<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A1
Post-Effective Amendment No. 1 to Registration Statement on Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
COOKIE CUP INTERNATIONAL
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(Name of Small Business Issuer as specified in its charter)
NEVADA 87-0447497
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(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
3255 South 8820 West
Magna, Utah 84044
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 250-3433
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
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Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
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PART I
Item 1. Description of Business.
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Business Development.
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Cookie Cup International (the "Company") was organized under the laws of
the State of Utah on September 19, 1977, under the name "Sierra Development."
The Company was formed for the purpose of doing any and all things permitted a
corporation under the laws of the State of Utah. The Company's initial
authorized capital consisted of 50,000 shares of $1.00 par value common voting
stock. A copy of the Company's Articles of Incorporation is attached hereto
and is incorporated herein by reference. See Item 13 of this Registration
Statement.
Pursuant to an Application for Registration of Securities filed with the
Utah Securities Commission (now the "Utah Division of Securities"), and an
Offering Prospectus dated October 24, 1997, the Company offered shares of its
common stock to residents of the State of Utah in reliance on the federal
exemption from registration under Section 3(a)(11) of the Securities Act of
1933 as amended (the "1933 Act").
On July 5, 1979, the Company filed with the Secretary of
State/Lieutenant Governor's offices Articles of Amendment reducing the number
of directors from five to three, and designating a new Board of Directors. A
copy of the Articles of Amendment is attached hereto and is incorporated
herein by reference. See Item 13 of this Registration Statement.
The Company filed Articles of Amendment to its Articles of Incorporation
on April 15, 1987. These Articles of Amendment increased the Company's
authorized capital from 50,000 shares to 50,000,000 shares and reduced the par
value from $1.00 to $0.001 per share. The amendments also deleted pre-emptive
rights and cumulative voting in the election of directors. A copy of the
Articles of Amendment is attached hereto and is incorporated herein by
reference. See Item 13 of this Registration Statement.
On May 11, 1987, the Company organized a wholly-owned subsidiary known as
"Cookie Cup International" under the laws of the State of Nevada ("Cookie
Cup") for the sole purpose of changing the Company's domicile to the State of
Nevada. This merger was completed on June 30, 1987, and Cookie Cup was the
surviving entity. Copies of Cookie Cup's Articles of Incorporation and the
Certificate of Ownership and Merger effecting the merger are attached hereto
and are incorporated herein by reference. See Item 13 of this Registration
Statement.
On July 16, 1996, the Company filed in the State of Utah a Certificate of
Authority to Transact Business in that state. A copy of this Certificate of
Authority is attached hereto and is incorporated herein by reference. See
Item 13 of this Registration Statement.
Business.
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Other than the above-referenced matters and seeking and investigating
potential assets, property or businesses to acquire, the Company has had no
material business operations for over five 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 venture would
require it to issue shares of its common stock as the sole consideration for
the venture. 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 venture; 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 plan to provide its stockholders with audited financial statements
or any other disclosure documentation concerning any target company before any
merger or acquisition transaction, absent any such requirement. 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 these
entities may deem 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% 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, its officers, directors, promoters and affiliates
have not communicated with any other entity with respect to any potential
merger or acquisition transaction, management has determined to file this
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, 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
business acquired, as well as pro forma financial information consisting of a
pro forma condensed balance sheet, pro forma statements of income and
accompanying explanatory notes.
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.
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 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 the lack of
funds, 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. In certain cases, the Company may agree to pay
a finder's fee, in the form of cash or Company securities, 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 has not adopted any policy limiting the amount of
any finder's fee that may be paid.
The Company will not actively seek out a target company through
advertisements or active solicitation, 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.
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. Therefore, management has not formulated any criteria to be
used in hiring any such person.
None of the Company's directors, executive officers or promoters, or
their affiliates or associates, has had any negotiations with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction with the Company. Nor are
there any present plans, proposals, arrangements or understandings with any
such persons regarding the possibility of any acquisition or merger involving
the Company.
There are no arrangements between management and non-management
stockholders that would provide for such stockholders to directly or
indirectly participate in or influence the Company's affairs other than
through the exercise of their voting rights. Although the Company's directors
and management can not predict the votes of non-management stockholders, it
has no reason to believe that such stockholders will not continue to vote to
retain the current directors of the 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.
Risk Factors.
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In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however,
at a minimum, the Company's present and proposed business operations will be
highly speculative and be subject to the same types of risks inherent in any
new or unproven venture, and will include those types of risk factors outlined
below.
