<PAGE>
UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
ASCOT GROUP INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 113375915
-------- ---------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
CITY CENTER BELLEVUE, STE 730
-----------------------------
500 108TH AVENUE. BELLEVUE,WA 98004
- ------------------------------ -----
(Address of principal executive Offices) (Zip Code)
Registrant's telephone number, including area code (425) 990-6477
--------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Securities to be registered pursuant to Section 12(g) of the Act:
(Title of class)
(Title of class)
1
<PAGE>
INDEX
ITEMS PAGE
- ----- ----
Item 1. BUSINESS 3
Item 2. FINANCIAL INFORMATION 5
Item 3. PROPERTIES 11
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 11
Item 5. DIRECTORS AND EXECUTIVE OFFICERS 12
Item 6. EXECUTIVE COMPENSATION 13
Item 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 14
Item 8. LEGAL PROCEEDINGS 15
Item 9. MARKET PRICE OF AND DIVIDENDS ON THE
REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTER 15
Item 10. RECENT SALES OF UNREGISTERED SECURITIES 15
Item 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO
BE REGISTERED 15
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS 15
Item 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 15
Item 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 22
Item 15. FINANCIAL STATEMENTS AND EXHIBITS 22
SIGNATURES 24
2
<PAGE>
Item 1. DESCRIPTION OF THE BUSINESS
HISTORY AND ORGANIZATION
ASCOT GROUP INC. (the "Company") was organized on August 16th 1996 as Express
Finance Inc., under the laws of the State of Delaware, having the stated purpose
of engaging in any lawful act or activity for which corporations may be
organized. The Company was formed to act as the United States holding company
for Mayhem Ltd. a UK corporation. Mayhem is a young persons department store
designed to be visually exciting and fashionable without being frivolous.
Mayhem intended to open its first store in Summer 1996 with further openings
geared to the success of the launch with a maximum of 20 stores in the whole UK
to maintain exclusivity. By a Private Placement Memorandum under Rule 504 dated
10th September 1996 the company raised $29,000 through the sale of 2,900,000
shares of common stock to fund expansion and refund existing indebtedness. In
the event the company found suitable premises but was unable to attract a
satisfactory standard of management to develop the concept and decided to
investigate other opportunities in the retail sector. An offer was made for a
group trading in southern and central England with four main Post Office
franchises and agreement with the a post Office for a further four main offices
in 1997. The election of a Labor government in May 1997 resulted in a change of
policy away from further franchising and it was decided not to pursue this
opportunity. As a result the Company is now being made available by the major
shareholders for merger or acquisition. The company has not engaged in active
trade or business throughout the period 1996 to 1998.
MEDIC MEDIA INC.
(A Development Stage Company)
The present promoters of the Company acquired the majority of the shares in
April 1997 and are, the President of the Company, L J Boyne, and a major
shareholder, namely Wing Capital Ltd. The company is currently inactive and the
directors are now determined that the Company should become active in seeking
potential operating businesses and business opportunities with the intent to
acquire or merge with such businesses. The Company has began to consider and
investigate potential business opportunities.
The Company is considered a development stage company and, its principal
business purpose is to locate and consummate a merger or acquisition with a
private entity. Because of the Company's current status having no assets and no
recent operating history, in the event the Company does successfully acquire or
merge with an operating business opportunity, it is likely that the Company's
present shareholders will experience substantial dilution and there will be a
probable change in control of the Company.
The selection of a business opportunity in which to participate is complex and
risky. Additionally, as the Company has only limited resources, it may be
difficult to find favorable opportunities. There can be no assurance that the
Company will be able to identify and acquire any business opportunity which will
ultimately prove to be beneficial to the Company and its shareholders. The
Company will select any potential business opportunity based on management's
business judgment.
3
<PAGE>
The Company has voluntarily filed a registration statement on Form 10 in order
to make information concerning itself more readily available to the public.
Management believes that being a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), could provide a prospective merger
or acquisition candidate with additional information concerning the Company. In
addition, management believes that this might make the Company more attractive
to an operating business opportunity as a potential business combination
candidate.
As a result of filing its registration statement, the Company is obligated to
file with the Commission certain interim and periodic reports including an
annual report counting audited financial statements. The Company intends to
continue to voluntarily file these periodic reports under the Exchange Act even
if its obligation to file such reports is suspended under applicable provisions
of the Exchange Act. Any person reviewing this information is advised to refer
to the Company's Form 10 for additional information.
