SECOND AMENDMENT TO THE
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Great Basin Water Company
(Name of Small Business Issuer in its charter)
Nevada 86-0889096
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
number)
2950 E. Flamingo Rd., Suite F
Las Vegas, Nevada 89121
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (702) 734-1223
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: n/a
Name of exchange on which each class is to be registered: n/a
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
<PAGE> 1
TABLE OF CONTENTS
Page No.
Part I
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis
Or Plan of Operation 10
Item 3. Description of Property 13
Item 4. Security Ownership of Certain
Beneficial Owners and Management 14
Item 5. Directors, Executive Officers,
Promoters and Control Persons 16
Item 6. Executive Compensation 18
Item 7. Certain Relationships and Related
Transactions 19
Item 8. Description of Securities 20
Part II
Item 1. Market for Common Equity and Related
Stockholder Matters 21
Item 2. Legal Proceedings 21
Item 3. Changes In and Disagreements with
Accountants 22
Item 4. Recent Sales of Unregistered
Securities 22
Item 5. Indemnification of Directors and
Officers 23
Part F/S 23
Part III
Item 1. Index to Exhibits 32
Item 2. Description of Exhibits 32
Signatures 32
<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
-------
Great Basin Water Company (the "Registrant" or the
"Company") was incorporated on August 27, 1997 under the laws of
the state of Nevada. On November 1, 1998, the Company purchased
all of the outstanding shares of Shadow Ridge Water Company
("Shadow Ridge"), an Arizona corporation, by issuing 1,000,000
shares of common stock of the Company, valued at $2.00 per share.
In February of 1999, the Company acquired four water wells with
pumps and 2,733.35 acre feet of water in Arizona in exchange for
the payment of 7,500 shares of Preferred Series B Stock, valued
at $100.00 per share, and the annual payment, commencing November
1, 2000, of $60,000 cash. On July 12, 1999, the Company acquired
100% of HDB Telemetry Corporation, a Nevada corporation ("HDB
Telemetry"), by issuing 100,000 shares of common stock, valued at
$2.00 per share. Also on July 12, 1999, the Company acquired 20%
of HDB Telemetry Systems, a Canadian corporation ("HDB Telemetry-
Canada"), by issuing 20,000 shares of common stock valued at
$2.00 per share.
Business of the Registrant
--------------------------
The Company is a holding company in the business of
acquiring new or existing water companies and utility-related
products. The Company aims to centralize any acquired utility
organization to better service its end-users and to capitalize
new water utility corporations in need of capitalization for the
expansion and/or construction of new systems to service the
demands of developers and builders. In addition, new products
that serve utility companies may also become a target of
acquisition by the Company. While the Company does not engage in
providing utility services directly, it serves as a holding
company for other companies it acquires that may provide such
services.
The main goal of the Company is to acquire certified
companies that provide public water utility service and waste
treatment services to identified portions of Arizona, California,
Nevada and Utah. Management intends to locate companies with
respectable operating histories that do not suffer from water
quality problems.
<PAGE> 3
While the Company intends to centralize the business
organization of the companies it acquires, it will also utilize
traditional distribution methods for water and waste treatment in
areas that are targeted for explosive growth in America's
Southwest.
Competitive business conditions are somewhat thwarted
because of the semi-monopolistic nature of utilities. While
considered natural monopolies, the acquisition of existing water
companies and the capitalization of new construction of other
water companies acquired, will eventually lead to the limits of
holding companies with utilities. Once the total monthly revenue
of all the Company's subsidiaries combined reach or exceed
$5,000,000 per month, new restrictions from the State of Arizona
and possibly other states would affect the further acquisition of
additional utilities.
All of the water in the utilities in the Company's current
subsidiaries is ground water (pump well) distribution. The amount
of acre feet that can be pumped is allocated in the Certificate
of Convenience and Necessity awarded by the State for that
particular water system.
The availability of water is proven in each instance where
demands for utility service (water and waste) is requested.
Developers and builders must submit a request for an assurance of
service prior to receiving any building or construction permits.
As each is examined, the availability of water to service such
demands is reviewed by hydrologists and a decision is made to
service from existing infrastructural designs and existing pump
wells, or to develop additional pump well capacity. Current
hydrological reports indicate vast quantities of ground water in
the alluvial basins in the area of Arizona where the Company is
active.
The dependence on customers for water is a known demand
factored by unit into the Certificate of Necessity and the 100
year water plan so the matter of few or many customers is
centrally organized into the overall plan of combined customer
demand.
Franchises for water and waste treatment services on two
townships in Mohave County, Arizona are owned by Shadow Ridge.
All services are approved by the Arizona Department of
Environmental Quality, the Corporate Commission of the State of
Arizona, Mohave County Arizona, Department of Engineering and the
water is tested weekly for quality by an approved chemical
laboratory.
<PAGE> 4
Each governmental approval is on an "as needed" basis for
each subsidiary corporation. There are not any approvals required
at this time that has not been obtained. The effect of
governmental approvals for service and operational requirements
are not any different than normal operating procedures.
The Company has not expended any time or money on research
and development. The Company relies on manufacturing corporations
for equipment and components. Costs and effects of compliance
with environmental laws have been approximately $5,000, mainly
for biological and endangered species surveys and control in
compliance with Federal laws.
The Company currently has two full-time employees. Darryl E.
Schuttloffel is the President/CEO and works full time for the
Company implementing the business plan. He is an officer and
director of the Corporation. Ray E. Warren is the Chairman of the
Board of Directors and devotes approximately twenty hours per
week to implementing the business plan. Mr. Thomas R. Warren is a
director as well as the CFO of the Company and devotes
approximately 20 hours per week to the Company's affairs.
SHADOW RIDGE
------------
The Company purchased 2,733.35 acre feet of agricultural
water in the Mesquite, Nevada area. The Mesquite, Nevada area,
which is called the Arizona Strip, is embarking on a building and
housing boom for subdivisions and rural communities. The
Company's subsidiary, Shadow Ridge, will service water in these
communities. This Arizona Strip section of land is situated
northwest of the Grand Canyon and is not accessible from the rest
of the State of Arizona. In order to get there, one must travel
through the state of Nevada or the state of Utah. Indeed, Mohave
County, in which most of the Arizona Strip is located, is larger
than five of the smaller eastern states, is largely unsettled and
is desert. Golf courses and country clubs are planned for this
area as well as planned communities of 2,000 homes.