Extremely Limited Assets; No Source of Revenue. The Company has
virtually no assets and has had no revenue for over five years or to the date
hereof. Nor will the Company receive any revenues until it completes an
acquisition, reorganization or merger, at the earliest. The Company can
provide no assurance that any acquired business will produce any material
revenues for the Company or its stockholders or that any such business will
operate on a profitable basis.
Auditor's "Going Concern" Opinion. The Independent Auditor's Report
issued in connection with the audited financial statements of the Company for
the calendar years ended December 31, 1997, and June 30, 1997, expresses
"substantial doubt about its ability to continue as a going concern," due to
the Company's lack of significant operations. See the Index to Financial
Statements, Part F/S of this Registration Statement.
Discretionary Use of Proceeds; "Blank Check" Company. Because the
Company is not currently engaged in any substantive business activities, as
well as management's broad discretion with respect to the acquisition of
assets, property or business, the Company may be deemed to be a "blank check"
company. Although management intends to apply any proceeds it may receive
through the issuance of stock or debt to a suitable acquisition, subject to
the criteria identified above, such proceeds will not otherwise be designated
for any more specific purpose. The Company can provide no assurance that any
use or allocation of such proceeds will allow it to achieve its business
objectives.
Absence of Substantive Disclosure Relating to Prospective
Acquisitions. Because the Company has not yet identified any assets, property
or business that it may acquire, potential investors in the Company will have
virtually no substantive information upon which to base a decision whether to
invest in the Company. Potential investors would have access to significantly
more information if the Company had already identified a potential acquisition
or if the acquisition target had made an offering of its securities directly
to the public. The Company can provide no assurance that any investment in
the Company will not ultimately prove to be less favorable than such a direct
investment.
Unspecified Industry and Acquired Business; Unascertainable Risks.
To date, the Company has not identified any particular industry or business in
which to concentrate its acquisition efforts. Accordingly, prospective
investors currently have no basis to evaluate the comparative risks and
merits of investing in the industry or business in which the Company may
acquire. To the extent that the Company may acquire a business in a high
risk industry, the Company will become subject to those risks. Similarly, if
the Company acquires a financially unstable business or a business that is in
the early stages of development, the Company will become subject to
the numerous risks to which such businesses are subject. Although management
intends to consider the risks inherent in any industry and business in which
it may become involved, there can be no assurance that it will correctly
assess such risks.
Uncertain Structure of Acquisition. Management has had no
preliminary contact or discussions regarding, and there are no present plans,
proposals or arrangements to acquire any specific assets, property or
business. Accordingly, it is unclear whether such an acquisition would take
the form of an exchange of capital stock, a merger or an asset acquisition.
However, because the Company has virtually no resources as of the date of this
Registration Statement, management expects that any such acquisition would
take the form of an exchange of capital stock. See Part I, Item 2, of this
Registration Statement.
State Restrictions on "Blank Check" Companies. A total of 36 states
prohibit or substantially restrict the registration and sale of "blank check"
companies within their borders. Additionally, 36 states use "merit review
powers" to exclude securities offerings from their borders in an effort to
screen out offerings of highly dubious quality. See paragraph 8221, NASAA
Reports, CCH Topical Law Reports, 1990. The Company intends to comply fully
with all state securities laws, and plans to take the steps necessary to
ensure that any future offering of its securities is limited to those states
in which such offerings are allowed. However, while the Company has no
substantive business operations and is deemed to be a "blank check" Company,
these legal restrictions may have a material adverse impact on the Company's
ability to raise capital because potential purchasers of the Company's
securities must be residents of states that permit the purchase of such
securities. These restrictions may also limit or prohibit stockholders from
reselling shares of the Company's common stock within the borders of
regulating states.
By regulation or policy statement, eight states (Idaho, Maryland,
Missouri, Nevada, New Mexico, Pennsylvania, Utah and Washington), some of
which are included in the group of 36 states mentioned above, place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing"
registration exemptions for secondary trading privileges and outright
prohibition of public offerings of such companies.
In most jurisdictions, "blank check" and "blind pool" companies are
not eligible for participation in the Small Corporate Offering Registration
("SCOR") program, which permits an issuer to notify the Securities and
Exchange Commission of certain offerings registered in such states by
filing a Form D under Regulation D of the Securities and Exchange Commission.
All states (with the exception of Alabama, Delaware, Hawaii,
Minnesota, Nebraska and New York) have adopted some form of SCOR.
States participating in the SCOR program also allow applications for
registration of securities by qualification by filing a Form U-7 with the
states' securities commissions. Nevertheless, the Company does not anticipate
making any SCOR offering or other public offering in the foreseeable future,
even in any jurisdiction where it may be eligible for participation in SCOR,
despite its status as a "blank check" or "blind pool" company.
