SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of The Securities Act
of 1934.
Date of Report (Date of earliest event reported):
MAY 12, 1999
M & A WEST, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-21955
COLORADO 84-1356427
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
583 San Mateo Avenue
San Bruno, CA 94066
__________________________________________
Address of principal executive offices
Registrant's telephone number: (650) 588-2678
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On May 12, 1999, a change in control of the Company
occurred, in conjunction with closing under a Reorganization and
Stock Purchase Agreement. On that date, the Company first
completed a 3.5:1 forward split, increasing its issued and outstanding
shares of common stock from 1,260,000 to 4,410,000. Following
that forward split, the Company issued 6,590,000 newly issued shares
of common stock from the Company to Scott L. Kelly, trustee of the
Kelly Family Trustee, and Administrative Systems Corp. ("ASC"),
solely in exchange for 2,500 shares of M & A West, Incorporated,
constituting all issued and outstanding shares of common stock of M
& A West, Incorporated As a result of that transaction, M & A
West, Incorporated became a wholly owned subsidiary of the
Company.
Also on May 12, 1999, persons designated by M & A West,
Incorporated purchased a total of 986,220 shares from Mark DiSalvo,
a principal shareholder of the Company.
On May 13, 1999, certain persons, who are not affiliates of M
& A West, Incorporated, purchased an additional 2,983,780 shares, or
approximately 27.13%, from the Company.
As a result of these transactions, the Company now has
11,000,000 issued and outstanding common stock, of which 7,576,220
shares, or approximately 68.6%, are owned by Scott L. Kelly,
Trustee of the Kelly Family Trust and ASC. Persons who were
previously shareholders of the Company own a total of 440,000 shares
or approximately 4%.
M & A West, Incorporated is engaged in the business of
investor relations, and will continue its existing operations as a wholly
owned subsidiary.
In conjunction with the change in ownership of a controlling
interest in the stock of the registrant, the previous officers and
directors of the registrant resigned and appointed new officers and
directors designated by the purchasers. The newly appointed officers
and directors are:
<TABLE>
<CAPTION>
Name Position
<S> <C>
Scott L. Kelly President/Director
Zahra Gilak Secretary/Treasurer/Director
</TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Consolidated financial statements at May 31, 1999 and for
the years ended May 31, 1999 and 1998 are attached.
<PAGE>
M & A WEST, INC.
<TABLE>
<CAPTION>
Index to Financial Statements
<S> <C>
Report of Independent Public Accountants 6
Consolidated Balance Sheet 7
Consolidated Statements of Operations 8
Consolidated Statements of Cash Flows 10
Notes to Financial Statements 12
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
M & A West, Inc.
We have audited the accompanying consolidated balance sheet of M &
A West, Inc. as of May 31, 1999, and the related consolidated
statements of operations and cash flows for each of the two years then
ended. 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 audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we 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. We believe that our audit provides 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 M & A West,
Inc. as of May 31, 1999, and the consolidated results of its
operations, and cash flows for each of the two years then ended in
conformity with generally accepted accounting principles.
Denver, Colorado
August 10, 1999
<PAGE>
M & A West, Inc.
CONSOLIDATED BALANCE SHEET
May 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents 1,141,813
Accounts receivable - clients 10,000
Marketable securities held for
trading 573,976
Investments - at equity 426,558
Investments - at cost 327,000
Employee advances 8,000
TOTAL CURRENT ASSETS: 2,487,347
OTHER ASSETS:
Deferred income tax asset 12,110
Property and equipment, net
of depreciation 20,584
TOTAL ASSETS 2,520,041
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 114,127
Income taxes payable 168,000
Payroll taxes accrued and
payable 25,912
TOTAL CURRENT LIABILITIES 308,039
STOCKHOLDERS' EQUITY
Common stock, no par value;
100,000,000 shares authorized;
11,000,000 shares issued and
outstanding 2,020,538
Retained earnings 191,464
Total equity 2,212,002
TOTAL LIABILITIES AND EQUITY 2,520,041
</TABLE>
The accompanying notes are an integral part of these financial statements.
M & A West, Inc.
