UNITED STATES
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ______ to ______
Commission file number: 000-25511
Source One, Incorporated
-----------------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0379078
---------- -------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
number)
236 S. Rainbow Bl., Suite 486, Las Vegas, Nevada 89128
- ------------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (702) 363-0066
Securities registered under Section 12(b) of the Act:
Title of each class: n/a
Name of each exchange on which registered: n/a
Securities registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]
State issuer's revenues for its most recent fiscal year: $17,354
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)
None (No public market exists for the Company's common stock.)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
As of December 31, 1999, the Company has issued and outstanding 11,292,000
shares of common stock.
No documents have been incorporated by reference.
Transitional Small Business Disclosure Format: Yes [ ] No [x]
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Source One, Incorporated (the "Company" or the "Registrant") was organized
as a Nevada corporation on November 18, 1997. The Company sells jewelry
through the Internet and via mail order. To date, the Company has concentrated
on the sale of wholesale jewelry through these avenues.
PRINCIPAL PRODUCTS AND MARKETS
In 1999, the Company offered for retail sale, 16 different items of jewelry
and related merchandise. This merchandise consists of one necklace style, one
style of ring, five bracelets styles, two earrings styles, one tack pin, and two
different types of jewelry boxes. New for 1999,the Company introduced one 14
karat bracelet style and loose 10 point diamonds. Prices of this product line
range from $2.00 for one of the jewelry boxes to $160.00 for a 14 karat gold
bracelet, depending on the price of gold at the time of purchase.
The jewelry products are all 18 karat (or 14 karat) overlaying sterling
silver, which the jewelry industry refers to as Vermeil. The jewelry products
offered by the Company are 100% guaranteed for wear as to appearance, loss of
stones, and breakage.
The Company markets its products via the Internet and has relied heavily
on positive word of mouth advertising. The nature of the jewelry offered lends
itself to promotional/incentive uses. As such, current clientele of the Company
ranges from independent Mary Kay sales directors, and other direct sales
companies.
The Company intends to investigate other business opportunities in the
jewelry industry such as maintaining a retail store front, purchasing overstock
merchandise from suppliers, and/or investing in other related jewelry
businesses.
METHODS OF DISTRIBUTION
Since February of 1998, the Company has maintained its web-site/online
catalog at http://wizard.com/source1. The Company has prepaid for Internet
services through January of 2001. The Company does not yet offer a secure
web-site wherein purchases may be made online, but intends to offer such a
service in the future. Currently, orders are accepted via e-mail or telephone.
Customers may purchase items using their Mastercard or Visa credit card.
The Company is dependent upon advertising and publicity (via word of
mouth) to bring awareness of the Company's products to its potential clientele.
The Company relies upon word-of-mouth and referrals to help establish its
client base. To date the Company has generated a large portion of its client
base from these referrals. When the Company is able to better identify and
focus on more specific markets it will adjust its distribution methods
accordingly. At such time as the Company has built its market profile, it
anticipates advertising through direct mail.
<PAGE>
SUPPLIERS
The Company obtains its merchandise from a number of sources. Its
principal supplier is MK Resources, Inc., a Nevada corporation that acquires
its merchandise from PAJ, Inc. in Dallas, Texas and Gold Rush Jewelry Design in
Las Vegas, Nevada, the Company's supplier of loose gem stones, gold products.
In 1999, the Company established an account with Benjamin & Company, in Los
Angeles, CA., for the Company's 14 karat bracelet. The Company has no exclusive
arrangements with any company and therefore, may obtain its products from any
source. Relationships have been established at executive levels within the
Company suppliers in order to ensure quality products, contain costs, and
receive superior service.
COMPETITION
There are a large number of companies and individuals engaged in the
jewelry industry. On one search engine on the Internet, Yahoo.com, there are
over 31,000 listings under the topic "Jewelry." The jewelry industry is highly
competitive with respect to name recognition, quality of products, Internet
presentation and advertising.
Mignon Cardenas, President of the Company, is an independent sales
director with Mary Kay Cosmetics. Such a position gives Ms. Cardenas special
insight into the needs of independent consultants to the direct marketing
industry. Management of the Company believes that this gives the Company an
edge in providing promotional types of jewelry products to those individuals
with a need to purchase jewelry and related items for incentives and rewards.