The net effect of the above-referenced laws, rules and regulations
will be to place significant restrictions on the Company's ability to
register, offer and sell and/or to develop a secondary market for shares of
the Company's common stock in virtually every jurisdiction in the United
States. These restrictions should cease once and if the Company acquires a
venture by purchase, reorganization or merger, so long as the business
operations succeeded to involve sufficient activities of a specific nature.
Management to Devote Insignificant Time to Activities of the
Company. Members of the Company's management are not required to devote
their full time to the affairs of the Company. Because of their time
commitments, as well as the fact that the Company has no business operations,
the members of management anticipate that they will devote less than 10% of
their time to the activities of the Company, at least until such time as
the Company has identified a suitable acquisition target. To date, Mr.
Johnson's activities have been limited to maintaining the Company's good
standing in the State of Nevada and with the preparation of this Registration
Statement and accompanying financial statements.
Loss of Corporate Control. Due to the fact that the Company has no
assets, management anticipates that any merger or acquisition transaction will
require the Company to issue shares of its common stock as the sole
consideration for such transaction. Such an issuance would almost certainly
result in a change in control of the Company and may also result in
substantial dilution of the shares of current stockholders.
Conflicts of Interest; Related Party Transactions. 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. Such a transaction may occur if
management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A
transaction of this nature would present a conflict of interest to those
parties with a managerial position and/or an ownership interest in both the
Company and the acquired entity, and may compromise management's fiduciary
duties to the Company's stockholders. In addition, any remedy available under
state corporate law in the event that management's fiduciary duties are
compromised will most likely be prohibitively expensive and time consuming. An
independent appraisal of the acquired company may or may not be obtained in
the event a related party transaction is contemplated. Furthermore, because
management and/or beneficial owners of the Company's common stock may be
eligible for finder's fees or other compensation related to potential
acquisitions by the Company, such compensation may become a factor in
negotiations regarding such potential acquisitions.
Voting Control. Approximately 78% of the outstanding voting securities
of the Company are owned by Chiricahua Company and Network Associates, which
entities are respectively wholly-owned and/or controlled by David C. Merrell
and Bruce H. Rogers, persons who may be deemed to be promoters of the Company.
Due to their ownership of a majority of the shares of the Company's
outstanding common stock, these shareholders have the ability to elect all of
the Company's directors, who in turn elect all executive officers, without
regard to the votes of other stockholders.
No Market for Common Stock; No Market for Shares. Although the
Company has submitted for listing of its common stock on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD"),
there is currently no market for such shares; and there can be no assurance
that any such market will ever develop or be maintained. Any market price for
shares of common stock of the Company is likely to be very volatile, and
numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and
continue to experience, extreme price and volume fluctuations which have
affected the market price of many small capital companies and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop. Sales of "restricted securities" under Rule 144 may also
have an adverse effect on any market that may develop. See the caption
"Security Ownership of Certain Beneficial Owners," Part I, Item 4, of this
Registration Statement.
Risks of "Penny Stock." The Company's common stock may be deemed to
be "penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price
of less than five dollars per share; (ii) that are not traded on a
"recognized" national exchange; (iii) whose prices are not quoted on the
NASDAQ automated quotation system (NASDAQ-listed stocks must still meet
requirement (i) above); or (iv) in issuers with net tangible assets less than
$2,000,000 (if the issuer has been in continuous operation for at least three
years) or $5,000,000 (if in continuous operation for less than three years),
or with average revenues of less than $6,000,000 for the last three years.
There has been no "established public market" for the Company's
common stock during the last five years. At such time as the Company
completes a merger or acquisition transaction, if at all, it may attempt to
qualify for listing on either NASDAQ or a national securities exchange.
However, at least initially, any trading in its common stock will most likely
be conducted in the over-the-counter market in the "pink sheets" or the OTC
Bulletin Board of the NASD.
Section 15(g) of the Securities Exchange Act of 1934, as amended,
and Reg. Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in
a penny stock for the investor's account. Potential investors in the
Company's common stock are urged to obtain and read such disclosure carefully
before purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange
Commission requires broker-dealers in penny stocks to approve the account of
any investor for transactions in such stocks before selling any penny stock to
that investor. This procedure requires the broker-dealer to (i) obtain from
the investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor
and that the investor has sufficient knowledge and experience as to be
reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it
more difficult for investors in the Company's common stock to resell their
shares to third parties or to otherwise dispose of them.
Year 2000.
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Because the Company is not presently engaged in any substantial business
operations, management does not believe that computer problems associated with
the change of year to the year 2000 will have any material effect on its
operations. However, the possibility exists that the Company may merge with
or acquire a business that will be negatively affected by the "year 2000"
problem. The effect of such problem or the Company in the future can not be
predicted with any accuracy until such time as the Company identifies a merger
or acquisition target.