Any target acquisition or merger candidate of the Company will become subject to
the same reporting requirements as the Company upon consummation of any such
business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years or, in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
The Company has no recent operating history and no representation is made, nor
is any intended, that the Company will be able to carry on future business
activities successfully. Further, there can be no assurance that the Company
will have the ability to acquire or merge with an operating business, business
opportunity or property that will be of material value to the Company.
Management plans to investigate, research and, if justified, potentially acquire
or merge with one or more businesses or business opportunities. The company
currently has no commitment or arrangement, written or oral, to participate in
any business opportunity and management cannot predict the nature of any
potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and negotiations with
any potential business or business opportunity.
ASCOT GROUP INC.
(A Development Stage Company)
4
<PAGE>
Item 2. FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of Ascot Group, Inc.
We have audited the accompanying balance sheet of Ascot Group, Inc. as of June
30, 1998, and the related statements of income, cash flows and stockholders'
equity, for the year 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 Ascot Group Inc. as of June 30,
1998, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has losses form operations and a net capital
deficiency, which raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters also are described in
Note 3. The financial statements do not include any adjustments that might
result form the outcome of this uncertainty.
Peter J. Repetti
New York, New York
August 22, 1998
5
<PAGE>
ASCOT GROUP, INC.
-----------------
BALANCE SHEET
-------------
JUNE 30, 1998
-------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash $ 0
Other Current Assets 0
--------
Total Current Assets 0
--------
Other Assets 0
--------
Total Assets $ 0
--------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 0
Accrued Expenses 12,450
--------
Total Current Liabilities 12,450
--------
Other Liabilities 0
--------
Total Liabilities 0
--------
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding 3,450,000
Shares 3,450
Additional Paid in Capital 30,550
Deficit Accumulated During the Development
Stage (46,450)
--------
Total Stockholders' Equity (12,450)
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 0
--------
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
ASCOT GROUP, INC.
-----------------
INCOME STATEMENT
----------------
FOR THE YEAR ENDED JUNE 30, 1998
--------------------------------
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
TOTAL REVENUES: $ 0 $ 0
---------- ----------
OPERATING EXPENSES:
Accounting 2,400 2,400
Legal 10,000 10,000
Filing Fee 50 50
Other Start Up Costs 0 34,000
---------- ----------
Total Operating Expenses 12,450 46,450
Operating Loss $ (12,450) $ (46,450)
---------- ----------
OTHER INCOME (EXPENSES):
Other Income 0 0
---------- ----------
NET LOSS $ (12,450) $ (46,450)
NET LOSS PER SHARE $(0.003609) $(0.013140)
---------- ----------
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,450,000 3,535,137
---------- ----------
</TABLE>
The accompanying notes re an integral part of these financial statements
7
<PAGE>
ASCOT GROUP, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30,1998
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(12,450) $(46,450)
-------- --------
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities:
Changes in Assets and Liabilities
Increase in Accounts Payable and
Accrued Expenses 12,450 12,450
-------- --------
Total Adjustments 12,450 12,450
-------- --------
Net Cash Used in Operating Activities 0 (34,000)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Insurance of common Stock 0 34,000
-------- --------
Net Cash Provided by Financing Activities 0 34,000
-------- --------
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 $ 0
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for
Interest Expense $ 0 $ 0
-------- --------
Corporate Taxes $ 0 $ 0
-------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
ASCOT GROUP, INC.
-----------------
STATEMENT OF SHAREHOLDERS' EQUITY
---------------------------------
FOR THE YEAR ENDED JUNE 30, 1998
--------------------------------
<TABLE>
<CAPTION>
Total
COMMON STOCK ISSUED Additional Accumulated Shareholders'
SHARES PER VALUE PAID IN CAPITAL DEFICIT EQUITY
------ --------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ISSUANCE OF
5,000,000
SHARE
AUGUST
29, 1996 5,000.000 $ 5,000 $ 0 $ 0 $ 5,000
ISSUANCE OF
2,900,000
SHARES
OCTOBER
25, 1996 2,900,000 2,900 26,100 0 29,000
REVERSE
STOCK SPLIT
JANUARY
20, 1997 (3,400,000) (3,400) (3,400) 0 0
CANCELLATION
OF 1,050,000
SHARES
JANUARY
20, 1997 (1,050,000) (1,050) 1,050 0 0
NET LOSS
FOR THE
PERIOD FROM
INCEPTION
JUNE 30,
1997 0 0 0 34,000 (34,000)
---------- ------- ------- -------- --------
BALANCE
JULY 1,
1997 3,450,000 3,450 30,550 $(34,000) $ 0
NET LOSS
FOR THE
YEAR ENDED
JUNE 30,
1998 0 0 0 (12,450) (12,450)
---------- ------- ------- -------- --------
BALANCE
APRIL 30,
1998 3,450,000 $ 3,450 $30,550 $(46,450) $(12,450)
---------- ------- ------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
ASCOT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. DESCRIPTION OF COMPANY: Ascot Group Inc. ("the Company") is a for-profit
corporation incorporated under the laws of the State of Delaware on August 16,
1996. Ascot Group Inc.'s principle objective is to develop a retail company in
Europe using developed North American concepts which have commonly been five
years ahead of Europe. The mission will be realized by using a range of master
franchises and local franchises to develop high quality retail outlets using
the best available management in the country concerned. Strategic partnerships
with leading retailers are being investigated.