The Company faces competition from a broad range of companies in the
jewelry industry, retail jewelry stores, and promotional & incentive companies
that offer jewelry items. Many of the Company's competitors have achieved
national, regional and local recognition. Many of these competitors engage in
extensive advertising and promotional programs.
The Company is by no means the only such company specializing in this
particular niche. However, Ms. Cardenas has many contacts within the ranks of
the independent sales directors of Mary Kay and has found that word of mouth
advertising among her peers to be a successful competitive tool.
The Company believes that its competitive advantages are as follows:
1. Pricing - The Company prices its products at twenty-five
percent over its cost, depending on the cost of the product. The Company
utilizes this strategy to attract volume buyers verses the one-item purchase.
Also, the Company offers a price brake on certain items when six or more are
purchased.
2. Product Line - The Company believes that its largest
advantage is its specialization in vermeil products. Management believes that
the Company is developing a niche in this market, and that once established in
the vermeil market, it will be able to introduce new product lines to increase
revenues.
3. Lower Overhead - The operating costs for national competitors
can be expensive. Management believes that its lower operational costs will
enable the Company to compete because of the lower overall overhead. Also, the
Company keeps the advertising expense to a minimum by advertising over the
Internet and by reliance on word of mouth advertising.
<PAGE>
SEASONALITY
The business of the Company is somewhat seasonal in that the jewelry
industry in general has traditional holidays that spur seasonal consumer
buying. The fourth calendar quarter is traditionally the highest sales volume
quarter for sales inside the jewelry industry as a whole. However, the Company
has not experienced the traditional spending habits of the industry. Rather,
the first and fourth quarters generate a higher percentage of the company's
annual revenues.
This natural seasonality of the industry may not necessarily be
represented in the patterns of the Company's revenues.
EMPLOYEES
The Company currently has only one employee, its President, Mignon
Cardenas. Ms. Cardenas does not devote her full attention to the affairs of the
Company. As growth of the Company continues, additional employees will be
added when necessary.
ITEM 2. DESCRIPTION OF PROPERTY
The Company maintains a monthly rental with an organization from which
it rents an address/postal box and telephone answering service. The annual
rental on this space is approximately $180 and includes the use, when
available, of a small desk area. The Company has not signed a lease on this
space but has prepaid the rental through April of 2000. The Company utilizes a
portion of its President's home (705 Vincent Way, Las Vegas, NV 89128) for
storing unsold inventory.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings and,
to the best of its knowledge, no such action by or against the Company has
been threatened. None of the Company's officers, directors, or beneficial
owners of 5% or more of the Company's outstanding securities is a party adverse
to the Company nor do any of the foregoing individuals have a material interest
adverse to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to the shareholders for a vote in the
fourth quarter of 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company has no public trading market for its common stock. Although
the Company intends to seek a quotation for its common shares on the Over-the-
Counter Bulletin Board in the future, there is no assurance the Company will
do so, nor is there any assurance that should the Company succeed in obtaining
a listing for its securities on the OTC Bulletin Board or on some other
exchange, that a trading market for the Company's stock will develop. There are
no outstanding options, warrants to purchase, or securities convertible into
common equity of the Company outstanding. The Company has not agreed to
register any shares of its common stock for any shareholder.
<PAGE>
The Company has not issued any new securities during the last quarter of
1999.
STOCKHOLDERS
The Company's transfer agent, Silver State Transfer & Registrar, confirms
that there are 44 shareholders of record for the Company.
DIVIDENDS
To date, the Company has not paid any dividends on its common stock. The
payment of dividends, if any, in the future is within the discretion of the
Board of Directors and will depend upon the Company's earnings, its capital
requirements and financial condition, and other relevant factors. The Board
does not intend to declare any dividends in the foreseeable future, but
instead intends to retain all earnings, if any, for use in the Company's
business operations. Under Nevada Corporate Law, dividends may be paid out of
surplus or, in case there is no surplus, out of net profits for the fiscal
year in which the dividend is declared and/or the proceeding fiscal year.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
GENERAL
The Company currently operates at 236 S. Rainbow Bl., Suite 486, Las
Vegas, Nevada 89128. The Company's principal business is providing
promotional/incentive types of jewelry through the Internet and mail order.
Results of Operations for the Period Ending December 31, 1999
- -------------------------------------------------------------
The following is a discussion of the results of operations for the year
ended December 31, 1999, compared to the year ended December 31, 1998.