Principal Products and Services.
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The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted
by the Company are to seek out and investigate the acquisition of any viable
business opportunity by purchase and exchange for securities of the Company or
pursuant to a reorganization or merger through which securities of the Company
will be issued or exchanged.
Distribution Methods of the Products or Services.
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Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts,
professionals, securities broker-dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
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None; not applicable.
Competitive Business Conditions.
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Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company;
many of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a
private entity may have access to the public capital markets. There is no
reasonable way to predict the competitive position of the Company or any other
entity in the strata of these endeavors; however, the Company, having limited
assets and cash reserves, will no doubt be at a competitive disadvantage in
competing with entities which have recently completed IPO's, have significant
cash resources and have recent operating histories when compared with the
complete lack of any substantive operations by the Company for the past
several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
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None; not applicable.
Dependence on One or a Few Major Customers.
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None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
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None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
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Because the Company currently produces no products or services, it is
not presently subject to any governmental regulation in this regard. However,
in the event that the Company engages in a merger or acquisition transaction
with an entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on
Business.
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On the effectiveness of its Registration Statement on Form 10-SB, the
Company will be subject to Regulation 14A of the Securities and Exchange
Commission, which regulates proxy solicitations. Section 14(a) of the
Securities Exchange Act of 1934, as amended, requires all companies with
securities registered pursuant to Section 12(g) thereof to comply with the
rules and regulations of the Securities and Exchange Commission regarding
proxy solicitations, as outlined in Regulation 14A. Matters submitted to
stockholders of the Company at a special or annual meeting thereof or pursuant
to a written consent will require the Company to provide its stockholders with
the information outlined in Schedules 14A or 14C of Regulation 14; preliminary
copies of this information must be submitted to the Securities and Exchange
Commission at least 10 days prior to the date that definitive copies of this
information are forwarded to stockholders.
The Company will also be required to file annual reports on Form 10-KSB
and quarterly reports on Form 10-QSB with the Securities and Exchange
Commission on a regular basis, and will be required to timely disclose certain
material events (e.g., changes in corporate control; acquisitions or
dispositions of a significant amount of assets other than in the ordinary
course of business; and bankruptcy) in a Current Report on Form 8-K.
Management believes that these obligations will increase the Company's
annual legal and accounting costs, but it is expected that assets will be
sufficient to meet these costs; in the event that assets are not sufficient,
it is likely that management will advance funds. See the heading "Plan of
Operation" of the caption "Management's Discussion and Analysis or Plan of
Operation", Part I, Item 2 of this Registration Statement.
The integrated disclosure system for small business issuers adopted by
the Securities and Exchange Commission in Release No. 34-30968 and effective
as of August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority-owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more.
The Securities and Exchange Commission, state securities commissions and
the North American Securities Administrators Association, Inc. ("NASAA") have
expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets. The present laws, rules and regulations
designed to promote availability to the small business issuer of these capital
markets and similar laws, rules and regulations that may be adopted in the
future will substantially limit the demand for "blank check" companies like
the Company, and may make the use of these types of companies obsolete.
Research and Development.
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None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
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None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. 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 last two 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 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 Registration Statement, and there are
currently no outstanding loan agreements or understandings, it is
impossible to predict the amount of any such loan. However, 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. In deciding whether to seek any such loan, the Company will
consider such factors as the necessity for such funding (e.g., whether it is
necessary to maintain the Company's good standing); any other potential
funding sources; and the payment terms, including interest rate, of any such
loan. As of the date of this Registration Statement, the Company has
not actively begun to seek any such venture.
The Company may also raise any funding that becomes necessary during the
next 12 months through the private placement of "unregistered" and
"restricted" securities to "accredited" investors, including directors,
executive officers, or promoters or affiliates of the Company. The issuance
of such shares may have the effect of diluting the stockholdings of existing
stockholders. As of the date of this Registration Statement, the Company has
no present plans to conduct any private placement and has no plans to raise
capital through any public offering of its securities.
Results of Operations.
- ----------------------
The Company has had no material operations since December 31, 1991. The
Company had no losses for the year ended June 30, 1996 and losses of $2,750,
for the year ended June 30, 1997. The Company also had losses of $750 for the
period ended December 31, 1997.
Liquidity.
- ---------
Bruce H. Rogers, who is a stockholder of the Company, contributed $750
for expenses of the Company during 1996; and an additional $750 for expenses
in 1997. These expenses were incurred in connection with the audit of the
Company's financial statements. No shares were issued in consideration of
these contributions and they have not been treated as loans.