The acquisition of Shadow Ridge was the first of the utility
companies purchased by the Company. Shadow Ridge was a start-up
company that owns franchises on over 7,000 acres of real estate
in the Arizona Strip. The first 18.25 miles of water and waste
treatment mains have been engineered and construction is
scheduled to start in March 2000. The system will currently serve
two developers that have requested service, but it is engineered
to serve a total of seven square miles of property that should
attract other future developers as well.
<PAGE> 5
Even though this utility is located directly across the
Virgin River from Mesquite, Nevada, one of the fastest growing
cities in Nevada, a market analysis was conducted on the utility
by Tamsen Market Research and Analysis for the developers
regarding the proposed residential and utility development. The
site is situated approximately 3.5 miles southeast of Mesquite,
Nevada and is currently barren property.
Research consisted of a site area reconnaissance, local
records review, available news articles and interviews with local
governmental and industry professionals. Their assessment has
revealed the following information in connection with the
development of the property for residential utilization and the
operation of a supporting utility.
1. Mesquite Nevada is the fastest growing city in Nevada
(currently the fastest growing small city in the entire
United States) with other nearby Nevada cities in second
and third place.
2. The current population is approximately 15,000 and is
expected to double in the next three years with the city
of Mesquite eventually supporting 30,000 to 35,000
people.
3. During the past ten years the area population has
increased 400%+.
4. The economy is well diversified and not tied to any
particular employer, creating a wide variance of
opportunities and expectations.
5. Completion of the recent casinos during the past five
years has put a strain on the existing supply of housing
lots.
6. The average home in Mesquite is a 1,500 square foot
ranch home priced between $95,000 and $140,000.
7. Certain unique building methods permitted in the area
can help provide more affordable housing.
8. Lot prices are high ($50,000-$80,000) due to a lot
shortage.
9. About thirty-two (32) new subdivisions have recently
been developed during the last three years. Several of
these developments have been pre-sold.
10. The prices of Mesquite residential building lots are
climbing and lots are hard to come by. There are still a
few in-fill lots scattered throughout the older parts of
the city, but even these are selling at premium prices.
It is the opinion of the study that with proper management
and marketing, there is no reason that the ongoing successful
home building boom which is going on in Mesquite, Nevada cannot
be duplicated in the Arizona side across the Virgin River from
<PAGE> 6
Mesquite. The Mohave County Plan for that area estimates that a
population in that part of Arizona could reach 80,000 in the next
twenty years. Shadow Ridge has positioned itself to be the
utility of choice for all that area and management of the Company
sees it as one of the leading subsidiaries of the Company's
future.
The earnings from Shadow Ridge will not grow in direct
proportion to their customer growth. In most business, such a
relationship is natural. Management cannot expect that from this
Company because the customer growth for Shadow Ridge will be
rapid, for at least seven years. In addition, that relationship
does not hold true for this corporation. To put it in short and
simple terms, the expenses associated with the rapid growth will
outpace the revenues received from the new customers.
The assets of the Company will, however, grow in direct
proportion to developer activities. While we are responsible for
the waste treatment facilities, the wells, storage tanks and some
of the main transmission lines, the developer is responsible for
some of the main transmission lines, all the laterals and all the
service units. Upon completion of the developers responsibility
for the transmission and distribution systems, they are inspected
by Company personnel and then accepted from the developer. They
then become the assets of the Company.
In order to alleviate such a financial impact upon any of
our utility companies, that is only followed by earnings from a
slower customer growth than retail businesses experience, "impact
fees" are placed upon the developers that provide a return of
investment into the Company and alleviate the initial financial
impact and creates a return of investment that is comparable to
growth. Such fees charged to the developers range from $3,000.00
per unit to $6,000.00 per unit for residential developments.
It is reasonable to assume that the water and waste
treatment facilities for the area in the Arizona Strip serviced
by Shadow Ridge, will cost approximately $1.2 Million. Shadow
Ridge has an agreement with the developers wherein the developers
will pay to Shadow Ridge, $3,000.00 per unit on the first 475
homes in Phase I. The developers then would pay back as the homes
are built a total of $1,425,000 against the cost of the $1.2
Million and turn over to Shadow Ridge, assets of the
infrastructure of approximately $2.9 Million. There are three
developers with a total of 2,000 homes in the plans. There are,
of course, no guarantees that such numbers will be achieved.
<PAGE> 7
REMOTE CONTROL OF WATER AND UTILITY METERS
------------------------------------------
The Company's entry into high tech utilities started with
the acquisition of HDB Telemetry and the acquisition of 20% of
HDB Telemtry-Canada. The remote control of water meters availing
the ability to monitor, control and bill water clients via
satellite/computer interlinks is what management believes to be
the way of the future.
Shadow Ridge is commencing to supply water to large housing
projects. In addition, with the planned acquisition of additional
utility companies, management feels that the building,
construction and expansion of the Company's utility company
subsidiaries should be with the latest technology which H.D.B.
Telemetry can supply, not only to the Company's subsidiaries but
to all utility companies.
That means a cost effective means of collecting water and
utility meter billing data and processing of the collected data.
Such a telemetry system is not only cost effective in systems
management, but allows ease of expansion in the system with
future acquisitions of other water companies.
In October, 1994, ORBCOMM was granted a USA commercial
license for the transmission of data to Low Earth Orbit (LEO)
Satellites. In October, 1998, ORBCOMM had completed placing 28
LEO satellites into orbit. In June, 1998, Houston Technologies
Inc. had secured a retail distributorship for the ORBCOMM SYSTEM
By December, 1998, Houston Technologies Inc. had effective one
way communication established through the system and by January
1999, effective two way communication was established giving the
ability to receive messaging/alarms and respond to them, all via
satellite. The micro processor developed by Houston Technology
gives the system full SCADA capabilities. Houston Technology
merged with H.D.B. Telemetry of Canada and started the H.D.B.
Telemetry System Corporation in the United States.
Electronic Water Meters with a data output port and a built-
in solenoid are installed at each dwelling on the oncoming water
or utility lines. A four pair line is run from the water or
utility meter to the outside of the dwelling and trenched into a
satellite communicator which is placed in a central location to
accommodate 20 homes. The micro processor within the communicator
would be programmed to extract data from the utility or water
meter on command or on a set frequency and then transfer the data
to the main or central office.
