U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 0-23511
FIRST DELTAVISION, INC.
(Name of Small Business Issuer in its Charter)
NEVADA 87-0412182
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
9005 Cobble Canyon Lane
Sandy, Utah 84093
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act: $0.001 par
value common stock
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.
(1) Yes X No (2) 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. [ ]
State Issuer's revenues for its most recent fiscal year: June 30, 1999-$0
<PAGE>
State the aggregate market value of the common voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days.
October 5, 1999 - $94. There are approximately 94,325 shares of
common voting stock of the Registrant held by non-affiliates. Since 1988,
there has been no "public market" for shares of common stock of the
Registrant, so the Registrant has arbitrarily valued these shares on the basis
of par value per share or $0.001.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not Applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
October 5, 1999
235,000
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is
contained in Item 13 of this Report.
Transitional Small Business Issuer Format Yes X No ___
PART I
Item 1. Description of Business.
Business Development.
Except as indicated in the 10-SB Registration Statement of First
Deltavision, Inc. (the "Company"), which was filed with the Securities and
Exchange Commission on December 16, 1997, and which became effective on or
about February 14, 1998, there have been no material developments during the
most recent fiscal year. The 10-SB Registration Statement is incorporated
herein by reference. See the Exhibit Index, Part III, Item 13.
Business.
Other seeking and investigating potential assets, property or business to
acquire, the Company has had no business operations for the past eight fiscal
years. To the extent that the Company intends to continue to seek the
acquisition of assets, property or business that may benefit the Company and
its stockholders, it is essentially a "blank check" company. Because the
Company has limited assets and conducts no material business, management
anticipates that any such acquisition would require it to issue shares of its
common stock as the sole consideration for the acquisition. This may result in
substantial dilution of the shares of current stockholders. The Company's
Board of Directors shall make the final determination whether to complete any
such acquisition; the approval of stockholders will not be sought unless
required by applicable laws, rules and regulations, its Articles of
Incorporation or Bylaws, or contract nor does the Company intend to provide
any disclosure documentation to stockholders unless similarly required. The
Company makes no assurance that any future enterprise will be profitable or
successful.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what may be
deemed to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80 and 95 percent of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
Although the Company has not communicated with any other entity with
respect to any potential merger or acquisition transaction, management has
determined to file its 10-SB Registration Statement on a voluntary basis. In
order to have stock quotations for its common stock on the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ"), one
of the requirements is that an issuer must have such securities registered
under the Securities and Exchange Act of 1934 (the "1934 Act"). Upon the
effective date of this Registration Statement, the Company's common stock
became registered for purposes of the 1934 Act. Management believes that this
will make the Company more desirable for entities that may be interested in
engaging in a merger or acquisition transaction. To the extent that
management deems it advisable or necessary to maintain a quotation of its
common stock on any securities market, the Company will voluntarily file
periodic reports in the event its obligation to file such reports is
terminated under the 1934 Act.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business by
purchase, reorganization or merger, the Company will be required to file with
the Securities and Exchange Commission a Current Report on Form 8-K within 15
days of such transaction. A filing on Form 8-K also requires the filing of
audited financial statements of the acquired venture, as well as pro forma
financial information consisting of a pro forma condensed balance sheet, pro
forma statements of income and accompanying explanatory notes, within 75 days
of the date of any such report.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific
objective criteria.