Item 3. 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, Charles Johnson, 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 Registration Statement and the accompanying financial statements. These
activities have consumed an insignificant amount of management's time;
accordingly, the costs to Mr. Johnson of providing the use of his home and
telephone have been minimal. Except as indicated above, management does not
have any preliminary agreements or understandings with respect to the use of
any office facility in the future.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons
who own more than five percent of the Company's common stock as of December
31, 1997, and to the date hereof, to wit:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Chiricahua Company 19,000,000(1) 38.0%
9005 Cobble Canyon Ln.
Sandy, Utah 84093
Network Associates 20,000,000(2) 40.0%
P. O. Box 2004
Salt Lake City, Utah 84110
Don H. and Annabelle Savage 2,650,000 5.3%
11889 Hidden Valley Club Drive
Sandy, Utah 84092
</TABLE>
(1) Chiricahua Company is a "doing business as" name of David C. Merrell,
a person who may be deemed to be a promoter of the Company. Chiricahua
Company is engaged in business consulting, particularly in the area of mergers
and acquisitions.
(2) Network Associates is a Utah sole proprietorship that is solely owned
and controlled by Bruce H. Rogers, a person who may be deemed to be a promoter
of the Company. Network Associates is a "doing business as" name used by Mr.
Rogers in his investment activities.
Each of the persons identified above has sole investment power and sole
voting power over the securities indicated opposite his/her/its name.
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of December 31, 1997 and to the date
hereof, to wit:
<TABLE>
Number of Shares
Beneficially Owned Percentage of
Name and Address of Class
- ---------------- ------------------ -------------
<S> <C> <C>
Charles Johnson -0- -0-
3255 South 88240 West
Magna, Utah 84044
</TABLE>
See the caption "Directors, Executive Officers, Promoters and Control
Persons," below, Part I, Item 5, of this Registration Statement for
information concerning the offices or other capacities in which Mr. Johnson
serves with the Company.
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ----------------------------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth the names of all current directors
and executive officers of the Company. These persons will serve until the
next annual meeting of the stockholders (held in June of each year) or until
their successors are elected or appointed and qualified, or their prior
resignation or termination.
<TABLE>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Charles Johnson Director and 5/11/95 *
President
Sec'y/Treasurer
Bruce H. Rogers Former Director 5/23/90 5/11/95
Former President
Former Sec'y/
Treasurer
</TABLE>
* This person presently serves in the capacities indicated.
There are no agreements or understandings for any director or executive
officer to resign at the request of any other person. Nor is any director or
executive officer of the Company acting on behalf of or at the direction of
any other person. Until it completes a merger or acquisition transaction with
an operating entity, Mr. Charles Johnson is the only person whose activities
will be material to the Company's operations and who will have any involvement
in its day-to-day activities. However, to the extent that such a transaction
may come about through the personal contacts of Bruce H. Rogers or David C.
Merrell, each of these persons, together with Mr. Johnson, may be deemed to be
a promoter. There are no other promoters of the Company.
Business Experience.
- --------------------
Charles Johnson. Mr. Johnson is 44 years old; he graduated from Cyprus
High School in Salt Lake City, Utah in 1972. He has worked for Kennecott
Copper Corporation since 1972 and has been a material handling operations
supervisor since June, 1997. He attended Salt Lake Community College from
1986 to 1987.
Other "Public Shell" Activities.
- -------------------------------
Mr. Johnson is not and has never been involved in any blank check public
offerings and has no plans to conduct such an offering. Nor has Mr. Johnson
been involved as a director or executive officer of other companies that may
be deemed to be "blank check" companies. Future involvement in other "blank
check" companies is possible, but presently unplanned.
In the event that Mr. Johnson becomes involved as a director or executive
officer of any other "blank check" companies and a potential merger or
acquisition candidate is brought to hiss attention, these other relationships
may present a conflict of interest. Mr. Johnson will attempt to minimize such
conflict by presenting a list of the various "blank check" companies that are
available for such a transaction and allowing management of the candidate
entity to select the company that best meets its needs. Factors that
differentiate such "blank check" companies from one another include, for
example, the state of incorporation (and, accordingly, the corporation laws to
which such company is subject); whether or not the company has filed a
Registration Statement on Form 10-SB and is subject to the periodic reporting,
proxy and other requirements of the 1934 Act; the authorized classes of stock
and number of shares; the number of shares issued and outstanding; the number
of stockholders; the amount and nature of any assets and liabilities; and
whether or not the company's securities are quoted on the OTC Bulletin Board
of the NASD.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers.
Family Relationships.