<PAGE> 8
The data would then be automatically rolled into the billing
software with limited possibility of corruption. Clerical staff
would only be required to print billing. Meters would be able to
be polled on demand from the central office for data. Water or
any utility could be turned off or on from the office without
having to enter onto the customer's property. This communication
system can also be used to control golf course irrigation and is
presently designed for installation into a twenty seven hole golf
course in Arizona.
All of the utility companies associated with the Company
will be utilizing the new type meters and H.D.B. Telemetry is
expected to begin international distribution in the first quarter
of 2000.
COMPETITION
-----------
The Company is aware that there are other holding companies
attempting to acquire independent water companies for
consolidation. However, the Company is not intimate with any of
these corporations. Citizens Utilities has attempted to purchase
the same independent water companies that the Company has and
five of the companies targeted by us have decided to accept our
acquisition offers. The share of the market that the Company can
achieve is estimated at 30% because of the marketing plan
implemented to identify independent companies considering take-
overs, the consolidation plans and the corporate representation
by legal representatives; however, the water and waste treatment
business is intensely competitive. The Company will be at a
disadvantage with some other companies which may have larger
staffing and greater financial and operational resources.
In the utility equipment businesses, in which H.D.B.
Telemetry is engaged, the marketing plan being developed by
H.D.B. Telemetry is to acquire national and international
distributors for the water meters and software package that is
monitored by satellite. In the related fields, H.D.B. Telemetry
is entering into the petroleum market that will allow petroleum
companies to monitor pumping, pressure, distribution and flow via
the Orsbcomm Satellite system. These systems are being custom
designed by H.D.B. Telemetry and during the year 2000, the
marketing will continue with custom designed systems for the
petroleum industry and the establishment of distributors in the
water and waste portion of the business plan.
<PAGE> 9
DEPENDENCE UPON ONE OR A FEW MAJOR CUSTOMERS
--------------------------------------------
Although the Company currently has no revenue, if it does
not make further acquisitions of operating water utility
companies, it will be dependent upon the development activities
of the Shadow Ridge water project for future revenue. Likewise,
HDB Telemetry is dependent upon the Company's activities and
acquisitions of water utility companies for its future revenues,
unless and until HDB Telemetry seeks unrelated, third-party
customers for revenue.
Item 2. Management's Discussion and Analysis or Plan of
Operation
This registration statement includes, without limitation,
certain statements containing the words "believes",
"anticipates", "estimates", "could", "should", "plans to" and "it
is reasonable to assume", and words and phrases of a similar
nature which constitute "forward-looking statements" meaning
actual results could differ from projected or expected results.
In particular, the statements herein regarding the Company's
expansion and acquisition plans and methods; the stabilization of
business and its affect on revenues and expenses; the length of
time the proceeds from the Company's stock and cash acquisition
plans and the cash flow from operations acquired and planned
could and would fund its planned operations and acquisitions; the
complete effect to the Company's operations if lack of agreement
or cooperation with those third party investors on which the
company relies, the effect of the name recognition associated
with the utility industry in acquiring future and planned water
and waste treatment companies or the effects on the operations of
the Company if the Company were to lose the services of any of
its officers or directors or the management anticipated to be
acquired in the acquisitions; the role consolidation has in the
acquisition of the companies that is anticipated and the effects
on rate limitations levied by the Corporate Commissions or the
Utility Commissions, and the possible effect of misinterpretation
of new policies or lack of awareness could have on operations,
are forward looking statements. These forward-looking statements
reflect management's current expectations and are inherently
uncertain and dependent upon investor relations for the
acquisitions. The Company's actual results may differ
significantly from management's expectations.
<PAGE> 10
INTRODUCTION
------------
The Company is a holding company with two operating
subsidiaries: Shadow Ridge and H.D.B. Telemetry. Shadow Ridge
holds franchises for water and waste treatment utility services
on approximately 7,000 acres of land in the State of Arizona. It
has requests for Assurance of Service from three developers that
are currently awaiting their preliminary approval prior to
starting construction on the first phase of 435 homes within the
franchise area of Shadow Ridge.
H.D.B. Telemetry is a "start up" company that has developed
utility meters that can be read by satellite on OrbsComm and
through the system can transfer the data from Satellite directly
to the software billings with limited possibility of corruption.
There have not been any revenues from either subsidiary and
revenues are not expected from either until the third quarter of
2000.
The Company is designed to serve as a utility holding
company that would acquire and operate water utility companies
and waste treatment systems, first in Northwest Arizona and
eventually throughout the Southwestern United States. The Company
has negotiated agreements to acquire three operating water
utility companies in the region of Northwestern Arizona and are
expected to close on the acquisitions in the first quarter of
2000. The acquisitions, if and when completed, are expected to
produce for the Company an immediate increase in annual revenues
of approximately $600,000.00 per year.
Management's vision for the Company is to build a
substantial regional utility company through a strategic program
of acquiring water rights, service franchises and existing water
companies along the paths of predicted growth throughout the
desert regions of the Pacific Southwest. In this way, the
Corporation can systematically build equity, increase earnings
and maximize share value through the consolidation of the
companies acquired.
"New-build" systems as in the case of Shadow Ridge, will
utilize the latest in hi-tech plastic pipe, pumps and delivery
systems, which allow the smaller companies to become more
profitable and less expensive. Packaged waste treatment plants
are planned in all of the systems in which Shadow Ridge has been
petitioned for service. In the "new-build" systems, the assets of
the corporation grow in direct proportion to developer
activities. While the company is responsible for the waste
<PAGE> 11
treatment facility, wells, storage facilities and some of the
main transmission lines, the developer is responsible for the
mains, lateral's and service units. Upon completion of the
infrastructure (transmission and distribution system), the
developer deeds the infrastructure to the Company for ownership
and of course the utility assumes the maintenance after proper
inspection. Hence earnings from new-build systems do not grow in
direct proportion to the customer growth. This cost is off-set
through impact fees and tap fees paid by the developer which then
in turn, pays for the build out cost and the costs associated
with the assurance of continued service.
