U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from ___________________ to ________________
Commission file number: 0-26457
Marina Capital, Inc.
(Name of small business issuer in its charter)
Utah 87-0554016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2605 Wall Ave., Odgen, Utah 84401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (801) 394-2400
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, .001 par value
(Title of class)
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 X No
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of 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 10KSB. [ ]
Issuer's revenues for its most recent fiscal year: $35,334.00
Aggregate market value of voting stock held by non-affiliates of the issuer
as of: 12/31/99: $0
Number of shares of common stock, .001 par value, outstanding on 12/31/00
was 4,058,774
DOCUMENTS INCORPORATED BY REFERENCE
Transitional Small Business Disclosure Format: Yes ; No x
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Marina Capital, Inc.
FORM 10-KSB
TABLE OF CONTENTS
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 2. DESCRIPTION OF PROPERTY
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ITEM 7. FINANCIAL STATEMENTS
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
ITEM 10. EXECUTIVE COMPENSATION
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
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PART I
Item 1. Description of business
This report on Form 10-KSB contains forward-looking statements that involve
risks and uncertainties. Marina Capital, Inc.'s actual results may differ
significantly from the results discussed in the forward-looking statements.
Forward-Looking Information-General
This report contains a number of forward-looking statements, which reflect
Marina's current views with respect to future events and financial performance
including statements regarding Marina's projections, real estate projects and
real estate investments. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results or those anticipated. In this report, the
words "anticipates", "believes", "expects", "intends", "future", "plans",
"targets" and similar expressions identify forward-looking statements. Readers
are cautioned to not place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof Marina undertakes no
obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that may arise after the date hereof.
Additionally, these statements are based on certain assumptions that my prove to
be erroneous and are subject to certain risks including, but not limited to,
Marina's dependence on limited cash resources, and its dependence on certain key
personnel within Marina. Accordingly, actual results may differ, possibly
materially, from the predictions contained herein.
Background of the Company
Marina Capital, Inc. ("Marina") was incorporated in the State of Utah on the 5th
day of March, 1996, as a Subchapter-S Corporation. The Subchaper-S Corporation
election was terminated by Marina as of January 1, 1997. Marina established a
C-Corporation in place of the Subchapter-S Corporation on January 1, 1997.
Marina is considered as being in the development stage.
Marina is, and has been for the past three years, a development stage company
that is in the business of real estate development, real estate sales, mortgage
brokering, land planning and business consulting. Marina identifies and
develops specific parcels of real property in various locations within the State
of Utah and other geographical locations. The real property may be acquired
through outright purchases, lease, options or through other acceptable
arrangements. In addition, Marina in some instances may act as a lender,
broker, marketer or business consultant for other companies.
Marina is a development stage Company which is comprised of a group of highly
experienced professionals, specializing in real estate planning, development,
sales, mortgage banking, marketing, consulting, acquisitions and business
development. The management group has accumulated over 100 years of combined
experience in providing services in the areas of management, accounting,
advertising, marketing, land planning, legal, mortgage banking, real
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estate sales, real estate development, and the raising of capital through equity
and debt financing. Thus, Marina is uniquely structured to operate as a real
estate developer, broker, mortgage lender, principal, facilitator, marketer,
consulting and joint venture partner.
Marina specializes primarily in the development of real estate projects and real
estate sales in the State of Utah but will consider other geographical areas as
opportunities arise. Marina develops its own residential, recreational and
commercial projects as well as provides consulting and professional services for
other developers.
Marina is also the manager of Marina Holding, LLC, a Utah Limited Liability
Company and is the sole member. Marina Holding, LLC is the manager of Shupe-
Williams Plaza, LLC, a Utah Limited Liability Company. Shupe-Williams Plaza,
LLC, is the owner (by Warranty Deed) of the Shupe-Williams property located at
2605 Wall Avenue, Ogden, Utah.
Marina has several projects in various stages of development; however, most of
these projects are still in the planning stages and major development has not
commenced. Marina has begun construction of the Shupe-Williams building, but
has not completed the build out or sales of the property.
Divisions
Marina is composed of three divisions: (a) Marina Capital Development Services-
land planning/engineering and consulting; (b) Marina Capital-real estate sales
and marketing, at this time, has generated a total sales volume of $1,553,390
between twelve properties representing $58,074 in commissions; and (c) Marina
Capital Mortgage-originating, processing and funding construction and mortgage
loans division, has not, as yet, been developed by Marina. However, Marina
proposes to develop this division in the year 2000.
Marina began its real estate sales business in January of 1997, opening the
Ogden, Utah office in March of 1997, and the San Francisco office in April,
1998. Marina has four real estate sales associates.
The Market
Utah's business growth over the past several years has been extensive. With the
selection of Salt Lake City as the site of the 2002 WINTER OLYMPIC GAMES, the
State's robust economy, job creation and excellent quality of life, Utah
continues to generate national attention. Such rapid economic growth gives rise
to continued real estate development and growth. Demand for commercial,
residential, and recreation property continues to outpace supply, despite
record-breaking new construction and development.
The real estate market presents numerous opportunities. Marina has positioned
itself in such a way as to be able to take advantage of the expected continued
growth throughout the next decade, keeping in mind environmental issues and
concerns, as well as community needs and desires.
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In the past decade, a large number of new high-technology companies have
commenced and prospered in the Salt Lake City/Provo/Ogden, Utah areas. With
these new endeavors has come a well-educated work force. Numerous construction
and service businesses have converted the area into a metro-plex of nearly 2
million people. Utah's growth over the past several years has been extensive.
There are many indications that the growth will continue over the next five
years.
Utah's current employment boom is unprecedented in terms of the number of years
of continued growth and the rates of increase. In 1996, Utah's job growth rate
was 5.3 percent, ranking second among all states. Utah's job growth rate has
now equaled or exceeded 3.0% for nine consecutive years and exceeded 5.0% in
four straight years. Never before in Utah's post World War II economic history
has employment increased at rates this high for such a sustained period.
The expansion of private sector jobs has fueled Utah's recent economic
prosperity. Since 1986, Utah added 321,700 jobs, with 92% of the growth
occurring in the private sector. Private sector employment increased from 78%
of total employment to 83%. The fastest growing segments have been in the
construction (6.6%), and services (6.4%) industries.
Outlook. Utah's current economic prosperity is expected to continue through
1999 and beyond. Utah's young and educated work force, strong work ethic, and
low business costs help businesses succeed in Utah. The State government has
also successfully kept business taxes low and fostered a reasonable regulatory
environment. The substantial infrastructure investments slated to occur during
the next year, and subsequent years, will continue to benefit the State's
economy. Perhaps the most important feature of the 1998 forecast has been the
prognosis for Utah's current construction boom, which is in its seventh year of
double-digit employment growth rates. The State Economic Coordinating Committee
expects construction to remain at historically high levels in 1999.
Construction projects of $25 million or more will proceed through 1999 which
includes such large projects as the reconstruction of Interstate 15, completion
of the Bangerter Highway, Light Rail, Snowbasin Ski Resort, Kennecott Tailings
Project, the State Courts Complex, Huntsman Cancer Institute, Orem Medical
Center, the Central Utah Project, Micron's computer Chip Factory, State of Utah
Justice Center, American Towers and Gateway buildings in downtown Salt Lake
City, Thanksgiving Point, Orem Medical Center, Weber Center, West Valley Hockey
Arena, Salt Lake County Jail, Provo One Freedom Center, Murray Corporate Center,
Central Utah Project, Lake Park Corporate Center, Proswood-Pegasus Luxury
Apartments, Geneva's Air Separation plant, Danon's Yogurt Plant, and
continuation of the I-15 Interstate Expansions project.
The State Economic Coordinating Committee expects employment to grow at about
4.2% in 1999. Population is forecast to increase at 2.1%, total wages 8.5%, and
personal income 7.8%. Average wages are expected to grow faster than inflation
for the third consecutive year.
Utah's Long-Term Projections. The demographic attributes that have
characterized Utah in the past (the youthful and rapidly growing population) are
projected to continue well into the next century. The relative strength of the
economy is expected to continue as well, although there will be some convergence
with national demographic and economic trends. Utah's population and employment
growth rates are projected to continue to out-pace those of the nation for the
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1998 through 2020 period. Utah's population is projected to reach 3.3 million
by the year 2020. This rate of population growth will be sustained by a rapid
rate of natural increase and a strong and diversified economy.
The majority of the new Utahns will reside along the Wasatch Front Range. The
most rapid rates of growth are expected in the counties in Southwestern Utah,
Grand County, Summit County and Wasatch County.
In 1998, the combined value of both residential and non-residential construction
rose to 3.8 billion which represented an approximate 2.1% increase over the
previous year. In 1997, the total construction value was approximately 3.72
billion, which represented an 8.1% increase over 1996.
In 1998, there were 21,743 new dwelling permits and in 1997, there were a total
of 20,687 new dwelling permits. In 1996, the value of construction rose 13.5%
to $3.5 billion compared to $3.1 billion in 1995. Both residential and
nonresidential construction reached record levels during1996 with $2.1 billion
in residential construction value and $1billion non-residential construction
value being permitted. New dwelling share permits reached a record level of
23,500. Population growth enhanced by net in-migration, strong economic and job
growth, low vacancy rates, and low mortgage interest rates, all have contributed
to this record year. Several large projects contributed to the record year in
nonresidential construction. These include projects such as the $34.8 million
library at Brigham Young University, the $27 million Prime Option office
building, and the $65 million Court Complex.
