U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB/A
AMENDMENT NO. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
RIMPAC RESOURCES LTD.
(Name of Small Business Issuer in its charter)
NEVADA 91-1921379
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11930 MENAUL BOULEVARD, N.E., SUITE 107, ALBUQUERQUE, NEW MEXICO 87112
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (505) 298-8235
Securities to be registered under Section 12(b) of the Act: NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $0.001 PAR VALUE
(Title of class)
Exhibit index on page 31 Page 1 of 31 pages
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Rimpac Resources Ltd. (the "Company"), was organized under the laws of
the State of Nevada on January 26, 1998, to acquire a mineral exploration permit
and to explore for precious metals in the State of Arizona. The Company
subsequently acquired a mineral exploration permit issued by the State of
Arizona and intended to explore for gold mineralization on the Goldstone
Prospect within the permit area. However, the Company was unable to secure
financing for the intended exploration and the world market price of gold was on
the decline. As a result, the Company has abandoned its operations and the
permit was not renewed, as more fully described below under "Prior Operations".
The Company may now be considered as a "shell" company, whose sole
purpose at this time is to locate and consummate a merger or acquisition with a
private entity. The Company's sole officer and director has elected to commence
implementation of the Company's principal business purpose, as more fully
described below under "Plan of Operations".
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities classify the Company as a "blank
check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any offering of the
Company securities, either debt or equity, until such time as the Company has
successfully implemented its business plan.
The Company's offices are located at 11930 Menaul Boulevard, N.E.,
Suite 107, Albuquerque, New Mexico 87112, and its telephone number is (505)
298-8235. Our registered office and records are located at One East First
Street, Reno, Nevada.
PRIOR OPERATIONS
On March 28, 1998, the Company entered into a related party Assignment
of Lease and Purchase Option agreement with its sole officer and director, Mr.
Leroy Halterman. See Exhibit 10.1. According to the agreement, Mr. Halterman
assigned to the Company all of his rights and interests in the Mineral
Exploration Permit Number 08-103044 issued by the State of Arizona in exchange
for 500,000 shares of the Company's common stock. The Company assumed all of the
terms and obligations of the permit, and the deemed value of the permit was
$1,250.
The Mineral Exploration Permit Number 08-103044 allowed the Company to
prospect and explore for minerals on approximately 160 acres of land located in
Cochise County, Arizona, and included all of the north half of the southwest
quarter and south half of the northwest quarter of Section 28, T20S, R23E SE.
Please see Exhibit 10.2. The Mineral Exploration Permit was valid for five
years, expiring on September 16, 2002. The State of Arizona required an annual
renewal payment for the last four years equal to $1.00 per acre, the first two
years of which were prepaid by Mr. Halterman, along with a $100.00 filing fee to
obtain the permit. The State of Arizona also required a $100.00 filing fee for
each renewal period. Mr. Halterman posted a $3,000 cash bond on the property,
which has been repaid to Mr. Halterman. In addition, the Company was required to
make annual exploration expenditures of $10.00 per acre during the first two
years and $20.00 per acre during the last three years.
The Mineral Exploration Permit was limited to minerals owned by the
State of Arizona and to which there was no reservation by a predecessor in title
to the State of Arizona. The permit only allowed the Company to remove minerals
from the land that were required for sampling, assay and metallurgical testing
purposes. The Company was
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required to fill any holes, ditches, or other excavations as may be required by
the Arizona State Land Commissioner, and so far as reasonably possible, restore
the surface to its former condition.
The Company intended to explore the Goldstone Prospect area which was
subject to the Mineral Exploration Permit and located in the north half of the
southwest quarter and south half of the northwest quarter of Section 28 T20S
R23E SE of Coshise County, Arizona. The Goldstone Prospect was exploratory
property and did not have any proven mineral reserves. Prior to the Company's
acquisition of the Mineral Exploration Permit, Mr. Halterman, CPG, RPG, prepared
a report dated December 15, 1997 for the purpose of evaluating the Goldstone
Prospect. See Exhibit 10.3.
Based on this report, management believed the Goldstone Prospect
represented a large epithermal gold system that shared many common
characteristics with other systems that host disseminated gold deposits in the
western United States. The report also indicated that there was a mineralized
trend on the Goldstone Prospect which paralleled the northwest trending range
front faults trend, extending at least two miles along strike. All known
significant mineralization occured within one-half mile of the range front.
Management believed the most significant mineralization appeared to occur within
one-quarter mile of this structure. Management believed that this gave a strong
indication that the source of the gold mineralization probably lies west at an
unknown depth in the valley just off the range front. The epithermal nature of
the mineralization also indicated that it would not lie at a great depth.