B. BASIS OF PRESENTATION: Financial statements are prepared on the accrual basis
of accounting. Accordingly revenue is recognized when earned and expenses when
incurred
C. CASH AND CASH EQUIVALENTS: For purposes of the statements of cash flows, the
Company considers all short-term investments with maturity of three months or
less to be cash equivalents.
D. USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates. Significant
estimates in the financial statements include the assumption that the Company
will continue as a going concern. See Note 3.
NOTE 2 - USE OF OFFICE SPACE
The Company uses 1,000 square feet of space for its executive
offices at Talbot House, High Street, Crowthorne, Berks, UK which it receives
from one of its shareholder at no cost.
NOTE 3 - LIQUIDITY
The Company's viability as a going concern is dependent upon raising
additional capital, and ultimately, having net income.
The Company established its office in Crowhthorne, UK in early 1997 when it
began the initial development of its business plan. The Company's limited
operating history, including its losses and no revenues, primarily reflect the
operations of its early stage.
As a result, the Company had from time of inception to June 30, 1998 no revenue
and a net loss from operations of $46,450. As of June 30, 1998, the Company had
a net capital deficiency of $12,450.
10
<PAGE>
The company requires additional capital principally to meet its costs for the
implementation of its business plan, for general and administrative expenses and
to fund costs associated with start up and trading of retail outlets. It is not
anticipated that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. Ascot Group, Inc. does
not have a working capital line of credit with any financial institution.
Therefore, future sources of liquidity will be limited to the Company's ability
to obtain additional debt or equity funding.
The Company anticipates that its existing capital resources will enable it to
maintain its current implemented operations for at least 12 months; however,
full implementation of its business plan is dependent upon its ability to raise
substantial funding. Management's plan is to move the Company toward
profitability within five years, and to seek additional capital to fund further
expansion of its operations.
Item 3. DESCRIPTION OF PROPERTY
The company's administrative offices are located at 590 Madison Ave, New York,
NY 10022 which are the offices of a major shareholder and are utilized free of
charge. The company does not own or control any material property.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets for the information, to the best knowledge of the
Company as of June 30, 1998, with respect to each person known by the Company to
own beneficially more than 5% of the Company's outstanding common stock, each
director of the Company and all directors and officers of the Company as a
group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ---------------- -------------------- --------
Wing Capital Ltd.
Talbot House High Street
Crowthorne, UK 530,582 15.4%
Channing Investments Ltd.
S8 Int. Business Center
Casemates Main Street
Gibraltar 249,000 7.2%
Bradwall
S8 Int. Business Center
Casemates Main Street
Gibraltar 223,500 6.5%
Win Capital Corp
26 Ludlum Avenue
Byaville, NY 11709 200,000 5.8%
Note: The Company has been advised that each of the persons listed above has
sole voting, investment, and dispositive power over the share indicated above.
Percent of Class (third column above) is based on 3,450,000 shares of common
stock outstanding on June 30, 1998.
ASCOT GROUP INC.
(A Development Stage Company)
11
<PAGE>
Item 5. DIRECTORS AND EXECUTIVE OFFICERS
Position(s) Held and
Name Age Duration of Service Family Relation
- ---------------- --- ------------------- ---------------
Linden J H Boyne 54 President and Director None
Alan G R Bowen 54 Secretary-Treasurer and Director None
All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respects to the election of directors.
Set forth below is certain biographical information regarding the Company's
executive officers and directors.
Linden J H Boyne has been President and director of the Company since 1997.