Housing prices in Utah over the past five years and in the most recent 12-month
period have increased faster than any other State. From 1991 to 1997, Utah's
house price index, as published by the Office of Federal Housing Enterprise
Oversight, increased by 72.7%. The house price index is derived from repeat
mortgage transactions on single-family homes whose mortgages have been purchased
by the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation. The median sales price of an existing single family home in the
third quarter of 1996 was $123,100 in Utah and $120,500 for the national
average. Home ownership in Utah in 1995 ranked seventh highest in the nation at
73.1%.
The economic statistics cited were derived from the following sources:
* National Geographic, January 1996 issue.
* Salt Lake City Chamber of Commerce annual issue of "Life in the Valley" from
1996, 1997 and 1998.
* Ogden Chamber of Commerce 1997 magazine entitled "Ogden, Awaiting Your
Discovery", 1996 and 1997, "The Ogden Area and Weber County Community and
Business Profile" and 1996 "Ogden, This Is The Place."
* Financial World Magazine February 1997 issue.
* The State of Utah, Governor's Office of Planning and Budget, Demographic and
Economic Analysis - August 1994 "Estimated Economic and Fiscal Impacts on
Utah of the 2002 Winter Olympic Games."
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In some instances Marina will seek to option land, obtain all the necessary
approvals to subdivide these properties, pre-sell lots, exercise purchase
options on land, construct the infrastructure (roads, water, sewer, etc.) and
pay all the development costs in the expectation of realizing a profit. Marina
may elect to sell projects at any time during the approval and development stage
to another purchaser if profits warrant an early sale. In other instances,
Marina may elect to finance other developers for an equity participation and
eventual profits. Marina may also elect to participate in joint ventures with
existing landowners rather than an option or outright purchase of the
properties. On selected projects, Marina may elect to offer financing and
participate in real estate and mortgage lending. Marina proposes to be a fully
integrated Real Estate and Business Development Company with in-house experience
in development, construction, acquisition, marketing, legal, financing and
management.
PROJECTS
1. OlymPeak Estates
* Location: Ogden Valley, Utah, is four miles from Snowbasin Ski Resort
which will be the site of the 2002 Olympic downhill events and one hour
from the Salt Lake City International Airport.
* Use: Phase One - 65 acres zoned for building lots subdivided into 22 view
lots. The lots are priced from $155,000 to $358,000. As of the date of
this Registration Statement, twelve lots have been reserved at a sale
price of between $155,000 to $358,000 per lot for a total market value of
approximately $995,000. Marina has received deposits on these reserved
lots in the amount of $176,000, and the balances will be due upon
closing, which is estimated to be mid-year 2000.
* Phase Two - 365 acres that will have an 18-hole destination golf course
and planned Residential Unit Development (PRUD) 135 single family lots,
35 condominiums, commercial space. Currently, Marina is in negotiations
with another developer to construct the project.
* Financing Required: Phase One - $1.0 million; Phase Two, golf course
construction - $4.0 to $6.0 million; Construct infrastructure - $5.0 to
$8.0 million.
Phase One:
The OlymPeak Estate project consists of 22 view lots located in Ogden Valley
approximately four miles from the Snowbasin Ski Resort.
Preliminary approval was obtained from Weber County on March 14, 1996. The
final approval will be subject to the State of Utah Engineer and Weber County
approval of the water and sewer system by the County.
Marina anticipates that final approval will be granted within three to six
months from the date of this Registration Statement. Upon receiving the final
approval, construction on the roads, water and sewer system will commence and
will take approximately three to six months to complete.
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Twelve of the lots have been reserved at a sale price between $155,000 to
$358,000 per lot.
Marina has prepared the necessary documentation to form a not-for-profit Water
and Sewer District to service the area. The documentation will be submitted to
the State of Utah Engineer for approval within the next ninety days.
Marina exercised its option to purchase the OlymPeak Estate property on October
31, 1996, and entered into a five-year purchase agreement with the Maughan
Family Partnership. Marina executed a Trust Deed and Note for the balance of the
purchase price of $725,000. The original purchase price was $975,000. The
terms of the note are as follows: A five-year note, twenty-year amortization
schedule with annual payments of $75,000 and a balloon payment at the end of the
five-year period for the balance. Marina is current with its $75,221 payments
due to the Maughan Family Partnership. There are two years remaining on the
five-year Agreement with a balance of $634,147 due in the year 2001.
Marina proposes to spend approximately $1,000,000 in the construction of roads,
water and sewer system for Phase One.
Phase Two:
The OlymPeak Village project is a Planned Residential Unit Development (PRUD)
located on approximately 365 acres in Weber County, Utah. The current zoning
for the property is FR-3. OlymPeak Village is a destination resort consisting
of an 18-hole golf course with clubhouse, commercial space, 145 single-family
view lots and 35 condominium units.
The project will include two ski lifts and facilities to teach beginning skiers.
This project will cost approximately $15,000,000 to complete.
OlymPeak Village is located approximately four miles from the Snowbasin Ski
Resort and three miles from Pineview Reservoir. The site has views of Mt. Ogden
to the west and Pineview Reservoir to the east.
The project will be serviced by water from the OlymPeak Estates water system and
by an aerated lagoon sewer system located on the property. The PRUD is a
cluster development that includes commercial development, single-family lots and
homes, golf and ski area plus open space. The cost for infrastructure will be
greatly reduced by clustering and can be further reduced by allowing connections
to third party lot owners along Snowbasin Road.
Marina proposes to identify a joint venture partner or seek financing from
conventional sources in order to finance Phase One and Phase Two of the project.
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II. Shupe-Williams Plaza
Location. Shupe-Williams Plaza at 26th Street and Wall Avenue near Historic
25th Street in downtown Ogden, Utah.
Description. The Shupe-Williams Plaza Building is a four-story building of
approximately 62,500 feet located on an 85,000 square foot building lot. The
building was erected in 1902 and was used as a warehouse and candy manufacturing
facility. The building has been abandoned for 15 years.
Current Zoning. With the assistance of the City of Ogden, the property and
building have been zoned to accommodate both residential and commercial use.
Proposed Use. Marina is currently rehabbing the building and vacant lot. The
main floor will be converted into a restaurant, office and retail use. The
upper floors will be converted to Live/Work lofts. Six penthouse lofts will be
constructed on top of the building.
Status. The Shupe-Williams Plaza property was conveyed to Shupe-Williams Plaza,
LLC by the Ogden City Corporation and the Ogden City Developmental Agency on May
27, 1998. The total purchase price was $100,000. The City has also agreed to
rebate $250,000 in taxes over a five-year period.
Estimated Revenue Phase One: $6,000,000 to $7,500,000
Financing. Marina is in the process of financing the construction phase and
has made application with several financial brokers and institutions. The first
phase of construction was started in September of 1998. Marina expects
construction to be completed within twelve to eighteen months after financing
has been approved. Marina has started to pre-sell and market the lofts.
Currently, 20 of the units have been reserved. A trust account has been set up
to hold reservation deposits until construction of the building is complete. In
addition, several Letters of Intent to Lease Space have been received.
Recent and Significant Developments (Shupe-Williams Plaza)
Marina entered into a Real Estate Purchase Contract on October 8, 1997, with the
City of Ogden, Utah, and Ogden City neighborhood Development Agency to purchase
the Shupe-Williams Building located at 2605 Wall Avenue, including the abandoned
portion of 26th Street. The total purchase price was one hundred dollars
($100.00). The City has also agreed to tax increment rebates totaling $250,000.
The rebate will be made to Marina over a five-year period. The closing date on
the building was May 27, 1998, at which time fee simple title was conveyed to
Marina.
An Agreement was entered into with the Land Development Group of Provo, Utah to
act as developer/consultants for the conversion of the old Shupe-Williams candy
manufacturing building. The building will be converted into a 45 Live/Work
loft-condominium complex plus commercial and retail space. The building was
built in 1902, has four floors (approximately 62,500 sq. ft.) on a two-acre lot.
The proposed sale of the lofts is expected to generate
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approximately $6,000,000 to $7,500,000 in revenue. The Land Development Group
has, in the past, successfully converted buildings in Houston, Texas; San Diego,
California and Salt Lake City, Utah.
In February of 1999, negotiations were initiated with WADMAN INVESTMENTS L.L.C.
to form a joint venture development to construct a four seasons golf and ski
resort on property owned by both parties. In addition, an application has been
applied for with the Utah State Engineer to form a Water and Sewer District to
be jointly managed by WADMAN INVESTMENTS L.L.C. and Marina.
PROJECT FUNDING
OlymPeak Estates:
Marina intends to fund the OlymPeak Estates Project by initially funding the
sale of the lots to qualified purchaser in-house. Marina will offer to
potential purchasers two financing options: 1) Requires a twenty-five percent
down payment, interest rate will be 3 points over prime with a 3-year balloon
payment, a 20-year amortization schedule with a loan origination fee of 2
points. 2) Requires a fifty- percent down payment, an interest rate of 2 points
over prime, 5-year balloon payment, 30-year amortization schedule with a loan
origination fee of 1 1/2 points. neither option will carry a pre-payment
penalty and they will be transferable upon credit approval and a $300.00 fee.