Total revenues for the year ended December 31, 1999 increased $1,553 as
compared to 1998, to $17,354 from $15,801 respectively. The increase achieved
in 1999 represents an increase of approximately 9%. However, the increase is
due to the fact that the Company's client base and retail sales orders increased
over the year.
Total costs and expenses increased for the year ended December 31, 1999
as compared to 1998 by $4,042, to $10,552 from $6,510. Again, this increase was
due to the fact that the Company's operating expenses increased, due largely to
expenses associated with the increase in the expenditure in professional fees
related to the preparation and filing of the Company's Form 10-SB and quarterly
filings and general expenses.
The net income for the year ended December 31, 1999 was $(7,565) and was
associated with the increase in general expenses of the Company. The net
income for 1999, when compared to 1998, decreased due to the increase in other
general and administrative expenses and due largely to expenses associated with
the increase in the expenditure in professional fees related to the preparation
and filing of the Company's Form 10-SB and subsequent quarterly filings.
Liquidity and Capital Resources
Cash as of December 31, 1999 was $4,651 as compared to $9,953 as of
December 31, 1998. The change was primarily the net of cash $5,302, used by
operating activities and the purchase of inventory.
<PAGE>
PLAN OF OPERATION
During the next twelve months, the Company's plan of operation is to look
to further expansion on the World Wide Web(WWW). The Company believes the World
Wide Web could become the greatest resource for the Company's future growth and
expansion.
In year 2000, the Company's plans to modifying its web site. Management
looks to include an on-line ordering service and to offer a secured site to
increase the Company's on-line e-commerce. The Company intends to continue to
develop its advertising concept on the Web which is currently represented in the
form of banner ads.
During the next twelve months, the Company's cash requirements will include
the following: (1) $100 per month to its bookkeeper; (2) The Company's monthly
rental for its address/postal box and telephone answering service. The annual
rental on this space is approximately $180; and (3) miscellaneous overhead. The
Company, therefore, will require a minimum of $2,000 for the next 12 month for
services and lease payments. The Company believes that the Capital Resources
will be sufficient to provide for the foregoing cash requirements of $25,000 for
day to day operations in the next twelve months. It will also provide for the
costs of implementing its business plan, for the purchase of supplies and
equipment, and general working capital which will include costs of advertising,
mailings, Internet access and web site, and purchase of inventory. There is no
guarantee that the budgeted funds will be sufficient to achieve these goals.
Management believes that it will not achieve profitability until it is able to
realize approximately $5,000 in gross sales per month. The Company has no
guarantee that it will be able to achieve this goal in the next twelve months.
The Company may require additional funds and time to achieve these goals.
The Company could require additional funding for expansion. The Company may
find it difficult to succeed in securing additional financing. The Company may
be able to attract some private investors, or an officer and/or director may be
willing to make additional cash contributions, advancements or loans. Or, as an
alternative, the Company could attempt some form of debt or equity financing.
YEAR 2000 ISSUES
- -----------------
Management has not encountered any problems with the Company's accounting
and operational systems. Management believes the operating systems which the
Company utilizes are compliant and fully operational.
The Company is not dependent on computers other than for its internal
bookkeeping which is done on a Microsoft office 2000 system. The Company has no
relationship with any third parties which are dependent on computers other than
its bank.
ITEM 7. FINANCIAL STATEMENTS
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
<PAGE>
TABLE OF CONTENTS
Page Number
INDEPENDENT ACCOUNTANT'S REPORT 1
FINANCIAL STATEMENT
Balance Sheets 2
Statements of Operations and Deficit
Accumulated During the Development Stage 3
Statement of Changes in Stockholders' Equity 4
Statements of Cash Flows 5
Notes to the Financial Statements 6-7
<PAGE>
DAVID E. COFFEY 3651 LINDELL ROAD, SUITE A, LAS VEGAS, NEVADA 89103
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Stockholders
of Source One, Incorporated
Las Vegas, Nevada
I have audited the accompanying balance sheets of Source One, Incorporated,
(a development stage company) as of December 31, 1999, and December 31, 1998,
and the related statements of operations, cash flows, and changes in
stockholders' equity for the period from November 18, 1997, (date of inception)
to December 31, 1999. These statements are the responsibility of Source One,
Incorporated's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of Source One, Incorporated, as of
December 31, 1999, and December 31, 1998, and the results of operations, cash
flows, and changes in stockholders' equity for the periods then ended, as well
as the cumulative period from November 18, 1997, in conformity with generally
accepted accounting principles.
