U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB/A
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUER
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
AREA INVESTMENT AND DEVELOPMENT COMPANY
(Name of Small Business Issuer in its charter)
Utah 87-0284871
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2133 East 9400 South, Suite 151, Sandy, Utah 84093
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 944-0701
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.01
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TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part I
1. Description of Business 3
2. Management's Discussion and Analysis or
Plan of Operations 7
3. Description of Properties 8
4. Security Ownership of Certain Beneficial Owners and
Management 8
5. Directors, Executive Officers, Promoters and
Control Persons 9
6. Executive Compensation 10
7. Certain Relationships and Related Transactions 11
8. Description of Securities 11
Part II
1. Market Price of and Dividends on the Registrant's
Common Equity and Related Stockholder Matters 11
2. Legal Proceedings 12
3. Changes in and Disagreements with Accountants 12
4. Recent Sales of Unregistered Securities 12
5. Indemnification of Directors and Officers 12
Part F/S Financial Statements 13
Part III
1. Index to Exhibits 14
2. Description of Exhibits 14
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
History
The Company was formed as a Utah corporation in June 1970, for
the purpose of engaging in real estate, general business and
investment opportunities. The Company has had no operations for
the past three years. The Company is a shell corporation seeking
a business venture to acquire. The Company entered into a
Financial Consulting Agreement with Park Street Investments,
Inc., a Utah corporation wholly owned by Ken Kurtz, an officer
and director. In consideration for consulting services and
payment of the Company's expenses, Company issued 3,000,000
shares of common stock to Park Street Investments, Inc., in
November 1997. Park Street Investments, Inc., assigned 2,000,000
of the shares to Ken Kurtz, and 500,000 each to Carrie Kurtz and
Tammy Gehring, both directors of the Company.
In January 1999, the Company began discussions with
representatives of Fax4free.com, Inc. - an online service
provider - for the possibility of a business combination. The
Company and Fax4free.com, Inc., agreed on the terms of
acquisition, and in anticipation of the acquisition the Company
authorized an offering for 4,000,000 shares of its common stock
under Rule 504 of Regulation D promulgated under the Securities
Act of 1933. The 4,000,000 shares were offered at $.03125 per
share to raise $125,000. Proceeds were to be used to pay
expenses related to the acquisition of Fax4free.com, Inc., and to
pay off the remainder of the Company's debts. On March 30, 1999,
the Company closed the offering after having sold the 4,000,000
shares to seven investors of which 3,918,750 shares were sold for
$122,461 in cash and 81,250 were sold for $2,539 in debt
settlement. On March 24, 1999, the Company paid off the
remainder of its debts in the amount of $32,461 and paid a
finder/consulting fee in the amount of $90,000 to Hudson
Consulting Group, Inc. ("Hudson") for introducing Fax4free.com,
Inc., to the Company. In April 1999, the acquisition of
Fax4free.com, Inc., was terminated by Fax4free.com, Inc., because
it subsequently discovered it could not obtain from unrelated
financing sources additional funding for its future business
operations on acceptable terms. Hudson has agreed to assist in
locating another merger acquisition candidate in the future as
part of its $90,000 fee, which has been already paid. Management
has opted to expense the entire $90,000 fee, which is non-
refundable, because Hudson does not have an exclusive agreement
with management and is not obligated to perform. Therefore,
there are no assurances that the Company may not be obligated to
pay additional fees to other parties in the future.
In April 1999, the Company issued 2,000,000 shares of its common
stock to Ken Kurtz, an officer and director, at $0.01 per share,
or a total of $20,000, which will be used as working capital.
General
During the past three years, the Company has attempted to
identify and acquire a favorable business opportunity. The
Company has reviewed and evaluated a number of business ventures
for possible acquisition or participation by the Company. The
Company has not entered into any agreement, nor does it have any
commitment or understanding to enter into or become engaged in a
transaction as of the date of this filing. The Company continues
to investigate, review, and evaluate business opportunities as
they become available and will seek to acquire or become engaged
in business opportunities at such time as specific opportunities
warrant.
To date, opportunities have been made available to the Company
through its officers and directors and through professional
advisors including securities broker-dealers and through members
of the financial community. It is anticipated that business
opportunities will continue to be available primarily from these
sources.
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis
regarding the quality of the other firm's management and
personnel, the asset base of such firm or enterprise, the
anticipated acceptability of new products or marketing concepts,
the merit of the firms business plan, and numerous other factors
which are difficult, if not impossible, to analyze through the
application of any objective criteria.
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Since its inception, the Company has had no active business
operations, and has been seeking to acquire an interest in a
business with long-term growth potential. The Company currently
has no commitment or arrangement to participate in a business and
cannot now predict what type of business it may enter into or
acquire. It is emphasized that the business objectives discussed
herein are extremely general and are not intended to be
restrictive on the discretion of the Company's management.
There are no plans or arrangements proposed or under
consideration for the issuance or sale of additional securities
by the Company prior to the identification of an acquisition
candidate. Consequently, management anticipates that it may be
able to participate in only one potential business venture, due
primarily to the Company's limited capital. This lack of
diversification should be considered a substantial risk, because
it will not permit the Company to offset potential losses from
one venture against gains from another.
Selection of a Business
The Company anticipates that businesses for possible acquisition
will be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and
others who may present unsolicited proposals. The Company will
not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its
officers and directors and their affiliates, as well as indirect
associations between them and other business and professional
people. By relying on "word of mouth", the Company may be
limited in the number of potential acquisitions it can identify.
