THIS DOCUMENT IS A COPY OF THE FORM 10-SB FILED ON JULY 2, 1997
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
PASCAL VENTURES, INC.
(Name of Small Business Issuer in its charter)
Delaware 33-0312389
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Venture, Ste. 207
Irvine, CA 92618
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (714)453-9262
Securities to be registered pursuant to Section 12(b) of the Act:
none
SSecurities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Page One of 65 Pages.
Exhibit Index Appears at Page 34.
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TABLE OF CONTENTS
Page
Part I
Item 1. Description of Business . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . 7
Item 3. Description of Property. . . . . . . . . . . . . . 14
Item 4. Security Ownership of Certain
Beneficial Owners and Management 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . 15
Item 6. Executive Compensation . . . . . . . . . . . . . . 17
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . . 18
Item 8. Description of Securities. . . . . . . . . . . . . 19
Part II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . . . . . 20
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . 22
Item 3. Changes in and Disagreements with Accountants. . . 22
Item 4. Recent Sales of Unregistered Securities. . . . . . 22
Item 5. Indemnification of Directors and Officers. . . . . 23
Part F/S
Financial Statements . . . . . . . . . . . . . . . 25
Part III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . 34
Item 2. Description of Exhibits. . . . . . . . . . . . . . 40
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PART I
Item 1. Description of Business.
Guideline Capital Corporation (the "Company") was incorporated
on August 31, 1988 under the laws of the State of Delaware, to
engage in any lawful corporate undertaking, including but not
limited to selected mergers and acquisitions. The Company has been
in the developmental stage since inception and has undertaken no
business operations to date. Other than issuing shares to its
original shareholders, the Company has never commenced any
operational activities. As such, the Company can be defined as a
"shell" company, who's sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The
Board of Directors of the Company has elected to commence
implementation of the Company's principal business purpose,
described below under "Item 2, Plan of Operation".
The Company is filing this registration statement on a
voluntary basis because the primary attraction of the Company as a
merger partner or acquisition vehicle will be its status as a
public company. Any business combination or transaction will
likely result in a significant issuance of shares and substantial
dilution to present stockholders of the Company.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions. In
order to comply with these various limitations, management does not
intend to undertake any efforts to sell any additional securities
of the Company, either debt or equity, or cause a market to develop
in the Company's securities until such time as the Company has
successfully implemented its business plan described herein.
Relevant thereto, each shareholder of the Company has executed and
delivered a "lock-up" letter agreement, affirming that they shall
not sell their respective shares of the Company's common stock
until such time as the Company has successfully consummated a
merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that
no trading will occur in the Company's securities until a merger or
acquisition has been consummated, each shareholder has agreed to
place their respective stock certificate with the Company's legal
counsel, Bryan A. Gianesin who will not release these respective
certificates until such time as legal counsel has confirmed that a
merger or acquisition has been successfully consummated. However,
while management believes that the procedures established to
preclude any sale of the Company's securities prior to closing of
a merger or acquisition will be sufficient, there can be no
assurances that the procedures established relevant herein will
unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
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The Company's business is subject to numerous risk factors,
including the following:
No Operating History or Revenue and Minimal Assets. The
Company has had no operating history nor any revenues or earnings
from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain
operating expenses without corresponding revenues, at least until
the consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase
continuously until the Company can consummate a business
combination with a profitable business opportunity. There is no
assurance that the Company can identify such a business opportunity
and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The
success of the Company's proposed plan of operation will depend to
a great extent on the operations, financial condition and
management of the identified business opportunity. While
management intends to seek business combination(s) with entities
having established operating histories, there can be no assurance
that the Company will be successful in locating candidates meeting
such criteria. In the event the Company completes a business
combination, of which there can be no assurance, the success of the
Company's operations may be dependent upon management of the
successor firm or venture partner firm and numerous other factors
beyond the Company's control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an
insignificant participant in the business of seeking mergers with,
joint ventures with and acquisitions of small private and public
entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers
and acquisitions of companies which may be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the
Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete in
seeking merger or acquisition candidates with numerous other small
public companies.
No Agreement for Business Combination or Other Transaction-No
Standards for Business Combination. The Company has no arrangement,
agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public
entity. There can be no assurance the Company will be successful
in identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified
any particular industry or specific business within an industry for
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evaluation by the Company. There is no assurance the Company will
be able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target business
opportunity to have achieved, and without which the Company would
not consider a business combination in any form with such business
opportunity. Accordingly, the Company may enter into a business
combination with a business opportunity having no significant
operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative
characteristics.
Continued Management Control, Limited Time Availability.
While seeking a business combination, management anticipates
devoting up to twenty hours per month to the business of the
Company. None of the Company's officers has entered into a written
employment agreement with the Company and none is expected to do so
in the foreseeable future. The Company has not obtained key man
life insurance on any of its officers or directors. Notwithstanding
the combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood of
continuing operations. See "Management."
Conflicts of Interest - General. Officers and directors of
the Company may in the future participate in business ventures
which could be deemed to compete directly with the Company.
Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the
Company transacts business. Management has adopted a policy that
the Company will not seek a merger with, or acquisition of, any
entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold any
ownership interest.
Reporting Requirements May Delay or Preclude Acquisition.
Sections 13 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), require companies subject thereto to provide
certain information about significant acquisitions, including
certified financial statements for the company acquired, covering
one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by
some target entities to prepare such statements may significantly
delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements
may not be appropriate for acquisition so long as the reporting
requirements of the 1934 Act are applicable.
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Lack of Market Research or Marketing Organization. The
Company has neither conducted, nor have others made available to
it, results of market research indicating that market demand exists
for the transactions contemplated by the Company. Moreover, the
Company does not have, and does not plan to establish, a marketing
organization. Even in the event demand is identified for a merger
or acquisition contemplated by the Company, there is no assurance
the Company will be successful in completing any such business
combination.
Lack of Diversification. The Company's proposed operations,
even if successful, will in all likelihood result in the Company
engaging in a business combination with a business opportunity.
Consequently, the Company's activities may be limited to those
engaged in by business opportunities which the Company merges with
or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic
fluctuations within a particular business or industry and therefore
increase the risks associated with the Company's operations.
Regulation. Although the Company will be subject to
regulation under the Securities Exchange Act of 1934, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In
the event the Company engages in business combinations which result
in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would
be required to register as an investment company and could be
expected to incur significant registration and compliance costs.
The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company
under the Investment Company Act of 1940 and, consequently, any
violation of such Act would subject the Company to material adverse
consequences.
Probable Change in Control and Management. A business
combination involving the issuance of the Company's Common Shares
will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in the Company. Any such
business combination may require management of the Company to sell
or transfer all or a portion of the Company's Common Shares held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors of
the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business
Combination. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
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likelihood, would result in the Company issuing securities to
shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by present
and prospective shareholders of the Company and may result in a
change in control or management of the Company.
Disadvantages of Blank Check Offering. The Company may enter
into a business combination with an entity that desires to
establish a public trading market for its shares. A business
opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may
include, but are not limited to, time delays of the registration
process, significant expenses to be incurred in such an offering,
loss of voting control to public shareholders and the inability or
unwillingness to comply with various federal and state laws enacted
for the protection of investors.
Taxation. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such
business combination will meet the statutory requirements of a tax-
free reorganization or that the parties will obtain the intended
tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both
parties to the transaction.
Requirement of Audited Financial Statements May Disqualify
Business Opportunities. Management of the Company believes that
any potential business opportunity must provide audited financial
statements for review, for the protection of all parties to the
business combination. One or more attractive business
opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an
entity actively engaged in business which generates revenues, in
exchange for its securities. The Registrant has no particular
acquisitions in mind and has not entered into any negotiations
regarding such an acquisition. None of the Company's officers,
directors, promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other company
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regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration
statement.
The Company's Board of Directors intends to provide the
Company's shareholders with complete disclosure documentation
concerning a potential business opportunity and the structure of
the proposed business combination prior to consummation of the
same, which disclosure is intended to be in the form of a proxy or
information statement. While such disclosure may include audited
financial statements of such a target entity, there is no assurance
that such audited financial statements will be available. The
Board of Directors does intend to obtain certain assurances of
value of the target entity assets prior to consummating such a
transaction, with further assurances that an audited statement
would be provided within sixty days after closing of such a
transaction. Closing documents relative thereto will include
representations that the value of the assets conveyed to or
otherwise so transferred will not materially differ from the
representations included in such closing documents, or the
transaction will be voidable.
The Company has no full time employees. The Company's
President and Secretary have agreed to allocate a portion of their
time to the activities of the Registrant, without compensation.
These officers anticipate that the business plan of the Company can
be implemented by their devoting approximately 20 hours per month
to the business affairs of the Company and, consequently, conflicts
of interest may arise with respect to the limited time commitment
by such officers. See "Management - Resumes."
The Company's officers and directors may, in the future,
become involved with other companies who have a business purpose
similar to that of the Company. As a result, additional potential
conflicts of interest may arise in the future. If such a conflict
does arise and an officer or director of the Company is presented
with business opportunities under circumstances where there may be
a doubt as to whether the opportunity should belong to the Company
or another "blank check" company they are affiliated with, they
will disclose the opportunity to all such companies. If a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company has no preference as to which company will
merger or acquire such target company, the company which first
filed a registration statement with the Securities and Exchange
Commission will be entitled to proceed with the proposed
transaction.
The Bylaws of the Company provide that the Company shall
possess and may indemnify officers and/or directors of the Company
for liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of the Company could be used or
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attached to satisfy any liabilities subject to such
indemnification. See "Item 12, Indemnification of Directors and
Officers."