/s/ David Coffey, C.P.A.
David Coffey, C. P. A.
Las Vegas, Nevada
February 15, 2000
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31, December 31,
1999 1998
------------ ------------
ASSETS
Cash $ 4,651 $ 9,953
Accounts receivable 565 3,357
Inventory 3,001 3,886
Deposits 670 420
------------ ------------
Total Assets $ 8,887 $ 17,616
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 38 $ 1,261
------------ ------------
Total Liabilities 38 1,261
Stockholders' Equity
Common stock, authorized 20,000,000
shares at $.001 par value, issued and
outstanding 11,292,000 shares 11,292 11,292
Preferred stock, authorized 5,000,000
shares at $.001 par value, none
issued or outstanding 0 0
Additional paid-in capital 12,628 12,628
Deficit accumulated during the
development stage (15,071) (7,565)
------------ ------------
Total Stockholders' Equity 8,849 16,355
Total Liabilities and Stockholders' Equity $ 8,887 $ 17,616
============ ============
The accompanying notes are an integral part of
these financial statements.
-2-
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
<TABLE>
<CAPTION>
For the three For the three For the twelve For the twelve Inception,
months ended months ended months ended months ended Nov. 18,1997,
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec.31,1998 to Dec. 31, 1999
------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Sales $ 5,383 $ 6,582 $ 17,354 $ 15,801 $ 37,446
Cost of sales 4,006 4,492 14,308 10,766 28,396
------------- ------------- ------------- ----------- -------------
Gross margin 1,377 2,090 3,046 5,045 9,050
Expenses
Organizational expense 0 0 0 0 4,185
Advertising 0 550 395 550 945
Consulting 300 300 1,200 1,995 5,195
Licenses and fees 221 217 915 546 1,630
Office expenses 82 122 837 1,442 2,774
Professional fees 1,750 0 7,025 0 7,025
Rent 0 0 180 0 390
Travel 0 0 0 1,691 1,691
Uncollectible accounts 0 0 0 286 286
------------ ------------- ------------- ----------- -------------
Total expenses 2,353 1,189 10,552 6,510 24,121
Net Income (loss) (976) 901 (7,506) (1,465) (15,071)
Deficit accumulated,
beginning of period (14,095) (8,466) (7,565) (6,100) 0
------------- ------------- ------------- ------------ -------------
Deficit accumulated during
the development stage $ (15,071) $ (7,565) $ (15,071) $ (7,565) $ (15,071)
============= ============= ============= ============ =============
Earnings ( loss) per share
assuming dilution: $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Weighted average shares
outstanding 11,292,000 11,292,000 11,292,000 11,292,000 10,813,616
</TABLE>
The accompanying notes are an Integral part of
these financial statements.
-3-
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM NOVEMBER 18,1997, ( Date of Inception)
TO DECEMBER 31,1999
<TABLE>
<CAPTION>
Common Stock Additional Total
Shares Amount Paid-in
Capital
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ $ $
Balance,
November 18, 1997 ---- ---- ---- ----
Issuance of common stock for cash
December, 1997 1,000,000 1,000 0 1,000
Issuance of common stock for services
December, 1997 8,000,000 8,000 0 8,000
Issuance of common stock for cash
December, 1997 2,292,000 2,292 20,628 22,920
Less offering costs 0 0 (4,100) (4,100)
Less net loss 0 0 0 (6,100)
---------- ---------- ---------- ----------
Balance,
December 31, 1997 11,292,000 11,292 16,528 21,720
Less offering costs 0 0 (3,900) (3,900)
Less net loss 0 0 0 (1,465)
---------- ---------- ---------- ----------
Balance,
December 31, 1998 11,292,000 11,292 12,628 16,355
Less net loss 0 0 0 (7,506)
---------- ---------- ---------- ----------
Balance,
December 31, 1999 11,292,000 $ 11,292 $ 12,628 $ 8,849
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of
these financial statements
-4-
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the three For the three For the twelve For the twelve Inception,
months ended months ended months ended months ended Nov. 18,1997
Dec. 31, 1999 Dec.31,1998 Dec.31,1999 Dec. 31, 1998 to Dec. 31, 1999
<S> <C> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net Loss $ (976) $ 901 $ (7,506) $ (1,465) $ (15,071)
Non-cash items included
in net loss 0 0 0 0 0
Adjustments to reconcile
net loss to cash used
by operating activity
(Incr.) Decr. in
Accounts receivable (565) (3,356) 2,792 (2,978) (565)
(Incr.) Decr. in
Inventories 2,606 (293) 885 (3,886) (3,001)
