and
transactions in penny stocks by broker-dealers whose income from
penny stock activities does not exceed five percent of their
total income during certain defined periods.
The Penny Stock Disclosure Rule
-------------------------------
Another Commission rule - the Penny stock Disclosure Rule - requires a
broker-dealer, who recommends the sale of a penny stock to a customer in a
transaction not exempt from the suitability rule described above, to furnish the
customer with a "risk disclosure document." This document includes a description
of the penny stock market and how it functions, its inadequacies and
shortcomings, and the risks associated with investments in the penny stock
market. The broker-dealer must also disclose the stock's bid and ask price
information and the dealer's and salesperson's compensation related to the
proposed transaction. Finally, the customer must be furnished with a monthly
statement including prescribed information relating to market and price
information concerning the penny stocks held in the customer's account.
Effects of the Rule
-------------------
The above penny stock regulatory scheme is a response by the Congress
and the Commission to known abuses in the telemarketing of low-priced securities
12
<PAGE>
by "boiler shop" operators. The scheme imposes market impediments on the sale
and trading of penny stocks. It has a limiting effect on a stockholder's ability
to resell a penny stock.
Starfest's merger shares likely will trade below $5 a share on the OTC
Bulletin Board and be, for some time at least, shares of a "penny stock" subject
to the trading market impediments described above.
Directors and Executive Officers of Starfest
--------------------------------------------
The following persons are the current directors and officers of
Starfest:
Office Held Term
Person Offices Since of Office
------ ------- ----------- ---------
Michael Huemmer,60 President and 1999 2000
Director
Janet Alexander,66 Secretary and 1999 2000
Director
Michael Huemmer. Mr. Huemmer has been employed by Starfest since April
---------------
1999. Prior to this employment he was the president of Ameripro Sports Marketing
Company of Palm Desert, California from 1995 until his employment with Starfest.
Janet Alexander. Ms. Alexander has served as Starfest's secretary since
---------------
July 1999. Prior to this employment she was self-employed as a hypnotherapist in
Wildomer, California from 1995 until June 1998 when she moved to Palm Springs,
California. She was not employed from June 1998 until she became the secretary
of Starfest in July 1999.
There are no family relationships between the directors and officers.
There are no significant employees of Starfest who are not described above.
Executive Compensation
----------------------
During 1999 no executive officer of Starfest received cash compensation
except Mr. Huemmer. He received an aggregate of $18,000 in cash compensation and
300,000 shares of common stock of Starfest for his services as president during
1999. In 2000 he was granted 760,000 shares of common stock of Starfest for his
services as president during 2000.
13
<PAGE>
In November 1999 Ms. Alexander was granted 100,000 shares of common
stock of Starfest as compensation for her services as secretary and a director.
Other than as stated above, no cash compensation, deferred compensation
or long-term incentive plan awards were issued or granted to Starfest's
management during the period ended December 31, 1999. Further, no member of
Starfest's management has been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from Starfest, with respect to any director or
executive officer of Starfest which would in any way result in payments to any
such person because of his or her resignation, retirement or other termination
of employment with Starfest or its subsidiaries, any change in control or
Starfest, or a change in the person's responsibilities following a change in
control of Starfest.
Long-Term Compensation
----------------------
As of March 7, 2000, Starfest has no long-term compensation plans or
employment agreements with any of its officers or directors.
Potential De-Listing of Common Stock
------------------------------------
Starfest may be de-listed from the OTC Bulletin Board. NASD Eligibility
Rule 6530 issued on January 4, 1999, states that Issuers that do not make
current filings pursuant to Sections 13 and 15(d) of the Securities Exchange Act
of 1934 are ineligible for listing on the OTC Bulletin Board. Issuers who are
not current with such filings are subject to de-listing according to a phase-in
schedule depending on each issuer's trading symbol as reported on January 4,
1999. Our trading symbol on January 4, 1999 was SFST. Under the phase-in
schedule, our common stock is subject to de-listing on April 5, 2000. On March
10, 2000 our common stock trading symbol will be changed to SFSTE if we are not
current in filing reports by that date.
14
<PAGE>
Item 3. Bankruptcy or Receivership.
-----------------------------------
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
------------------------------------------------------
Not applicable.
Item 5. Other Events.
---------------------
Successor Issuer Election.