STATEMENTS OF OPERATIONS
For the years ended May 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
REVENUE
Commission income 602,087 97,033
Trading gains and losses 1,224,932 -
TOTAL REVENUE 1,827,019 97,033
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Advertising 258,579 3,859
Employee business expenses 119,003 10,286
Consultants 422,298 5,625
Payroll 153,885 3,261
Other selling, general and
administrative expenses 544,358 27,400
TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
1,498,123 50,431
Income from operations 328,896 46,602
OTHER INCOME (EXPENSE)
Interest income 364 -
Unrealized investment gains
and losses on trading securities,
net (6,483) 15,345
Equity in loss of unconsolidated
subsidiary (37,370) -
TOTAL OTHER INCOME (EXPENSE) (43,489) 15,345
NET INCOME BEFORE INCOME TAX 285,407 61,947
Income tax expense (128,690) (27,200)
NET INCOME 156,717 34,747
RETAINED EARNINGS
Balance, beginning of year 34,747 -
Balance, end of year 191,464 34,747
Net income per share .01 .0
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 10,582,904 10,560,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
M & A West, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended May 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income 156,717 34,747
Adjustments to reconcile net loss
to net cash flows from operations:
Unrealized (gain) loss on investments 6,483 (15,345)
Equity in loss of unconsolidated subsidiary 37,370 -
Depreciation 4,071 -
Deferred income taxes (12,110) 6,750
Equity securities - trading (538,548) (26,566)
Accounts receivable (10,000) -
Employee advances 13,000 (21,000)
Accounts payable 114,029 98
Bank overdraft (866) 866
Other current liabilities 166,712 20,450
Net cash used in operations (63,142) -
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (4,117) -
Purchase of investments (790,928) -
Net cash used by investment activities (795,045) -
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of stock for cash 2,000,000 -
Net cash provided by financing activities 2,000,000 -
Net increase in cash and equivalents 1,141,813 -
CASH AND CASH EQUIVALENTS
Beginning of year - -
CASH AND CASH EQUIVALENTS
End of year 1,141,813 -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES AND OTHER CASH INFORMATION
During the year ended May 31, 1999, management of the Company
contributed fixed assets totalling $20,538 to the Company as an equity
investment.
Cash paid for interest 16 -
Cash paid for income taxes - -
</TABLE>
The accompanying notes are an integral part of these financial statements.
M & A West, Inc.
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business:
M & A West, Inc. is engaged in providing public relations
consulting services primarily to public companies, and in the trading
of equity securities for its own account. On May 12, 1999, M & A
West, Inc., a Nevada corporation, underwent a share exchange with
Buffalo Capital IV, Ltd., a publicly traded shell company, in a
transaction more fully described in Note 3, whereby M & A West
become a wholly owned subsidiary of Buffalo Capital IV, Ltd.
Immediately after the transaction, Buffalo Capital IV, Ltd. changed its
name to M & A West, Inc. All references to "the Company" in these
financial statements refer to M & A West, Inc., the Nevada
corporation, prior to May 12, 1999, and to the consolidated entity
from May 12 forward.
Basis of accounting
The accompanying financial statements of M & A West, Inc.
are prepared using the accrual basis of accounting in which revenues
are recognized when earned, and expenses are recognized when
incurred.
Principles of Consolidation
The accompanying consolidated financial statements of M & A
West, Inc., include the Company, a Colorado corporation, and its
wholly owned subsidiary, a Nevada corporation. All material
intercompany transactions and balances have been eliminated in
consolidation.
Marketable Securities and Investments
The Company holds investments in marketable equity securi-
ties. Investments held for trading purposes are represented at market
value, with realized and unrealized gains and losses on the
investments recognized in earnings during the period incurred.
Investments in which the Company has significant influence, but not
voting control, are accounted for at original cost, as adjusted for the
Company's share of the investee's gains and losses. Investments in
non-trading equity securities are considered available for sale, and are
accounted for at cost, which approximates market. There were no
sales of available-for-sale securities during the periods presented.
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 reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during each period presented. Actual results
could differ from these estimates.
Property and Equipment
The Company's property and equipment, consisting of
computers and equipment supporting the administrative function, are
stated at cost. Depreciation is provided using the straight line method
over estimated useful lives of 5 to 7 years.
Advertising
Advertising costs are expensed as incurred.
Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
Income Per Share
Income per share has been calculated using the weighted
average number of shares outstanding. Shares issued in the share
exchange transaction have been treated as outstanding since the
beginning of the period. Shares remaining with the original
shareholders of Buffalo Capital IV, Inc. have been treated as
outstanding since May 12, 1999. All per share amounts have been
restated to reflect stock splits and the share exchange ratio applicable
to the share exchange transaction.
2. RELATED PARTY TRANSACTIONS
For the year ended May 31, 1999, the Company's offices were
leased from the Company's Chief Executive Officer on a month-to-
month basis for monthly payments of $1,811.
Effective May, 1999, the Company leased space from its Chief
Financial Officer on a month-to-month basis for $692 per month.
3. STOCKHOLDERS' EQUITY
Authorized Capital
The Company's capital consists of 100,000,000 authorized
common shares, no par value, of which 11,000,000 shares were
issued and outstanding at May 31, 1999.
Reorganization and Stock Purchase
On May 12, 1999, a change in control of the Company
occurred, in conjunction with closing under a Reorganization and
Stock Purchase Agreement. On that date, the Company first
completed a 3.5:1 forward split, increasing its issued and outstanding
shares of common stock from 1,260,000 to 4,410,000. Following
that forward split, the Company issued 6,590,000 newly issued shares
of common stock to Scott L. Kelly, trustee of the Kelly Family Trust,
and Administrative Systems Corp. ("ASC"), solely in exchange for
2,500 shares of M & A West Incorporated, constituting all issued and
outstanding shares of common stock of M & A West, Incorporated.
As a result of that transaction, M & A West, Incorporated became a
wholly owned subsidiary of the Company.