General Business Plan
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act
registered corporation. The Company will not restrict its search
to any specific business, industry, or geographical location and
the Company may participate in a business venture of virtually any
kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter
into potential business opportunities. Management anticipates that
it may be able to participate in only one potential business
venture because the Company has nominal assets and limited
financial resources. See Item F/S, "Financial Statements." This
lack of diversification should be considered a substantial risk to
shareholders of the Company because it will not permit the Company
to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize
the public marketplace in order to raise additional capital in
order to expand into new products or markets, to develop a new
product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available
capital, management believes that there are numerous firms seeking
the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms
on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business opportunities with any
significant cash or other assets. However, management believes the
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Company will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and
accounting costs in connection with acquisition of a business
opportunity, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The
Securities Exchange Act of 1934 (the "34 Act"), specifically
requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited
financial statements to be included within the numerous filings
relevant to complying with the 34 Act. Nevertheless, the officers
and directors of the Company have not conducted market research and
are not aware of statistical data which would support the perceived
benefits of a merger or acquisition transaction for the owners of
a business opportunity.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the officers and directors of the
Company, none of whom is a professional business analyst.
Management intends to concentrate on identifying preliminary
prospective business opportunities which may be brought to its
attention through present associations of the Company's officers
and directors, or by the Company's shareholders. In analyzing
prospective business opportunities, management will consider such
matters as the available technical, financial and managerial
resources; working capital and other financial requirements;
history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of
management services which may be available and the depth of that
management; the potential for further research, development, or
exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the
Company; the potential for growth or expansion; the potential for
profit; the perceived public recognition of acceptance of products,
services, or trades; name identification; and other relevant
factors. Officers and directors of the Company will meet
personally with management and key personnel of the business
opportunity as part of their investigation. To the extent
possible, the Company intends to utilize written reports and
personal investigation to evaluate the above factors. The Company
will not acquire or merge with any company for which audited
financial statements cannot be obtained within a reasonable period
of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in
matters relating to the new business of the Company, shall rely
upon their own efforts and, to a much lesser extent, the efforts of
the Company's shareholders, in accomplishing the business purposes
of the Company. It is not anticipated that any outside consultants
or advisors, other than the Company's legal counsel and
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accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective merger/
acquisition candidate, as the Company has no cash assets with which
to pay such obligation. There have been no contracts or agreements
with any outside consultants and none are anticipated in the
future.
The Company will not restrict its search for any specific kind
of firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in essentially
any stage of its corporate life. It is impossible to predict at
this time the status of any business in which the Company may
become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However,
the Company does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as the Company has successfully
consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses
in the implementation of its business plan described herein.
Because the Company has no capital with which to pay these
anticipated expenses, present management of the Company will pay
these charges with their personal funds, as interest free loans to
the Company. However, the only opportunity which management has to
have these loans repaid will be from a prospective merger or
acquisition candidate. Management has agreed among themselves that
the repayment of any loans made on behalf of the Company will not
impede, or be made conditional in any manner, to consummation of a
proposed transaction.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and
shareholders of the Company will no longer be in control of the
Company. In addition, the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by new
directors without a vote of the Company's shareholders or may sell
their stock in the Company. Any terms of sale of the shares
presently held by officers and/or directors of the Company will be
also afforded to all other shareholders of the Company on similar
terms and conditions. Any and all such sales will only be made in
compliance with the securities laws of the United States and any
applicable state.
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It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated or
at specified times thereafter. If such registration occurs, of
which there can be no assurance, it will be undertaken by the
surviving entity after the Company has successfully consummated a
merger or acquisition and the Company is no longer considered a
"shell" company. Until such time as this occurs, the Company will
not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any
trading market which may develop in the Company's securities may
have a depressive effect on the value of the Company's securities
in the future, if such a market develops, of which there is no
assurance.
While the actual terms of a transaction to which the Company
may be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to avoid
the creation of a taxable event and thereby structure the
acquisition in a so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In
order to obtain tax-free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or
more of the voting stock of the surviving entity. In such event,
the shareholders of the Company, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors
of the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis of verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.
The manner in which the Company participates in an opportunity will
depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the management of the
opportunity and the relative negotiation strength of the Company
and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage of
the Company which target company shareholders would acquire in
exchange for all of their shareholdings in the target company.
Depending upon, among other things, the target company's assets and
liabilities, the Company's shareholders will in all likelihood hold
a substantially lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage ownership may
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be subject to significant reduction in the event the Company
acquires a target company with substantial assets. Any merger or
acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the
Company's then-shareholders. While management of the Company
anticipates obtaining the approval of the shareholders of the
Company via a Proxy Statement, the effect will be to assure such
approval where management supports such a business transaction
because management presently controls sufficient shares of the
Company to effectuate a positive vote on the proposed transaction.
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate written
agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific
representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing
and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing
costs, including costs associated with the Company's attorneys and
accountants, will set forth remedies on default and will include
miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge
with any entity which cannot provide independent audited financial
statements within a reasonable period of time after closing of the
proposed transaction. The Company is subject to all of the
reporting requirements included in the 34 Act. Included in these
requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to
be filed with the Securities and Exchange Commission upon
consummation of a merger or acquisition, as well as the Company's
audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements
of the 34 Act, or if the audited financial statements provided do
not conform to the representations made by the candidate to be
acquired in the closing documents, the closing documents will
provide that the proposed transaction will be voidable, at the
discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for
all costs associated with the proposed transaction.