While it is not presently anticipated that the Company will
engage unaffiliated professional firms specializing in business
acquisitions or reorganizations, such firms may be retained if
management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take
various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments
involving issuance of securities (including those of the
Company), or any combination of these or other compensation
arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services. Pursuant to the
Financial Consulting Agreement between the Company and Park
Street Investments, Inc., Park Street Investments, Inc. is
entitled to 10% of the Company's issued and outstanding shares
after reorganization.
The Company will not restrict its search to any particular
business, industry, or geographical location, and management
reserves the right to evaluate and enter into any type of
business in any location. The Company may participate in a newly
organized business venture or a more established company entering
a new phase of growth or in need of additional capital to
overcome existing financial problems. Participation in a new
business venture entails greater risks since in many instances
management of such a venture will not have proved its ability,
the eventual market of such venture's product or services will
likely not be established, and the profitability of the venture
will be unproved and cannot be predicted accurately. If the
Company participates in a more established firm with existing
financial problems, it may be subjected to risk because the
financial resources of the Company may not be adequate to
eliminate or reverse the circumstances leading to such financial
problems.
In seeking a business venture, the decision of management will
not be controlled by an attempt to take advantage of any
anticipated or perceived appeal of a specific industry,
management group, product, or industry, but will be based on the
business objective of seeking long-term capital appreciation in
the real value of the Company.
The analysis of new businesses will be undertaken by or under the
supervision of the officers and directors. In analyzing
prospective businesses, management will consider, to the extent
applicable, the available technical, financial, and managerial
resources; working capital and other prospects for the future;
the 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; the potential for growth and
expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trade or
service marks; name identification; and other relevant factors.
It is anticipated that the results of operations of a specific
firm may not necessarily be indicative of the potential for the
future because of the requirement to substantially shift
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marketing approaches, expand significantly, change product
emphasis, change or substantially augment management, and other
factors.
The Company will analyze all available factors and make a
determination based on a composite of available facts, without
reliance on any single factor. The period within which the
Company may participate in a business cannot be predicted and
will depend on circumstances beyond the Company's control,
including the availability of businesses, the time required for
the Company to complete its investigation and analysis of
prospective businesses, the time required to prepare appropriate
documents and agreements providing for the Company's
participation, and other circumstances.
Acquisition of a Business
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, or other reorganization with another corporation
or entity; joint venture; license; purchase and sale of assets;
or purchase and sale of stock, the exact nature of which cannot
now be predicted. Notwithstanding the above, the Company does
not intend to participate in a business through the purchase of
minority stock positions. On the consummation of a transaction,
it is likely that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of 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.
In connection with the Company's acquisition of a business, the
present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell
a portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the
Company. As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company
would acquire a higher percentage of equity ownership in the
Company. Management does not intend to actively negotiate for or
otherwise require the purchase of all or any portion of its stock
as a condition to or in connection with any proposed merger or
acquisition. Although the Company's present shareholders did not
acquire their shares of Common Stock with a view towards any
subsequent sale in connection with a business reorganization, it
is not unusual for affiliates of the entity participating in the
reorganization to negotiate to purchase shares held by the
present shareholders in order to reduce the amount of shares held
by persons no longer affiliated with the Company and thereby
reduce the potential adverse impact on the public market in the
Company's common stock that could result from substantial sales
of such shares after the business reorganization. Public
investors will not receive any portion of the premium that may be
paid in the foregoing circumstances. Furthermore, the Company's
shareholders may not be afforded an opportunity to approve or
consent to any particular stock buy-out transaction.
In the event sales of shares by present shareholders of the
Company, including officers and directors, is a negotiated
element of a future acquisition, a conflict of interest may arise
because directors will be negotiating for the acquisition on
behalf of the Company and for sale of their shares for their own
respective accounts. Where a business opportunity is well suited
for acquisition by the Company, but affiliates of the business
opportunity impose a condition that management sell their shares
at a price which is unacceptable to them, management may not
sacrifice their financial interest for the Company to complete
the transaction. Where the business opportunity is not well
suited, but the price offered management for their shares is
high, Management will be tempted to effect the acquisition to
realize a substantial gain on their shares in the Company.
Management has not adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not intend to
obtain an independent appraisal to determine whether any price
that may be offered for their shares is fair. Stockholders must
rely, instead, on the obligation of management to fulfill its
fiduciary duty under state law to act in the best interests of
the Company and its stockholders.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms
of such registration rights and the number of securities, if any,
which may be registered cannot be predicted, it may be expected
that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.
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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 such market.
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
structure the acquisition as a so-called "tax-free" event under
sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
"Code"). In order to obtain tax-free treatment under section 351
of the Code, it would 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. Section 368(a)(1) of the Code provides for tax-
free treatment of certain business reorganizations between
corporate entities where one corporation is merged with or
acquires the securities or assets of another corporation.
Generally, the Company will be the acquiring corporation in such
a business reorganization, and the tax-free status of the
transaction will not depend on the issuance of any specific
amount of the Company's voting securities. It is not uncommon,
however, that as a negotiated element of a transaction completed
in reliance on section 368, the acquiring corporation issue
securities in such an amount that the shareholders of the
acquired corporation will hold 50% or more of the voting stock of
the surviving entity. Consequently, there is a substantial
possibility that the shareholders of the Company immediately
prior to the transaction would retain less than 50% of the issued
and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be
anticipated that stockholders immediately prior to the
transaction will experience a significant reduction in their
percentage of ownership in the Company.