Mr. Merrell has substantial experience and expertise with analyzing
prospective business endeavors and will be the one to determine the viability
of a prospective business endeavor. Mr. Merrell has served as a director and
executive officer of various companies that have completed merger or
reorganization transactions with operating entities. Mr. Ross has limited
experience with analyzing the quality of a prospective business endeavor.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management or its legal counsel and authorized representatives will
attempt to meet personally with management and key personnel of the entity
sponsoring any business opportunity afforded to the Company, visit and inspect
material facilities, obtain independent analysis or verification of
information provided and gathered, check references of management and key
personnel and conduct other reasonably prudent measures calculated to ensure a
reasonably thorough review of any particular business opportunity; however,
due to time constraints of management and minimal resources to engage others,
these activities may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker-dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. Nevertheless, there can be no assurance that
the Company will be successful in locating a business with which to merge or
to acquire. In certain cases, the Company may agree to pay a finder's fee or
to otherwise compensate the persons who submit a potential business endeavor
in which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their
affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
The Company will not seek out a target company, but will use referrals
from previous business contacts for potential acquisition targets.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business
or company in which the Company's executive officers, directors, beneficial
owners or their affiliates may have an ownership interest. Current Company
policy does not prohibit such transactions. Because no such transaction is
currently contemplated, it is impossible to estimate the potential pecuniary
benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. It is not anticipated that any such opportunity will be afforded to
other stockholders. In the event that such fees are paid, they may become a
factor in negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
Management may actively negotiate or otherwise consent to the purchase of any
portion of its common stock as a condition to, or in connection with, a
proposed merger or acquisition. In such an event, the Company's remaining
stockholders may not be afforded an opportunity to approve or consent to any
particular stock buy out transaction.
With the exception of Leonard W. Burningham, Branden T. Burningham,
Sheryl Ross and Bradley C. Burningham, who have rendered certain legal and
"due diligence" services in connection with the preparation of the Company's
10-SB Registration Statement, the Company's officers and directors in the past
have not used any particular consultants and do not intend to use any
consultants in regard to this Company.
Although it is not formally prohibited by Company policy, it is not
expected that the Company will borrow funds in order to make payment to its
management, promoters or their affiliates or associates in connection with any
buy out transaction.
Item 2. Description of Property.
The Company has no assets, property or business; its principal
executive office address and telephone number are the home address and
telephone number of its President, David C. Merrell, and are provided at no
cost. Because the Company has no current business operations, its activities
have been limited to keeping itself in good standing in the State of Nevada,
and with preparing this Report and the accompanying financial statements.
These activities have consumed an insignificant amount of management's time;
accordingly, the costs to Mr. Merrell of providing the use of his home and
telephone have been minimal.
Item 3. Legal Proceedings.
The Company is not the subject of any pending legal proceedings; and to
the knowledge of management, no proceedings are presently contemplated against
the Company by any federal, state or local governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the period covered by this Report or during the
previous two fiscal years; further, since the cessation of business operations
in 1989, no matter has been submitted to a vote of the Company's security
holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market Information
The Company's common stock is quoted on the OTC Bulletin Board of the
NASD under the symbol "FDVS", with quotations commencing in November 1998;
however, the market for shares of the Company's common stock is extremely
limited. No assurance can be given that the present limited market for the
Company's common stock will continue or will be maintained, and the sale of
the Company's common stock pursuant to Rule 144 of the Securities and Exchange
Commission by David C. Merrell may have a substantial adverse impact on any
such public market. All shares owned by Mr. Merrell have satisfied the
required holding period of Rule 144. See Item 11 of this Report.
The high and low closing bid prices for shares of common stock of the
Company for each quarter within the last two fiscal years, or the applicable
period when there were quotations are as follows:
<TABLE>
<CAPTION>
Bid
Quarter ending: High Low
- --------------- ---- ---
<S> <C> <C>
November 10, 1998
through
December 31, 1998 $.125 $.125
January 4, 1999
through
March 31, 1999 $.125 $.125
April 1, 1999
through
June 30, 1999 $.125 $.125
July 1, 1999
through
September 30, 1999 $1.50 $.125
</TABLE>
These bid prices were obtained from the National Quotation Bureau, LLC
("NQB") and do not necessarily reflect actual transactions, retail markups,
mark downs or commissions.
No assurance can be given that any "established public market" will
develop in the common stock of the Company, regardless of whether the Company
is successful in completing an acquisition, reorganization or merger deemed by
management to be beneficial for the Company, or if any such market does
develop, that it will continue or be sustained for any period of time.
The "restricted securities" of Messrs. Merrell, Ross and Peterson
outlined under the caption "Recent Sales of Unregistered Securities" have all
been held for a sufficient period of time to allow resales by these persons
under Rule 144.
