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, 1998
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 0-23905
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COOOKIE CUP INTERNATIONAL
--------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0447497
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3255 South 8820 West
Magna, Utah 84044
-----------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 250-3433
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 voting 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, 1998 - $0
For the Exhibit Index see Item 13 of this Report.<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 6, 1998 - $11,000. There are approximately 11,000,000 shares of
common voting stock of the Registrant held by non-affiliates. During the past
five years, 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.
(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 6, 1998
50,000,000
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.
- --------------------
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 with the purpose to do 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.
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.
Articles of Amendment to the Articles of Incorporation were also filed
in Utah on April 15, 1987, increasing the authorized capital to 50,000,000
shares from 50,000 shares and reducing the par value from $1.00 to $0.001 per
share.
On May 11, 1987, the Company organized 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.
On July 16, 1996, a Certificate of Authority to Transact Business in the
State of Utah was filed for by the Company.
The Company filed a 10-SB Registration Statement with the Securities and
Exchange Commission (the "Commission") on March 12, 1998, which became
effective May 11, 1998. Copies of the Articles of Incorporation, as amended,
and Bylaws, of the Company, were attached as exhibits to this Registration
Statement, which is incorporated herein by reference.
Business.
--------
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. 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.
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 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 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.
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. 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.
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.
Risk Factors.
- ------------
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.
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 Report,
management expects that any such acquisition would take the form of an
exchange of capital stock.
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 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 an insignificant
amount of time to the activities of the Company, at least until such time as
the Company has identified a suitable acquisition target.
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. 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 III, Item 11.
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
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 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.
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, 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 Report 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.
Item 3. 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 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 calendar years.
PART II
Item 5. Market for Common Equity and Related 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"); 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 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 III, Item 11, of this Report.
Holders
- -------
The number of record holders of the Company's securities as of the
date of this Report is approximately 350.
Sales of Unregistered Securities
- --------------------------------
There have been no sales of any securities of the Company during the
past three years; however, the "restricted securities" owned by Chiricahua
Company and Network Associates, which may be deemed to be "affiliates" of the
Company, may be presently sold pursuant to the limitations set forth in Rule
144 of the Commission, amounting to one percent of the outstanding securities
of the Company (50,000 shares) every three months. See Part III, Item 11,
respecting the stock ownership of these securities.
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 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 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 Report, 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. 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 December 31, 1991. The
Company had losses of ($2,750), for the year ended June 30, 1997 and losses of
($9,004) for the year ended June 30, 1998.
Liquidity
- ---------
A stockholder of the Company contributed $750 for expenses of the
Company during 1997; and an additional $750 for expenses in 1998.
Item 7. Financial Statements.
- -----------------------------
For the periods ended June 30, 1998 and 1997
Independent Auditors' Report
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to the Financial Statements
Item 8. 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, 1998.
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 the name of the current director and
executive officer of the Company. He will serve until the next annual meeting
of the stockholders (held in June of each year) or until his successors are
elected or appointed and qualified, or his 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
</TABLE>
* This person presently serves in the capacities indicated.
Term of Office
- --------------
The term of office of the current director shall continue until
the annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in December of each year. 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
- -------------------
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.
Family Relationships
- --------------------
Mr. Johnson is the only director and executive officer of the Company.
Involvement in Certain Legal Proceedings
- ----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer 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 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.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
Charles Johnson, Chiricahua Company and Network Associates filed Forms 3
with the Commission on October 5, 1998.
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)
Name and Years or other all
principal periods Annual restricted option/ LTIP other
position Ended $ $ Compen- Stock SAR's Payouts Compen-
Salary Bonus sation awards$ # $ sation$
- ------------------------------------------------------------------------------
Charles
Johnson 6/30/98 0 0 0 0 0 0 0
President, 6/30/97 0 0 0 0 0 0 0
Sec/Treas, 6/30/96 0 0 0 0 0 0 0
Director
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, 1998, 1997, or 1996, 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.
Termination of Employment and Change of Control Arrangement
- -----------------------------------------------------------
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 11. 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 June 30,
1998, 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
(1) This entity is solely owned and controlled by David C. Merrell, a
person who may be deemed to be a promoter of the Company.