The featured direction of the Company is to acquire existing
water and waste treatment companies. The fundamental feature of
these investor owned water companies is that each is structured
in the holding company, servicing its customers through one or
more subsidiary companies, usually, but not necessarily, wholly
owned subsidiaries. The management of the Company's affairs is
centralized within its executive management team and its Board of
Directors. As of December 31, 1999, the Company's net
shareholders equity was $2,551,723 or $0.48 per share. Net
shareholder's equity (also called "book value") per share
represented the amount of the total assets of the Company from
its audited balance sheet, reduced by the amount of its total
liabilities, divided by the total number of shares of Common
Stock issued and outstanding.
To ensure the continued operations to effect the business
plan for the year 2000, the Chairman of the Board and the
President of the Corporation have assigned proceeds from their
personal bonds in the amount of $592,050.00 which will be
sufficient to move the corporation into the acquisition phases of
the business plan. It is reasonable to assume that such funds
shall be sufficient and the total may not be required.
Relationships with investment groups have enabled the
corporation to move into the acquisition phases of the business
plan and three companies that have agreed to acquisition terms
are in the review process. It is anticipated that all three
companies shall pass the reviews and be acquired by the
Corporation. The Company anticipates that all three of these
shall pass the reviews and the acquisitions could be completed,
if at all, by the end of May of the year 2000. The Company also
anticipates that it might acquire a minimum of two water or
utility-related corporations in 2000.
<PAGE> 12
Because of the anticipated acquisition of these three (or
more) companies, it is expected that the Company would add a
minimum of three additional employees by May, 2000. Consolidation
efforts would probably reduce the number of employees of the
companies that might be acquired, by approximately six personnel.
Year 2000
---------
Neither the Company, nor its subsidiaries, has had any
negative effects from the year 2000 date change and management
does not expect any material issues to arise in the future in
this regard. The year 2000 was not considered a problem or a
threat to the Company or any of our subsidiaries. All the
programs were checked by the technicians from H.D.B. Telemetry
and were all considered Y2K compliant, including all the software
designs of H.D.B. Telemetry.
ITEM 3. DESCRIPTION OF PROPERTY
The Company leases approximately 2000 square feet of office
space at 2950 E. Flamingo Rd., Suite F, Las Vegas, NV 89121 for
its corporate offices. The monthly payment on this space is
$500 and the lease expires on January 1, 2002. The use of this
space is expected to be sufficient for the Company's needs until
approximately 2002.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of
February 25, 2000, with respect to the beneficial ownership of
the common stock by each officer and director of the Company,
each person (or group of persons whose shares are required to be
aggregated) known to the Company to be the beneficial owner of
more than five percent (5%) of the common stock, and all such
directors and executive officers of the Company as a group.
Unless otherwise noted, the persons named below have sole voting
and investment power with respect to the shares shown as
beneficially owned by them.
Title of Name and Address Amount & Nature Percent of
Class of Beneficial Owner of Beneficial Owner Class
---------------------------------------------------------------
Common Ray Warren<F2> 95,000 2%
2138 Abarth Street
Las Vegas, NV 89122
<PAGE> 13
Common Darryl E. Schuttloffel 1,317,520 25%
<F1> <F2>
2808 Tumble Brook
Las Vegas, NV 89134
Common Norman Bebell<F2> 27,000 1%
9050 Union Turnpike
Apartment 3M
Glendale, NY 11385
Common Antony Brazenas<F2> 142,000<F3> 3%
315 Douglas Road
Canmore, Alberta
Canada T1W 1K2
Common Ronald L. Drake<F1><F2> 81,250 2%
2950 E. Flamingo Rd.
Suite F
Las Vegas, NV 89121
Common Scott B. Grams<F2> 207,000 2%
805 Souris Avenue
Weyburn, Saskatchewan
Canada S4H 085
Common Thomas R. Warren<F1><F2> 450,000 9%
3541 Summer Estates Circle
Salt Lake City, UT 84121
Common Intermountain Management 1,074,032<F4> 20%
Associates
2950 E. Flamingo Rd.
Suite F
Las Vegas, NV 89121
Common Officers and Directors 3,466,802 66%
Of the Company as a
Group (9 Persons)
-----------------------------------------------------------------
<F1> An officer of the Company.
<F2> A director of the Company.
<F3> 40,000 shares are held in the name of 599743 Sask LTD which
is owned in part by Antony Brazenas, and 2,000 shares are
held in Mr. Brazenas wife's name.
<F4> Intermountain Management is owned and controlled by both Ray
E. Warren and Thomas R. Warren, both of whom are directors
of the Company.
<PAGE> 14
CHANGES IN CONTROL
The Company has no arrangements which might result in a
change in control of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following table sets forth the directors and executive
officers of the Company, their ages, and all positions with the
Company.
Name Age Positions
---------------------------------------------------------------
Ray E. Warren 74 Chairman of the Board
Darryl E. Schuttloffel 62 Director, President and CEO
Thomas R. Warren 52 Director and Chief Financial
Officer
Ronald L. Drake 55 Director and Secretary
Jay Johnson Taylor 80 Director
Norman Bebell 74 Director
Antony Brazenas 59 Director
Scott B. Grams 33 Director
Alex Peluffo 39 Director
Ray E. Warren, Chairman of the Board, has worked a lifetime
in business and finance. He has been self employed for over 50
years. He is currently a self-employed business consultant,
operating under the name Investment Associates, giving strategic
planning and operational direction to large and small companies
in a variety of industries. Mr. Warren was an owner and executive
officer of a regional stock brokerage firm, Warren & Brown
Associates from 1980 to 1990, where his responsibilities included
capital formation and securities underwriting for small and large
companies as well as compliance with federal and state
regulations, and has acquired considerable expertise in the field
of mortgage banking, under the name Salt Lake Mortgage, in which
he has been engaged for the last six years. He will serve as a
Director until the year 2000.
Darryl E. Schuttloffel, President/CEO/Director, contributes
to the Company more than forty years experience in
entrepreneurship, business development, management, marketing and
finance. Following a distinguished career in the television and
motion picture industry as a producer (CKS Media, 1974-1978)
(Tiffany Productions, 1978-1984) (Mark VII Ltd Productions 1984-
1990), he went into marketing and syndication (Lense Productions
and Syndications, President, 1990-1993). That career included the
production of the long-running television show, "The American
<PAGE> 15
Investor." In 1993, Mr. Schuttloffel went into mortgage banking
with The Investors Financial Network where he was Senior Loan
Officer, (1993-1996). In 1996, he recognized the need for water
in the West and in the area of development in the Arizona Strip
and filed for franchises on water on two townships. He then
formed The Shadow Ridge Water Company where he was President from
its inception, 1996 to 1998, when it was acquired by the Company.