Total sales are estimated to be $4,848,000. The anticipated costs will be
$975,000 for land cost, $1,300,000 infrastructure and $485,000 marketing for a
net profit of $2,090,000. Twelve of the twenty-two lots have been reserved.
Shupe-Williams Plaza:
Marina has made an application, and as of the date of this Registration
Statement, is in negotiations for a $4 million construction loan for the Shupe-
Williams Project, through US Bank's Commercial Real Estate Division. The terms
are: prime + 1 1/2 points and the fees are 1 1/2 points for 24 months. The
advance rate is 75% of the appraisal or 85% of the cost.
Additionally, a loan submittal for an equity financing credit line of $5,000,000
- - $5,500,000 has been pre-qualified by Kilpatrick & Hart, LTD>, Inc., Financial
Specialists. Marina is currently in negotiations to close this credit line
under the following terms and conditions: 1) Purpose of Loan: Renovations of
property and building, construction, advertising, marketing and working/
operating capital. 2) Interest Rate: 10% per annum. Fixed rate. Interest only
and may accrue. 3) Term: Five years, no pre-payment penalty. 4) Investor's Fee:
2% - 3% from proceeds at closing. "Due-diligence costs" to be credited against
fee payable upon funding; expenditures to be pre-approved by borrower. 5)
Collateral: If applicable, pledging of to-be-determined percent of available
company stock. 6) Equity Participation/Investor Internal Rate of Return: To be
determined upon completion of formal due-diligence and mutually agreed upon by
both parties prior to issuance of Firm Commitment to Funding. Subsequent to
repayment of all principal and interest minimum Internal Rate of Return 25% per
annum, including 10% preferred return.
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Business Opportunities
On May 15, 1996, Marina entered into a Letter of Understanding with VR Utah,
Inc., d.b.a. Business Resource Center. The Letter of Understanding sets forth
the terms whereby the parties can assist and cooperate with each other from time
to time in identifying business opportunities that may be of beneficial and
financial interest to each party. VR Utah, Inc. was founded in Ogden, Utah in
September, 1981, by William J. Tabar, who is currently a director of Marina. VR
Utah, Inc.'s purpose, as a business broker, is to assist business owners in the
sale and/or valuation of its clients' businesses. it provides expertise in the
valuation and marketing of businesses. VR Utah, Inc. also provides guidance in
the selection and purchase for those clients desiring ownership of a business.
VR Utah, Inc. expended in 1983 to include offices in downtown Salt Lake City and
Murray, Utah. In 1990, an additional location was opened in St. George, Utah.
Business Resource Center is a member of International Business Brokers
Association, which has over 800 members. Since its founding, VR Utah, Inc. has
brokered the sale of approximately one thousand businesses.
In many instances, VR Utah's clients and customers require consulting services.
The consultation may include financing options for equity, debt or a combination
of both. Marina may seek to assist businesses which have recently commended
operation, development stage companies in need of additional capital for
expansion into new markets, businesses seeking to develop a new product or
service, and established businesses which may be experiencing financial or
operating difficulties and are in need of additional capital. In addition to
those businesses that VR Utah, Inc. may refer to Marina, Marina believes that
there are numerous other business entities which will benefit from the infusion
of capital. Thus, Marina believes ample business opportunities exist outside
the real estate area; however, as of the date of this Registration Statement,
Marina has not generated any revenues from the VR Utah business opportunity.
Marina proposes to charge a fee for business consulting services. The
compensation may be in the form of a consultation fee, an equity position in the
business or a combination of both.
Real Estate Investment and Proposed Project
Ski Inn at Powder Mountain
Location. The Ski Inn at Powder Mountain property is located in Northern Utah,
Cache County, and is adjacent to the main parking lot at Powder Mountain Ski
Resort, eight miles from Eden, Utah. The property is located one hour from the
Salt Lake City International Airport and thirty minutes from Ogden, Utah.
Description. The proposed Ski Inn at Powder Mountain project is located on a
two-acre parcel of mountainous unimproved land with access through the Powder
Mountain Resort parking lot. The ski lifts and trails can be skied directly to
and from the property.
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Current Use. The property is currently zoned FR-40 (conditional use permit.)
Proposed Use. Marina proposes to construct a Hotel/Condominium consisting of 48
units for sale or rent.
Marina exercised its option on December 31, 1996, and in an arms length
transaction, acquired the property from the Ski Inn at Powder Mountain Limited
Partnership. The Ski Inn at Powder Mountain Limited Partnership purchased the
property in April of 1978 for $10,000. Mr. Larry Walker, an Office and Director
of Marina, was the General Partner of the Limited Partnership. The Limited
Partnership received 60,000 shares of Marina's $.001 par value Common Stock in
consideration for the properties valued at $120,000. Marina proposes to
allocate approximately $50,000 for the necessary entitlement work which includes
the submittal to the local, county or state regulatory authority the geological
date, surveys, conceptual plans and drawing, in order to obtain a construction
building permit.
Competition.
Marina may face direct competition from other business and real estate
development projects in the area, and it is possible that additional competitors
will enter Marina's market. The real estate industry is highly competitive and
consists of several medium and large companies who are better financed than
Marina. These competitive properties may be priced lower than the price at
which the property will be sold; and, in some instances, may have amenities
superior to those of Marina's property. In addition, there may be other real
estate sales offices that may have more real estate sales people and have a
better marketing plan. There can be no assurance that Marina will be able to
compete successfully with present or future competitors.
Regulation
Marina is not subject to any governmental regulations other than those generally
applicable to all businesses. However, Marina is regulated to the extent it
deals with Federal, State and local governments regarding entitlements such as
water, sewer, zoning and other utilities.
Employees
Marina presently has four full-time employees and four real estate agents.
Marina does not currently employ a mortgage loan originator, but additional
employees will be hired as necessary to provide Marina's services and carry on
its operations as Marina expands.
Item 2. Description of Property
Marina's corporate office is located in Ogden, Utah along with associates
located in San Francisco, California; Denver, Colorado; Boston, Massachusetts;
Lake Tahoe, Nevada; England and Scotland.
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Currently, Marina maintains its corporate office at 2605 Wall Avenue, Ogden,
Utah. The office space is approximately 1,500 sq. Ft. in the Shupe-Williams
Plaza Building. Marina owns the Shupe-Williams Plaza property and pays no rent
for the office space it utilizes.
Item 3. Legal Proceedings
There are no lawsuits filed against Marina or pending as of December 31, 1999.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fourth quarter of the fiscal year ended
December 31, 1999 covered by this report to a vote of security holders, through
the solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
There is no public trading market where Marina's common shares are traded.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Marina, as of the date of the Form 10-KSB, had several projects in varying
degrees of development:
I. The OlymPeak Estates Subdivision Project is currently in the final plan
phase and the projected schedule for obtaining permits are: 1) Public culinary
water system to include State Division of Drinking Water approval, well
development and the formation of a water company. These tasks are all currently
being addressed, and approval is expected on or before May 1, 2000. 2) Sewer
system plans and approvals - Marina is currently working with State and County
officials on an aerated lagoon sewage treatment facility. Conceptual design has
been completed, and final construction design and approvals is anticipated to be
completed by May 1, 2000. 3) Construction drawings are currently being
finalized by the engineers. Final plans are anticipated to be completed on or
before April 1, 2000. 4) Final plat is anticipated to be completed on or before
May 2, 2000. 5) application survey for final plan approval from the County will
be submitted on or before May 1, 2000, and final approval is expected on or
before June 1, 2000. 6)Construction of subdivision roads and infrastructure
should begin on or before July 1, 2000, or as weather permits.
Marina has made application and is in the process of negotiating for a $4
million construction loan for the Shupe-Williams Project through US Bank's
Commercial Real Estate Division; and a loan submittal for an equity financing
credit line of $5,000,000 - $5,500,000 has been pre-qualified by Kilpatrick &
Hart, LTD., Inc., Financial Specialists.
13
<PAGE>
II. Powder Mountain: Marina proposes to construct a Hotel/Condominium
consisting of 48 units for sale or rent. However, Marina has not, as yet, begun
development; and it is still in the review stage. The lot may either be sold or
developed in the future.
III. The Sanpete Development Project has been abandoned.
IV. Shupe-Williams Plaza is currently in the early stages of construction.
The first floor has been partially renovated with one unit completed and a
second unit under construction on the second floor.
While Marina has taken options and deposits on sales of OlymPeak lots and Shupe-
Williams Live/Work loft units, final sales will not be realized until
completion, which may not take place until the following year. Revenues are not
expected to be significant until that time.
The financial statements for the six months ended June 30, 1999, reflect an
increase in sales commissions of $5,700 due to the sale of one parcel of real
estate to an unrelated party. Operating expenses increased by $81,211. The
largest expense was wages of $61,350. There was a $15,000 expense for writing
off the Sanpete project. The balance of expenses of $4,861 was for various
office and operating expenses.
In 1998, Marina was funding development of 3 projects:
1. OlymPeak Estates - Snowbasin Land: $66,429 was spent on planning, land
design, permits and fees, and water and sewer development.