Notwithstanding the fact that the Company is technically the
acquiring entity in the foregoing circumstances, generally
accepted accounting principles will ordinarily require that such
transaction be accounted for as if the Company had been acquired
by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the
other company.
The manner in which the Company participates in a business will
depend on the nature of the business, the respective needs and
desires of the Company and other parties, the management of the
business, and the relative negotiating strength of the Company
and such other management.
The Company will participate in a business only after the
negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require 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 such closing, will outline the manner of bearing costs
if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business
will be dependent on the nature of the business and the interest
acquired. The Company is unable to predict whether the Company
will be in control of the business or whether present management
will be in control of the Company following the acquisition. It
may be expected that the business will present various risks,
which cannot be predicted at the present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to
which the Company may be subject until it has acquired an
interest in a business. The use of assets and/or conduct of
businesses which the Company may acquire could subject it to
environmental, public health and safety, land use, trade, or
other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, management
will endeavor to ascertain, to the extent of the limited
resources of the Company, the effects of such government
regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of
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government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will
make the acquisition of an interest in such business a higher
risk.
Competition
The Company will be involved in intense competition with other
business entities, many of which will have a competitive edge
over the Company by virtue of their stronger financial resources
and prior experience in business. There is no assurance that the
Company will be successful in obtaining suitable investments.
Employees
The Company is a development stage company and currently has no
employees. Executive officers, who are not compensated for their
time contributed to the Company, will devote only such time to
the affairs of the Company as they deem appropriate, which is
estimated to be approximately 20 hours per month per person.
Management of the Company expects to use consultants, attorneys,
and accountants as necessary, and does not anticipate a need to
engage any full-time employees so long as it is seeking and
evaluating businesses. The need for employees and their
availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business
industry.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
Results of Operations
Period Ended May 31, 1999 and Calendar Years Ended December 31,
1998 and 1997
The Company had no revenue from continuing operations for the
periods ended May 31, 1999, December 31, 1998 and 1997.
General and administrative expenses for period ended May 31, 1999
were $90,000, compared to $480 for the year ended December 31,
1998 and $46,107 for the year ended December 31, 1997. General
and administrative expenses during the fiscal year 1999,
consisted of a finder/consulting fee in the amount of $90,000 to
Hudson Consulting Group, Inc. for introducing a potential
candidate or acquisition by the Company.
The Company has a net loss of $90,000 for the period ended May
31, 1999, a net income of $51,435 for the year ended December 31,
1998 and a net loss of $46,107 for the year ended December 31,
1997. The Company's net gain for the year ended December 31,
1998 is attributable to management's negotiation of accounts
payable due to a prior consultant in the amount of $51,915.
The Company does not expect to generate any meaningful revenue or
incur operating expenses unless and until it acquires an interest
in an operating company.
Liquidity and Capital Resources
At May 31, 1999, the Company had a working capital of $20,000.
The Company's cash in the amount of $20,000 resulted from the
sale of 2,000,000 of the Company's common stock to Ken Kurtz, the
Company's president and a director. The shares were sold to
obtain capital to pay the costs of becoming a reporting company
under the Securities Exchange Act of 1934. Management is hopeful
that becoming a reporting company will increase the number of
prospective business ventures that may be available to the
Company. Management believes that the Company has sufficient
cash to meet the anticipated needs of the Company's operations
through at least the first calendar quarter of 2000. However,
there can be no assurances to that effect, as the Company has no
revenues and the Company's need for capital may change
dramatically if it acquires an interest in a business opportunity
during that period. The Company's current operating plan is to
(i) handle the administrative and reporting requirements of a
public company; and (ii) search for potential businesses,
products, technologies and companies for acquisition. At
present, the Company has no understandings, commitments or
agreements with respect to the acquisition of any business,
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product, technology or company and there can be no assurance that
the Company will identify any such business, product, technology
or company suitable for acquisition in the future. Further,
there can be no assurance that the Company would be successful in
consummating any acquisition on favorable terms or that it will
be able to profitably manage the business, product, technology or
company it acquires. If the Company is unable to participate in
a business venture by the end of the first calendar quarter of
2000, it may require additional capital to continue its search
for a business venture and avoid dissolution. There is no
assurance additional capital will be available to the Company on
acceptable terms.
ITEM 3. DESCRIPTION OF PROPERTIES
The Company uses, at no cost, the office and related clerical
services owned and provided by Ken Kurtz, an officer and director
of the Company located at 2216 East Aspen Wood Way, Sandy, Utah
84093. All correspondence for the Company is received through a
mail service at 2133 East 9400 South, Suite 151, Sandy, Utah
84093.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of July 31, 1999, the number
and percentage of the outstanding shares of common stock which,
according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
Common Percent
Shares of
Class
Name and Address
Principal Stockholders
A-Z Oil L.L.C. 770,000 8.5
27 Burr Road
London, England SW184SQ
David Michael Irrevocable Trust 730,000 8.1
c/o Wendell Hall
5519 Rawls Road
Tampa, FL 33625
Ariel Fiancies, Inc. 800,000 8.8
10, Elvira Mendez Street
Panama 5
Rep. of Panama
Arno Holding Corp. 800,000 8.8
10, Elvira Mendez street
Panama 5
Rep. of Panama
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Yosif Flek 737,500 8.2
Wilhelm Str. 41
10963 Berlin Germany
Officers and Directors
Ken Kurtz (1) 3,801,843 42.0
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Carrie Kurtz (1) 500,000 5.5
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Tammy Gehring 500,000 5.5
2133 East 9400 South, Suite 151
Sandy, Utah 84093
All Executive officers and 4,800,000 53.0
Directors as a Group
(3 persons)
(1) Carrie Kurtz is the spouse of Ken Kurtz. The stock figure
for Ken Kurtz includes 1,843 shares held by Park Street
Investments, Inc., of which Mr. Kurtz is the sole owner.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Officers
The following table sets forth the names, ages, and positions
with the Company for each of the directors and officers of the
Company.