Recent Sales of Unregistered Securities.
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
David C. Merrell 5/27/96 136,648 Services
Todd D. Ross 5/27/96 4,027 Services
Jerry Peterson 5/27/96 4,027 Services
Raymond Wilson 10/15/97 5,000 Release of any
and all
liabilities
Victor Ivashin 10/15/97 1,000 Services
Messrs. Merrell, Ross, Peterson, Wilson and Ivashin are persons believed
to be either "accredited investors" or "sophisticated investors," who by
reason of business acumen, experience, employment, education or other factors,
were fully capable of evaluating the risks and merits of an investment in the
Company's securities. Messrs. Peterson, Ivashin and Wilson are all former
directors of the Company, and Messrs. Merrell and Ross are current directors
and executive officers of the Company. Each had all information regarding the
Company available to them. The offers and sales of these securities are
believed to have been exempt from the registration requirements of Section 5
of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof,
and from similar states' securities laws, rules and regulations requiring the
offer and sale of securities by available state exemptions from such
registration.
Holders
The number of record holders of the Company's common stock as of
June 30, 1999, were approximately 169; these numbers do not include an
indeterminate number of stockholders whose shares may be held by brokers in
street name. As of October 5, 1999, there were approximately 169
stockholders.
Dividends
There are no present material restrictions that limit the ability
of the Company to pay dividends on common stock or that are likely to do so in
the future. The Company has not paid any dividends with respect to its common
stock, and does not intend to pay dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation
The Company has not engaged in any material operations or had any
revenues from operations during the past nine fiscal years. The Company's
plan of operation for the next 12 months is to continue to seek the
acquisition of assets, property or business that may benefit the Company and
its stockholders. Because the Company has virtually no resources, management
anticipates that to achieve any such acquisition, the Company will be required
to issue shares of its common stock as the sole consideration for any such
venture.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which may be advanced by management or principal
stockholders as loans to the Company. Because the Company has not identified
any such venture as of the date of this Report, it is impossible to predict
the amount of any such loan. However, there are no preliminary agreements or
understandings with respect to loan agreements by officers, directors,
principals or affiliates of the Company and any such loan will not exceed
$25,000 and will be on terms no less favorable to the Company than would be
available from a commercial lender in an arm's length transaction. As of the
date of this Report, the Company has not actively begun to seek any such
venture.
Results of Operations
The Company has had no material operations since 1989. The Company had
losses of ($7,940), ($12,857) and ($7,065), respectively, for the fiscal years
ended June 30, 1997, 1998 and 1999. These losses are primarily related to
maintaining the Company in good standing and "due diligence" activities
with respect to its history and past operations. These activities have
included, for example, confirming good standing, reviewing stock transfer
records and Articles of Incorporation, as amended, and arranging for the
preparation and auditing of financial statements.
Liquidity
The Company had no current assets for the period ended June 30, 1999,
with $27,557 in current liabilities for the same period.
Item 7. Financial Statements.
For the periods ended June 30, 1999, 1998 and 1997
Independent Auditors' Report
Balance Sheets for June 30, 1999, 1998 and 1997
Statements of Operations for the years ending
June 30, 1999, 1998 and 1997, and accumulated
for the period from inception July 31, 1984 to June 30, 1999
Statements of Stockholders' Equity (Deficit)
From July 31, 1984 through June 30, 1999
Statements of Cash Flows for the years ended
June 30, 1999, 1998 and 1997, and accumulated
for the period from inception July 31, 1984 to June 30, 1999
Notes to the Financial Statements
<PAGE>
First Deltavision, Inc.
(A Development Stage Company)
Financial Statements
<PAGE> June 30, 1999, 1998 and 1997
/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell Schvaneveldt, C.P.A.
Independent Auditors Report
Board of Directors
First Deltavision, Inc.