2. Sanpete Development: $4,275 was spent on planning and land design.
3. Shupe-Williams Plaza: $131,405 was spent on planning, architectural design,
paint and asbestos removal, fire system, and building a model unit.
In addition, Marina had overhead expenses of $341,171. This included salaries
of $171,919, travel $26,763, professional fees $27,147 and other expenses of
$115,342. These expenses were incurred in promoting and operating Marina.
As of December 31, 1998, Marina had cash totaling approximately $214,442.
During the fiscal years ending December 31, 1998 and 1997, Marina expended
$477,099 and $441,517 respectively to fund operations. In addition, Marina has
expended $714,728 on land purchases and development.
Marina, over a twelve-month period between April 1, 1999, to March 31, 2000,
anticipates incurring operation expenses of approximately $425,000 and $18,000
in debt service which is the principal reduction on the Maughan Note. This
expenditure was incurred by Marina in September of 1999. The Maughan Note had
an initial term consisting of a five-year repayment schedule. Marina is in year
four of this repayment schedule. Annual payments of principal and interest of
$75,221 are due in October of each year. Marina is current on payments. There
are two remaining payments, $75,221 in October 2000 and the balance of $634,147
due in October
14
<PAGE>
of 2001. It is expected that Marina's current cash position will be sufficient
to satisfy its cash requirements for the next six months. Additional cash will
be required to sustain operations.
Marina will be required to raise substantial additional financing in future
years. There can be no assurance that such funds will be sufficient in the near
term or that conditions and circumstances described herein may not result in
subsequent cash requirements by Marina in the immediate future just to sustain
operations. In the event of such developments, attaining financing under such
conditions may not be possible, or even if additional capital may be otherwise
available, the terms on which such capital may be available may not be
commercially feasible or advantageous.
During the next twelve months, Marina does not expect to make any significant
purchases of plant or equipment. Investments in development projects will
continue as cash availability permits.
Marina does not anticipate any significant changes in its number of employees
during the next twelve months.
Marina has reviewed the primary operations of its core business and does not
anticipate any problems with Year 2000 Compliance. Marina's operation is not
reliant upon the proper functionality of any computer system other than those
used by third party vendors. Marina believes that its banking relationships,
transfer agent and title companies are Year 2000 Compliant. Should any of these
third party vendors not be Year 2000 Compliant, Marina will experience little to
no adverse material impact on its cash flow or prohibit its ability to continue
operations.
Item 7. Financial Statements
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
15
<PAGE>
INDEX
Page
Independent Auditor's Report 1
Consolidated Balance Sheets 2 - 3
Consolidated Statements of Operations 4 - 5
Consolidated Statements of Cash Flows 6 - 7
Consolidated Statements of Stockholders' Equity 8
Consolidated Notes to Financial Statements 9 - 23
16
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
Marina Capital, Incorporated
We have audited the accompanying consolidated balance sheets of Marina Capital,
Incorporated, (a development stage enterprise), a Utah corporation, as of
December 31, 1999 and 1998 and the related consolidated statements of
operations, stockholders' equity, and cash flows for the 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 audits.
We conducted our audits 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 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 Marina Capital, Incorporated as
of December 31, 1999 and 1998 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Davis, James, & Chase-Kraaima
Certified Public Accountants
Ogden, Utah
February 15, 2000
17
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
December 31, December 31,
1999 1998
CURRENT ASSETS
Cash - unrestricted $ 15,714 $ 166,342
Escrow deposits 45,100 51,100
Accounts receivable 0 15,000
Deposits 220 220
TOTAL CURRENT ASSETS 61,034 232,662
OTHER ASSETS
Office equipment (net) 4,897 4,101
OlymPeak Estates land 1,284,242 1,242,190
Powder Mountain land 96,000 96,000
Sanpete development 0 10,402
Shupe-Williams Plaza 287,986 151,417
TOTAL OTHER ASSETS 1,673,125 1,504,110
TOTAL ASSETS $1,734,159 $1,736,772
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued interest $ 50,614 54,631
Accounts payable 8,926 16,576
Payroll taxes payable 2,200 1,001
Note payable - Maughan 19,546 17,951
Note payable - Coombs 30,000 0
Trust deposits 45,100 51,100
TOTAL CURRENT LIABILITIES 156,386 141,259
See accompanying notes and accountants' report.
Fwd ...(2)
18
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 1999 AND 1998
December 31, December 31,
1999 1998
LONG-TERM LIABILITIES:
Note payable $ 674,853 $ 694,181
Less current portion (19,546) (17,951)
TOTAL LONG-TERM LIABILITIES 655,307 676,230
TOTAL LIABILITIES 811,693 817,489
STOCKHOLDERS' EQUITY
Common stock - 30,000,000 shares $.001
par value authorized 4,058,774 shares
issued 2,064,674
3,863,205 shares issued 1,634,101
Preferred stock - 5,000,000 shares no
par value authorized 84,259 shares
issued 240,778 240,778
Deficit accumulated in the
development stage (1,382,986) (955,596)
TOTAL STOCKHOLDERS' EQUITY 922,466 919,283
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,734,159 $1,736,772
See accompanying notes and accountants' report.
(3)
19
<PAGE>
<TABLE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Year Year Memo Only
Ended Ended March 5, 1996
December 31, December 31, (inception) to
1999 1998 December 31, 1999
<S> <C> <C> <C>
REVENUE
Real estate sales commissions $ 34,134 $ 3,642 $ 94,306
Rent - land 1,200 2,100 3,300
Gain on sale of Ski Inn land 0 15,000 15,000
TOTAL REVENUE 35,334 20,742 112,606
OPERATING EXPENSES
Abandoned projects 25,402 1,781 27,184
Accounting 13,697 8,767 36,519
Advertising and promotion 946 9,679 13,712
Commissions 19,772 9,307 70,539
Consulting 9,714 5,765 198,546
Dues and registrations 2,599 1,082 8,250
Legal 19,659 12,615 68,120
Office expenses 16,360 18,298 50,583
Miscellaneous 10,039 2,336 17,822
Rent 999 10,084 28,898
Taxes 17,361 20,778 56,033
Travel & entertainment 16,554 26,763 75,455
Telephone 9,116 15,460 38,287
Salaries 232,906 171,919 602,634
Insurance 18,477 5,645 32,537
Auto 27,819 20,436 66,075
Depreciation 1,101 456 1,557
TOTAL OPERATING EXPENSES 442,521 341,171 1,392,751
NET LOSS FROM OPERATIONS (407,187) (320,429) (1,280,145)
OTHER INCOME AND (EXPENSES)
Interest income 7,291 2,874 11,743
Interest expense (27,494) (52,240) (114,584)
TOTAL OTHER INCOME AND (EXPENSE) (20,203) (49,366) (102,841)
</TABLE>
See accompanying notes and accountants' report.
Fwd ...(4)
20
<PAGE>
<TABLE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Year Year Memo Only
Ended Ended March 5, 1996
December 31, December 31, (inception) to
1999 1998 December 31, 1999
<S> <C> <C> <C>
NET LOSS $(427,390) $(369,795) $(1,382,986)
BASIS LOSS PER SHARE $(.11) $(.10)
WEIGHTED AVERAGE COMMON SHARES 3,960,990 3,697,487
</TABLE>
See accompanying notes and accountants' report.
(5)
21
<PAGE>
<TABLE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Year Year Memo Only
Ended Ended March 5, 1996
December 31, December 31, (inception) to
1999 1998 December 31, 1999
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(427,390) $(369,795) $(1,382,986)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Changes in operating assets and liabilities
Accounts receivable 15,000 (220) (220)
Accounts payable and accrued expenses (10,468) (38,719) 61,740
Depreciation 1,101 456 1,557
Net cash provided (used) in operating activities (421,757) (408,278) (1,319,909)
INVESTING ACTIVITIES
Sale of land 0 24,000 24,000
Real estate development (168,219) (202,109) (1,692,228)
Purchase of equipment (1,897) (2,718) (6,454)
Net cash provided (used) in investing activities (170,116) (180,827) (1,674,682)
FINANCING ACTIVITIES
Proceeds from debt 30,000 0 1,192,000
Principle payments on debt (19,328) (64,819) (487,147)
Proceeds from sale of common stock 430,573 774,989 2,064,674
Proceeds from sale of preferred stock 0 30,000 240,778
Net cash provided in financing activities 441,245 740,170 3,010,305
Change in cash (150,628) 151,065 15,714
Cash at beginning of period 166,342 15,277 0
Cash at end of period $ 15,714 $ 166,342 $ 15,714
</TABLE>
See accompanying notes and accountants' report.
Fwd...(6)
22
<PAGE>
<TABLE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Year Year Memo Only
Ended Ended March 5, 1996
December 31, December 31, (inception) to
1999 1998 December 31, 1999
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES
Non-cash investing activities - None
Operating activities reflect
Interest $ 31,510 $ 49,366
Taxes $ 0 $ 0
</TABLE>
For purposes of the statements of cash flows, the Company considers all short
term instruments purchased with a maturity of three months or less to be cash
equivalents. There were no cash equivalents at December 31, 1999 and 1998.