Mr. Schuttloffel has served as President and CEO of the Company
since November 1998 and has been appointed to serve through the
end of the year 2000.
Thomas R. Warren, Chief Financial Officer and Director,
brings to the enterprise a strong background in corporate
finance, executive-level management, and the securities industry,
as well as a level of energy that has enabled him to successfully
manage multiple enterprises throughout his thirty-year-plus
business career. Following his education in Business Management
and Marketing at the University of Utah, Mr. Warren became
licensed in Life, Accident and Health insurance, and remains
licensed in Utah and Nevada. From 1980 to 1992, Mr. Warren was a
principal in a stock brokerage firm and was responsible for all
areas of the firm's operations. He has operated a stock transfer
agency, Silver State Registrar and Transfer, for the last 15
years. Mr. Warren has been in the home mortgage business for the
last six years as the branch manager for the Las Vegas office of
Salt Lake Mortgage. He joined the Board of Directors in 1999. He
will serve until December, 2000.
Ronald L. Drake, Secretary and Director, provides to the
Company expertise in several key disciplines. As a U. S. Treasury
Enrolled Agent since 1994, Mr. Drake owns and operates an
accounting firm, Tax Planners, that specializes in income tax
preparation, serving large and small businesses. His formal
schooling includes securities, insurance and financial planning
(Denver School of Certified Financial). Before retiring as
Captain from a distinguished 25 year career with the Clark County
(Nevada) Fire Department, Mr. Drake had primary responsibility
for recruiting, personnel, training, reporting and equipment
accounting. Mr. Drake has been a Director since the inception of
the Corporation and will serve through December, 2000.
Jay Johnson Taylor, Director, retired as Colonel for the
U.S. Air Force's Strategic Air Command Headquarters, where he
served as Director of Plans. Transitioning easily to the business
world, Mr. Taylor soon distinguished himself as Vice President of
Marketing for the Woodmoor Corporation, a Colorado-based real
estate developer. He held this position from 1967 to 1973. Mr.
Taylor helped to plan and market developments ranging from
residential communities in the Colorado ski areas, to a resort
<PAGE> 16
development near Guaymas, Mexico, to a shopping center at Golden,
Colorado. From 1976 to 1980 he was President of Vida del Mar
resort in Manzanilla. From 1980 to 1997, Mr. Taylor served as
Vice President of Finco International, an import and export
company in Ogden, Utah, dealing mainly with Porcelain products.
Mr. Taylor was elected to the Board in 1999 and will serve
through December 2000.
Norman Bebell, Director, resides in New York and has been a
multifaceted technical and creative factor in the film and
television industry for over thirty years. He has headed up the
following corporations: Continental Film Laboratory of New York,
Bebell and Bebell Color Laboratories, Marquis Film Distributors,
Films for Educators, and Cineffects Visuals. Mr. Bebell teaches
the film business at a private school and since 1994 has been a
consultant to Lab Link and other film companies in New York. Mr.
Bebell will serve the Board of Directors through the year 2000.
Antony Brazenas, Director, is from Weyburn, Saskatchewan and
is a Municipality Chancillor with the government and is involved
in the ranching business as well as the petroleum business with
JAC Petroleum Corporation. He has also been in the hospitality
business as a hotelier. Mr. Brazenas also serves on the board of
directors of H.D.B. Telemetry-Canada and has been a director of
many businesses in Canada and the United States as well as a
consultant to those companies. Since 1965, Mr. Brazenas has been
the Secretary/Treasurer for Tonorose Farms Ltd., the Secretary/
Treasurer of Jo Amerts Petroleum Corporation, and the Secretary/
Treasurer for Saskatchewan Ltd 599743 since 1989. In 1975 he was
elected to the board of directors of the Lucky Seven Farms Ltd
and still serves in that capacity. In 1987 he was elected to the
Board of Directors of Troika Petroleum Corporation, and still
serves in that capacity. He was elected to the Board of Directors
of this corporation in 1998 and will serve through the year 2000.
Scott B. Grams, Director, is in the hospitality and travel
business in Saskatchewan Canada where he is a partner in the
family-owned tour bus and travel tour business, Stage Coach Tours
and Chargers, since 1994. Mr. Grams has served on the board of
directors since 1998 and consults with other businesses in the
travel and hospitality industry. Mr. Grams will serve the Board
of Directors until the end of 2000.
Alex Peluffo, Director, is currently employed in a
management position with The Paris Hotel in Las Vegas, Nevada.
>From 1991 to 1996, he was Food and Beverage Manager at the Four
Seasons and Stratosphere Hotels in Las Vegas, Nevada and prior to
that was Food and Beverage Manager at the Ritz Carlton, in San
Francisco, California, from 1991 to 1996. He is also a director
<PAGE> 17
in the Town Square LLC since 1998, the Shadow Ridge LLC since
1998 and is also managing a commercial development north of Las
Vegas, Nevada, called "The Arizona Town Square." Mr. Peluffo is
also a consultant to other corporations in the gaming and hotel
industry.
The Chairman of the Board of Directors, Mr. Ray E. Warren,
and the Chief Financial Officer of the Corporation, Mr. Thomas R.
Warren, are father and son. None of the directors, officers,
control persons or promoters have had, in the last five years:
i. Any voluntary or involuntary bankruptcy with any other
company, general partnership or executive officership within the
past two years.
ii. Any conviction in a criminal proceeding or being subjected
to a pending criminal proceedings.
iii. been the subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoined,
barred, suspended or otherwise limited in their involvement in
any type of business, securities or banking activities.
iv. Been found by a court of competent jurisdiction (in a civil
action), the SEC 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.
ITEM 6. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
SUMMARY COMPENSATION TABLE<F1>
Name and Annual Compensation
Principal Position Year Salary
--------------------------------------------------------------
Darryl 1999 $3,000
Schuttloffel 1998 $3,000
President 1997 $ -0-
<F1> All columns which are not applicable have been removed.
OPTIONS/SAR GRANTS
There were no stock options or stock appreciation rights
granted to the chief executive officer during the last fiscal
year.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END
OPTION/SAR VALUE TABLE
Not applicable.