-------------------------
Upon execution of the Purchase Agreement and the subsequent delivery of
$100,000 cash and 150,000 shares of common stock of Starfest on March 7, 2000,
to MAS Capital Inc., pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Starfest became the
successor issuer to MAS Acquisition XX Corp. for reporting purposes under the
Securities and Exchange Act of 1934 and elected to report under the Act
effective March 7, 2000.
Item 6. Resignations of Directors and Executive Officers.
--------------------------------------------------------
Not applicable.
Item 7. Financial Statements.
----------------------------
Starfest, Inc.
Independent Auditors' Report..................................... 16
Balance Sheet as of December 31, 1999............................ 17
Statement of Operations for the years
ended December 31, 1999 and
December 31, 1998 ........................................ 18
Statement of Changes in Stockholders' Equity
(Deficit) for the period from
December 31, 1997 to December 31, 1999 ................... 19
Statements of Cash Flows for the years ended
December 31, 1999 and December 31, 1998 .................. 20
Notes to Financial Statements
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
Starfest, Inc.
I have audited the accompanying balance sheet of Starfest, Inc. as of December
31, 1999, and the related statements of operations, stockholders' equity
(deficit) and cash flows for the year ended December 31, 1999 and the year ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit 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.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starfest, Inc. as of December 31,
1999, and the results of its operations and its cash flows for the year ended
December 31, 1999 and the year ended December 31, 1998, 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 2 to the
financial statements, the Company has suffered recurring significant losses from
operations that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/Jack Olesk CPA
---------------------------
Beverly Hills, California
February 9, 2000
16
<PAGE>
STARFEST, INC.
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
<TABLE>
<S> <C>
Cash $ 481
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 17,687
-----------
Total current liabilities
17,687
-----------
Stockholders' equity (deficit)
Common stock: no par value,
65,000,000 shares authorized;
21,697,999 shares issued and
outstanding 2,639,651
Retained earnings (deficit) (2,656,857)
-----------
Total stockholders' equity (deficit) (17,206)
-----------
$ 481
===========
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
STARFEST, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues $ - $ -
------------ ------------
General and Administrative
Expenses 518,606 2,366
------------ ------------
Operating (Loss) (518,606) (2,366)
Provision for income taxes - -
------------ ------------
NET (LOSS) $ (518,606) $ (2,366)
Net (Loss)
per common share $ (.04) $ (.01)
Weighted Average Shares
Outstanding 15,893,441 8,301,323
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
STARFEST, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
<TABLE>
<CAPTION>
Common Stock Retained
Number of Amount Earnings
Shares Total (Deficit) Total
--------- ------ --------- -----
Balance,
<S> <C> <C> <C> <C>
December 31, 1997 6,236,323 $1,598,072 $(2,135,885) $ (537,813)
Net (loss) for
year ended
December 31, 1998 - - (2,366) (2,366)
---------- ---------- ----------- ----------
Balance,
December 31, 1998 6,236,323 1,598,072 (2,138,251) (540,179)
Shares issued
for services 2,313,338 87,200 - 87,200
Shares issued
for assets 2,950,000 118,000 - 118,000
Shares issued
for debt
extinguishment 6,165,005 646,379 - 646,379
Shares issued
for cash 4,033,333 190,000 - 190,000
Net (loss) for
year ended
December 31, 1999 - - (518,606) (518,606)
---------- ---------- ----------- ----------
Balance,
December 31, 1999 21,697,999 $2,639,651 $(2,656,857) $ (17,206)
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
STARFEST, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
---------- ----------
Net Cash From
Operating Activities:
<S> <C> <C>
Net (loss) $(518,606) $ (2,366)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Shares issued for services 87,200 -
Shares issued for assets 118,000 -
Shares issued for
debt extinguishment 646,379 -
Changes in assets
and liabilities:
Accounts payable (413,692) 2,366
Other liabilities (108,800) -
Net cash (used)
by operating activities (189,519) -
Investing Activities:
Net cash provided (used) by
Investing Activities x - -
--------- -------
Cash flows from Financing
Activities
Common stock issued for cash 190,000 -
--------- -------
Net cash provided by
Financing Activities: 190,000
Increase in Cash 481 -
Cash at beginning of period - -
--------- -------
Cash at end of period $ 481 $ -
Supplemental cash flow information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Non cash financing transactions:
Shares for services $ 87,200 $ -
Shares for debt extinguishment $ 646,379 $ -
Shares for assets $ 118,000 $ -
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies
Nature of Operations
Starfest, Inc. (the "Company"), a California corporation, was
incorporated on August 18, 1993 as Fanfest, Inc.. In August, 1995 the Company
changed its name to Starfest, Inc.. During the year ended December 31, 1998, the
Company was inactive, just having minimal administrative expenses. During the
year ended December 31, 1999 the Company attempted to pursue operations in the
online adult entertainment field.