Name Age Positions (1) Since
Ken Kurtz 31 President and Director 1997
Carrie Kurtz 36 Vice President and Director 1997
Tammy Gehring 24 Secretary, Treasurer and Director 1997
All executive officers are elected by the Board and hold office
until the next Annual Meeting of stockholders and until their
successors are elected and qualify.
The following is information on the business experience of each
director and officer.
Mr. Kurtz has been since February 1992, the president, sole
director and sole shareholder of Park Street Investments, Inc., a
Utah corporation and the Company's largest shareholder. Through
Park Street Investments, Inc., Mr. Kurtz provides consulting
services to public and private companies on mergers,
recapitalizations, and other forms of corporate reorganization.
Mr. Kurtz is, and additionally, Mr. Kurtz has served on the board
of directors and as an officer of other reporting publicly held
companies including Hamilton Exploration Co., Inc. in 1995 and is
currently deemed a control person of Nugget Exploration, Inc. Mr.
Kurtz graduated from the University of Utah with a Bachelor's of
Science degree in Finance.
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Mrs. Kurtz, age 36, has been Vice-President and director of the
Company since September 25, 1997. Mrs. Kurtz is married to Ken
Kurtz, the Company's President and director. From January 1992
until the present, Mrs. Kurtz has held several part time
positions in the health, banking, and food service industries
while also working as a homemaker. Prior to 1992, Mrs. Kurtz
spent seven years in the banking industry in positions ranging
from customer representative to branch manager. Mrs. Kurtz is
not an officer, director or control person of any other public
company.
Tammy Gehring, age 24, became Secretary, Treasurer and director
of the Company on September 25, 1997. Ms. Gehring is employed at
Park Street Investments, Inc. as an assistant and consultant in
Mergers and Acquisitions since June 1997. Prior to this, Ms.
Gehring was employed as an administrative assistant in the
mergers and acquisitions department of a financial consulting
firm based in Salt Lake City, Utah since December 1995. Previous
to that, Ms. Gehring was an accounting and finance student at
Salt Lake Community College. Ms. Gehring served as an officer
and director of Flexweight Corporation from August 1996 until May
1998. Currently, Ms. Gehring is not an officer, director or
control person of any other public company.
Other Shell Company Activities
Mr. Kurtz is currently an officer, director, and controlling
stockholder of Score One, Inc. and of Nugget Exploration, Inc.,
both publicly held shell corporations seeking a business
acquisition. The possibility exists that Mr. Kurtz could become
an officers, director, or major stockholder of other shell
companies in the future. Certain conflicts of interest are
inherent in the participation of the Company's officers and
directors as management in other shell companies with respect to
allocation of Mr. Kurtz' time and the determination of whether to
present an acquisition opportunity to the Company or another
shell corporation. No policy has been adopted by the Company to
resolve these conflicts, and it may be difficult, if not
impossible, to resolve the conflicts in all cases in the best
interests of the Company. These conflicts could affect the
timing and quality of an acquisition by the Company, and
therefore affect the value, liquidity, and duration of an
investment in the Company. Failure by management to conduct the
Company's business in its best interests may result in liability
of management of the Company to the shareholders.
ITEM 6. EXECUTIVE COMPENSATION
No compensation was paid to any of the Company's executive
officer during the year ended December 31, 1998. No compensation
has been paid to any of the executive officers since the
beginning of 1999, and it is not expected any compensation will
be paid during the remainder of 1999. The Company has no
agreement or understanding, express or implied, with any officer,
director, or principal stockholder, or their affiliates or
associates, regarding employment with the Company or compensation
for services. The Company has no plan, agreement, or
understanding, express or implied, with any officer, director, or
principal stockholder, or their affiliates or associates,
regarding the issuance to such persons of any shares of the
Company's authorized and unissued common stock. There is no
understanding between the Company and any of its present
stockholders regarding the sale of a portion or all of the common
stock currently held by them in connection with any future
participation by the Company in a business. There are no other
plans, understandings, or arrangements whereby any of the
Company's officers, directors, or principal stockholders, or any
of their affiliates or associates, would receive funds, stock, or
other assets in connection with the Company's participation in a
business. No advances have been made or contemplated by the
Company to any of its officers, directors, or principal
stockholders, or any of their affiliates or associates.
There is no policy that prevents management from adopting a plan
or agreement in the future that would provide for cash or stock
based compensation for services rendered to the Company.