Since 1991 he has been Secretary of a number of companies principally Rosegold
Ltd. Shopfitters.
Alan G R Bowen has been Secretary Treasurer and a director of the Company since
1997 he is director of a retail company in the UK.
To the knowledge of management, during the past five years, no present or former
director or executive officer of the Company: (1) filed a petition under the
federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal
agent or similar officer appointed by a court for the business or present of
such a person, or any partnership in which he was a general partner at or within
two years before the time of such filing, or any corporation or business
association of which he was an executive officer within two years before the
time of such filing; (2) was convicted in a criminal proceeding or named subject
of a pending criminal proceeding (excluding traffic violations and other minor
offenses); (3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him form or otherwise
limiting, the following activities:
ASCOT GROUP INC.
(A Development Stage Company)
12
<PAGE>
(i) acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, associated person of any of the foregoing, or as an investment
advisor, underwriter, broker or dealer in securities, or as an affiliated
person, director of any investment company, or engaging in or continuing any
conduct or practice in connection with such activity; (ii) engaging in any type
of business practice; or (iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodity laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending, or otherwise limiting for more than 60 days the right of such person
to engage in any activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in subsequently reversed, suspended, or vacate;
(6) was found by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal commodities
law, and the judgment in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed, suspended or vacated.
The Company's Common Stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
connection therewith, directors, officers, and beneficial owners of more than
10% of the Company's Common Stock are required to file on a timely basis certain
reports under Section 16 of the Exchange Act as to their beneficial ownership of
the Company's Common Stock. The following table sets forth, as of the date of
this report, the name and relationship of each person who is required to file on
a timely basis any reports required pursuant to Section 16 of the Exchange Act:
Name Position Report to be filed
- ---- -------- ------------------
Wing Capital Ltd. 10% or greater beneficial owner Form 3
Item 6. EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred compensation plan
for the benefit of its employees, officers or directors. The Company has not
paid any salaries or other compensation to its officers, directors or employees
for the year ended April 30,1998, nor at any of its officers, directors or any
other persons and no such agreements are anticipated in the immediate future.
It is intended that the Company's directors will forego any compensation until
such time as an accusation or merger can be accomplished and will strive to have
the business opportunity provide their remuneration. As of the date hereof, no
person has accrued any compensation from the Company.
13
<PAGE>
COMPENSATION TABLE: None; no form of compensation was paid to any officer or
director at any time during the last two fiscal years.
CASH COMPENSATION
There was no cash compensation paid to any director or executive officer of the
Company during the two fiscal years ended June 30, 1998.
ASCOT GROUP INC.
(A Development Stage Company)
BONUSES AND DEFERRED COMPENSATION: None.
COMPENSATION PURSUANT TO PLANS: None.
PENSION TABLE: None.
OTHER COMPENSATION: None.
COMPENSATION OF DIRECTORS: None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT:
There are no compensatory plans or arrangements of any kind, including payments
to be received from the Company, with respect to any person which would in any
way result in payments to any such person because of his or her resignation,
retirement, or other termination of such person's employment with the Company or
its subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
To the best of Management's knowledge, during the fiscal year ended December 31,
1996 and 1997, there were no material transactions, or series of similar
transactions, since the beginning the Company's last fiscal year, or any
currently proposed transactions, or series of similar transactions, to which the
Company was or is to be a party, in which the amount involved exceeds $60,000,
and in which any director or executive officer, or any security holder who is
known by the Company's common stock, or any member of the immediate family of
any of the foregoing persons, has an interest.
Wing Capital Ltd. has advanced funds to pay for attorney's fees and accounting
fees for the preparation of the Form 10, and will continue to advance such funds
as needed for future reporting and compliance, for which it will be reimbursed
by the Company when or if, funds become available to the Company. These
Shareholder advances totaled nil in the fiscal years ended June 30, 1996 and
1997, and $12,450 since that date.
CERTAIN BUSINESS RELATIONSHIPS:
During the fiscal years ended June 30, 1997 and 1998, there were no material
transactions between the Company and its management.
14
<PAGE>
INDEBTEDNESS OF MANAGEMENT:
To the best of Management's knowledge, during the fiscal years ended June 30,
1996 and 1997, there were no material transactions, or series of similar
transactions, since the beginning of the Company's last fiscal year, or any
currently proposed transactions, or series of similar transactions, to which the
Company was or is to be a party, in which the amount involved exceeds $60,000,
and in which any director or executive officer, or any security holder who is
known by the Company to own of record or beneficially more than
5% of any class of the company's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS:
To the best Knowledge of management, no such transactions exist.