See accompanying notes and accountants' report.
(7)
23
<PAGE>
<TABLE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK PREFERRED STOCK IN THE
NO. OF NO. OF DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT STAGE
<S> <C> <C> <C> <C> <C>
Balance December 31, 1997 3,531,768 $ 859,112 74,259 $210,778 $ (585,801)
Stock issued 331,437 774,989 10,000 30,000 0
Net loss (369,795)
Balance December 31, 1998 3,863,205 1,634,101 84,259 240,778 (955,596)
Stock issued 195,569 430,573 0 0 0
Net loss (427,390)
Balance December 31, 1999 4,058,774 $2,064,674 84,259 $240,778 $(1,382,986)
</TABLE>
See accompanying notes and accountants' report.
(8)
24
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. Nature of Business
The company was incorporated in Utah on March 5, 1996. The purpose of
the company is to invest in and develop various real estate and other
business opportunities. The company has several projects in various
stages of development. Marina Capital, Incorporated has formed two
Limited Liability Companies to own and manage the Shupe-Williams
building project. The Shupe-Williams building was purchased by Shupe-
Williams Plaza, LLC for $100 and is its' only asset. Shupe-Williams
Plaza, LLC is 100% owned by Marina Holding, LLC which has no other
assets. Marina Holding, LLC is 100% owned by Marina Capital,
Incorporated. All three companies have been consolidated into these
financials and any intercompany transactions have been eliminated.
B. Income Taxes
The company elected subchapter-S status at inception. This election has
been terminated as of January 1, 1997. There are no tax liabilities at
this time, as the company has loss carryovers of $1,235,326 as of
December 31, 1999. The Company has adopted SFAS No. 109 (See Note 8).
C. Accounting Methods
The company uses the accrual method of accounting. Development and
organization costs are capitalized and amortized or expensed according
to generally accepted accounting principles. Commission revenue and
gains on sales of real estate are recognized as sales are closed.
D. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company was organized by Richard V. Murray and Larry R. Walker. Salaries
and expense allowance have been paid to these individuals. They are currently
working to develop the company with compensation of $6,875 each month.
Fwd...(9)
25
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - RELATED PARTY TRANSACTIONS (CONTINUED)
Year ended Year ended
December 31, December 31,
1999 1998
Salaries and expense allowance paid to
related parties $175,450 $169,200
The Company purchased 65 acres of land called the Snowbasin land from the
Maughan Family Partnership for $975,000 on October 31, 1996 (See Note 15).
Russell Maughan, who is a 1% shareholder and chairman of the Board of Marina
Capital is also a partner in the Maughan Family Partnership. The Company feels
it was an arms-length transaction.
The Company purchased a two acre lot at Powder Mountain from Ski Inn, a company
in which Larry Walker was an owner. The purchase price was $120,000 in stock
(See Note 15).
NOTE 3 - TRUST ACCOUNTS
The Company has four trust accounts maintained at the Bank of Utah. The
Investor's Trust Account is where new investor moneys are deposited. Stock is
issued to investors. The Real Estate Trust Account holds deposits and proceeds
of real estate brokerage transactions. The Shupe Williams Trust holds 19 $1,000
refundable deposits for investors interested in purchasing condo units. The
OlymPeak Trust holds money deposited on OlymPeak lot sales. A liability account
has been set up for all but the investor deposits.
NOTE 4 - NOTES PAYABLE
The Company has the following notes outstanding:
December 31, December 31,
1999 1998
Maughan Family Partnership - 8.25% secured by
Snowbasin land-first position $674,853 $694,181
Coombs 30,000 0
Total 704,853 694,181
Less current maturities 49,546 17,951
Long-term portion $655,307 $676,230
Fwd...(10)
26
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - NOTES PAYABLE (CONTINUED)
5 year repayment schedule
2000 $ 49,546
2001 655,307
$704,853
NOTE 5 - DEVELOPMENT COSTS
The Company has incurred development costs on various development projects.
These costs have been capitalized and will be expended when the related projects
are sold or abandoned. Total costs as of December 31, 1999 are $1,668,228.
This includes costs directly associated with the development of the project such
as materials, labor, subcontractors, licensing fees, building permits, surveys,
insurance, taxes, interest and any other costs directly associated with the
development. As of this date, all costs have been directly associated with
individual projects and no overhead allocation has been necessary.
NOTE 6 - STOCK
The Company has the following shares of stock outstanding:
Restricted Unrestricted Total
Common 3,878,874 179,900 4,058,774
Preferred 84,259 - 84,259
The preferred stock bears interest at 10 to 12% per annum. Purchaser may elect
to receive cash or additional preferred stock at $2.75 to $3.25 per share.
After 2 years the stockholder may elect to redeem their stock at a price of
$3.00 to $3.50. Four stockholders also have an option to redeem their stock
towards the purchase of a lot in the OlymPeak Estates Subdivision No. 1. No
additional stock has been issued. Interest owed was $35,483 at December 31,
1998, and $40,335 at December 31, 1999. Interest of $7,200 was been paid.
The preferred stock has no voting rights. No stockholder has exercised their
conversion rights.
NOTE 7 - EARNINGS PER COMMON SHARE
Earnings per common share are calculated by dividing net income by the weighted
average number of common shares outstanding during the period as required by
SFAS 128. Under the new requirements for calculating primary net income per
share (basis earnings per share), the dilutive effect of stock options will be
excluded.
Fwd...(11)
27
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 - INCOME TAXES
The Company has adopted SFAS No. 109, "Accounting for Income Taxes". Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. No deferred tax assets or liabilities
have been reflected in the financial statements. There are no differences
between the carrying values of assets and liabilities for book verses tax basis.
The Company has operated at a loss since inception. The Company feels that any
tax benefit from these operating losses is uncertain and would be reduced to
zero under the valuation allowance rules. The Company has net operating losses
of $1,235,326 as of December 31, 1999. They begin to expire in the year 2017.
NOTE 9 - CONTINGENT LIABILITIES
Ogden City Corporation and the Ogden City Redevelopment Agency each hold a
$250,000 trust deed note on the Shupe-Williams Building and adjacent lot. Said
notes will be deemed satisfied upon sufficient completion of the project as
specified in the purchase agreement. The Company is also subject to
restrictions on transfer of the building (See the agreement for complete
details). Management has not reported this obligation in the financial
statements due to its contingent nature. They feel it will never be paid as
it will be satisfied on completion of the project or canceled if the building
is returned to the sellers. (See FAS 105.)
NOTE 10 - ESCROW DEPOSITS
The Company has established bank trust accounts to hold money restricted for
specified uses.
REAL ESTATE TRUST - This is a trust account to hold real estate customer
deposits.
SHUPE-WILLIAMS TRUST - This is a trust account to hold deposits from
individuals who are interested in purchasing Shupe-Williams Building
condo units when completed. The funds are refundable if not completed.
Fwd...(12)
28
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 10 - ESCROW DEPOSITS (CONTINUED)
OLYMPEAK TRUST - This is a trust account to hold deposits from
individuals interested in purchasing lots in the OlymPeak subdivision
when completed. The funds are refundable if not completed.
December 31, December 31,
1999 1998
Real Estate Trust $ 100 $ 8,100
Shupe Williams Trust 19,000 17,000
OlymPeak Trust 26,000 26,000
$45,100 $51,100
NOTE 11 - ACCOUNTS RECEIVABLE
Marina Capital contracted to do consulting and due diligence work for Mr. Joseph
Graves on development of the Rincon Golf and Country Club Community.
The project was abandoned in March 1999.
NOTE 12 - REAL ESTATE SALES COMMISSIONS
The Company operates a real estate sales division. It currently has only three
agents. The Company generally receives a 6% commission on real estate sales
transactions.
NOTE 13 - SALE OF SKI INN LAND
In 1998 the Company sold an approximate .40 acre of the Ski Inn land at Powder
Mountain. It was sold for $40,000 with a cost basis of $24,000 showing a profit
of $15,000. The property was sold to an unrelated party.
NOTE 14 - REAL ESTATE VALUATION
All real estate and land are recorded at cost. This includes the actual cost of
the land plus improvements made. All real estate projects are still in the
early development stages. The Company feels the net realizable value of each
project is more than the costs recorded on the books.
Fwd...(13)
29
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 - REAL ESTATE
I. SNOWBASIN LAND
The OlymPeak Estate project consists of 65 acres of raw land located in Ogden
Valley approximately four (4) miles from the Snow Basin Ski Resort. It is being
developed into 22 residential lots. Preliminary approval was obtained from Weber
County on March 14, 1996. The final approval will be subject to the State of
Utah Engineer and Weber County approval of the water and sewer system by the
County. The Company anticipates that final approval will be granted within
three (3) to six (6) months from the date of this Registration Statement. Upon
receiving the final approval, construction on the roads, water and sewer system
will commence and will take approximately three (3) to six (6) months to
complete. Six (6) of the lots have been reserved at a sale price between
$155,000 to $226,000 per lot. The Company has prepared the necessary
documentation to form a not-for-profit Water and Sewer District to service the
area. The documentation will be submitted to the State of Utah Engineer for
approval within the next ninety (90) days. The Company exercised its option to
purchase the OlymPeak Estate property on October 31, 1996 and entered into a
five (5) year purchase agreement with the Maughan Family Partnership. The
Company executed a Trust Deed and Note for the balance of the purchase price of
$725,000. The original purchase price was $975,000. The terms of the note are
as follows: A five (5) year note, twenty (20) year amortization schedule, with
annual payments of $75,221 and a balloon payment at the end of the five (5) year
period for the balance. The Company proposes to spend approximately $1,000,000
in the construction of roads, water and sewer system.