- ---------------------
Mr. Johnson is the only director and executive officer of the Company.
There are no family relationships between any directors or executive officers
of the Company, whether by blood or marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated below, during the past five years, no 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
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or vacated.
On or about June 21, 1994, Bruce H. Rogers, who may be deemed to be an
"affiliate" and a promoter of the Company, and Trans National Transfer, Inc.,
a sole proprietorship of Mr. Rogers ("Trans National"), were the subjects of
an Order Instituting Administrative Proceedings Pursuant to Sections
17A(c)(3), 17A(c)(4)(C) and 21C of the Securities Exchange Act of 1934, Making
Findings, Imposing Remedial Sanctions and Ordering Respondents to Cease and
Desist (the "Order"). The Order found violations by Mr. Rogers and Trans
National of certain provisions of the 1934 Act pertaining to transfer agents.
Item 6. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid
by the Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------
- -------------------
(a) (b) (c) (d) (e) (f) (g)
(h) (i)
Securities
All
Other Underlying
Other
Name and Year or Annual Restricted Options/
LTIP Compen-
Principal Period Salary Bonus Compen- Stock SAR's (#)
Payouts sation
Position Ended ($) ($) sation($) Awards($)
($)
- ------------------------------------------------------------------------------
- -------------------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
Charles Johnson12/31/97 0 0 0 0 0
0 0
President, Sec/ 6/30/97 0 0 0 0 0
0 0
Treas, Director 6/30/96 0 0 0 0 0
0 0
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the fiscal
years ended June 30, 1997 or 1996, or the period ending December 31, 1997.
Further, no member of the Company's management has been granted any option or
stock appreciation rights; accordingly, no tables relating to such items have
been included within 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.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- -------------
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any director or executive officer of the Company which would in any way
result in payments to any such person because of his or her resignation,
retirement or other termination of employment with the Company or its
subsidiaries, any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest.
Certain Business Relationships.
- -------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest.
Indebtedness of Management.
- ---------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest.
Parents of the Issuer.
- ----------------------
The Company has no parents. However, see the caption "Security
Ownership of Certain Beneficial Owners and Management," Part I, Item 4, of
this Registration Statement.
Transactions with Promoters.
- ----------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
promoter or founder, or any member of the immediate family of any of the
foregoing persons, had a material interest.
Item 8. Description of Securities.
- -----------------------------------
The Company has one class of securities authorized, consisting of
50,000,000 shares of $0.001 par value common voting stock. The holders of the
Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of stockholders. The shares of common stock
do not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire
additional shares of common stock or other securities. The common stock is
not subject to redemption rights 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. All shares of the common stock now outstanding are fully
paid and non-assessable.
There are no outstanding options, warrants or calls to purchase any
of the authorized securities of the Company.
There is no provision in the Company's Articles of Incorporation, as
amended, or Bylaws, as amended, that would delay, defer, or prevent a change
in control of the Company.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Stockholder Matters.
- --------------------------
Market Information.
- -------------------
The Company's common stock last traded in July, 1989, in the "Pink
Sheets" published by the National Quotation Bureau, Inc. The Company has
submitted for listing on the OTC Bulletin Board of the National Association of
Securities Dealers ("NASD"), with ACAP Financial of Salt Lake City, Utah, to
be the market maker; however, management does not expect any public
market to develop unless and until the Company completes an acquisition,
reorganization or merger. In any event, no assurance can be given that any
market for the Company's common stock will develop or be maintained. If a
public market ever develops in the future, the sale of "unregistered" and
"restricted" shares of common stock pursuant to Rule 144 of the Securities and
Exchange Commission by certain large stockholders may have a substantial
adverse impact on any such public market, and such stockholders (Chiricahua
Company and Network Associates) have already satisfied the "holding period"
requirement of Rule 144. See the caption "Security Ownership of Certain
Beneficial Owners and Management," Part I, Item 4, of this Registration
Statement.
Holders.
- --------
The number of record holders of the Company's securities as of the
date of this Registration Statement is approximately 356.
Dividends.
- ----------
The Company has not declared any cash dividends with respect to its
common stock and does not intend to declare dividends in the foreseeable
future. The future dividend policy of the Company cannot be ascertained with
any certainty, and if and until the Company completes any acquisition,
reorganization or merger, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its securities.
Item 2. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. No
federal, state or local governmental agency is presently contemplating any
proceeding against the Company. No director, executive officer or affiliate
of the Company or owner of record or beneficially of more than five percent of
the Company's common stock is a party adverse to the Company or has a
material interest adverse to the Company in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountant in the past two fiscal years or as of the date of this Registration
Statement. The current accountant for the Company audited its last financial
statements for the fiscal year ended June 30, 1997, and the six month period
ended December 31, 1997.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
There have been no sales of unregistered securities of the Company in
the last three fiscal years.