Also on May 12, 1999, persons designated by M & A West,
Incorporated purchased a total of 986,220 shares from Mark DiSalvo,
a principal shareholder of the Company.
On May 13, 1999, certain persons, who are not affiliates of M
& A West Incorporated, purchased an additional 2,983,780 shares, or
approximately 27.13%, from the Company for total proceeds of
$2,000,000.
As a result of these transactions, the Company now has
11,000,000 issued and outstanding shares of common stock, of which
7,576,220 shares, or approximately 68.6%, are owned by Scott L.
Kelly, Trustee of the Kelly Family Trust and ASC. Persons who
were previously shareholders of Buffalo Capital IV, Ltd., own a total
of 440,000 shares or approximately 4%.
Preferred Stock
The Company is authorized to issue up to 10,000,000 shares of
Preferred Stock, with rights and privileges to be determined by the
Board of Directors. No preferred shares were issued and outstanding
at May 31, 1999.
Options and Warrants
In connection with the share exchange transaction described
above, the Company cancelled previously outstanding warrants to
purchase common shares. At May 31, 1999, no options or warrants
were outstanding to purchase the Company's common shares.
4. INCOME TAXES
The Company records deferred taxes for the effects of
unrealized gains and losses on marketable equity securities which are
recognized in income for tax purposes only when realized. The
Company's deferred tax assets and liabilities at May 31 consist of the
following:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C
Deferred tax asset (liability) 12,110 (6,750)
Valuation allowance - -
Total deferred tax asset (liability) 12,110 (6,750)
The Company's tax provision for each year is as follows:
Income taxes currently payable 147,550 20,450
Increase (decreased) in deferred taxes (18,860) 6,750
Total income tax expense 128,690 27,200
The difference between the Company's effective tax rate for financial reporting
purposes and federal statutory rates applied to pretax financial statement
income is reconciled as follows:
Federal statutory rate 34.0% 16.9%
State taxes 09.0% 09.0%
Penalties and other 02.0% 18.0%
Total effective tax rate 45.0% 43.9%
</TABLE>
5. INVESTMENTS
Investments at Equity
The Company has an approximate 21% investment in
VirtualLender.com at May 31, 1999, which is accounted for using the
equity method, whereby the Company's investment is increased by
gains and additional investments, and decreased by losses and
distributions. The following is a summary of the financial position
and operating results of Virtuallender.com as of May 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Current Assets 180,913
Property and equipment 260,266
Other assets 65,570
506,749
Total liabilities 3,748
Total stockholders' equity 503,001
Total revenue 11,135
Net loss 78,819
</TABLE>
The Company's total investment in Virtuallender.com at May 31,
1999, consists of 5,869,300 shares of Virtuallender.com common
stock. Of this amount, approximately 4,600 shares are included in
trading securities at May 31, 1999, at a market value of $29,900.
Market value for the remaining shares which constitute the
Company's investment at equity, based upon the closing bid for
Virtuallender.com at May 31, 1999, totalled $38,120,550, before
application of discounts for liquidity or current trading restrictions.
Investments in Other Equity Securities
The Company has invested in equity securities of companies
for which no established trading market exists at May 31, 1999.
These securities are stated at cost that does not exceed the estimated
net realizable value.
6. FIXED ASSETS
The Company's property and equipment consists of the
following at May 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Computers 16,613
Office furniture 8,042
24,655
Less accumulated depreciation 4,071
20,584
</TABLE>
7. CONCENTRATIONS.
At May 31, 1999, the Company had cash in excess of federally
insured limited of approximately $1,176,000.
For the year ended May 31, 1999, the Company realized
trading gains of approximately $1,000,000 from sales of securities of
a single entity.
8. LITIGATION
M & A West, Inc., the Nevada corporation, has been named
as a party in a lawsuit filed by Mortgage Intertechnologies against M
& A West, Inc. and others. The litigation (Case No. C-99-2183 CW
in the United States District Court, Northern District of California)
seeks to enjoin parties from the utilization of the name VirtualLender.
The application for a temporary restraining order was denied by the
Court on the grounds that the Plaintiffs were not likely to prevail.
Management considers this suit without merit and has accrued no
provision for loss in the matter at May 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
M & A West, Inc.
(Registrant)
August 17, 1999
(Date)
/s/__________________
Scott Kelly, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-END> MAY-31-1999
<CASH> 1,141,813
<SECURITIES> 1,327,534
<RECEIVABLES> 10,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,487,347
<PP&E> 24,655
<DEPRECIATION> 4,071
<TOTAL-ASSETS> 2,520,041
<CURRENT-LIABILITIES> 308,039
<BONDS> 0
0
0
<COMMON> 2,020,538
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,520,041
<SALES> 0
<TOTAL-REVENUES> 1,827,019
<CGS> 0
<TOTAL-COSTS> 1,498,123
<OTHER-EXPENSES> 43,489
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 285,407
<INCOME-TAX> 128,690
<INCOME-CONTINUING> 156,717
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,717
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