However, the Company was not successful in this pursuit.
Cash equivalents
Cash equivalents consist of funds invested in money market accounts and
in investments with a maturity of three months or less when purchased. There
were no cash equivalents at December 31, 1999.
Loss per share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding during the periods presented.
Fully diluted calculations are not presented since the Company only had losses
for all periods presented (thus antidilutive).
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in financial statements and
accompanying notes. Actual results could differ from those estimates.
Issuance of Shares for Services
Valuation of shares for services is based on the estimated fair market
value of the services performed.
Income taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". (See Note 3).
21
<PAGE>
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies(continued)
Fair Value of Financial Instruments
Pursuant to SFAS No. 107, Disclosures about Fair Value of Financial
Instruments, the Company is required to estimate the fair value of all financial
instruments included on its balance sheet at December 31, 1999. The Company
considers the carrying value of such amounts in the consolidated financial
statements to approximate their expected realization and interest rates, which
approximate current market rates. During the periods presented and at December
31, 1999 the Company had no financial instruments.
Comprehensive Income (Loss)
In fiscal 1999, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. This statement establishes standards for the reporting of
comprehensive income and its components in a financial statement that is
displayed with the same prominence as other financial statements. The adoption
of SFAS No. 130 required no additional disclosure for the Company and did not
have any effect on the Company's financial position, as there was no difference
between comprehensive loss and the net loss as reported.
Segment Disclosures
In Fiscal 1999, the Company adopted SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information. This Statement establishes
standards for the way companies report information regarding operating segments
in annual financial statements. The adoption of SFAS No. 131 required no
additional disclosure for the Company as the Company operated in one principal
business segment.
Reclassifications
Certain items in prior period financial statements have been
reclassified to conform with 1999 classifications.
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern)
The Company's financial statements have been presented on the basis that
it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
incurred a net loss of $518,606 for the year ended December 31, 1999. The
Company incurred a net loss of $2,366 for the year ended December 31, 1998.
22
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STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern) (continued)
These factors, among others, raise substantial doubt as to the Company's
ability to continue as a going concern.
The Company's management intends to raise additional operating funds
through equity and/or debt offerings. However, there can be no assurance
management will be successful in this endeavor.
NOTE 3 - Income Taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" which requires the use of the liability method of accounting for deferred
income taxes.
Since the Company did not have taxable income during the periods
presented, no provision for income taxes has been provided. At December 31,
1999, the Company did not have any significant tax net operating loss
carryforwards (tax benefits resulting from losses for tax purposes have been
fully reserved due to the uncertainty of a going concern). At December 31, 1999,
the Company did not have any significant deferred tax liabilities or deferred
tax assets.
NOTE 4 - Subsequent Events
On January 18, 2000 the Company issued 1,302,001 of its common shares,
for January, 2000 services, to three shareholders.
In January and February, 2000 the Company was in negotiations regarding
possibly entering into a business combination with Concierge, Inc., a
development stage software developer. Concierge, Inc. does not have significant
assets or revenues.
23
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Item 8. change in Fiscal Year.
------------------------------
Starfest, as the successor issuer, has a fiscal year end of December 31, which
fiscal year will continue for the successor issuer.
Exhibits.
---------
2 Stock Purchase Agreement of March 6, 2000 between Starfest,
Inc. and MAS Capital, Inc.*
3.1 Certificate of Amendment of Articles of Incorporation of
Starfest, Inc. and its earlier articles of incorporation.*
3.2 Bylaws of Starfest, Inc.*
10.1 Agreement of Merger between Starfest, Inc. and Concierge,
Inc.*
23 Consent of Jaak (Jack) Olesk, certified public accountant
(superseded by Exhibit 23.1 filed herein).
23.1 Consent of Jaak (Jack) Olesk, certified public accountant
* Previously filed with Form 8K12G3 on March 10, 2000; Commission File No.
000-29913, incorporated herein.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 6, 2000 Starfest, Inc.
By /s/ Michael Huemmer
----------------------------------
Michael Huemmer, President
24