(Incr.) Decr. in
Deposits 0 0 (250) 0 (670)
Incr. (Decr.) in Accounts
payable 38 961 (1,223) (4,201) 38
-------------- ------------- -------------- -------------- -------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,103 (1,787) (5,302) (12,530) (19,269)
CASH FLOWS USED BY
INVESTING ACTIVITIES 0 0 0 0 0
-------------- ------------- -------------- -------------- -------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Sale of common stock 0 0 0 11,292
Paid-in capital 0 0 0 20,628
Less offering costs (3,900) (8,000)
-------------- ------------- -------------- -------------- -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 (3,900) 23,920
NET INCREASE IN CASH 1,103 (1,787) (5,302) (16,430) 4,651
CASH AT BEGINNING OF PERIOD 3,548 11,740 9,953 26,383 0
CASH AT END OF PERIOD $ 4,651 $ 9,953 $ 4,651 $ 9,953 $ 4,651
============== ============= ============== ============== =============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-5-
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on November 18, 1997, under
the laws of the State of Nevada. The business purpose of
the Company is to provide wholesale jewelry mail order and
the Internet.
The Company will adopt accounting policies and procedures
based upon the nature of future transactions.
NOTE B INVENTORY
Inventories are carried at the lower of cost or market on
the first-in, first-out basis.
NOTE C OFFERING COSTS
Offering costs are reported as a reduction in the amount of
paid-in capital received for sale of the shares.
NOTE D EARNINGS (LOSS) PER SHARE
Basic EPS is determined using net income divided by the
weighted average shares outstanding during the period.
Diluted EPS is computed by dividing net income by the
weighted average shares outstanding, assuming all dilutive
potential common shares were issued. Since the Company
has no common shares that are potentially issuable, such as
stock options, convertible securities or warrants, basic and
diluted EPS are the same.
NOTE E COMMON STOCK AND PUBLIC STOCK OFFERING
The Company retained two of its stockholders and issued
them 8,000,000 shares of its common stock in exchange for
their services in connection with the organization of the Company
and preparation of the business plan. The Company also sold the
stockholders 1,000,000 shares of its common stock for $1,000
or $. 001 per share.
-6-
<PAGE>
SOURCE ONE, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
(continued)
NOTE E COMMON STOCK AND PUBLIC STOCK OFFERING (continued)
The Company completed a public stock offering in December
of 1997 and sold 2,292,000 shares of its common stock for
$22,920 at $.01 per share. The net proceeds of the offering
will be used to provide wholesale jewelry through mail order and
the Internet.
NOTE F RELATED PARTY TRANSACTIONS
The Company has agreed to pay two of its officers $1,000
each for services in their positions during the initial development
stage of the Company.
The Company retained two of its stockholders and issued
them eight million shares of common stock in exchange for
their services in connection with the organization of the Company
and preparation of the business plan. These services were valued
at $8, 000 or $. 001 per share.
-7-
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has used the same independent accountant since its inception
in November of 1997 and has not had any disagreements with said independent
accountant.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth the directors and executive officers of the
Company, their ages, and all positions with the Company.
Name Age Position
____________________________________________________________________________
Mignon Cardenas 32 President, and a Director
Sandra Ramirez 35 Secretary/Treasurer and a Director
Charles R. Powell 41 A Promoter of the Company
Mignon M. Cardenas, 32, is President and a director of the Company. Ms.
Cardenas received her middle school and high school studies in Mexico. From
1984 to 1988, Ms. Cardenas taught English as a second language to students in
grades 3 to 6 for Escuela Active Integral, a private elementary school, located
in Culiacan, Mexico. During that same period of time, she also opened her own
language academy located in the same city where she taught English as a second
language. Ms. Cardenas sold this business to return to the United States.