Item 5. Indemnification of Directors and Officers.
- ---------------------------------------------------
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes
a Nevada corporation to indemnify any director, officer, employee, or
corporate agent "who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, except an action by or
in the right of the corporation" due to his or her corporate role. Section
78.751(1) extends this protection "against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with the action, suit or proceeding if he
or she acted in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director, officer,
employee or agent who is sued, or is threatened with a suit, by or in the
right of the corporation. The party must have been acting in good faith and
with the reasonable belief that his or her actions were not opposed to the
corporation's best interests. Unless the court rules that the party is
reasonably entitled to indemnification, the party seeking indemnification must
not have been found liable to the corporation.
To the extent that a corporate director, officer, employee, or agent
is successful on the merits or otherwise in defending any action or proceeding
referred to in Section 78.751(1) or 78.751(2), Section 78.751(3) of the NRS
requires that he be indemnified "against expenses, including attorneys' fees,
actually and reasonably incurred by him or her in connection with the
defense."
Section 78.751 (4) of the NRS limits indemnification under Sections
78.751 (1) and 78.751(2) to situations in which either (1) the stockholders,
(2)the majority of a disinterested quorum of directors, or (3) independent
legal counsel determine that indemnification is proper under the
circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may
advance an officer's or director's expenses incurred in defending any action
or proceeding upon receipt of an undertaking. Section 78.751(6)(a) provides
that the rights to indemnification and advancement of expenses shall not be
deemed exclusive of any other rights under any bylaw, agreement, stockholder
vote or vote of disinterested directors. Section 78.751(6)(b) extends the
rights to indemnification and advancement of expenses to former directors,
officers, employees and agents, as well as their heirs, executors, and
administrators.
Regardless of whether a director, officer, employee or agent has the
right to indemnity, Section 78.752 allows the corporation to purchase and
maintain insurance on his behalf against liability resulting from his or her
corporate role.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements
- --------------------
Audited Financial Statements for the period ended
December 31, 1997 and June 30, 1997
-----------------------------------
Independent Auditors' Report
Balance Sheets for December 31, 1997 and June 30, 1997
Statements of Operations for the six months ended December 31, 1997, for
the years ended June 30, 1997 and June 30, 1996, and from inception April
15, 1977 through December 31, 1997
Statements of Stockholders' Equity
Statements of Cash Flows for the six months ended December 31, 1997, for
the years ended June 30, 1997, and June 30, 1996 and inception through
December 31, 1997
Notes to the Financial Statements
PART III
Item 1. Index to Exhibits.
- ---------------------------
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ ------------
<S> <C>
3.1 Initial Articles of Incorporation dated September 19, 1977 for
Sierra Development (Utah).**
3.2 Articles of Amendment dated July 5, 1979,
respecting change in Board of Directors (Utah).**
3.3 Articles of Amendment dated April 15, 1987,
respecting change in authorized shares, par value,
pre-emptive rights and cumulative voting (Utah).**
3.4 Articles of Incorporation dated May 11, 1987, for Cookie
Cup International (Nevada).**
3.5 Certificate of Ownership and Merger between Sierra Development, a
Utah corporation and Cookie Cup International, a Nevada
corporation to change the Company's domicile to Nevada, filed on
June 30, 1987 (Nevada).**
3.6 Bylaws**
27 Financial Data Schedule**
99 Certificate of Authority to Transact Business in the State of Utah
for Cookie Cup International filed July 16, 1996.**
</TABLE>
* Summaries of all exhibits contained within this
Registration Statement are modified in their
entirety by reference to these Exhibits.
** These documents and related exhibits have been
previously filed with the Securities and Exchange
Commission as exhibits to the initial 10-SB Registration
Statement of the Company and are incorporated herein by
reference.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
COOKIE CUP INTERNATIONAL
Date: July 10, 98 By/s/Charles Johnson
------------ ------------------------
Charles Johnson, Director
President and Sec/Tres
<PAGE>
Jones, Jensen & Company [letterhead]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Cookie Cup International
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheets of Cookie Cup International (A
Development Stage Company) as of December 31, 1997 and June 30, 1997, and the
related statements of operations, stockholders' equity (deficit), and cash
flows for the six months ended December 31, 1997 and for the years ended June
30, 1997, 1996, and from inception on April 15, 1977 through December 31,
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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that 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 Cookie Cup International (A
Development Stage Company) as of December 31, 1997 and June 30, 1997 and the
results of its operations and its cash flows for the six months ended December
31, 1997 and for the years ended June 30, 1997, 1996, and from inception on
April 15, 1977 through December 31, 1997 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company does not have any significant operations.