On acquisition of a business, it is possible that current
management will resign and be replaced by persons associated with
the business acquired, particularly if the Company participates
in a business by effecting a stock exchange, merger, or
consolidation as discussed under "BUSINESS." In the event that
any member of current management remains after effecting a
business acquisition, that member's time commitment and
compensation will likely be adjusted based on the nature and
location of such business and the services required, which cannot
now be foreseen.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1997, the Company entered into a consulting agreement
with Park Street Investments, Inc., a corporation wholly owned by
Ken Kurtz, the Company's President and Director. Pursuant to
that agreement, Park Street Investment, Inc. has agreed to pay
all necessary expenses to maintain the Company in good standing
and to assist in seeking out a favorable business opportunity.
In consideration for the above services, the Company issued
3,000,000 shares of common stock to Park Street Investments,
Inc., which were subsequently assigned to Mr. Kurtz and the other
two directors of the Company. In addition to these shares, Park
Street Investments, Inc. is entitled to up to 15% of the total
outstanding shares of the Company post-merger, as well as any
cash fees it can obtain from a merger candidate.
In April 1999, the Company sold 2,000,000 shares of common stock
to Ken Kurtz, an officer and director, for $20,000. The shares
were sold to raise working capital to pay the cost of the Company
becoming a reporting company under the Securities Exchange Act of
1934.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of common
stock, par value $0.01 per share, of which 9,048,171 shares are
issued and outstanding. Holders of common stock are entitled to
one vote per share on each matter submitted to a vote at any
meeting of stockholders. Shares of common stock do carry
cumulative voting rights and, therefore, shareholders are
entitled to accumulate their vote by giving one candidate as many
votes as the number of such directors multiplied by the number of
the shareholders shares, or by distributing such votes computed
among any number of such candidates. The Company's board of
directors has authority, without action by the Company's
stockholders, to issue all or any portion of the authorized but
unissued shares of common stock, which would reduce the
percentage ownership in the Company of its stockholders and which
may dilute the book value of the common stock. Stockholders of
the Company have no pre-emptive rights to acquire additional
shares of common stock. The common stock is not subject to
redemption and carries no subscription or conversion rights. In
the event of liquidation of the Company, the shares of common
stock are entitled to share equally in corporate assets after
satisfaction of all liabilities.
Holders of common stock are entitled to receive such dividends as
the board of directors may from time to time declare out of funds
legally available for the payment of dividends. The Company has
not paid dividends on its common stock and does not anticipate
that it will pay dividends in the foreseeable future.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock has traded thinly in the over-the-
counter market. There was no trading market for the common stock
prior to the last quarter of 1998. The following table sets
forth for the respective periods indicated the prices of the
common stock in the over-the-counter market, as reported and
summarized on the OTC Bulletin Board. Such prices are based on
inter-dealer bid and asked prices, without markup, markdown,
commissions, or adjustments and may not represent actual
transactions.
Calendar Quarter Ended High Bid ($) Low Bid ($)
December 31, 1998 2.5 0.00
March 31, 1999 1.5 0.25
June 30, 1999 0.5 0.25
Since its inception, no dividends have been paid on the Company's
common stock. The Company intends to retain any earnings for use
in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future.
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At July 31, 1999, there were approximately 41 holders of record
of the Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings, and to the best of its knowledge, no such
proceedings by or against the Company have been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with accountants
since the Company's organization.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On April 5, 1999, the Company issued 2,000,000 shares of common
stock to Ken Kurtz, the Company's president and a director, for
$20,000. The shares were issued in reliance on the exemption
under Section 4(2) of the Securities Act of 1933. No broker was
involved and no commissions were paid.
On March 30, 1999, the Company completed an offering of
4,000,000 shares of the Company's common stock at a price of
$0.03125, or a total of $125,000. Of the shares sold, 3,918,750
shares were sold for $122,461 in cash and 81,250 were sold for
$2,539 in debt settlement. With respect to the debt settlement,
the Company owed $35,000 to an unrelated consultant for services
rendered in 1995 in connection with revitalizing the Company.
The 81,250 share issued to the Consultant were valued at $.03125
per share and hence reduced the $35,000 obligation by $2,539.
The shares were offered and sold in reliance on the exemption set
forth in Rule 504 of Regulation D. At the time of the offering,
the Company was not a reporting company under the Securities
Exchange Act of 1934, and the aggregate offering price, together
will all other offerings by the Company during the 12-month
period prior to the offering, did not exceed $1,000,000. The
offering was made in anticipation of a business combination with
an Internet company, Fax4free.com, Inc., which subsequently
failed to occur. Therefore, the Company was not a development
stage business with its only business plan to acquire an
unidentified business at the time the offering was made. No
broker was involved in the offering and no commissions were paid.
The name and number of shares purchased by each investor are as
follows:
Investor Name Shares Purchased
Type Investment Holdings, Ltd. 81,250
Leeward Consulting Group, L.L.C. 81,250
A-Z Oil, L.L.C. 770,000
David Michael Irrevocable Trust 730,000
Ariel Finances, Inc. 800,000
Arno Holding Corp. 800,000
Yosif Flek 737,500
In November 1997, the Company issued 3,000,000 shares of its
common stock to Park Street Investments, Inc., as compensation
for services and advancement of certain costs for the benefit of
the Company. The shares were subsequently assigned to the
officers and directors of the Company. The shares were sold in
reliance on the exemption under Section 4(2) of the Securities
Act of 1933. No broker was involved and no commissions were
paid.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 16-10a-902 of the Utah Code Annotated provides in
relevant part as follows:
(1) Except as provided in Subsection (4), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director, against liability incurred in the
proceeding if:
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(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not
opposed to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(4) A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation; or
(b) in connection with any other proceeding charging that
the director derived an improper personal benefit, whether or not
involving action in his official capacity, in which proceeding he
was adjudged liable on the basis that he derived an improper
personal benefit.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in
connection with the proceeding.