<PAGE> 18
LONG TERM INCENTIVE PLANS
There are no long term incentive plans in effect and
therefore no awards have been given to any executive officer in
the past year.
COMPENSATION OF DIRECTORS
The Company pays no fees to members of the Company's Board
of Directors for the performance of their duties as directors.
The Company has not established committees of the Board of
Directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS
The Company does not have any employment contracts with any
of its officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Darryl E. Schuttloffel, the President and a director of the
Company, was issued 1,500,000 shares by the Company for $1,000
cash and services valued at $500 at the organization of the
Company. These shares were valued at the par value of $.001 per
share.
Ray E. Warren, Chairman of the Board of Directors, was
issued 1,500,000 shares by the Company for $1,000 cash and
services valued at $500 at the organization of the Company. These
shares were valued at the par value of $.001 per share.
Darryl Schuttloffel, an officer, director and affiliate of
the Company, gifted to Antony Brazenas 100,000 shares, which were
valued at $25,000, for services as a director.
Darryl Schuttloffel, an officer, director and affiliate of
the Company, gifted to Scott B. Grams, 100,000 shares, which were
valued at $25,000, for services as a director.
Thomas R. Warren, an officer and director of the Company,
was issued 50,000 shares of common stock for services rendered as
the Company's Transfer Agent. These shares were valued at $2.00
per share.
All other shares owned by the Company's officers and
directors were purchased by the respective individuals in the
Company's offering, on the open market or in an exchange during
the acquisition of Shadow Ridge, upon the same terms as any other
investor.
<PAGE> 19
Mr. Schuttloffel has notes to the corporation for a total of
$218,000. One note for $26,947 was due in December, 1998. The
remaining notes are due in December, 2000. Mr. Schuttloffel does
intend to collect on the notes until profits are available to the
Company. On the assignment of $592,000 worth of notes to the
Company, the Company intends to utilize the monies to acquire
companies with cash flow, which will be then paid back to Mr.
Schuttloffel and Mr. Warren as the profits avail. Due date on the
note for the assignments of $592,000 is December, 2010.
The Company utilizes the services of Silver State Transfer
Agency as its transfer agent and Registrar. Silver State is
operated by Thomas R. Warren, an officer and director of the
Company.
Other than as described above, there have been no material
transactions in the past two years or proposed transactions to
which the Company has been or proposed to be a party in which any
officer, director, nominee for officer or director, or security
holder of more than 5% of the Company's outstanding securities is
involved.
The Company has no promoters other than its executive
officers and directors. There have been no transactions, other
than as described above, which have benefitted or will benefit
its executive officers and directors either directly or
indirectly.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is presently authorized to issue 25,000,000
shares of common stock, $.001 par value per share. The Company
presently has 5,242,572 shares of common stock outstanding. The
shareholders of the Company do not have a preemptive right to
acquire the Company's unissued shares. There are no provisions,
other than the articles and by-laws of the Company and the
Nevada Revised Statutes, that govern the voting of the Company's
shares. The Company has not to date paid any dividends on its
common stock. There are no provisions, other than as may be set
forth in the Nevada Revised Statutes, that prohibit or limit the
payment of dividends. There are no provisions in the Company's
articles or by-laws that would delay, defer or prevent a change
in control of the Company.
<PAGE> 20
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company is voluntarily filing this Registration
Statement on Form 10-SB in order to re-establish its listing on
the OTC Bulletin Board, which now requires all listed companies
to be registered with the SEC under Section 13 or 15(d) of the
Securities Exchange Act of 1934 and to be current in its required
filings once so registered.
There are no outstanding options, warrants to purchase, or
securities convertible into common equity of the Company
outstanding. The Company has not agreed to register any shares of
its common stock for any shareholder. There are presently
4,768,572 shares of restricted common stock which may be sold
in reliance upon Rule 144 of the Securities Act of 1933, now or
at some time in the future.
STOCKHOLDERS
The are approximately 126 shareholders of record for the
Company's common stock.
DIVIDENDS
To date, the Company has not paid any dividends on its
common stock. The payment of dividends, if any, in the future is
within the discretion of the Board of Directors and will depend
upon the Company's earnings, its capital requirements and
financial condition, and other relevant factors. There are no
provisions in the Company's articles of incorporation or by-laws
that prevent or restrict the payment of dividends. Dividend
payments, if any, would be subject to the provisions of the
Nevada Revised Statutes as well.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened. To the best of
management's knowledge, none of the Company's officers,
directors, or beneficial owners of 5% or more of the Company's
outstanding securities is a party adverse to the Company nor do
any of the foregoing individuals have a material interest adverse
to the Company.
<PAGE> 21
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has used the same auditor since inception has
had no disagreements with its auditor.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
There were three individuals in Canada to whom the Company
sold 2,340 shares of investment stock that were issued under the
Securities Act of 1933, as amended (the "Securities Act"), in
reliance upon exemptions from registration provided by Sections
3(b) and 4(6) of the Securities Act and Rule 504 of Regulation D
thereunder and the meaning of rule 501 to accredited. These
investors were accredited.
The Shadow Ridge Water Company was purchased with a share
for share exchange and the Company issued 1,000,000 shares of
stock under Section 4(2) of the Securities Act, at a value of
$2.00 per share on November 1, 1998. There were thirty five
shareholders of The Shadow Ridge Water Company that received the
distribution.
H.D.B. Telemetry Corporation - Nevada was purchased for
100,000 shares of restricted stock under Section 4(2) of the
Securities Act, and the shares were issued at the par value of
$.001 per share. The stock was issued to two individuals in
Canada and two companies in Canada.
Twenty percent of H.D.B. Telemetry Ltd (Canada) was
purchased for 25,000 shares of restricted stock issued under
Section 4(2) of the Securities Act, which shares were issued at
par value to two individuals in Canada and two companies in
Canada.
There were 500,000 shares issued in an offering made
pursuant to Regulation D, Rule 504 at $.15 per share for a total
of $75,000 that was purchased by a total of 49 individuals (of
which 26 were Canadian) and two Canadian Companies. The offering
was completed in August of 1998.
The Company issued for services, 1,680,000 shares of stock
to eleven people. The stock was issued for services rendered to
the Company from inception to December, 1998 and were issued at
the par value of $.001 per share. Such stock was issued for
services under Section 4(2) of the Securities Act.