Capitalized Costs Expensed Costs
Balance December 31, 1997 $1,175,761 $ 0
1998 costs 66,429 0
Balance December 31, 1998 1,242,190 0
1999 costs 42,052 0
Balance December 31, 1999 $1,284,242 $ 0
Fwd...(14)
30
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 - REAL ESTATE (CONTINUED)
Capitalized Costs
Summary of costs:
Land costs $ 975,000
Development costs - roads, water &
sewer, environmental studies, etc. 309,242
$1,284,242
II. POWDER MOUNTAIN LAND:
Location. The Ski Inn at Powder Mountain property is located in Northern Utah,
Cache County, and is adjacent to the main parking lot at Powder Mountain Ski
Resort, eight miles from Eden, Utah. The property is located one hour from the
Salt Lake City International Airport, and thirty minutes from Ogden, Utah.
Description. The proposed Ski Inn at Powder Mountain project is located on a
1.6 acre parcel of mountainous unimproved land with access through the Powder
Mountain Resort parking lot. The ski lifts and trails can be skied directly to
and from the property.
Current Use. The property is currently zoned FR-40 (conditional use permit).
Proposed Use. The Company proposes to construct a Hotel/Condominium consisting
of 48 units for sale or rent.
The Company exercised its option on December 31, 1996 and in an arms-length
transaction, acquired the property from Ski Inn at Powder Mountain, a Limited
Partnership in which Mr. Larry R. Walker, a director and president of the
Company was the General Partner. The Limited Partnership received 60,000 shares
of the Company's $.001 par value Common Stock in consideration for the
properties valued at $120,000. The Company proposes to allocate approximately
$50,000 for the necessary
Fwd...(15)
31
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 - REAL ESTATE (CONTINUED)
entitlement work in order to obtain development approval from the county.
Capitalized Costs Expensed Costs
Balance December 31, 1997 $120,000 $ 0
1998 costs (24,000) 0
Balance December 31, 1998 96,000 0
1999 costs 0 0
Balance December 31, 1999 $ 96,000 $ 0
Summary of costs:
Land costs $ 96,000
III. SHUPE-WILLIAMS PLAZA
Location. Shupe-Williams Plaza at 26th Street and Wall Avenue near Historic
25th Street in downtown Ogden, Utah.
Description. The Shupe-Williams Plaza Building is a four-story building of
approximately 62,500 feet located on an 85,000 square foot building lot. The
building was built in 1902 and was used as a warehouse and candy manufacturing
facility. The building has been abandoned for 15 years.
Current Zoning. With the assistance of the City of Ogden, the property and
building have been zoned to accommodate both residential and commercial use.
Proposed Use. The Company is currently rehabbing the building and vacant lot.
The main floor will be converted into a restaurant, office and retail use. The
upper floors will be converted to Live/Work lofts. Six (6) penthouse lofts will
be constructed on top of the building.
Fwd...(16)
32
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 - REAL ESTATE (CONTINUED)
Status. The Shupe-Williams Plaza property was conveyed to the Company by the
Ogden City Corporation and the Ogden City Developmental Agency on May 27, 1998.
The total purchase price was $100.00. The sellers have also retained a $250,000
Trust Deed on the property which will be considered satisfied upon sufficient
development of the property. The City has also agreed to rebate $250,000 in
taxes, over a five-year period.
Estimated Revenue Phase One. $6,000,000 to $7,500,000.
Financing. The Company is in the process of financing the construction phase
and has made application with several financial brokers and institutions. The
first phase of construction was started in September of 1998. The Company
expects construction to be completed within twelve (12) to eighteen (18) months
after financing has been approved. The Company has started to pre-sell and
market the lofts. Currently 20 of the units have been reserved. A trust
account has been set up to hold reservation deposits until construction of the
building is complete. In addition, several Letters of Intent to lease space
have been received.
Recent and Significant Developments (Shupe-Williams Plaza). The Company entered
into a Real Estate Purchase Contract on October 8, 1997, with the City of Ogden,
Utah, and Ogden City Neighborhood Development Agency, to purchase the Shupe-
Williams Building located at 2605 Wall Avenue, including the abandoned portion
of 26th Street. The total purchase price was $100.00. The City has also agreed
to tax increment rebates totaling $250,000. The rebate will be made to the
Company over a five (5) year period. The closing date on the building was May
27, 1998 at which time fee simple title was conveyed to the Company.
An agreement was entered into with the Land Development Group of Provo, Utah to
act as developer/consultants for the conversion of the old Shupe-Williams candy
manufacturing building. The building will be converted into a 45 Live/Work
loft-condominium complex plus commercial and retail space. The building was
built in 1902, has four floors (approximately 62,500 sq. ft.) on a two (2) acre
lot. The proposed sale of the lofts is expected to generate approximately
$6,000,000 to $7,500,000 in revenue. The Land Development Group has in the
past, successfully converted buildings in Houston, Texas, San Diego, California
and Salt Lake City, Utah.
Fwd...(17)
33
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 - REAL ESTATE (CONTINUED)
Capitalized Costs Expensed Costs
Balance December 31, 1997 $ 20,012 0
1998 costs 131,405 0
Balance December 31, 1998 151,417 0
1999 costs 136,569 0
Balance March 31, 1999 $287,986 $ 0
Summary of costs:
Land costs $ 100
Development costs 287,886
$287,986
Carrying Value of Real Estate. FAS 121 requires that real estate development
projects be valued at lower of cost or market value. The projects on the
Company's balance sheet are valued at cost as management feels the value of each
project exceeds costs.
SNOWBASIN LAND - The land was originally purchased in 1996 for $15,000
per acre for 65 acres. Subsequent costs incurred amount to $4,438 per
acre for a total cost of $19,757 per acre. Land costs in the Ogden
Valley area have increased dramatically over the last three (3) years.
It is estimated that the land could now be sold for $30,000 per acre
as is.
POWDER MOUNTAIN LAND - The Company owns 1.6 acres of land at a cost of
$60,000 per acre. One acre lots adjacent to the land are selling for
$75,000 per acre.
SHUPE-WILLIAMS PLAZA - The Company has $287,886 invested in the project.
The Company has done substantial improvements to the property such as
clean up, paint removal, mechanical system repairs, and two (2)
completed units. Based on these improvements management feels the fair
market value significantly exceeds the costs put in.
SAN PETE DEVELOPMENT - The Company has invested $10,402 in attempting to
develop a parcel of land in San Pete County, Utah. The project has been
abandoned.
Fwd...(18)
34
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 16 - STOCK OPTION AGREEMENTS
On October 20, 1998 the Company entered into a stock option agreement in which
the Company grants the option to a stockholder to purchase up to 300,000 shares
of voting common stock for an exercise price of $2.50 per share at any time from
October 20, 1999 through October 20, 2004, with a 90 day extension period.
On December 14, 1998, an option to purchase a second group of 200,000 shares of
voting common stock at the same exercise price was granted and fully exercisable
from December 14, 1999 through December 14, 2004 with a 90 day extension period.
Special provisions apply in the event of death, disability or termination of the
stockholder.
Richard Murray and Larry Walker also have employment agreements which gives them
the right to purchase additional stock up to 5% of the then issued and
outstanding common stock at a price equal to 75% of the book value. No stock
has been issued under these agreements.
First Group Second Group
of Options of Options
Number of options outstanding on
January 1, 1998 - -
Number of options granted in 1998 300,000 200,000
Number of options outstanding on
December 31, 1998 and December 31, 1999 300,000 200,000
Number of options exercisable at
December 31, 1998 and December 31, 1999 0 0
Weighted average exercise price per share
outstanding and per share exercisable $ 2.50 $ 2.50
Total compensation cost recognized in 1998
and 1999 for stock based compensation awards $ - $ -
Grant date fair value of options granted in 1998 $ 0 $ 0
Weighted average grant date fair value of
options granted in 1998 $ 0 $ 0
Weighted average remaining contractual life of
options outstanding and exercisable 6 years 6 years
Fwd...(19)
35
<PAGE>
MARINA CAPITAL, INCORPORATED
(A Development Stage Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 16 - STOCK OPTION AGREEMENTS (CONTINUED)
No options were exercised, were forfeited or expired in 1998 or 1999.
The calculation of the fair values of the options, under the minimum value
method, assumes that no corporate dividends will be issued prior to exercise
of the options, and that the options will be exercised immediately prior to the
exercise expiration date. The Company deems the options to have minimal value
as there is no publicly traded market for the shares.
The Company has accounted for the stock options under APB Opinion 25, an
accounting standard under which no related compensation expense was recognized
in 1998, the year of the grant. Under an alternative accounting standard, FAS
123, compensation expense of $-0- would have been recognized related to the
grant, resulting in net loss of $(341,710).
NOTE 17 - STOCKHOLDERS
See Exhibit I.