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Competition
The Company will remain an insignificant participant among the
firms which engage in the acquisition of business opportunities.
There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources
and technical expertise than the Company. In view of the Company's
combined extremely limited financial resources and limited
management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's
competitors.
Item 3. Description of Property.
The Registrant has no properties and at this time has no
agreements to acquire any properties. The Registrant intends to
attempt to acquire assets or a business in exchange for its
securities which assets or business is determined to be desirable
for its objectives.
The Company operates from its offices at 6 Venture, Suite 207,
Irvine, California 92618, which is the office of the legal counsel
of the Company, Bryan A. Gianesin. This space is provided to the
Company on a rent free basis and it is anticipated that this
arrangement will remain until such time as the Company successfully
consummates a merger or acquisition. Management believes that this
space will meet the Company's needs for the foreseeable future.
The Company paid a total of $0 in rent during its 1996 fiscal year.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company to
be the beneficial owner of more than 5% of such securities, as well
as the securities of the Company beneficially owned by all
directors and officers of the Company. Unless otherwise indicated,
the shareholders listed possess sole voting and investment power
with respect to the shares shown.
Name and Amount and
Address of Nature of
Beneficial Beneficial
Title of Class Owner Owner Percent of Class
Common Bruce Crawford 125,000 25%
813 N. Mt. View Dr.
Santa Ana, CA 92703
Common Kristin M. Walker 100,000 20%
28188 Moulton Pkwy.
Laguna Niguel, CA 92677
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Common Gerard S. Jackson 100,000 20%
23422 Dune Mear
Lake Forest, CA 92630
Common All Officers and 325,000 65%
Directors as a
Group (3 persons)
The balance of the Company's outstanding Common Shares are
held by 7 persons.
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The following table lists the directors and executive officers
who also may be considered as promoters and control persons of
Pascal Ventures, Inc.:
Name Age Position
Bruce Crawford 48 President, Director
Kristin M. Walker 26 Secretary, Director
Gerard S. Jackson 32 Director
The above listed officers and directors will serve until the
next annual meeting of the shareholders or until their death,
resignation, retirement, removal, or disqualification, or until
their successors have been duly elected and qualified. Vacancies
in the existing Board of Directors are filled by majority vote of
the remaining Directors. Officers of the Company serve at the will
of the Board of Directors. There is no family relationship between
any executive officer and director of the Registrant.
Resumes
Bruce Crawford, President and a director. Mr. Crawford has
held his positions with the Company since August 1991. Mr.
Crawford is a licensed doctor of chiropractic in the State of
California. In 1988, Mr. Crawford opened a chiropractic-physical
therapy clinic in Orange County, California. He later expanded the
clinic to Los Angeles County, California and practiced in these
locations until July 1993. Mr. Crawford was also the president and
a director of Brightwood, Inc., a privately-held California
corporation since October 1988. Brightwood, Inc., was responsible
for the active management of the two medical-chiropractic clinics
in Orange and Los Angeles Counties. Since August 1993, Mr.
Crawford has also been active as the president and a director of
Brightwood Productions, Inc., a privately-held California
corporation, whose primary business is the acquisition,
rehabilitation and sale of multi-family residences in Kern County,
California. Mr. Crawford has a Bachelor of Arts Degree from Cal-
State, Northridge and has a
15
<PAGE>
California State Teaching Credential, which he obtained in 1975.
Mr. Crawford obtained his Doctor of Chiropractic from Los Angeles
Chiropractic College in 1987. He shall devote only such time as
necessary to the business of the Company.
Kristin M. Walker, Secretary and a director. Ms. Walker has
held her positions with the Company since August 1991. Ms. Walker
was a student from 1989 to 1993 at the University of California,
Bakersfield. From January 1994 to June 1996, Ms. Walker was
employed by Kern County and various other school districts as a
substitute teacher. In June 1996 Ms. Walker became a legal
secretary for the law firm of Lee R. Goldberg, Esq., Irvine
California, for whom she is still employed. Ms. Walker received
her Liberal Studies Degree from the University of California at
Bakersfield in June 1993. Ms. Walker shall devote only such time
as necessary to the business of the Company.
Gerard S. Jackson, director. Mr. Jackson has held his
position since August 1991. Mr. Jackson has been a primary heavy
equipment mechanic and technician for the County of Orange,
California since 1990. Mr. Jackson's duties include ensuring the
maintenance of the counties' fleet of mobile and crawler cranes,
excavators, and other large earth moving equipment. Mr. Jackson
has received certification for: General Motors Heavy Electronics,
Robert Bosch Fuel Injection Systems, Allison Transmissions-
including New World, Detroit Diesel Computer Controls (DDEC),
Rexroth-Sundstrand Hydostatic Drive Pumps and Motors, Commercial
Shearing Hydraulic Pumps and Motors, Vickers Hydraulic Pumps and
Controls, AQMD Certification for R-12 Refrigerants. Mr. Jackson
shall devote only such time as necessary to the business of the
Company.