<PAGE> 22
Darryl E. Schuttloffel and Ray E. Warren, the two
incorporators, were issued 1,000,000 shares each at par value
of $.001 per share, for which each paid $1,000. These shares were
purchased under Section 4(2) of the Securities Act of 1933.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws provide that the Company will indemnify
its directors and executive officers and may indemnify its other
officers, employees and agents to the fullest extent permitted by
Nevada law. The Company is also empowered under its Bylaws to
enter into indemnification agreements with its directors and
officers and to purchase insurance on behalf of any person it is
required or permitted to indemnify.
In addition, the Company's Articles provide that the
Company's directors will not be personally liable to the Company
or any of its stockholders for damages for breach of the
director's fiduciary duty as a director or officer involving any
act or omission of any such director or officer. Each director
will continue to be subject to liability for breach of the
director's fiduciary duties to the Company for acts or omissions
that involve intentional misconduct, fraud or a knowing violation
of law, or the payment of dividends in violation of Nevada
corporate law. This provision also does not affect a director's
responsibilities under any other laws, such as the federal
securities laws.
<PAGE> 23
Part F/S
Table of Contents
Page
Independent Auditor's Report F1
Consolidated Balance Sheet F2
Consolidated Statements of Operations F3
Consolidated Statements of Shareholders' Equity F4
Consolidated Statements of Cash Flows F5
Notes to Consolidated Financial Statements F6
<PAGE> 24
Russell G. Nay, CPA
4278 Apex Drive
Las Vegas, Nevada 89147
Telephone: (702) 227-8380
The Board of Directors
Great Basin Water Company
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying consolidated balance sheet of
Great Basin Water Company as of December 31, 1999, and the
related consolidated statements of income, cash flows and
retained earnings for each of the two years then ended. These
financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on
these consolidated financial statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis
for my opinion.
In my opinion, the consolidated financial statements referred to
above, present fairly, in all material respects, the financial
position of Great Basin Water Company as of December 31, 1999.
And the results of its income, cash flows, and retained earnings
for each of the two years then ended, in conformity with generally
accepted accounting principles.
/s/ RUSSELL G. NAY
Las Vegas, Nevada
January 30, 2000
Restated
August 10, 2000
F1
<PAGE> 25
Great Basin Water Company
Consolidated Balance Sheet
For the Year Ended December 31, 1999
ASSETS
Restated
Current assets
Cash and cash equivalents $ 1,633
Accounts receivable 2,300
Land Escrow 5,000
Other Receivables 2,000
---------------
Total current assets 10,933
Fixed Assets
Property and equipment, net 17,578
Wells including water rights 750,000
Capitalized costs 249,046
Land 135,000
---------------
Total fixed assets 1,151,624
Other assets
Investment in HDB Telemetry Systems - Canada (20%) 40,000
Total assets $ 1,202,557
================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities $ 65,272
Other payables 9,852
---------------
Total current liabilities 75,124
Long-Term Liabilities
Notes Payable 145,401
Loans from shareholders 210,457
---------------
Total long-term liabilities 355,858
Total liabilities 430,982
Stockholders' equity
Common Stock, $.001 par value -
25,000,000 shares authorized; 5,415,000 shares
issued and outstanding 5,415
Preferred stock, $100 par value -
1,000,000 shares authorized; 7,500 shares issued and
outstanding 750,000
Paid-in capital 341,165
Accumulated deficit (325,005)
---------------
Total stockholders' equity 771,575
---------------
Total liabilities and stockholders' equity $ 1,202,557
===============
The accompanying notes are an integral part of this statement.
F2
<PAGE> 26
Great Basin Water Company
Consolidated Statements of Operations
For the Years Ended December 31, 1999 and 1998
Restated Restated
1999 1998
--------------- --------------
Revenue $ - $ -
Operating expenses:
Rents 11,230 6,973
Payroll and payroll related 5,186 2,580
Taxes, licenses and fees 2,900 2,999
Services 81,347 46,510
Administrative and general expenses 87,529 71,893
Depreciation 3,654 1,804
--------------- --------------
Total operating expenses 191,846 132,759
Loss from operations (191,846) (132,759)
Other income (expense):
Interest income - -
Interest expense - -
--------------- --------------
Total other expense - -
--------------- --------------
Net Loss $ (191,846) $ (132,759)
=============== ==============
Basic and diluted net loss per common
share $ (0.04) $ (0.03)
--------------- --------------
Weighted average shares outstanding 5,350,000 4,365,000
--------------- --------------
The accompanying notes are an integral part of these statements.
F3
<PAGE> 27
Great Basin Water Company
Consolidated Statement of Shareholders' Equity
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
Restated Restated Restated Restated Restated Restated
$0.001 Additional $100
par Paid In par Accumulated
Shares Value Capital Value Deficit Total
---------- -------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at 12/31/97 2,000,000 $ 2,000 $ - $ - $ (400) $ 1,600
Net loss (132,759) (132,759)
Issuance of Common
Stock in 504 Offering
May 1998 500,000 500 74,500 75,000
Issued for Services and
Consulting Sep. 1998 1,680,000 1,680 1,680
Issued to Director for
Services Nov. 1998 110,000 110 110
Issued for Shadow
Ridge Water Co.
November 1998 1,000,000 1,000 248,046 249,046
---------- -------- ---------- --------- ---------- ----------
Balance at 12/31/98 5,290,000 5,290 322,546 - (133,159) 194,677
Net loss (191,846) (191,846)
Issuance of Preferred
Stock for Four Water
Wells in February 1999 750,000 750,000
Stock Issuance For
HDB Telemetry Systems
July 12, 1999 100,000 100 100
Stock Issuance For 20%
HDB Telemetry Systems,
Canada July 12, 1999 25,000 25 39,975 40,000
Stock Issuance Costs (21,356) (21,356)
---------- -------- ---------- --------- ---------- ----------
Balance at 12/31/99 5,415,000 $ 5,415 $ 341,165 $ 750,000 $ (325,005) $ 771,575
</TABLE>
The accompanying notes are an integral part of this statement.