From October 1988 to August 1994 she was employed by Citibank Nevada, in Las
Vegas, Nevada, a credit card company, as a customer service representative
specializing in correspondence received in foreign languages. She now has a
business out of her home with Mary Kay Cosmetics, Inc., where she has reached
the level of Independent Sales Director, and is directly involved in managing a
sales force of 40 to 50 members, training, motivating and managing them in
their personal businesses. Ms. Cardenas is also a certified court interpreter
and works as an independent contractor translating and interpreting for the
court system and the legal community.
Sandra Ramirez, age 35, is Secretary/Treasurer and a director of the
Company. Ms. Ramirez received her high school studies from Riverside High
School in El Paso, Texas. From 1982 until 1985, Ms. Ramirez attended El Paso
Community College located in El Paso, Texas and obtained her Associates Degree
in Data Processing. Ms. Ramirez was employed by Commercial Uniform Co. in
Los Angeles, California from 1986 to 1988 as a bilingual customer service
representative and also assisted with Spanish/English translations. She has
been employed with Citibank Nevada, in Las Vegas, Nevada, from October 1988
until the present, as a customer service representative specializing in card
member disputes. Ms. Ramirez handles customer contacts in Spanish through
telephone and correspondence. She also deals with interbank relationships.
Ms. Ramirez currently has a home based business with Mary Kay Cosmetics, Inc.,
servicing the Hispanic community.
<PAGE>
Charles R. Powell, age 41, a promoter, attended Southwestern Community
College in Chula Vista, California taking general study courses from 1979 to
1981. From 1981 to 1982 Mr. Powell attended San Diego State University, San
Diego, California majoring in Business Management. From 1982-1983 Mr. Powell
attended National University in San Diego majoring in Business Management
before embarking on a management career with Carl Karcher Enterprises (Carl's
Jr. restaurants) from 1980 to 1984 supervising stores in San Diego, California
and Dallas, Texas. From 1984 to 1986, Mr. Powell worked as a store manager for
Tandy Corp. (Radio Shack) in Tucson, Arizona and San Diego, California. In
1986, Mr. Powell founded Discount Specialities Inc., a California corporation,
a general merchandise wholesaling company, which he nurtured into a successful
entity before selling the business in 1989. From 1990 to 1992, Mr. Powell was
an independent contractor for The Shell Group, located in Kona Coast, Hawaii.
In 1992, Mr. Powell founded Dollar Mania Inc., a private Nevada corporation,
engaged in the sale of low priced consumer goods and built the company from
one store to sixty three stores in nine states, including Hawaii. By March of
1995, Dollar Mania achieved sustained sales of over $1,000,000 monthly and
was acquired by Bargain Products, Inc., a Nevada corporation, in June of 1995.
Mr. Powell resigned from Dollar Mania in March of 1996 and sold all of his
holdings in Bargain Products, Inc. in November of 1996. In February of 1996,
he relinquished financial control of Dollar Mania to another party. Under the
control of Bargain Products, Dollar Mania grew at such a fast pace that it
was placed into Chapter 11 Bankruptcy on June 19, 1996. The case is still
active in the District of Nevada Bankruptcy Court, Las Vegas, Nevada.
Mr. Powell is also the Secretary/Treasurer and a director of Kona Gifts, Inc.,
a Nevada corporation, which is currently engaged in the direct sales of
Hawaiian gift specialty items. Mr. Powell is also the Secretary/Treasurer and
a director of Sawbuck Sunglasses, a Nevada corporation, which is currently
engaged in the sale of sunglasses. Both Kona Gifts, Inc. and Sawbuck Sunglasses
are private corporations which may elect to go public in the near future.
FAMILY RELATIONSHIPS
There are no family relationships among the Company's directors and/or
executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the best of management's knowledge, during the past five years, no
present or former director or executive officer of the Company:
(1) Has filed a petition under federal bankruptcy laws or any state
insolvency law, had a receiver, fiscal agent or similar officer appointed
by a court for the business or property of such person, or any partnership in
which she was a general partner at or within two years before the time of such
filing, or any corporation or business association of which she was an
executive officer at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named the subject of a
pending criminal proceeding (excluding traffic violations and other minor
offences);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining her from or otherwise
limiting her involvement in any type of business, securities or banking
activities; or
(4) Was found by a court of competent jurisdiction in a civil
action, by the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated any federal or state securities law.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the compensation received by the Company's
President since inception in November of 1997. There are no other officers
of the Company who have been paid any compensation.