Prior to their involvement with the Company, none of the
company's officers and directors had any direct experience in
identifying emerging companies for investment and/or business
combinations.
Conflicts of Interest
Members of the Company's management are associated with other
firms involved in a range of business activities. Consequently,
there are potential inherent conflicts of interest in their acting
as officers and directors of the Company. Insofar as the officers
and directors are engaged in other business activities, management
anticipates it will devote only a minor amount of time to the
Company's affairs.
The officers and directors of the Company are now and may in
the future become shareholders, officers or directors of other
companies which may be formed for the purpose of engaging in
business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in
16
<PAGE>
the future with respect to such individuals acting on behalf of the
Company or other entities. Moreover, additional conflicts of
interest may arise with respect to opportunities which come to the
attention of such individuals in the performance of their duties or
otherwise. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers
or directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation which
come to their attention, either in the performance of their duties
or in any other manner, will be considered opportunities of, and be
made available to the Company and the companies that they are
affiliated with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the officer or
director. If the Company or the companies in which the officers
and directors are affiliated with both desire to take advantage of
an opportunity, then said officers and directors would abstain from
negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if
the Company should decline to do so. Except as set forth above,
the Company has not adopted any other conflict of interest policy
with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment
company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and, consequently,
any violation of such Act would subject the Company to material
adverse consequences. The Company's Board of Directors unanimously
approved a resolution stating that it is the Company's desire to be
exempt from the Investment Company Act of 1940 via Regulation 3a-2
thereto.
17
<PAGE>
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any
compensation for their respective services rendered unto the
Company, nor have they received such compensation in the past.
They all have agreed to act without compensation until authorized
by the Board of Directors, which is not expected to occur until the
Registrant has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully
consummates a merger or acquisition with an unaffiliated entity,
that entity may desire to employ or retain one or a number of
members of the Company's management for the purposes of providing
services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a
policy whereby the offer of any post-transaction remuneration to
members of management will not be a consideration in the Company's
decision to undertake any proposed transaction. Each member of
management has agreed to disclose to the Company's Board of
Directors any discussions concerning possible compensation to be
paid to them by any entity which proposes to undertake a
transaction with the Company and further, to abstain from voting on
such transaction. Therefore, as a practical matter, if each member
of the Company's Board of Directors is offered compensation in any
form from any prospective merger or acquisition candidate, the
proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may
refer a prospective merger or acquisition candidate to the Company.
In the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form of
cash consideration. However, if such compensation is in the form
of cash, such payment will be tendered by the acquisition or merger
candidate, because the Company has insufficient cash available.
The amount of such finder's fee cannot be determined as of the date
of this registration statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein.
18
<PAGE>
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Registrant for the benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
Item 8. Description of Securities.
Pascal Ventures, Inc.'s authorized capital stock consists of
15,000,000 shares of Common Stock, $.001 par value, of which
500,000 shares are issued and outstanding as of the date of this
filing.
Common Stock. All shares of Common Stock have equal voting
rights and, when validly issued and outstanding, are entitled to
one vote per share in all matters to be voted upon by shareholders.
The shares of Common Stock have no preemptive, subscription,
conversion or redemption rights and may be issued only as fully-
paid and nonassessable shares. Cumulative voting in the election
of directors is not permitted, which means that the holders of a
majority of the issued and outstanding shares of Common Stock
represented at any meeting at which a quorum is present will be
able to elect the entire Board of Directors if they so choose and,
in such event, the holders of the remaining shares of Common Stock
will not be able to elect any directors. In the event of
liquidation of the Company, each shareholder is entitled to receive
a proportionate share of the Company's assets available for
distribution to shareholders after the payment of liabilities and
after distribution in full of preferential amounts, if any. All
shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are
entitled to share pro rata in dividends and distributions with
respect to the Common Stock, as may be declared by the Board of
Directors out of funds legally available therefor.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein. Relevant thereto, each shareholder of the
Company has executed and delivered a "lock-up" letter agreement,
affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has
successfully consummated a merger or acquisition and the Company is
19
<PAGE>
no longer classified as a "blank check" company. In order to
provide further assurances that no trading will occur in the
Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective
stock certificate with the Company's legal counsel, Bryan A.
Gianesin who will not release these respective certificates until
such time as legal counsel has confirmed that a merger or
acquisition has been successfully consummated. However, while
management believes that the procedures established to preclude any
sale of the Company's securities prior to closing of a merger or
acquisition will be sufficient, there can be no assurances that the
procedures established relevant herein will unequivocally limit any
shareholder's ability to sell their respective securities before
such closing.
Dividends. The Registrant has not paid any dividends to date,
and has no plans to do so in the immediate future.
PART II
Item 1. Market for Common Equity and Related Stockholder Matters.
There is no trading market for the Company's Common Stock at
present and there has been no trading market to date. Management
has not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the aftermarket for the Company's securities and
management does not intend to initiate any such discussions until
such time as the Company has consummated a merger or acquisition.