(A Development Stage Company)
I have audited the accompanying balance sheets of First Deltavision, Inc., as
of June 30, 1999, 1998 and 1997, and the related statements of operations,
stockholders' equity, and cash flows for the years ended June 30, 1999, 1998
and 1997. These financial statements are the responsibility of the Company'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
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 the significant
estimates made by management, as well as evaluating the overall financial
statements presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of First Deltavision, Inc., as of
June 30, 1999, 1998 and 1997, and the results of its operations and its cash
flows for the years ended June 30, 1999, 1998 and 1997, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #6 to the financial
statements, the Company has an accumulated deficit and a negative net worth at
June 30, 1999. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also discussed in Note #6. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
September 28, 1999
<PAGE>
<TABLE>
First Deltavision, Inc.
(A Development Stage Company)
Balance Sheets
For the Years Ended June 30, 1999, 1998 and 1997
<CAPTION>
June June June
30, 1999 30, 1998 30,1997
Assets
<S> <C> <C> <C>
Current Assets $ -0- $ -0- $ -0-
Total Assets $ -0- $ -0- $ -0-
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 16,403 $ 12,442 $ 4,739
Due to Officers 11,154 8,050 4,151
Total Liabilities 27,557 20,492 8,890
Stockholders' Equity
Common Stock 50,000,000 Shares Authorized:
$0.001 Par Value, 235,000 Shares & 200,000
Shares Issued & Outstanding Retroactively
Restated Respectively 235 235 200
Paid In Capital 101,376 101,376 100,156
Accumulated Deficit ( 129,168) ( 122,103) (109,246)
Total Stockholders' Equity ( 27,557) ( 20,492) ( 8,890)
Total Liabilities &
Stockholders' Equity $ -0- $ -0- $ -0-
</TABLE>
<TABLE>
First Deltavision, Inc.
(A Development Stage Company)
Statement of Operations
Accumulated for the Period Inception July 31, 1984 to June 30, 1999
For the Fiscal Years Ended June 30, 1999, 1998 and 1997
<CAPTION>
June June June
Accumulated 30, 1999 30, 1998 30, 1997
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
Expenses
Amortization 320 -0- -0- -0-
Royalties 46,410 -0- -0- -0-
Travel 3,914 -0- -0- -0-
Taxes 1,644 -0- -0- -0-
Consultant Fees 41,250 -0- -0- 1,250
Office 3,545 165 671 951
Professional Fees 22,025 6,750 11,586 3,489
Interest 668 -0- -0- -0-
Offering Costs 6,392 -0- -0- -0-
Transfer Agent Fees 3,000 150 600 2,250
Total Expenses 129,168 7,065 12,857 7,940
Net Loss ($129,168) ($7,065) ($12,857) ($7,940)
Loss Per Share ($ .03) ($ .06) ($ .63)
Weighted Average Shares
Outstanding Retroactively
Restated 235,000 203,000 200,000
</TABLE>
<TABLE>
First Deltavision, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
July 31, 1984 (Inception) to June 30, 1999
<CAPTION><CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, July 31, 1984 -0- $ -0- $ -0- $ -0-
Shares Issued to
Incorporators
for Cash Retroactively
Restated 22,863 23 57,553 -0-
Deficit for Year Ended
June 30, 1985 (39,661)
Balance, June 30, 1985 22,863 23 57,553 (39,661)
Capital Contributed by
Shareholder 2,536
Deficit for Year Ended
June 30, 1986 (20,451)
Balance, June 30, 1986 22,863 23 60,089 (60,112)
No Operations Year
Ended June 30, 1987
Balance, June 30, 1987 22,863 23 60,089 (60,112)
No Operations Year
Ended June 30, 1988
Balance, June 30, 1988 22,863 23 60,089 -0-
Capital Contributed by
Shareholder 1,044
Shares Issued for Cash
$.0002 Per Share
Retroactively Restated 24,160 24 1,176
Deficit for Year Ended
June 30, 1989 (2,107)
Balance, June 30, 1989 47,023 47 62,309 (62,219)
Deficit for Year Ended
June 30, 1990 (183)
Balance, June 30, 1990 47,023 47 62,309 (62,402)
Deficit for Year Ended
June 30, 1991 (183)
Balance June 30, 1991 47,023 47 62,309 (62,585)
Deficit for Year Ended
June 30, 1992 (183)
Balance June 30, 1992 47,023 47 62,309 (62,768)
Deficit for Year Ended