Item 8. LEGAL PROCEEDINGS
No legal proceedings are pending at this time.
Item 9. MARKET PRICE OF AND DIVIDENDS FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company is not aware of any quotations for its common stock, now or at any
time within the past two years.
At June 30, 1998, there were approximately 153 holders of record of the issued
and outstanding shares of Issuer's common stock.
Issuer has never paid a dividend on its outstanding equity.
Item 10. RECENT SALES OF UNREGISTERED SECURITIES
No recent sales of unregistered securities at this time.
Item 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
No description of registrant's securities to be registered at this time.
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
No indemnification of directors and officers at this time.
15
<PAGE>
Item 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of Ascot Group, Inc.
We have audited the accompanying balance sheet of Ascot Group, Inc. as of June
30, 1998, and the related statements of income, cash flows and stockholders'
equity, for the year 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 incudes
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 Ascot Group, Inc. as of June
30, 1998, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has losses form operations and a net capital
deficiency, which raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters also are described in
Note 3. The financial statements do not include any adjustments that might
result form the outcome of this uncertainty.
Peter J. Repetti
New York, New York
August 22, 1998
16
<PAGE>
ASCOT GROUP, INC.
-----------------
BALANCE SHEET
-------------
JUNE 30, 1998
-------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash $ 0
Other Current Assets 0
--------
Total Current Assets 0
========
Other Assets 0
========
Total Assets $ 0
--------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 0
Accrued Expenses 12,450
--------
Total Current Liabilities 12,450
--------
Other Liabilities 0
--------
Total Liabilities 0
--------
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000,000 Shares;
Issued and Outstanding 3,450,000
Shares 3,450
Additional Paid in Capital 30,550
Deficit Accumulated During the Development
Stage (46,450)
========
Total Stockholders' Equity (12,450)
========
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 0
========
</TABLE>
The accompanying notes are an integral part of these financial statements
17
<PAGE>
ASCOT GROUP, INC.
-----------------
INCOME STATEMENT
----------------
FOR THE YEAR ENDED JUNE 30,1998
-------------------------------
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
TOTAL REVENUES: $ 0 $ 0
========== ==========
OPERATING EXPENSES:
Accounting 2,400 2,400
Legal 10,000 10,000
Filing Fee 50 50
Other Start Up Costs 0 31,450
Total Operating Expenses 12,450 46,450
---------- ----------
Operating Loss (12,450) (46,450)
---------- ----------
OTHER INCOME (EXPENSES)
Other Income 0 0
---------- ----------
NET LOSS (12,450) (46,450)
---------- ----------
NET LOSS PER SHARE (0.003609) (0.013140)
---------- ----------
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,450,000 3,535,137
---------- ----------
</TABLE>
The accompanying notes are in integral part of these financial statements.
18
<PAGE>
ASCOT GR0UP, INC.
------------------
STATEMENT OF CASH FLOWS
-----------------------
FOR THE YEAR ENDED JUNE 30,1998
-------------------------------
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(12,450) $(46,450)
-------- --------
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities:
Changes in Assets and Liabilities
Increase in Accounts Payable and
Accrued Expenses 12,450 12,450
-------- --------
Total Adjustments 12,450 12,450
-------- --------
Net Cash Used in Operating Activities 0 (34,000)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Insurance of common Stock 0 34,000
-------- --------
Net Cash Provided by Financing Activities 0 34,000
-------- --------
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 $ 0
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for
Interest Expense $ 0 $ 0
-------- --------
Corporate Taxes $ 0 $ 0
-------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
ASCOT GROUP, INC.
