HEURISTIC DEVELOPMENT GROUP INC
10KSB40/A, 1999-07-12
COMPUTER PROGRAMMING SERVICES
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<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON, D.C. 20549
                               FORM 10-KSB-A
                              Amendment No. 1





[X]  Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended December 31, 1998



[ ]  Transition Report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the transition period from _________ to



                        COMMISSION FILE NUMBER:  0-29044



                        HEURISTIC DEVELOPMENT GROUP, INC.

                (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)



             Delaware                                    95-4491750
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)



                            1219 Morningside Drive
                                   Suite 102,
                    Manhattan Beach, CA                   90266
                     (Address of principal executive offices)

                  Issuer's telephone number: (310) 378-1749

Securities to be registered pursuant to Section 12(b) of the Act: None

Securities to be registered pursuant to Section 12(g) of the Act:


            Common Stock, $.01 par value


      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 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 no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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 10-KSB.

   [___]


     The issuer's revenues for the fiscal year ended December 31, 1998 were
 $0.00.

     The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 23, 1999 (based upon the average bid and asked
prices) was $1,200,000.

     The number of shares of the registrant's Common Stock, $.01 par value,
outstanding as of March 23, 1999 was 1,951,100.

     Documents incorporated by reference:  None.


     Transitional Small Business Issuer Format (check one):

      Yes        No  X
         ---        ---

<PAGE>

PART III


      Item 13.  Exhibits and Reports on Form 8-K











<PAGE>

ITEM 13

EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1  Certificate of Incorporation (Incorporated by reference to Exhibit 3.1
to the Company's Registration Statement on Form SB-2 (No. 333-17635))

3.2  By-laws of the Registrant (Incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form SB-2 (No. 333-17635))

4.1  Bridge Note Agreement (Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form SB-2 (No. 333-17635))

4.2  Bridge Warrant Agreement (Incorporated by reference to Exhibit 4.2 to
the Company's Registration Statement on Form SB-2 (No. 333-17635))

4.3  Warrant Agreement (Incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form SB-2 (No. 333-17635))

10.1 1996 Stock Option Plan. (Incorporated by reference to Exhibit 10.1 to
the Company's Registration Statement on Form SB-2 (No. 333-17635))

10.2 Form of Escrow Agreement by and between the Registrant, American Stock
Transfer & Trust Company and certain security holders of the Registrant.
(Incorporated by reference to Exhibit 10.2 to the Company's Registration
Statement on Form SB-2 (No. 333-17635))

10.3 Assignment dated August 22, 1994 between Nautilus Group Japan, Ltd. and
the Company. (Incorporated by reference to Exhibit 10.4 to the Company's
Registration Statement on Form SB-2 (No. 333-17635))

10.4 Exclusive Distribution License Agreement dated June 1995 between
Nautilus Group Japan, Ltd. and the Company. (Incorporated by reference to
Exhibit 10.5 to the Company's Registration Statement on Form SB-2   (No.
333-17635))

10.5 Letter Agreement dated November 27, 1996 between Nautilus Group Japan,
Ltd. and the Company. (Incorporated by reference to Exhibit 10.6 to the
Company's Registration Statement on Form SB-2 (No. 333-17635))

10.6 Retainer Agreement dated August 16, 1994 between TransPac Software Inc.
and the Company. (Incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form SB-2 (No. 333-17635))

<PAGE>

10.7 Conversion Agreement between the Company and Nautilus Group Japan, Ltd.
(Incorporated by reference to Exhibit 10.12 to the Company's Registration
Statement on Form SB-2 (No. 333-17635))

11.1 Statement re: computation of earnings per share.

23.1 Consent of Richard A. Eisner & Company, LLP *

27.0 Financial Data Schedule

(b) Reports on Form 8-K

There were no reports on Form 8-K filed during the quarter ended December 31,
1998.

* Filed herewith

Signatures

Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized

HEURISTIC DEVELOPMENT GROUP, INC.
- ---------------------------------
        (Registrant)


/s/ Gregory L. Zink
- ---------------------------------
Gregory L. Zink
Chief Executive Officer (Acting)

Dated: April 6, 1998



<PAGE>


                           INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
Heuristic Development Group, Inc.
Manhattan Beach, California



We have audited the accompanying balance sheet of Heuristic Development
Group, Inc. (a development stage company) as of December 31, 1998, and the
related statements of operations, changes in stockholders' equity (capital
deficiency) and cash flows for each of the years in the two-year period then
ended and for the period from July 20, 1994 (inception) through December 31,
1998. 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 required 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 enumerated above present fairly, in
all material respects, the financial position of Heuristic Development Group,
Inc. at December 31, 1998 and the results of its operations and cash
flows for each of the years in the two-year period then ended and for the
period from July 20, 1994 (inception) through December 31, 1998 in
conformity with generally accepted accounting principles.

As described in Note A the Company has decided to pursue a strategy of an
investment in, or acquisition of, an existing company.  However, there can be
no assurances that an appropriate investment or acquisition will be
identified.


Richard A. Eisner & Company, LLP



New York, New York
February 5, 1999




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