June 30, 1993 (183)
Balance June 30, 1993 47,023 47 62,309 (62,951)
Deficit for Year Ended
June 30, 1994 (119)
Balance June 30, 1994 47,023 47 62,309 (63,070)
Deficit for Year Ended
June 30, 1995 (118)
Balance June 30, 1995 47,023 47 62,309 (63,188)
Shares Issued for
Services
Retroactively
Restated 152,977 153 37,847
Deficit for Year Ended
June 30, 1996 (38,118)
Balance, June 30, 1996 200,000 200 100,156 (101,306)
Deficit for Year Ended
June 30, 1997 (7,940)
Balance, June 30, 1997 200,000 200 100,156 (109,246)
Shares Issued for
Services 35,000 35 1,220
Deficit for Year Ended
June 30, 1998 (12,857)
Balance, June 30, 1998 235,000 $ 235 $101,376 ($122,103)
Deficit for Year Ended
June 30, 1999 (7,065)
Balance, June 30, 1999 235,000 $ 235 $101,376 ($129,168)
</TABLE>
<TABLE>
First Deltavision, Inc.
(A Development Stage Company)
Statement of Cash Flows
Accumulated for the Period from Inception July 31, 1984 to June 30, 1999
& the Fiscal Years Ended June 30, 1999, 1998 & 1997
<CAPTION>
June June June
Accumulated 30, 1999 30, 1998 30, 1997
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net Loss ($129,168) ($ 7,065) ($ 12,857) ($ 7,940)
Adjustments to Reconcile
Net Cash Used by Operating
Activities:
Amortization 320 -0- -0- -0-
Non Cash Expenses 39,255 -0- 1,255 -0-
Changes in Operating Assets
& Liabilities:
Increase in Accounts
Payable 16,403 3,961 7,703 3,789
Increase in Due to Officers 11,154 3,104 3,899 4,151
Net Cash Used by
Operating Activities (62,036) -0- -0- -0-
Net Cash Used by Investing Activities
Incorporation Costs (320) -0- -0- -0-
Net Cash Used by
Investing Activities (320) -0- -0- -0-
Cash Flows from Financing Activities
Cash from Sale of Common
Stock 58,776 -0- -0- -0-
Contributed Capital 3,580 -0- -0- -0-
Net Cash Provided By
Financing Activities 62,356 -0- -0- -0-
Increase in Cash -0- -0- -0- -0-
Cash at Beginning of Period -0- -0- -0- -0-
Cash at End of Period $ -0- $ -0- $ -0- $ -0-
Cash Disclosures from Operating Activities
Interest $ 668 $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
Significant Non Cash Transactions
Issued 152,977 Post Split
Shares for Services $ 38,000 $ -0- $ -0- $38,000
Issued 35,000 Post Split
Shares for Services 35 -0- 1,255 -0-
</TABLE>
First Deltavision, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Corporate History
The Company was incorporated in the State of Utah on July 31, 1984, under the
name of Aquachlor Marketing, Inc. The Company never engaged in business
activities and was suspended for failure to file annual reports and tax
returns. In December 1988, all required reports and tax returns were filed
and the Company was reinstated by the State of Utah.
On December 23, 1988, the Company merged with Aquachlor, Inc., a Nevada
Corporation, incorporated on December 20, 1988. The Nevada Corporation became
the surviving corporation and changed its name to Deltavision, Inc.
On March 25, 1997, the Company received a Certificate of Revival from the
State of Nevada using the name First Deltavision, Inc.
The purpose of the Company as established by its Articles of Incorporation is
to engage in any lawful activity. The Company has not engaged in any business
activities that have produced significant revenues and therefore remains a
development stage company.
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses will be recognized in the period
when the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. Inventories: Inventories will be stated at the lower of cost,
determined by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is amortized over the lesser of the length of the lease of
the related assets of the estimated lives of the assets. Depreciation
and amortization is computed on the straight line method.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
<PAGE>
First Deltavision, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #3 - Related Party Transactions
The Company's President has advanced the Company funds to pay current costs.