Management adopted the recommendations as set forth in Mr. Halterman's
report. The recommendations consisted of two phases. The first phase, with an
estimated cost of $20,500, was limited to defining the drilling targets for the
phase two exploration program. The phase two exploration program involved the
offsetting of the unoffset mineralized drill holes on the edges of the edges of
the mineral body, offsetting other known mineralization, and offsetting the
mineralization found by prior exploration by other companies along the
range-front fault and testing geochemical targets. The approximate cost of the
phase two exploration program was $80,000.
During implementation and further investigation of the planned
operations, the Company decided not to renew the permit issued by the State of
Arizona. The Company did not pay the annual renew fee of $1,600, which was due
on September 16, 1999. The Company's decision, in large part, was based on its
inability to secure funding to finance the adopted exploration program and the
decline of the world market price of gold. As a result, the Company allowed the
mineral exploration permit to terminate. The Company is no longer allowed to
explore for gold mineralization within the permit area. To the extent necessary,
the Company has restored the property to its prior condition and has no further
financial or restoration obligations with respect to the Company's prior
operations.
PLAN OF OPERATIONS
The Company now intends to seek to acquire assets or shares of an
entity actively engaged in a business in exchange for its securities. Management
has not identified a particular acquisition target and has not entered into any
negotiations regarding such an acquisition.
Depending upon the nature of the relevant business opportunity and the
applicable state statutes governing the manner in which the transaction is
structured, the Company's sole director expects that he will provide the
Company's shareholders with complete disclosure documentation concerning a
potential business opportunity and the structure of the proposed business
combination prior to consummation. Such disclosure is expected to be in the form
of a proxy or information statement. While such disclosure may include audited
financial statements of such target entity, there is no assurance that such
audited financial statements will be available. The sole director intends to
obtain certain assurances of value of the target entity assets prior to
consummating such a transaction, with further assurance that audited statements
would be provided within sixty days after closing. Closing documents will
include representations that the value of the assets
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conveyed to or otherwise transferred will not materially differ from the
representations included in such closing documents, or the transaction will be
voidable.
Due to the Company's intent to remain a shell corporation until a
merger or acquisition candidate is identified, it's is anticipated that its cash
requirements shall remain minimal. The Company believes that it has sufficient
working capital to fund its operations through June 2000. To raise additional
working capital, if required, management believes that the Company may conduct
an offering of common stock or obtain short or long-term financing.
The Company has no employees, other than its sole officer and director,
Mr. Leroy Halterman, who is serving without compensation. It is anticipated that
the Company will have employees in the future. As President, Secretary and
Treasurer of the Company, Mr. Halterman is responsible for conducting the
day-to-day operations of the Company. See Part I Item 5. Directors, Executive
Officers, Promoters and Control Persons.
Mr. Halterman may become involved with other companies with a business
purpose similar to that of this Company. As a result, potential conflicts of
interests may arise in the future. If such a conflict does arise and Mr.
Halterman is presented with business opportunities under circumstances where
there may be a doubt as to whether the opportunity should belong to the Company,
he will disclose the opportunity to the Company.
GENERAL BUSINESS PLAN
The Company will be seeking, investigating and, if such investigation
warrants, acquiring an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of a
registered corporation. The Company will not restrict its search to any specific
business, industry, or geographical location and the Company may participate in
a business venture of virtually any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to be restrictive of
the Company's virtually unlimited discretion to search for and enter into
potential business opportunities. Management anticipates that it may be able to
participate in only one potential business venture because the Company has
nominal assets and limited financial resources. See Part F/S Financial
Statements. This lack of diversification should be considered a substantial risk
to shareholders of the Company because it will not permit the Company to offset
potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities that have
recently commenced operations, or that wish to utilize the public marketplace in
order to raise additional capital in order to expand into new products or
markets, to develop new product or service, or for other corporate purposes. The
Company may acquire assets and establish wholly owned subsidiaries in various
businesses or acquire existing businesses and subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes that the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with acquisition of a business opportunity, including the
costs of preparing Form 8-K's, 10-KSB's, agreements and related reports and
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documents. The Securities Exchange Act of 1934 specifically requires that any
merger or acquisition candidate comply with all applicable reporting
requirements, which include providing audited financial statements to be
included within the numerous filings relevant to complying with the Securities
Exchange Act of 1934. Nevertheless, the officers and directors of the Company
have not conducted market research and are not aware of statistical data which
would support the perceived benefits of a merger or acquisition transaction for
the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the sole officer and director of the Company, Mr.