Section 16-10a-903 of the Utah Code Annotated provides in
relevant part as follows:
Unless limited by its articles of incorporation, a corporation
shall indemnify a director who was successful, on the merits or
otherwise, in the defense of any proceeding, or in the defense of
any claim, issue, or matter in the proceeding, to which he was a
party because he is or was a director of the corporation, against
reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.
Section 16-10a-907 of the Utah Code Annotated provides in
relevant part as follows:
Unless a corporation's articles of incorporation provide
otherwise:
(1) an officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903, and is entitled to
apply for court-ordered indemnification under Section 16-10a-905,
in each case to the same extent as a director;
(2) the corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the corporation to the
same extent as to a director; and
(3) a corporation may also indemnify and advance expenses to
an officer, employee, fiduciary, or agent who is not a director
to a greater extent, if not inconsistent with public policy, and
if provided for by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.
The Company's by-laws provide that the Company shall indemnify to
the full extent of its power to do so under Utah law, all
directors and officers of the Company for any liability including
costs of defense reasonably incurred in connection with any
action, suit, or proceeding to which such person may be a party
by reason of such person's position with the Company, if the
officer or director acted in good faith and in a manner the
officer or director reasonably believed to be in, or not opposed
to, the best interests of the corporation. Consequently, the
Company intends to indemnify its officers and directors to the
full extent permitted by the statute noted above.
PART F/S. FINANCIAL STATEMENTS
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page F-1.
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PART III
ITEM 1. INDEX TO EXHIBITS
ITEM 2. DESCRIPTION OF EXHIBITS
Copies of the following documents are included as exhibits to
this filing.
Exhibit No. SEC Ref. No. Title of Document Page*
1 (2) Articles of Incorporation E-1
2 (2) By-Laws E-9
3 (6) Assignment of Accounts Receivable
Dated December 14, 1998 E-22
4 (6) Settlement Agreement
Dated June 25, 1998 E-23
5 (6) Financial Consulting Agreement
Dated June 15, 1997 E-24
6 (6) Financial Data Schedules **
* The listed exhibits are incorporated herein by this
reference to the Registration Statement on Form 10-SB filed by
the Company with the Securities and Exchange Commission on August
9, 1999, and the page references are to the page location of the
exhibit in said filing.
** The Financial Data Schedule is incorporated herein by this
reference to the Registration Statement on Form 10-SB filed by
the Company with the Securities and Exchange Commission on August
9, 1999. This exhibit was presented only in the electronic
filing with the Securities and Exchange Commission.
14
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned thereunto duly
authorized.
AREA INVESTMENT AND DEVELOPMENT
COMPANY
Date: September 24, 1999 By: /s/ Ken Kurtz, President
In accordance with the Exchange Act, this registration statement
has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: September 24, 1999 /s/ Ken Kurtz, Director
Dated: September 24, 1999 /s/ Carrie Kurtz, Director
Dated: September 24, 1999 /s/ Tammy Gehring, Director
15
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AREA INVESTMENT AND DEVELOPMENT COMPANY
TABLE OF CONTENTS
AUDITOR'S REPORT F-2
FINANCIAL STATEMENTS
Balance Sheets F-3
Statements of Operations F-4
Statements of Shareholders' Equity F-5
Statements of Cash Flows F-6
Notes of Financial Statements F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Area Investment and Development Company
Salt Lake City, Utah
We have audited the accompanying balance sheets of Area Investment
and Development Company as of June 30, 1999 and December 31, 1998
and 1997, and the related statements of operations, shareholders'
equity, and cash flows for the six months ended June 30, 1999 and
for each of the two years ending December 31, 1998 and 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 our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Area
Investment and Development Company as of as of June 30, 1999 and
December 31, 1998 and 1997, and the results of its operations and
its cash flows for the six months ended June 30, 1999 and for each
of the two years ending December 31, 1998 and 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been presented assuming
the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company is not a going concern.
The financial statements do not include any adjustments that might
otherwise be required since the Company is not a going concern.