(20)
36
<PAGE>
EXHIBIT I
<TABLE>
<CAPTION>
MARINA CAPITAL, INCORPORATED
(A Development State Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
LIST OF STOCKHOLDERS:
Preferred Stock: SHARES $
<S> <C> <C> <C> <C>
6-5-97 VERA MILLARD TRUST 10,000 30,000
7-12-97 RODERICK ORINGER 21,926 65,778
8-28-97 BRYCE JORGENSON 12,000 30,000
9-23-97 SCOTT KELLY 12,000 30,000
11-28-97 CLIFF JENNINGS 10,000 30,000
12-15-97 PETER NEUBAUER TRUST 8,333 25,000
TOTAL DECEMBER 31, 1997 74,259 210,778
4-16-98 EDWARD GRAZIANI 10,000 30,000
TOTAL DECEMBER 31, 1998 &
March 31, 1999 84,259 $240,778
Common Stock: SHARES $
1-5-96 SUSAN MONTGOMERY 9,583 14,375
1-5-96 BROOKWOOD TRUST 9,583 14,375
3-4-96 SHEILA KELLY 281,33 102,188
5-20-96 RICHARD ROSALES 16,125 16,125
5-30-96 BILL TABAR 37,500 6,946
6-3-96 CHARLES PARTRIDGE 5,733 8,600
6-3-96 KEN KLAGES 17,916 26,875
6-6-96 LEE MARKRACK 17,916 26,875
6-22-96 STUART BRIGGS 17,916 26,875
7-1-96 LARRY WALKER 1,240,000 2,000 SERVICES
7-1-96 RICHARD MURRAY 1,207,500 2,000 SERVICES
7-14-96 JON BLANCHARD 37,500 500 SERVICES
7-16-96 TODD ANDERSEN 37,500 500 SERVICES
10-23-96 STUART BRIGGS 40,000 80,000
10-23-96 JOHN DAHLBERG 15,000 30,000
12-30-96 MARK ARCHER 37,500 SERVICES
11-20-96 RUSS MAUGHAN 37,500 SERVICES
8-15-96 RAUL RODRIGUEZ 147,000 SERVICES
STOCK SUBSCRIBED (225,100)
TOTAL DECEMBER 3, 1996 3,213,105 133,134
STOCK SUBSCRIBED 225,100
1-16-97 CHARLES PRIEST 22,500 45,000
1-16-97 BRIDGET PRIEST 10,000 20,000
2-4-97 THOMAS LYONS 37,500 SERVICES
4-2-97 PETER NEUBAUER 12,500 25,000
4-11-97 COLIN BRIGGS 12,500 25,000
4-11-97 RONALD CANDRY 4,000 20,000
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
MARINA CAPITAL, INCORPORATED
(A Development State Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
LIST OF STOCKHOLDERS:
SHARES $
<S> <C> <C> <C> <C>
4-11-97 SAM MENDES 20,000 40,000
5-1-97 LAURI ANDERSON 3,500 11,935
5-1-97 MARVIN INGLET 10,000 43,250 SALE OF POWDER MT. LOT
5-1-97 VICKI MUNN 3,500 11,935
5-1-97 GERALD NAYLOR 5,000 17,050 SALE OF POWDER MT. LOT
5-1-97 LO'D WALKER 3,500 11,935
5-1-97 TRAVIS WEAVER 5,000 17,050
5-1-97 BONNIE PERKINS 1,000 3,410
5-1-97 TROY WALKER 3,500 11,935
7-6-97 R. RENNA 11,000 22,000
8-20-97 CHARLES PRIEST 10,000 20,000
8-25-97 RONALD CANDRAY 4,000 8,000
8-26-97 PETER NEUBAUER 5,480 10,960
9-1-97 GERALD CRAWFORD 50,000 16,667 SERVICES
9-1-97 SCOTT KELLY 50,000 50,000 SERVICES
9-4-97 D. WALTON 6,375 12,750
12-10-97 THOMAS REILLY 2,500 GIFT FROM RICHARD MURRAY
12-10-97 LAWRENCE LITWACK 5,000 GIFT FROM RICHARD MURRAY
12-22-97 DIANE MANGANARO 308 1,001
12-28-97 RICHARD & BILLIE GEIST 20,000 65,000
TOTAL DECEMBER 31, 1997 3,531,768 859,112
1-7-09 ARNOLD CANDRAY 1,400 SERVICES
3-5-98 RICHARD GIALLONGO 2,000 6,500
3-25-98 CHRISTINE VALLAS 1,550 5,038
4-16-98 FLOCO REAL ESTATE 1,540 5,005
4-16-98 BRENT LARSIN 1,540 5,005
4-21-98 CAROL CORRENTI 3,200 10,400
4-21-98 ROBERT MOSS JR. 615 2,000
4-30-98 DAVID KNOWLES 37,500 SERVICES
5-4-98 CLIFF JENNINGS 462 SERVICES
5-7-98 PACIF CST. PART-CHRUCH DAVIS 7,690 24,993
5-19-98 MICHAEL WAGNER 1,539 5,000
6-15-98 PETER NEUBAUER 615 2,000
6-18-98 GERARD O'ROUKE 6,154 20,000
7-7-98 RODERICK ORINGER 7,500 15,000
7-27-98 DAVID GIRARD 7,692 25,000
7-27-98 PETER NEUBAUER 12,308 40,000
8-20-98 EDWARD SANDERS 7,692 25,000
9-2-98 JOHN LEWIS 10,000 SERVICES
9-2-98 SHARRON O'TOOLE 500 SERVICES
9-30-98 DANIEL MASLIAH 2,667 10,000
10-8-98 ROBERT PLIMPTON 6,000 22,500
10-19-98 KEVIN MOLINAIRI 196,667 625,00
1-19-98 RONALD CANDRAY 2,500 9,375
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
MARINA CAPITAL, INCORPORATED
(A Development State Enterprise)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
LIST OF STOCKHOLDERS:
SHARES $
<S> <C> <C> <C> <C>
10-21-98 RODERICK ORINGER 480 SERVICES
10-23-98 GERALD O'ROURKE 1,000 3,750
10-23-98 PAUL CHAFFEE 1,000 3,750
10-30-98 VERA MILLARD 5,500 20,625
11-16-98 PAL JAUREGUI 1,300 4,875
11-21-98 RODERICK ORINGER 2,193 SERVICES
12-1-98 CHARLES PRIEST 37,000 SERVICES
12-17-98 KEITH GUETSCHOW 1,346 SERVICES
12-22-98 JOHN ASHER 2,700 10,125
12-22-98 RONALD CANDRAY 2,500 9,375
12-28-98 GREAGORY D'AURIA 2,000 7,500
12-31-98 KEVIN MOLINARI SUBSCRIBED (44,913) (142,826)
TOTAL DECEMBER 31, 1998 3,531,768 859,112
12-31-98 KEVIN MOLINAI SUBSCRIBED 44,913 142,826
1-6-99 MARILYN SPENCER\HELEN SCHOE 1,000 3,750
1-6-99 RICHARD LUSBY 3,934 14,750
2-16-99 CHARLES PRIEST 5,333 20,000
2-16-99 RODRIC ROBINSON 1,000 3,750
3-10-99 IAN MACDONALD 1,000 SERVICES
3-11-99 SHARON SKYLOR 3,467 13,000
3-30-99 GARY DOUGAN 2,666 9,997
3-31-99 JOHN MANGANARO 2,666 10,000
3-31-99 ROGERT PLIMPTON 6,000 22,500
8-2-99 JON BLANCHARD 15,605 SERVICES
6-2-99 DOROTHY CARTON 1,667 GIFT
6-2-99 DONALD CONNOLLY 1,000 GIFT
6-2-99 CREGORY AURIA 2,000 GIFT
6-2-99 RICHARD HIGGINS 3,334 GIFT
6-2-99 ANTHONY LOMONACO 2,000 GIFT
6-2-99 LEE MCCANN 3,559 SERVICES
6-2-99 KEVIN MOLINARI 10,000 20,000
6-2-99 KEVIN MOLINARI 15,000 30,000
6-2-99 KEVIN MOLINARI 27,500 55,000
6-2-99 KEVIN MOLINARI 30,000 60,000
6-2-99 FRANCIS SANDANATO 5,000 GIFT
6-2-99 JOHN TRETTER 5,258 GIFT
6-2-99 JOHN WARD 1,667 SERVICES
12-21-99 CHARLES PRIEST 25,000
TOTAL DECEMBER 31, 1999 4,058,774 2,064,674
39
<PAGE>
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
There has been no change in Marina's principal independent accountant during the
fiscal year ended December 31, 1999.
PART III
Item 9. Directors, Executive Officers, Promoters and Control persons;
Compliance with Section 16(a) of the Exchange Act.
The directors and Officers of Marina are as follows:
Name Age Position
Russell C. Maughan* 46 Director, Chairman of the Board
William J. Tabar* 69 Director
Larry R. Walker* 64 Director, President, CEO
Richard V. Murray* 48 Director, COO/Vice-President
Sherren O'Toole* 60 Secretary/Treasurer
Jon R. Blanchard* 37 Vice-President of Development
Services
*These persons may be deemed "promoters" of Marina as that term is defined under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
All Directors of Marina hold office for one year or until the next annual
meeting of shareholders of Marina and their successors are duly elected and
qualified.