Because the Company has no significant operations, there is substantial doubt
about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/Jones, Jensen & Company
Jones, Jensen & Company
February 9, 1998
<PAGE>
COOKIE CUP INTERNATIONAL
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND JUNE 30, 1997
<PAGE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
December 31, June 30,
1997 1997
<S> <C> <C>
CURRENT ASSETS
Cash $ - $ -
Total Current Assets - -
TOTAL ASSETS $ - $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,000 $ 2,000
Total Current Liabilities 2,000 2,000
TOTAL LIABILITIES 2,000 2,000
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares
authorized of $0.001 par value,
50,000,000 shares issued and
outstanding 50,000 50,000
Additional paid-in capital 255,500 254,750
Deficit accumulated during the
development stage (307,500) (306,750)
Total Stockholders' Equity (Deficit) (2,000) (2,000)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ - $ -
</TABLE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
For the Inception
Six Months on April 15,
Ended For the Years Ended 1977 Through
December 31, June 30, December 31,
1997 1997 1996 1997
<S> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ -
EXPENSES (750) (2,750) - (307,500)
NET (LOSS) $ (750) $ (2,750)$ - $(307,500)
NET (LOSS) PER SHARE OF
COMMON STOCK $ (0.00) $ (0.00)$ -
</TABLE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance, April 15, 1977 - $ - $ - $ -
Common stock issued at an
average of $0.01 per share 50,000,000 50,000 253,500 -
Additional capital contributed - - 500 -
Net loss from the year ended
June 30, 1994 - - - (304,000)
Balance, June 30, 1995 50,000,000 50,000 254,000 (304,000)
Net loss for the year ended
June 30, 1996 - - - -
Balance, June 30, 1996 50,000,000 50,000 254,000 (304,000)
Additional capital contributed - - 750 -
Net loss for the year ended
June 30, 1997 - - - (2,750)
Balance, June 30, 1997 50,000,000 50,000 254,750 (306,750)
Additional capital contributed - - 750 -
Net loss for the six months ended
December 31, 1997 - - - (750)
Balance, December 31, 1997 50,000,000 $ 50,000 $ 255,500 $(307,500)
</TABLE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
For the Inception
Six Months on April 15,
Ended For the Years Ended 1977 Through
December 31, June 30, December 31,
1997 1997 1996 1997
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss $ (750) $ (2,750) $ - $ (307,500)
Increase in accounts payable - 2,000 - 2,000
Net Cash Used By Operating
Activities (750) (750) - (305,500)
CASH FLOWS FROM INVESTING
ACTIVITIES - - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Contributed capital for expenses 750 750 - 2,000
Issuance of common stock for cash - - - 303,500
Net Cash Provided By Financing
Activities 750 750 - 305,500
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS - - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - - -
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ - $ - $ - $ -
Cash Paid For:
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - $ -
</TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1997 and June 30, 1997
NOTE 1 - ORGANIZATION AND HISTORY
a. Organization
The financial statements presented are those of Cookie Cup International
(the Company). The Company was originally incorporated under the laws of
the State of Utah on April 15, 1977. Subsequently the Corporation was
"re-incorporated" under the laws of the State of Nevada on May 11, 1987.
The Company is an outgrowth of a merger between Sierra Development, (A
Utah corporation that became public via an offering in October, 1977) and
Cookie Cup International, (A Nevada Corporation) that merged in 1987.
Sierra Development was organized as a "blind pool" corporation. Cookie
Cup International was organized to engage in the retail and wholesale
business of ice cream and frozen dessert novelties. The intended business
of the corporation was not successful and the corporation has been dormant
and operationally inactive for many years. The Company has been seeking
new business opportunities believed to hold a potential profit or to merge
with an existing, operating company.
b. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has elected a June 30, year end.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
d. Loss Per Share
The computations of loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements.
e. Provision for Taxes
At December 31, 1997, the Company has net operating loss carryforwards of
approximately $307,000 that may be offset against future taxable income
through 2012. No tax benefit has been reported in the financial
statements because the Company believes there is a 50% or greater chance
The carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of
the same amount.
f. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. It is the intent of the Company to seek a
merger with an existing, operating company. In the interim, shareholders
of the Company have committed to meeting its minimal operating expenses.
NOTE 3 - RELATED PARTY TRANSACTIONS
A shareholder of the Company contributed $750 for expenses paid on behalf
of the Company in 1996. An additional $750 was contributed by the
shareholder in 1997.