Sellers & Associates
July 6, 1999
Ogden, Utah
F-2
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Balance Sheets
June 30 December 31,
_________________________
1999 1998 1997
________ ________ _________
ASSETS
Current Assets:
Cash $ 20,000 $ - $ -
Total Current Assets - - -
Total Assets $ 20,000 $ - $ -
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Accounts Payable $ - $ 35,000 $ 86,435
Total Liabilities: - 35,000 86,435
COMMITMENTS/CONTINGENCIES - - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock $.01 par
value; authorized
50,000,000 shares
Issued and outstanding
9,048,173 shares at 6-30-99
and 3,048,173 shares at
12-31-98 and 12-31-97 90,482 30,482 30,482
Additional paid-in 116,700 31,700 31,700
capital
Accumulated (deficit) (187,182) (97,182) (148,617)
Net stockholders'
equity (deficit) 20,000 (35,000) (86,434)
Total Liabilities and
Stockholders' Equity
(Deficit) $ 20,000 $ - $ -
See accompanying notes
F-3
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Operations
Six Months
Ended
June 30, December 31,
_________________________
1999 1998 1997
__________ __________ _________
Revenues $ - $ - $ -
Costs and Expenses 90,000 $ 480 46,107
(Loss) from regular
activity - (480) (46,107)
Debt forgiveness
from settlement
of payable - 51,915 -
Net Income (loss) $ (90,000) $ 51,435 $ (46,107)
Income (loss per
share $ (0.01) $ 0.02 $ (.04)
Weighted average
shares outstanding
during the period 6,197,344 3,048,173 1,278,309
See accompanying notes
F-4
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Stockholders' Equity
June 30, 1999 and
December 31, 1998 and 1997
Common Stock
_____________________
Additional
Number of Par Paid In (Deficit)
Shares Value Capital Accumulated
__________ ________ _________ _______________
Balance December
31, 1996 48,173 $ 482 $ 31,700 $(102,510)
Issuance of
stock 3,000,000 30,000 - -
Net (loss) - - - (46,107)
Balance December
31, 1997 3,048,173 30,482 31,700 (148,617)
Net income - - - 51,435
Balance December
30, 1998 3,048,173 30,482 31,700 ( 97,182)
Issuance of
stock 6,000,000 60,000 85,000 -
Net (loss) - - - ( 90,000)
Balance June
30, 1999 9,048,173 $90,482 $116,700 $(187,182)
========= ======= ========== ============
See accompanying notes
F-5
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Cash Flows
Six Months
Ended
June December 31,
_______________________
30, 1999 1998 1997
__________ __________ __________
Cash flows from
operating activities:
Net income (loss) $ ($90,000) $ 51,435 $ (46,107)
Reconciliation of net income (loss)
To net cash provided (used) by
operating activities:
Increase/(decrease) in Accounts
Payable regular (35,000) - 16,107
Settlement of debt (payables) - (51,435) -
Net Cash provided (used) by ___________ _____ ________
operating activities (125,000) - (30,000)
Non cash flows from investing
activities
Issuance of stock for cash 142,461
Issuance of stock for settlement
of debt 2,539 - 30,000
Issuance of stock for services-
non cash activity - - 30,000
Net increases (decreases) in cash 20,000 - -
Cash, beginning of year/period - - -
Cash, end of year/period $ 20,000 $ - $ -
Supplemental Schedule of Non Cash Activities
On June 15, 1997 2,000,000 shares of restricted common stock valued at
$20,000 were authorized to be issued for services at $.01 per share and
on November 10, 1997 1,000,000 shares of restricted common stock valued
at $10,000 were authorized to be issued for services at $.01 per share.
All 3,000,000 shares were issued by November 25,1997.
On March 24, 1999, the Company issued 81,250 shares of common stock for
$2,539 in debt settlement.
See accompanying notes
F-6
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Notes to Financial Statements
June 30, 1999 and
December 31, 1998 and 1997
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization:
The Company was incorporated under the laws of the State of Utah
on June 10, 1970 to engage in real estate development, general
business and investment opportunities.
Income Taxes:
The Company has adopted the provisions of statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes,"
which incorporates the use of the asset and liability approach of
accounting for income taxes. The asset and liability approach
requires the recognition of deferred tax assets and liabilities
for the expected future consequences of temporary differences
between the financial reporting basis and tax basis of assets and
liabilities.
At June 30, 1999, the Company has $187,182 net operating loss of
which $187,182 is the net operating loss carry-forward that could
be offset against future taxable income, including the remaining
of the current year to end December 31, 1998. The loss carry-
forward expires December 31, 2014. Because of the uncertainty of
ever using the net operating loss, it has no value assigned to
the financial statements.
The Company changed its income tax reporting year end from June
30 to December 31, effective December 31, 1998.
Statement of Cash Flows:
For the purpose of the statement of cash flows, the Company
considers all highly liquid investments with maturity of three
months or less to be cash equivalents.
Net Income (Loss) Per Share:
Primary net income (loss) per share is computed by dividing net
income (loss) by the weighted average number of common shares
outstanding.
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 those estimates.
NOTE 2 GOING CONCERN AND EFFORTS TO REVIVE COMPANY:
Up until January 26, 1999 the Company had been inactive and non-
operating for years; consequently, it was not a going concern.
In June of 1995, the Company's previous board of directors was
approached by its current President and Director who proposed to
revive the Corporation and to seek out and identify a suitable
candidate with which to merge in order to provide value to its
shareholders. In July of 1995, the Company's board of directors
resigned and was replaced by a new board of directors including
F-7
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its current President. Because the Company had no assets or
resources to compensate or induce personnel to assist it with
such a program of reviving or combining the Company with an
operational business, the Company entered into a Financial
Consulting Agreement ("Agreement") with Park Street Investments,
Inc. ("Park Street") in June of 1997. Park Street is a Utah
Corporation 100% owned by Ken Kurtz, the Company's President,
majority shareholder and director.
According to the Agreement, Park Street has agreed to assist the
Company with its corporate maintenance, administration, financial
statement preparation and securities filings. In addition, Park
Street is to actively pursue, negotiate and structure a merger or
business combination with a third party on behalf of the Company.
Park Street has also agreed to pay for the costs associated with
these responsibilities until the Company effects a combination
with another entity.
As consideration for its services and payment of the Company's
costs therewith, the Company's board authorized the issuance of
3,000,000 restricted common stock shares valued at $.01 per
share. By November 25, 1997 all 3,000,000 shares were issued. Of
this, Park assigned 2,000,000 shares to Ken Kurtz, who is both
the Company's and Park's President and 500,000 shares to each of
the Company's two directors for their assistance with Park in
implementing its contract with the Company.