There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted at
the present time.
Effective August 11, 1993, the Securities and Exchange
Commission adopted Rule 15g-9, which established the definition of
a "penny stock," for purposes relevant to the Company, as any
equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a
penny stock, unless exempt, the rules require: (i) that a broker or
dealer approve a person's account for transactions in penny stocks;
and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker or
dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are suitable
for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the
20
<PAGE>
risks of transactions in penny stocks. The broker or dealer must
also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth the
basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a
signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of
investing in penny stock in both public offering and in secondary
trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for
the penny stock held in the account and information on the limited
market in penny stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in the
criteria for continued NASDAQ eligibility. In order to continue to
be included on NASDAQ, a company must maintain $2,000,000 in total
assets, a $200,000 market value of its publicly-traded securities
and $1,000,000 in total capital and surplus. In addition,
continued inclusion requires two market-makers and a minimum bid
price of $1.00 per share, provided, however, that if a company
falls below such minimum bid price it will remain eligible for
continued inclusion on NASDAQ if the market value of its publicly-
traded securities is at least $1,000,000 and the Company has
$2,000,000 in capital and surplus.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will
allow the Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to insure
continued listing. The failure of the Company to qualify its
securities or to meet the relevant maintenance criteria after such
qualification in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In
such events, trading, if any, in the Company's securities may then
continue in the non-NASDAQ over-the-counter market. As a result,
a shareholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Company's
securities.
(b) Holders. There are ten (10) holders of the Company's
Common Stock. In August, 1991, the Company issued 500,000 of its
Common Shares to ten persons for aggregate consideration of $500
($0.001 per share). All of the outstanding shares of the Company's
Common Stock were issued in accordance with the exemption from
21
<PAGE>
registration afforded by Section 4(2) of the Securities Act of
1933.
As of the date of this report, 500,000 shares of the Company's
Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain
limitations included in said Rule. In general, under Rule 144, a
person (or persons whose shares are aggregated) who has satisfied
a two year holding period, under certain circumstances, may sell
within any three-month period a number of shares which does not
exceed the greater of one percent of the then outstanding Common
Stock or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation
by a person who has satisfied a three-year holding period and who
is not, and has not been for the preceding three months, an
affiliate of the Company.
(c) Dividends. The Company has not paid any dividends on its
Common Stock.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against
the Company.
Item 3. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure.
There are no changes or disagreements with accountants on
accounting and financial disclosure.
Item 4. Recent Sales of Unregistered Securities.
The Company has not issued any of its securities during the
three year period preceding the date of this Registration
Statement. All of the shares of Common Stock of the Registrant
previously issued have been issued for investment purposes in a
"private transaction" and are "restricted" shares as defined in
Rule 144 under the Securities Act of 1933, as amended (the "Act").
These shares may not be offered for public sale except under Rule
144, or otherwise, pursuant to the Act.
As of the date of this report, all of the issued and
outstanding shares of the Company's Common Stock are eligible for
sale under Rule 144 promulgated under the Securities Act of 1933,
as amended, subject to certain limitations included in said Rule.
However, all of the shareholders of the Company have executed and
delivered a "lock-up" letter agreement which provides that each
such shareholder shall not sell their respective securities until
such time as the Company has successfully consummated a merger or
acquisition. Further, each shareholder has placed their respective
22
<PAGE>
stock certificate with the Company's legal counsel, Bryan A.
Gianesin, who has been instructed not to release any of the
certificates until the Company has closed a merger or acquisition.
Any liquidation by the current shareholders after the release from
the "lock-up" selling limitation period may have a depressive
effect upon the trading prices of the Company's securities in any
future market which may develop.
In general, under Rule 144, a person (or persons whose shares
are aggregated) who has satisfied a two year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly trading
volume during the four calendar weeks prior to such sale. Rule 144
also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who has satisfied a
three-year holding period and who is not, and has not been for the
preceding three months, an affiliate of the Company.
Item 5. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation, incorporates the
provisions of the Delaware Corporation Law providing for the
indemnification of officers and directors and other persons against
expenses, judgments, fines and amounts paid in settlement in
connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having
served as officers, directors or in other capacities, except in
relation to matters with respect to which such persons shall be
determined not to have acted in good faith and in the best
interests of the Company. With respect to matters as to which the
Company's officers and directors and others are determined to be
liable for misconduct or negligence, including gross negligence in
the performance of their duties to the Company, Delaware law
provides for indemnification only to the extent that the court in
which the action or suit is brought determines that such person is
fairly and reasonably entitled to indemnification for such expenses
which the court deems proper.
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to officers, directors or persons
controlling the Company pursuant to the foregoing, the Company has
been informed that in the opinion of the U.S. Securities and
Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act, and is therefore unenforceable.