These advanced funds are due to the President when funds become available and
bears no interest.
NOTE #4 - Net Operating Loss Carryforward for Income Tax Purposes
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses
are as follows:
Expiration
Year of Loss Amount Date
1985 $ 39,661 2005
1986 20,451 2006
1987 -0-
1988 -0-
1989 2,107 2009
1990 183 2010
1991 183 2011
1992 183 2012
1993 183 2013
1994 119 2014
1995 118 2015
1996 38,118 2016
1997 6,690 2017
1998 12,857 2018
1999 7,065 2019
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expenses. Net operating losses would create possible tax assets
in future years. Due to the uncertainty as to the utilization of net
operating loss carryforwards an evaluation allowance has been made to the
extent of any tax benefit that net operating losses may generate.
1999 1998 1997
Current Tax Assets Value of Net
Operating Loss Carryforwards
at Current Prevailing
Federal Tax Rate $ 33,272 $ 30,870 $ 25,368
Evaluation Allowance (33,272) (30,870) (25,368)
Net Tax Assets $ -0- $ -0- $ -0-
Current Income Tax Expense -0- -0- -0-
Deferred Income Tax Benefit -0- -0- -0-
NOTE #5 - Common Stock Transaction
The Company is authorized to issue 50,000,000 shares of common stock, with a
par value of $0.001 per share.
On December 9, 1988, the Company split its shares on a 5 for 1 basis.
Following the stock split there were 11,677,920 shares outstanding.
In 1996, the Company issued 38,000,000 shares of its common stock in lieu of
cash for consulting fees valued at $38,000.
On April 23, 1997, the Board of Directors unanimously consented to a one share
for 248.399 shares stock split. Following the stock split and adjustments so
that no shareholders held less than 100 shares, the Company had 200,000 shares
outstanding.
In 1997, the issued 35,000 shares of its common stock in lieu of cash for
services rendered to the Company.
NOTE #6 - Going Concern
The Company has no assets and no operations from which it can obtain working
capital. The Company recognizes that it must find a source of working capital
or the Company may not be able to continue its existence.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
No independent accountant of the Company has resigned, declined to
stand for re-election or was dismissed during the Company's two most recent
fiscal years or any interim period.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers
The following table sets forth, in alphabetical order, the names
and the nature of all positions and offices held by all directors and
executive officers of the Company during 1999, and the period or periods
during which each such director or executive officer served in his or her
respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
David C. Merrell Director 5/21/96 *
President 5/21/96 *
Todd D. Ross Director and 5/21/96 *
Secy./Treasurer 5/21/96 *
Term of Office
The term of office of the current directors shall continue until
the annual meeting of stockholders. The annual meeting of the Board of
Directors immediately follows the annual meeting of stockholders, at
which officers for the coming year are elected.
Business Experience
David C. Merrell, Director and President. Since 1989, he has been
the owner of DCM Finance, a Salt Lake City based finance company that makes
and brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Todd D. Ross. Mr. Ross is 37 years of age, and since 1995, he has been a
partner in DCM Finance, a Salt Lake City Based finance company. Mr. Ross
developed and manages DCM's Internet site. He also reviews and submits
venture capital proposals for funding. Since 1991, Mr. Ross has also been the
Lighting Director for the Utah Shakespearean Festival.
Family Relationships
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings
Except as indicated below and to the knowledge of management,
during the past five years, no present or former director, person nominated to
become a director, executive officer, promoter or control person of the
Company:
(1) Was a general partner or executive officer of any business
by or against which any bankruptcy petition was filed,
whether at the time of such filing or two years prior
thereto;
(2) Was convicted in a criminal proceeding or named the subject
of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant,
associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or
employee of any investment company, bank, savings and
loan association or insurance company, or engaging in
or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or
in connection with any violation of federal or
state securities laws or federal commodities
laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in
any activity described above under this Item, or to be
associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities
and Exchange Commission has not been subsequently reversed,
suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to
have violated any federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed,
suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
On or about May 13, 1998, each of the Company's current
directors and executive officers filed with the Securities and Exchange
Commission an Initial Statement of Beneficial Ownership of Securities on Form
3.