Also according to the Agreement, Park Street shall be entitled to
as much as 10% of the total issued and outstanding shares of the
Company after a business combination. Park Street shall also be
entitled to any cash consideration it can negotiate from a
potential reorganization entity.
Because the exact number of shares to be outstanding after a
business combination is currently unknown and because the exact
percentage of ownership that Park Street is entitled to will be
subject to negotiations between the Company, Park Street, and a
potential target Company, the actual number of shares to be owned
by Park Street will be modified by mutual agreement by the
parties involved. Moreover, the amount of cash that Park Street
is to receive is also subject to negotiations and is currently
unknown. In no event, shall Park Street's ownership percentage
exceed more than 10% of the total outstanding shares of the
Company after a business combination.
This agreement resulted in a change in control of the Company
giving Ken Kurtz 66% control of the Company's common stock. This
stock issuance is not deemed to be at arms length.
In January 1999, the Company began discussions with
representatives of Fax4free.com, Inc. - an online service
provider - for the possibility of a business combination. As
such, the Company changed its business plan from seeking a
business combination with an unidentified Company to effecting a
business transaction with Fax4free.com, Inc. In anticipation of
such business combination, the Company authorized an offering for
4,000,000 shares of its common stock under Regulation D Rule 504
at $.03125 per share to raise $125,000. Proceeds were to be used
to pay expenses related to the business combination and to pay
off the remainder of the Company's debts.
On March 30, 1999, the Company closed the offering after having
sold the 4,000,000 shares to seven investors of which 3,918,750
shares were sold for $122,461 in cash and 81,250 were sold for
$2,539 in debt settlement. On March 24, 1999, the Company paid
off the remainder of its debts in the amount of $32,461 and paid
a finder/consulting fee in the amount of $90,000 to Hudson
Consulting Group, Inc. ("Hudson") for introducing Fax4free.com,
Inc. to the Company. Hudson has agreed to assist in locating
another merger acquisition candidate as part of its $90,000 fee
F-8
<PAGE>
which has been already paid. Management has opted to expense the
entire $90,000 fee which is non-refundable because Hudson does
not have an exclusive agreement with management and is not
obligated to perform. Therefore, there are no assurances that
the Company may not be obligated to pay additional fees to other
parties in the future.
On April 5, 1999 the Company sold and issued 2,000,000 restricted
shares of its common stock to it its President, Ken W. Kurtz for
$20,000 cash.
Later in April, the company terminated its negotiations with
Fax4free.com, Inc.
NOTE 3 CONTINGENT LIABILITY:
On or before the corporate year end of June 30, 1992, the Company
reported uncollected receivables of $22,554, $11,643 of which
were loans to stockholders. Reported liabilities were $1,700.
The corporation continued in this state of no activity
thereafter. In 1995, prior management personally assumed all
corporate debt in exchange for the forgiveness of the loans to
stockholders and the uncollected receivables of the Company, thus
leaving the Company with no assets or liabilities.
NOTE 4 CHANGE IN COMPANY MANAGEMENT:
In June 1997 the Company appointed Ken Kurtz, a director at the
time, as the Company's President. In September 1997, the Company
appointed Tammy Gehring and Carrie Kurtz as additional directors
and as Secretary/Treasurer and Vice President respectively. Ms.
Gehring is also employed by Park. Mrs. Kurtz is the wife of the
Company's President/Director.
NOTE 5 REDUCED SETTLEMENT OF PAYABLE
Present management negotiated a settlement of accounts payable
due to a prior consultant. On June 25, 1998, the payable was
reduced by $51,915, going from $86,915 to $35,000. In February
1999, the Company issued 81,250 common stock shares to a creditor
towards payment of its $35,000 note payable. The 81,250 share
issuance was valued at $.03125 per share and hence reduced the
$35,000 obligation by $2,539. On March 24, 1999, the Company paid
off the remainder of its debts in the amount of $32,461 from
proceeds of its January 1999 Regulation D Rule 504 common stock
offering. Currently, the Company has no debts.
NOTE 6 ISSUANCE OF ADDITIONAL STOCK:
In June of 1997, the company entered into a consulting agreement
with Park Street Investments, Inc. ("Park"), a firm 100% owned by
the Company's President whereby Park has agreed to pay all
necessary expenses to maintain the company in good standing and
to seek out a merger with a viable operating entity. Park has
also agreed to provide all administrative assistance, office
space and costs as part of its Agreement. In consideration for
the above, the Company authorized the issuance of 3,000,000
restricted common stock shares valued at $.01 per share. By
November 25, 1997 all 3,000,000 shares were issued. Of this, Park
assigned 2,000,000 shares to Ken Kurtz, who is the Company's and
Park's President and 500,000 shares to each of the Company's two
directors for their assistance with Park in implementing its
contract with the Company.
In January 1999, the Company authorized an offering for 4,000,000
shares of its common stock under Regulation D Rule 504 at $.03125
per share to raise $125,000. Proceeds were to be used to pay
F-9
<PAGE>
expenses related to the business combination and to pay off the
remainder of the Company's debts. On March 30, 1999, the
Company closed the offering after having sold the 4,000,000
shares to seven investors of which 3,918,750 shares were sold for
$122,461 in cash and 81,250 were sold for $2,539 in debt
settlement.
On April 5, 1999 the Company sold and issued 2,000,000 restricted
shares of its common stock to it its President, Ken W. Kurtz for
$20,000 cash.
F-10
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