SUMMARY COMPENSATION
Name and Principal All other
Position Year Compensation
- --------------------------------------------------------------------------
Mignon Cardenas 1999 -0-
President 1998 $1,000<F1>
1997 -0-
<F1> Ms. Cardenas received $1,000 as non-salary compensation for her
assistance in the organization of the Company. The $1,000 was paid in January
of 1998. No additional compensation in any other form has been paid nor is
there currently any plan or arrangement for future compensation.
OPTIONS/SAR GRANTS
There were no stock options or stock appreciation rights granted to any
executive officer since its inception through the present date.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END
OPTION/SAR VALUE TABLE
Not applicable.
LONG TERM INCENTIVE PLANS
There are no long term incentive plans in effect and therefore no awards
have been given to any executive officer in the past year.
COMPENSATION OF DIRECTORS
The Company pays no fees to members of the Company's Board of Directors
for the performance of their duties as directors. The Company has not
established committees of the Board of Directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
The Company has no employment contracts in effect with any of the members
of its Board of Directors or its executive officers nor are there any
agreements or understandings with such persons regarding termination of
employment or change-in control arrangements.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND
PROMOTER
The following table sets forth certain information with respect to the
beneficial ownership of the common stock by each officer and director of the
Company, each person (or group of persons whose shares are required to be
aggregated) known to the Company to be the beneficial owner of more than five
percent (5%) of the common stock, and all such directors and executive officers
of the Company as a group. Unless otherwise noted, the persons named below have
sole voting and investment power with respect to the shares shown as
beneficially owned by them.
<PAGE>
Title of Name and Address Amount & Nature Percent of
Class of Beneficial Owner of Beneficial Owner Class
- -----------------------------------------------------------------------------
Common Mignon Cardenas<F1> 4,500,000<F2> 40%
705 Vincent Way
Las Vegas, NV 89128
Common Sandra Ramirez<F1> -0- -0-
1205 Daytona Lane
Las Vegas, NV 89117
Common Charles R. Powell<F3> 4,500,000<F2> 40%
3172 North Rainbow Blvd.
Suite 308
Las Vegas, NV 89108
Common All Officers and Directors 4,500,000<F2> 40%
as a Group (2 Persons)
<F1> An Officer and Director of the Company.
<F2> These shares are restricted.
<F3> A promoter of the Company.
CHANGES IN CONTROL
The Company has no arrangements which might result in a change in
control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no material transactions in the past two years or
proposed transactions to which the Company has been or proposed to be a party
in which any officer, director, nominee for officer or director, or security
holder of more than 5% of the Company's outstanding securities is involved.
The Company has no promoters other than its President, Mignon Cardenas,
and Charles Powell. There have been no transactions which have benefitted or
will benefit Ms. Cardenas or Mr. Powell either directly or indirectly.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
23.0 Consent of Accountant
27.0 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the registrant during the last quarter of
the year ended December 31, 1999.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Source One, Incorporated
(Registrant)
Date: April 5, 2000 By: /s/ MIGNON CARDENAS
--------------------------------
Mignon Cardenas
President, Chief Executive Officer and
Director
Date: April 5, 2000__ By: /s/ SANDRA RAMIREZ
--------------------------------
Sandra Ramirez
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date: April 5, 2000___ By: /s/ MIGNON CARDENAS
--------------------------------
Mignon Cardenas
Director
Date: April 5, 2000 By: /s/ SANDRA RAMIREZ
--------------------------------
Sandra Ramirez
Director
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use of our report, dated March 24, 2000, in
this annual report on Form 10-KSB for Source One, Inc.
/s/ DAVID COFFEY
David Coffey
Las Vegas, Nevada
March 24, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,651
<SECURITIES> 0
<RECEIVABLES> 565
<ALLOWANCES> 0
<INVENTORY> 3,001
<CURRENT-ASSETS> 670
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,887
<CURRENT-LIABILITIES> 38
<BONDS> 0
0
0
<COMMON> 11,292
<OTHER-SE> (2,443)
<TOTAL-LIABILITY-AND-EQUITY> 8,887
<SALES> 17,354
<TOTAL-REVENUES> 17,354
<CGS> 14,308
<TOTAL-COSTS> 14,308
<OTHER-EXPENSES> 10,552
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,506)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,506)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
</TABLE>