In accordance with the laws of the State of Delaware, the
Company's Bylaws authorize indemnification of a director, officer,
employee, or agent of the Company for expenses incurred in
connection with any action, suit, or proceeding to which he or she
is named a party by reason of his having acted or served in such
capacity, except for liabilities arising from his own misconduct or
23
<PAGE>
negligence in performance of his or her duty. In addition, even a
director, officer, employee, or agent of the Company who was found
liable for misconduct or negligence in the performance of his or
her duty may obtain such indemnification if, in view of all the
circumstances in the case, a court of competent jurisdiction
determines such person is fairly and reasonably entitled to
indemnification. Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers, or persons controlling the
issuing Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy
as expressed in the Act and is therefore unenforceable.
24
<PAGE>
Part F/S.
Attached are audited financial statements for the Company
for the Period August 31, 1988 (inception) through the fiscal year
ended April 30, 1997 and for the Month Ended May 31, 1997. The
following financial statements are attached to this report and
filed as a part thereof. See page 26.
1) Table of Contents - Financial Statements
2) Report of Independent Auditor
3) Balance Sheet
4) Statement of Cash Flows
5) Statement of Shareholders' Equity
6) Notes to Financial Statements
25
<PAGE>
PASCAL VENTURES, INC.
(a Development Stage Company)
(A Delaware corporation)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
For the Month Ended May 31, 1997
the Fiscal Year Ended April 30, 1997
and for the Period August 31, 1988
(inception) through April 30, 1997
26
<PAGE>
INDEX
PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Revenues and Expenses 3
Statements of Cash Flows 4
Statements of Changes in Stockholders' Equity 5
Notes to Financial Statements 6
27
<PAGE>
GARY A. CASE
CERTIFIED PUBLIC ACCOUNTANT
A Professional Corporation
4501 E. La Palma Avenue
Suite 300
Anaheim, California 92807
Telephone: (714)777-6800
Facsimile: (714)777-8383
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS
OF PASCAL VENTURES, INC.
We have audited the accompanying balance sheets of PASCAL VENTURES, INC. (a
Development State Company) as of May 31, 1997 and April 30, 1997, the related
statements of Revenues and Expenses, Changes in Stockholders'
Equity/(Deficit) and Cash Flows for the month ended May 31, 1997,
the fiscal year ended April 30, 1997, and the period August 31, 1988 (inception)
through April 30, 1997. 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 the audit in accordance with generally accepted audit 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 the audit provides a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage of operations and
has not generated revenues from operations. The continuation of the Company as
a going concern is dependent upon the Company's ability to obtain additional
financing and/or achieve profitable operations in the future.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PASCAL VENTURES, INC. as of May
31, 1997 and April 30, 1997 and the results of its operations and its cash flows
for the month ended May 31, 1997, the fiscal year ended April 30, 1997, and the
period August 31, 1988 (inception) through April 30, 1997 in conformity with
generally accepted accounting principals.
s/Gary A. Case
_____________________________________
GARY A. CASE, CPA
Anaheim, California
June 3, 1997
28
<PAGE>
<TABLE>
PASCAL VENTURES, INC.
(a Development Stage Company)
(A Delaware corporation)
BALANCE SHEET
<CAPTION>
ASSETS: May 31, April 30
1997 1997
-------- ------
<S> <C> <C>
Current Assets $ 0 $ 0
Organization Costs (net of $500
accumulated amortization) 0 0
Total Assets $ 0 0
======= =======
LIABILITIES
Current Liabilities
Accounts Payable $ 1,900 $ 900
Total Current Liabilities 1,900 900
Total Liabilities 1,900 900
STOCKHOLDERS' EQUITY
Common Stock - Par Value $.001 per shares;
15,000,000 Shares Authorized
500,000,000 Shares Issued and Outstanding 500 500
Additional Paid-In Capital -- --
Retained Deficit, accumulated in the
development stage ( 2,400) (1,400)
Total Stockholders' Equity ( 1,900) ( 900)
Total Liabilities and Stockholders' Equity $ 0 $ 0
======= ======
<FN>
See accompanying notes and accountant's report.
</TABLE>
29
<PAGE>
<TABLE>
PASCAL VENTURES, INC.
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF REVENUES AND EXPENSES
<CAPTION>
Period
8/31/88
Month Fiscal (Inception)
Ended Year Ended to
5/31/97 4/30/97 4/30/97
------ ------ ------
<S> <C> <C> <C>
REVENUE:
Revenue $ 0 $ 0 $ 0
EXPENSES:
Amortization Cost 0 0 500
Legal and Accounting 1,000 0 0
Taxes and Licenses 0 100 900
Total Expenses 1,000 100 1,400
Net Income/(Loss) $(1,000) $( 100) $(1,400)
======= ====== =======
Net loss per share $ .002 $ 0 $ .0028
======= ====== =======
<FN>
See accompanying notes and accountant's report.
</TABLE>
30
<PAGE>
<TABLE>
PASCAL VENTURES, INC.