F4
<PAGE> 28
Great Basin Water Company
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998
Restated Restated
1999 1998
--------------- --------------
Cash flows from operating activities:
Net loss $ (191,846) $ (132,759)
Adjustments to reconcile net loss to
cash used in operations:
Depreciation 3,654 1,804
Receivables (300) (4,000)
Accounts Payables 182,363 350
--------------- --------------
Net cash used in operating
activities (6,129) (134,605)
Cash flows from investing activities:
Capital Expenditures (7,438) (13,653)
--------------- --------------
Net cash used in investing
activities (7,438) (13,653)
Cash flows from financing activities:
Proceeds from issuance of common stock - 76,790
Long-term borrowings 10,401 75,097
--------------- --------------
Net cash provided by (used in)
financing activities 10,401 151,887
--------------- --------------
Net decrease in cash and cash
equivalents (3,166) 3,629
Cash and cash equivalents, beginning of
period 4,799 1,170
--------------- --------------
Cash and cash equivalents, end of period $ 1,633 $ 4,799
=============== ==============
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
The accompanying notes are an integral part of these statements.
F5
<PAGE> 29
Great Basin Water Company
Notes to Financial Statements
For the Years Ended December 31, 1999 and 1998
1. Organization of the Company
Great Basin Water Company, (the "Company) was incorporated on
August 27, 1997, under the laws of the State of Nevada.
The Company was organized as a utility holding company to
acquire, own, and consolidate water and waste treatment
companies.
The Company is currently a publicly traded company.
2. Stock Transactions
The Company issued 500,000 shares of stock in an offering in
May 1998. The majority of the proceeds received in this
offering were utilized to cover operations of the Company.
Shadow Ridge Water Company was acquired November 1, 1998.
The Company issued 1,000,000 shares of restricted common
stock, with a par value of $0.001 per share. The assets
received by the Company from Shadow Ridge are reflected on
the balance sheet at their fair market value of $249,046.
This is a change from the amount previously shown on the
12/31/99 financial statements. See Note #7 below discussing
restatement of the financial statements.
The Company has 7,500 shares of Preferred Series B Stock
valued at $100 per share, paying dividends at 8% per annum,
due on or before the first day of November. The first
dividend payment is due November 1, 2000.
3. Land and Well Acquisitions
In February of 1999, the Company acquired four water wells
with pumps and 2,733.35 acre feet of water in exchange for
7,500 shares of Preferred Stock with a par value of $100 per
share. The wells and pumps have a rated capacity of
approximately 1,850,000 gallons per day, more than adequate
to supply developments for which the Company has provided
Assurances of Service. Groundwater acquired was valued at
approximately $166.00 per acre foot.
Among the assets received in the acquisition of Shadow Ridge
is an access road which is 3.04 miles in length, and 184 feet
wide. The value of the road includes the surveying,
engineering and mapping of 7.5 miles of mains and laterals
for water and waste treatment. The value received from
Shadow Ridge Water Company also includes the acquisition of
three separate franchises from Mohave County, Arizona.
A parcel of land was purchased for $55,000 and holds Well #1.
The Company entered into an agreement for the purchase of
land that the Company plans to utilize as a waste treatment
plant site. The agreement is an executory contract which is
contingent on the selling party acquiring title to the land,
at which time the Company will then tender payment. This
obligation is reflected on the balance sheet as a liability
along with the subject property being shown as an asset.
F6
<PAGE> 30
Great Basin Water Company
Notes to Financial Statements
For the Years Ended December 31, 1999 and 1998
4. Accounts and Notes Payable
Accounts Payable on the Balance Sheet includes payables to
Darryl Shutteloffel and Ray Warren. They represent amounts
paid by them for The Company for operating expenses, and will
be reimbursed to them.
The Notes payable to Shareholder represent outstanding notes
to Darryl Shutteloffel which were made with Shadow Ridge
Water Co. prior to acquisition, and are now the obligation of
the Company. The total amount of those notes is $210,457.
A note payable, in the amount of $55,000 was issued to Derral
Christensen for the land which holds Well #1. The original
purchase price of the land was $55,000. A down payment of
$5,000 was paid. A non interest bearing promissory note was
accepted by the seller.
A note payable in the amount of $80,000 is shown as a
liability for the Company's obligation to purchase land
pursuant to an executory contract as discussed above. The
note is non-interest bearing and is not due until title to
land is provided.
5. Investments
On July 12, 1999, the Company acquired 100% of HDB Telemetry
Systems in exchange for 100,000 shares of stock and is being
reported at par value. See Note #7 for changes made in the
restatement of the 12/31/99 financial statements.
Also on July 12, 1999, the Company acquired 20% of HDB
Telemetry Systems, Canada in exchange for 25,000 shares of
stock. The Company estimated the value of this interest at
$40,000.
6. Depreciable Assets
The Company is depreciating assets on the straight-line basis
over the appropriate lives of those assets.
7. Restatement of Financial Statements for December 31, 1999
The December 31, 1999 financial statements are being restated
to reflect the removal of the Receivable-Sterling
Investments, Ltd., and the Note Payable to Shareholder, both
in the amount of $592,050. Subsequent test work established
that there was substantial question surrounding the value of
the bonds and they were returned to the owner. The
corresponding note was returned to the shareholders, Darryl
Shutteloffel and Ray Warren and the debt was extinguished.
The original December 31, 1999 financial statements
inappropriately showed an investment in Shadow Ridge Water
Co. and HDB Telemetry Systems. These should have been
eliminated in consolidation, and only the assets of these two
companies shown on the Balance Sheet. The current financial
statements reflect the elimination of these items and
correctly reflect the assets acquired in the acquisition of
these two companies. Shadow Ridge was originally valued at
$2,000,000, which was management's estimate of the fair
market value of the Company's stock. However, it has
subsequently been decided that it was inappropriate to
reflect goodwill associated this acquisition and consequently
the acquisition has been restated at the fair market value of
the assets, $249,046.
After the issuance of the financial statements, it was
discovered that the accounts payable and expenses had been
understated for 12/31/99. These amounts were included in the
March 31, 2000 interim statements, but have been brought back
into the 1999 statements to more fairly reflect the actual
balances at year end. The effect on Retained Earnings was to
increase the deficit by $67,967.
F7
<PAGE> 31
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION
Exhibit
Number Description
------- -----------------------------------------------------
27.0 Financial Data Schedule
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.
GREAT BASIN WATER COMPANY
(Registrant)
Date: September 19, 2000 By: /s/ DARRYL SCHUTTLOFFEL
--------------------------------
Darryl Schuttloffel
President, CEO and duly
authorized officer
<PAGE> 32