Leroy Halterman. Mr. Halterman is not a professional business analyst. See Part
I Item 5. Directors, Executive Officers, Promoters and Control Persons.
Management intends to concentrate on identifying preliminary prospective
business opportunities which may be brought to its attention through present
associations of Mr. Halterman, or by our shareholders. In analyzing prospective
business opportunities, management will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects for the future;
nature of present and expected competition; the quality and experience of
management services which may be available and the depth of that management; the
potential for further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition of acceptance of
products, services, or trades; name identification; and other relevant factors.
The sole officer and director of the Company expects to meet personally with
management and key personnel of the business opportunity as part of the "due
diligence" investigation. To the extent possible, the Company intends to utilize
written reports and personal investigations to evaluate the above factors.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, will rely upon his own efforts and,
to a much lesser extent, the efforts of our shareholders, in accomplishing the
business purposes of the Company. It is not anticipated that any outside
consultants or advisors, except for our legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes. However, if the
Company does retain such an outside consultant or advisor, any cash fee earned
by such party will be paid by the prospective merger/acquisition candidate. We
have no contracts or agreements with any outside consultants and none are
contemplated.
We will not restrict our search for any specific kind of firms, but may
acquire a venture that is in its preliminary or development stage or is already
operating. It is impossible to predict at this time the status of any business
in which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. Furthermore, the Company
does not intend to seek capital to finance the operation of any acquired
business opportunity until such time as the Company has successfully consummated
a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan. Because the Company has minimal capital
with which to pay these anticipated expenses, present management of the Company
may pre-pay these charges with their personal funds, loans to the Company at
fair interest rates. If additional funding is necessary, management and/or
shareholders will continue to provide capital or arrange for additional outside
funding. However, the only opportunity which management has to have these loans
repaid will be from a prospective merger or acquisition candidate, or an
additional issuance of shares of the Company's common stock. If a merger
candidate cannot be found in a reasonable period of time, management may be
required reconsider its business strategy, which could result in the dissolution
of the Company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
director may, as part of the terms of the acquisition transaction, resign and be
replaced by new directors without a vote
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of the Company's shareholders or may sell his stock in the Company. Any and all
such sales will only be made in compliance with the securities laws of the
United States and any applicable state.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition and the Company is no
longer considered a "shell" company. Until a merger or acquisition is
consummated, the Company will not attempt to register any additional securities.
The issuance of substantial additional securities and their potential sale into
any trading market which may develop in the Company's securities may have a
depressive effect on the value of the Company's securities in the future, if
such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company may retain 20% or less of
the issued and outstanding shares of the surviving entity, which would result in
significant dilution in the equity of such shareholders.
As part of the Company's "due diligence" investigation, the Company's
sole officer and director will meet with management and key personnel, may visit
and inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and may take other reasonable investigative measures to the extent of the
Company's limited financial resources and management expertise. The manner in
which the Company participates in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of the Company and other
parties, the management of the opportunity and the relative negotiation strength
of the Company and such other management.
With respect to any merger or acquisition, negotiations with target
company management are expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties, will specify
certain events of default, will detail the terms of closing and the conditions
that must be satisfied by each of the parties prior to and after such closing,
will outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, will set forth remedies on default and will
include miscellaneous other terms.
The Company will not acquire or merge with any entity that cannot
provide independent audited financial statements within a reasonable time after
closing of the proposed transaction. The Company will be subject to the
reporting requirements of the Securities Exchange Act of 1934. Included in these
requirements is the affirmative duty of the Company to file independent audited
financial statements as part of its Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-KSB. If such audited financial statements are not available at
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closing, or within time parameters necessary to insure the Company's compliance
with the requirements of the Securities Exchange Act of 1934, or if the audited
financial statements provided do not conform to the representations made by the
candidate to be acquired in the closing documents, the closing documents will
provide that the proposed transaction will be voidable at the discretion of the
present management of the Company. If such transaction is voided, the agreement
will also contain a provision providing for the acquisition entity to reimburse
the Company for all costs associated with the proposed transaction.
YEAR 2000 DISCLOSURE
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the change in the century. If not corrected, many
computer applications could fail or create erroneous results even after the year
2000. Because the Company has minimal assets, it is not anticipated that we will
incur any negative impact as a result of this potential problem. However, it is
possible that this issue may have an impact on us after we successfully
consummate a merger or acquisition. Management intends to address this potential
problem with any prospective merger or acquisition candidate. There can be no
assurances that new management of the Company will be able to avoid a problem in
this regard after a merger or acquisition is consummated.