The Officers of Marina are elected by the Board of Directors at the first
meeting after each annual meeting of Marina's shareholders and hold office until
their death, or until they resign or have been removed.
Officers and Directors:
Russell C. Maughan/Chairman of the Board. Mr. Maughan has been a Director of
Marina since May of 1997 and is currently Chairman of the Board. Mr. Maughan
presently serves as Vice-President of Home Abstract & Title Co. in Ogden, Utah,
and has been an officer and director for the past 20 years. He is also a
trustee, stockholder and Trust Officer of Home Abstract & Title Co. Mr. Maughan
is designated as a Utah Registered Abstractor and Licensed Title Agent. Mr.
Maughan is a General Partner of Wolf Creek Country Club Associates. He is a
member of the Ogden Chamber of Commerce, Utah Homebuilders Legislative Affairs
Committee and Ogden Board of Realtors. Mr. Maughan has also been a Utah State
Republican Party Delegate.
William J. Tabar/Director. Mr. Tabar has been a Director of Marina since May of
1997. Mr. Tabar was co-founder of Business Resource Center. Business Resource
Center opened its first business brokerage office 20 years ago in Ogden, Utah.
Mr. Tabar currently owns and manages
40
<PAGE>
4 business brokerage offices located throughout the State of Utah. Mr. Tabar is
a member of the board of Directors of The International Business Broker
Association, a member of the M & A Source, and a Certified Business
Intermediary. Before founding Business Resource Center, Mr. Tabar was Chief
Operating Officer and Executive Vice-President of Scott USA, a privately owned
company which manufactured ski and motorcycle products domestically and
internationally, and President of AMF Head Ski and Tennis Division, manufacturer
and distributor of sporting goods sold throughout the world. Mr. Tabar holds an
MS Degree in Chemical Engineering from West Virginia University.
Larry R. Walker/President, Director. Mr. Walker has been President/CEO and
Director since the inception of Marina. He is the Principal Broker for Marina
Capital and Managing Member for the Shupe-Williams Plaza LLC. Mr. Walker has
been a developer and manager of a major ski resort in the State of Utah. He
established and managed a regional office for a national brokerage firm. Mr.
Walker has owned and managed a business and financial services consulting
company for small to medium-sized businesses. Mr. Walker has been an executive
with an investment banking firm and president of Equitable Business & Financial
Services, Inc., a business consulting firm, and SCOR Financial Associates, Inc.,
a securities consulting company. Mr. Walker also has had extensive business
management, real estate development, securities and financial planning
experience. He is a licensed Real Estate Broker and obtained his Real Estate
Brokers License from the State of Utah in 1982. He obtained a California Real
Estate Sales License in 1986. He also was an airline pilot for 10 years.
Richard V. Murray/Vice-President, Director. Mr. Murray has been a Vice
President and Director since the inception of Marina. Mr. Murray has been
engaged in real estate as an investor, broker and developer since 1978. Mr.
Murray has been a featured speaker for several real estate investment and
brokerage firms specializing in commercial investment and development. Mr.
Murray has also been a consultant for corporate CEO's and other corporate
executives engaged in acquisition negotiations. Mr. Murray graduated Cum Laude
from Holy Cross in 1973 with a Bachelor of Arts Degree in History. Mr. Murray
obtained his California Real Estate Broker License in 1980. He is currently the
Chief Operating Officer and Principal Broker for the San Francisco Real Estate &
Investment office.
Sherren O'Toole, Secretary-Treasurer. Ms. O'Toole was selected by the Board of
Directors to fill the remaining term of office of Secretary upon the resignation
of the previous secretary in April of 1999. Ms. O'Toole has been involved in
real estate as an investor, sales agent, property manager and real estate office
manager for 15 years. Prior to that time, Ms. O'Toole was a Tax Technician and
Supervisory Manager for the Internal Revenue Service for 15 years. Ms. O'Toole
attended Weber State University in Ogden, Utah.
Jon R. Blanchard/Vice-President Development Services. Mr. Blanchard has been
involved in land planning and landscape architectural design since graduating
from Kansas State University's College of Architecture and Design in 1988. He
has extensive experience in land planning, landscape architectural design and
consultation for various resort, hotel skiing, golf course, light industrial,
retail commercial and residential projects. Mr. Blanchard has prepared design
construction documents, cost estimates, specifications and bid documents of
several parks throughout New York City and has worked on high-end projects in 14
states. Mr. Blanchard has
41
<PAGE>
done extensive work and consultation on Utah's Winter Sports Park, which will be
the site of all ski jumping, bobsled and luge events during the 2002 Winter
Olympics.
Item 10. Executive Compensation.
SUMMARY COMPENSATION TABLE
</TABLE>
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Annual Restricted Securities LTIP All Other
Principal Salary Bonus Compensation Stock Award(s) Underlying Payouts Compensation
Position Year ($) ($) ($) ($) Options/SARs (#) ($) ($)
Larry R. Walker 1999 $78,125 0 $9,600 0 0 0 0
Richard V. Murray 1999 $82,500 0 $9,600 0 0 0 0
</TABLE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
<TABLE>
The following table sets forth information as of the date hereof, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person known by the Company
to own beneficially 5% or more of the Common Stock, (ii) each director and
officer of the Company and (iii) all directors and officers as a group:
<CAPTION>
Name and Address Shares owned
of Beneficial Owner Beneficially (1) % Owned
<S> <C> <C>
Larry R. & Jean P. Walker 1,240,000 32%
195 Alhambra #3
San Francisco, CA 94123
Richard V. & Carolyn C. Murray 1,207,500 31%
3748 Divisadero Street
San Francisco, CA 94123
Sheila Kelly 281,333 7%
4775 Summit Ridge Drive
Reno, NV 89503
Sherren O'Toole 500 .013%
1120 Canyon Rd., #44
Ogden, UT 84404
William J. Tabar 37,500 1%
4185 Beus Dr.
Ogden, UT 84403
Russell C. Maughan 37,500 1%
1690 Shoshone Dr.
Ogden, UT 84403
Kevin Molinari 196,667 5.1%
2375 Bay Street
San Francisco, CA 94123
Jon R. Blanchard 37,500 1%
PO Box 3763
Park City, Utah 84060
42
<PAGE>
Officers, Directors and 5% 3,038,500 78.2%
shareholders as a group
(8 in number)
<FN>
<F1>
(1) The number of shares of Common Stock owned are those "beneficially owned"
as determined under the rules of the Securities and Exchange Commission,
including any shares of Common Stock as to which a person has sole or shared
voting or investment power and any shares of Common Stock which the person
has the right to acquire within 60 days through the exercise of any option,
warrant or right.
<F2>
(2) No officer, director or security holder listed above owns any warrants,
options or rights, with the exception of Kevin Molinari, who has options to
purchase an additional 600,000 shares of the Company's common stock. (See
"Certain Relationships and Related Transactions.")
</FN>
</TABLE>
Item 12. Certain Relationships and Related Transactions
Marina has not entered into any transactions during 1999 with any Director,
Executive Officer, Director Nominee or shareholder of 5% or more, with the
exception of Kevin Molinari. Marina, on March 15, 1999,issued to Kevin Molinari
100,000 options to be exercised on or before May 15, 1999, at an exercise price
of $2.00 per share. On May 15, 1999, Mr. Molinari exercised the option for
10,000 shares of restricted common stock at an exercise price of $2.00 per
share. Marina has not entered into transactions with any member of the
immediate families of the foregoing persons (includes spouse, children, siblings
and in-laws), nor is any such transaction proposed.
Item 13. Exhibits and Reports on Form 8-K.
Exhibits have been previously reported on Form 10-SB.
The following list describes the exhibits filed as part of this Form 10-KSB:
Exhibit No. Description of Document
3.1 Articles of Incorporation of Marina Capital, Incorporated.
3.2 Bylaws of Marina Capital, Incorporated.
4.0 Specimen form of Registrant's common stock.
10.1 Employment Agreement dated November 1, 1996 between Marina
Capital, Inc., and Larry R. Walker.
10.2 Employment Agreement dated November 1, 1996 between Marina
Capital, Inc., and Richard V. Murray.
10.3 Employment Agreement dated April 1, 1999, between Marina
Capital Inc., and John R. Blanchard.
10.4 Option Agreements dated, October 20, 1998, between Kevin
Molinari and Marina Capital, Inc. for 300,000 options.
43
<PAGE>
10.5 Option Agreement dated, December 14, 1998, between Kevin
Molinari and Marina Capital, Inc. for 200,000 options.
10.6 Subscription/Option Agreement dated March 15, 1999, between
Kevin Molinari and Marina Capital, Inc. for 100,000 options.
10.7 Consent of Accountants.
10.8 Letter of Intent and Understanding between VR Utah and Marina
Capital, Inc.
10.9 Financing Terms OlymPeak Estates Subdivision
10.10 Real Estate Purchase Contract Shupe Williams Plaza (the Company)
and Ogden City Corporation and Ogden City Neighborhood
Development Agency.
23.0 Loan Agreement dated, October 31, 1996, between the Maughn
Family Trust and Marina Capital, Inc.
44