(2) This entity is solely owned and controlled by the family of Bruce
H. Rogers, (Vince R. Rogers), a person who may be deemed to be an affiliate of
the Company; Bruce H. Rogers was a director and executive officer until May
11, 1995; he died recently.
</TABLE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of June 30, 1998 and to the date hereof,
to wit:
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
See the caption "Identification of Directors and Executive Officers,"
below, Part III, Item 9, 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 12. Certain Relationships and Related Transactions.
- -------------------------------------------------------
There have been no material transactions between any director, executive
officer, five percent stockholder or promoter during the past three years.
Item 13. Exhibits and Reports on Form 8-K.
- -----------------------------------------
Reports on Form 8-K
- -------------------
None.
Exhibit
Exhibits* Number
Number -------
- ------
(i)
Financial Data Schedule 27
(ii) Where Incorporated
In This Report
Number ------------------
- ------
Registration Statement on Form 10-SB** Part I
Initial Articles of Incorporation dated September 19, 1977 for
Sierra Development (Utah).
Articles of Amendment dated July 5, 1979,
respecting change in Board of Directors (Utah).
Articles of Amendment dated April 15, 1987,
respecting change in authorized shares, par value,
pre-emptive rights and cumulative voting (Utah).
Articles of Incorporation dated May 11, 1987, for Cookie
Cup International (Nevada).
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).
Bylaws
Financial Data Schedule
Certificate of Authority to Transact Business in the State of Utah
for Cookie Cup International filed July 16, 1996.
* 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 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.
COOKIE CUP INTERNATIONAL
Date: 10/6/98 By/s/Charles Johnson
Charles Johnson, President, Sec/Tres 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:
COOKIE CUP INTERNATIONAL
Date: 10/6/98 By/s/Charles Johnson
Charles Johnson, President, Sec/Tres and
Director
<PAGE>
COOKIE CUP INTERNATIONAL
FINANCIAL STATEMENTS
June 30, 1998 and 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Cookie Cup International
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Cookie Cup
International (a development stage company) as of June 30, 1998, and the
related statements of operations, stockholders' equity (deficit), and cash
flows for the years ended June 30, 1998 and 1997, and from inception on April
15, 1977 through June 30, 1998. 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 June 30, 1998 and the
results of its operations and its cash flows for the years ended June 30, 1997
and 1996, and from inception on April 15, 1977 through June 30, 1998 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
Salt Lake City, Utah
July 31, 1998
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
June 30,
1998
<S> <C>
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 10,254
Total Current Liabilities 10,254
TOTAL LIABILITIES 10,254
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares authorized of
$0.001 par value, 50,000,000 shares issued and
outstanding 50,000
Additional paid-in capital 255,500
Deficit accumulated during the development stage (315,754)
Total Stockholders' Equity (Deficit) (10,254)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -
</TABLE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
Inception on
April 15,
For the Years Ended 1977 Through
June 30, June 30,
1998 1997 1998
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES (9,004) (2,750) (315,754)
NET LOSS $ (9,004) $ (2,750) $ (315,754)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 50,000,000 50,000,000
</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 year ended
June 30, 1998 - - - (9,004)
Balance, June 30, 1998 50,000,000 $ 50,000 $ 255,500 (315,754)
</TABLE>
<TABLE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
Inception on
April 15,
For the Years Ended 1977 Through
June 30, June 30,
1998 1997 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (9,004) $ (2,750) $ (315,754)
Changes in operating assets
and liabilities:
Increase in accounts payable 8,254 2,000 10,254
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
<PAGE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1998
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. Basic Loss Per Share
The computations of basic 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 June 30, 1998, the Company has net operating loss carryforwards of
approximately $11,000 that may be offset against future taxable income through
2013. 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.
PAGE
<PAGE>
COOKIE CUP INTERNATIONAL
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1998
NOTE 1 - ORGANIZATION AND HISTORY (Continued)
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.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 10254
<BONDS> 0
0
0
<COMMON> 50000
<OTHER-SE> (60254)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9004
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9004)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9004)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9004)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