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF CASH FLOWS
<CAPTION>
Period
8/31/88
Month Fiscal (Inception)
Ended Year Ended to
5/31/97 4/30/97 4/30/97
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
OPERATING ACTIVITIES
Cash Received from Operating Activities $ 0 $ 0 $ 0
Cash Paid for Operating Activities 0 0 0
Net Cash Used By Operating Activities 0 0 0
CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Used in Investing Activities 0 0 (500)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash From Financing Activities 0 0 500
Net Decrease in Cash and Cash Equivalents 0 0 0
Cash and Cash Equivalents at
Beginning of Period 0 0 0
Cash and Cash Equivalents at End of Period $ 0 $ 0 $ 0
===== ===== ======
Reconciliation of Net Profit to Net Cash
Provided by Operating Activities:
Net Income/(Loss) $(1,000) $( 100) $ (1,400)
Adjustments to Reconcile Net Income
to Net Provided by Operating Activities:
Amortization and Depreciation Expense 0 0 500
Increase in Accounts Payable 1,000 100 900
Total Adjustments 1,000 100 1,400
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 0 $ 0 $ 0
====== ====== =======
<FN>
See accompanying notes and accountant's report.
</TABLE>
31
<PAGE>
<TABLE>
PASCAL VENTURES, INC.
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
Number of Additional Retained
Common Common Paid-In Earnings
Shares Stock Capital (Deficit) Total
------- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C>
Balance as at August 31, 1988 - - - - -
Net Income (Loss)
from August 31, 1988 (inception)
to April 30, 1991 _______ _______ ________ (567 (567)
Balance at April 30, 1991 0 0 0 (567) (567)
Issuance of Common Stock 500,000 500 500
Net Income (Loss)
from May 1, 1991
to April 30, 1996 ________ ______ _______ (733) (733)
Balance as at April 30, 1996 500,000 500 0 (1,300) (800)
Net Income (Loss) ________ ______ _______ 100 (100)
Balance at April 30, 1997 500,000 500 0 (1,400) (900)
Net Income (Loss) ________ ______ _______ (1,000) (1,000)
Balance as at May 31, 1997 $500,000 $ 500 $ 0 $(2,400) $(1,900)
======== ====== ======= ======== ========
<FN>
See accompanying notes and accountant's report.
</TABLE>
32
<PAGE>
PASCAL VENTURES, INC.
(a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
as of May 31, 1997 and April 30, 1997
NOTE 1: SUMMARY SIGNIFICANT ACCOUNTING POLICIES
The Pascal Ventures, Inc., a Delaware Corporation, was incorporated on August
31, 1998. The Company intends to engage in one or more mergers with or
acquisitions of target entities which may be private companies, partnerships,
or sole proprietorship.
The Company is in the development stage, not yet commencing its planned
principal operations. The company has not yet generated any revenue.
Net loss per common share is based on the weighted average of common shares
outstanding during the period. As of May 31, 1997 and April 30, 1997, there
were 500,000 outstanding shares of common stock.
NOTE 2: INCOME TAXES
The Company has not filed required federal income tax returns from inception
through 1997. Due to the late filing of these tax returns a minimum penalty of
$900.00 has been accrued and included in accounts payable on the balance sheet.
NOTE 3: CAPITALIZATION
Pascal Ventures, Inc., initially authorized 15,000,000 shares of common stock at
a par value $.001 per share.
On August 31, 1991, Pascal Ventures, Inc. issued 500,000 shares of stock at
$.001 per share for $500. These shares have been issued to ten individuals
based on the cash contributed.
NOTE 4: RELATED PARTY EVENTS
The Company maintains its principle offices in space provided by an officer of
the company on a rent free basis. The office is located 6 Venture, Suite 207,
Irvine, California
NOTE 5: SUBSEQUENT EVENTS
The Company intends to file a registration statement on Form 10-SB with the
United States Securities and Exchange Commission.
NOTE 6: YEAR END DATE
The Company's year end is April 30.
33
<PAGE>
PART IV
Item 1. Exhibit Index
No. Sequential
Page No.
(2) Certificate of Incorporation and Bylaws.
2.1 Certificate of Incorporation 35*
2.2 Bylaws 36*
2.3 Certificate of Good Standing 48*
(4) Instruments Defining the Rights of Holders
4.1 Copies of All Lock-up Agreements by the
Company's Shareholders 50*
4.2 List of Shareholders and Shares Held 61*
(10)(a) Contents - Experts
10.1 Consent of Gary Case, CPA 63*
* Incorporated by reference to paper filing effected on July 2, 1997.
34
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this amendment to its registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
PASCAL VENTURES, INC.
(Registrant)
Date: June 25, 1997
By:/s/Kristin M. Walker
-------------------------------
Kristin M. Walker, Secretary
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENT FOR THE MONTH ENDED MAY 31, 1997 AND FOR THE FISCAL YEAR
ENDED APRIL 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> 1-MO YEAR
<FISCAL-YEAR-END> APR-30-1998 APR-30-1998
<PERIOD-END> MAY-31-1997 APR-30-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
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<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 1,900 900
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0 0
0 0
<COMMON> 500 500
<OTHER-SE> (2,400) (1,400)
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<OTHER-EXPENSES> 1,000 100
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