Item 10. Executive Compensation.
Cash Compensation
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
[S] [C] [C] [C] [C] [C] [C] [C] [C]
David C.
Merrell, 6/30/97 0 0 0 0 0 0 0
President, 6/30/98 0 0 0 0 0 0 0
Director 6/30/99 0 0 0 0 0 0 0
Todd D.
Ross 6/30/97 0 0 0 0 0 0 0
Secretary/ 6/30/98 0 0 0 0 0 0 0
Treasurer, 6/30/99 0 0 0 0 0 0 0
Director
Raymond
Wilson
Secretary/ 6/30/97 0 0 0 * 0 0 0
Treasurer, 6/30/98 0 0 0 0 0 0 0
Director
* In October, 1997, the Company issued 5,000 "unregistered" and
"restricted" shares of its common stock to Raymond Wilson as
additional consideration for his release of any and all
liabilities owed to him by the Company. See the caption
"Recent Sales of Unregistered Securities", Part II, Item 5.
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
fiscal years ending June 30, 1999, 1998 or 1997, or the period ending on
the date of this Report. Further, no member of the Company's management has
been granted any option or stock appreciation right; accordingly, no tables
relating to such items have been included within this Item. See the Summary
Compensation Table of this Item.
Compensation of Directors
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed fiscal year or
the previous two fiscal years for any service provided as director. See the
Summary Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person named in
the Summary Compensation Table set out above which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of such person's employment with the Company or its
subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Certain Beneficial Owners.
The following table sets forth the share holdings of those persons
who own more than five percent of the Company's common stock as of June 30,
1999:
Number and Percentage
of Shares Beneficially Owned
Name and Address 6/30/99
David C. Merrell 136,648 58.148%
9005 Cobble Canyon Lane
Sandy, Utah 84093
Leonard W. Burningham, Esq. 29,050 12.361%
455 East 500 South, Suite #205
Salt Lake City, Utah 84111
TOTALS 165,698 70.509%
Security Ownership of Management.
The following table sets forth the shareholdings of the Company's
directors and executive officers as of June 30, 1998:
Number and Percentage
of Shares Beneficially Owned
Name and Address 6/30/98
David C. Merrell 136,648 58.148%
9005 Cobble Canyon Lane
Sandy, Utah 84093
Todd D. Ross 4,027 1.714%
38 South 1650 West
Cedar City, Utah 84720
TOTALS 140,675 59.862%
Changes in Control
There are no present arrangements or pledges of the Company's securities
which may result in a change in its control.
Item 12. Certain Relationships and Related Transactions.
The following transactions occurred between the Company and members of
management, five percent stockholders and promoters or founders of the Company
during the past three fiscal years:
Issuance of 136,648 shares of "restricted securities" of the Company to
David C. Merrell in May, 1996.
Issuance of 4,027 shares of "restricted securities" of the Company to
Todd R. Ross in May 1996.
Issuance of 5,000 shares of "restricted securities" of the Company to
Raymond Wilson in October 1997.
Item 13. Exhibits and Reports on Form 8-K.
Reports on Form 8-K
None.
Exhibit
Exhibits* Number
(i)
Financial Data Schedule 27
(ii) Where Incorporated
In This Report
Form 10-SB Registration Statement
filed on December 16, 1997 Part I **
* A summary of any Exhibit is modified in its entirety by reference
to the actual Exhibit.
** These documents and related exhibits have previously been filed
with the Securities and Exchange Commission and are incorporated
herein by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST DELTAVISION, INC.
Date: 10/7/99 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/99 By/s/Todd D. Ross
Todd D. Ross
Secretary/Treasurer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated:
FIRST DELTAVISION, INC.
Date: 10/7/99 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/99 By/s/Todd D. Ross
Todd D. Ross
Secretary/Treasurer and Director
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