-----------------
STATEMENT OF SHAREHOLDERS' EQUITY
---------------------------------
FOR THE YEAR ENDED APRIL 30, 1998
---------------------------------
<TABLE>
<CAPTION>
Total
COMMON STOCK ISSUED Additional Accumulated Shareholders'
SHARES PER VALUE PAID IN CAPITAL DEFICIT EQUITY
------ --------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ISSUANCE OF
9,000,000
SHARE
AUGUST
29, 1996 5,000,000 $9,000 $ 0 $ 0 $ 5,000
ISSUANCE OF
1,000,000
SHARES
OCTOBER
25, 1996 2,900,000 2,900 26,100 0 29,000
REVERSE
STOCK SPLIT
JANUARY
20,1997 (3,400,000) (3,400) 3,400 0 0
CANCELLATION
OF 1,050,000
SHARES
JANUARY
20,1997 (1,050,000) (1,050) 1,050 0 0
NET LOSS
FOR THE
PERIOD FROM
INCEPTION
JUNE 30,
1997 0 0 0 19,000 0
BALANCE
JULY 1,
1997 3,450,000 3,450 30,550 (34,000) (34,000)
NET LOSS
FOR THE
YEAR ENDED
JUNE 30,
1998 0 0 0 (12,450) (12,450)
---------- ------- ------- -------- --------
BALANCE
JUNE 30,
1998 3,450,000 $3,450 30,550 $(46,450) $(12,450)
---------- ------- ------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
ASCOT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. DESCRIPTION OF COMPANY: Ascot Group Inc. ("the Company") is a for-profit
corporation incorporated under the laws of the State of Delaware on August 16,
1996. Ascot Group Inc.'s principle objective is to develop a retail company in
Europe using developed North American concepts which have commonly been five
years ahead of Europe. The mission will be realized by using a range of master
franchises and local franchises to develop high quality retail outlets using the
best available management in the country concerned. Strategic partnerships with
leading retailers are being investigated.
B. BASIS OF PRESENTATION: Financial statements are prepared on the accrual basis
of accounting. Accordingly revenue is recognized when earned and expenses when
incurred.
C. CASH AND CASH EQUIVALENTS: For purposes of the statements of cash flows, the
Company considers all short-term investments with maturity of three months or
less to be cash equivalents.
D. USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates. Significant
estimates in the financial statements include the assumption that the Company
will continue as a going concern. See Note 3.
NOTE 2 - USE OF OFFICE SPACE
The Company uses 1,000 square feet of space for its executive
offices at Talbot House, High Street, Crowthorne, Berke, UK which it receives
from one of its shareholder at no cost.
NOTE 3 - LIQUIDITY
The Company's viability as a going concern is dependent upon raising
additional capital, and ultimately, having net income.
The Company established its office in Crowthorne, UK on November 18, 1996 when
it began the initial development of its business plan. The Company's limited
operating history, including its losses and no revenues, primarily reflect the
operations of its early stage.
As a result, the Company had from time of inception to June 30, 1998 no revenue
and a net loss from operations of $46,450. As of April 30, 1998, the Company
had a net capital deficiency of $12,450.
21
<PAGE>
The company requires additional capital principally to meet its costs for the
implementation of its business plan, for general and administrative expenses and
to fund costs associated with start up and trading of retail outlets. It is not
anticipated that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. Ascot Group, Inc. does
not have a working capital line of credit with any financial institution.
Therefore, future sources of liquidity will be limited to the Company's ability
to obtain additional debt or equity funding. The Company anticipates that its
existing capital resources will enable it to maintain its current implemented
operations for at least 12 months; however, full implementation of its business
plan is dependent upon its ability to raise substantial funding. Management's
plan is to move the Company toward profitability within five years, and to seek
additional capital to fund further expansion of its operations.
The financial statements of the Company are set forth immediately following
the signature page of this form 10.
Item 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
No changes in and disagreements with accountants on accounting and financial
disclosure.
Item 15. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS AND INDEX OF EXHIBITS
The following exhibits are included in Item 13(c). Other exhibits have been
omitted since the required information is not applicable to the registrant.
EXHIBIT
3 Certificate of incorporation and by-laws
11 Statement re: computation of per share earnings
(B) REPORTS ON FORM 8-K
No Report on Form 8-K was filed during the fourth quarter of the period for
which this Annual Report is filed.
(C) EXHIBITS
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Ascot Group, Inc.
- ----------------------------------------------------------------- -----------
(Registrant)
Date: September 3, 1998
-------------------------------------------
By: /s/ L.J. Boyne
-------------------------------------------------------------- -------------
President
23
<PAGE>
EXHIBIT 3: CERTIFICATE OF INCORPORATION AND BY LAWS
(a) Certificate of Incorporation of registrant consisting of:
(i) Certificate of Incorporation dated August 16, 1996.
(b) Corporate by-laws of registrant are incorporated herein by reference to
Exhibit 3(b) to registrant's Annual Report on Form 10=K for the year ended
November 18, 1996.
<PAGE>
EXHIBIT 11: STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Year ended June 30
1998
----
Net income (loss) $(12,450)
Average number of common shares outstanding 3,450,000
Net income (loss) per share of common stock
(basic and diluted) $(0.003609)