COMPETITION
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial resources
and limited management expertise, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.
RISK FACTORS
In addition to those described above, the Company's proposed business
is subject to numerous risk factors, including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. We have had no
recent operating history nor any revenues or earnings from operations since our
inception. The Company has no significant assets or financial resources. The
Company will, in all likelihood, incur operating expenses without corresponding
revenues, at least until the consummation of a business combination. This may
result in the Company incurring a net operating loss that will increase
continuously until the Company can consummate a business combination with a
profitable business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance we
will be successful in locating candidates meeting such criteria. In the event we
complete a business combination, the success of our operations may be dependent
upon management of the successor firm or venture partner firm and numerous other
factors beyond our control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for the Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the
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Company and, consequently, we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, we will also compete in seeking merger or
acquisition candidates with numerous other small public companies.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION. The Company
has no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public entity.
There can be no assurance that the Company will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or specific
business within an industry for evaluation by the Company. There is no assurance
we will be able to negotiate a business combination on terms favorable to the
Company.
NO STANDARDS FOR BUSINESS COMBINATION. The Company has not established
a specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require a target business opportunity
to have achieved. Accordingly, the Company may enter into a business combination
with a business opportunity having no significant operating history, losses,
limited or no potential for earnings, limited assets, negative net worth or
other characteristics that are indicative of development stage companies.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking
a business combination, management will only be devoting part-time efforts to
the business of the Company. The sole officer and director of the Company, Mr.
Halterman, does not have a written employment agreement with the Company and is
not expected to have one in the foreseeable future. The Company has not obtained
key man life insurance on Mr. Halterman. Notwithstanding the limited experience
and time commitment of management, loss of the services of Mr. Halterman would
adversely affect development of the Company's business and its likelihood of
continuing operations. See Part I Item 5. Directors, Executive Officers,
Promoters and Control Persons.
CONFLICTS OF INTEREST - GENERAL. The sole officer and director of the
Company may participate in business ventures which could be deemed to compete
directly with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the event that the Company's sole officer and
director is involved in the management of any firm with which the Company
transacts business. Management has adopted a policy that the Company will not
seek a merger with, or acquire, any entity in which management serves as
officers, directors or partners, or in which they or their family members own or
hold any ownership interest.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Sections 13
and 15(d) of the Securities Exchange Act of 1934 require reporting companies to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two, or three
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to prepare such
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may be
inappropriate for acquisition so long as the reporting requirements of the
Securities Exchange Act of 1934 are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, results of market
research indicating that market demand exists for the transactions contemplated
by the Company. Moreover, we do not have, and do not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by the Company, there is no assurance we will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, the Company's activities
may be limited to those engaged in by business opportunities which the Company
merges with or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
our operations.
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GOVERNMENT REGULATION. Although the Company will be subject to
regulation under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, management believes that the Company will not
be subject to regulation under the Investment Company Act of 1940, as amended,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investments interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, a violation of such Act could
subject the Company to material adverse consequences.
In addition, under Section 202(a)(11) of the Investment Advisors Act of
1940, as amended, an "investment advisor" means any person who, for
compensation, engages in the business of advising others, either directly or
indirectly or through publications or writings, as to the value of securities or
as to the advisability of investing in, purchasing or selling securities, or
who, for compensation and as part of a regular business, issues or promulgates
analyses or reports concerning securities. The Company shall only seek to locate
a suitable merger of acquisition candidate, and does not intend to engage in the
business of advising others in investment matters for a fee or otherwise.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a private company obtaining a controlling interest in
the Company. Any such business combination may require management of the Company
to sell or transfer all or a portion of the Company's common stock held by him
or resign as a member of the Board of Directors of the Company. The resulting
change in control of the Company could result in removal of the Company's sole
officer and director, Mr. Halterman, and a corresponding reduction in or
elimination of his participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING A BUSINESS
COMBINATION. Our primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of any such private company. The issuance of
previously authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity may attempt to avoid what it deems
to be adverse consequences of undertaking its own public offering by seeking a
business combination with us. Such consequences may include, but are not limited
to, time delays of the registration process, significant expenses to be incurred
in such an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state laws enacted
for the protection of investors.
ABSENCE OF TRADING MARKET. As of May 3, 2000, the Company's common
stock was listed for quotation on the OTC-Bulletin Board. However, subsequent to
the Company's listing on the OTC-Bulletin Board, the listing requirements were
revised. As a result of the revisions, the Company is required to file reports
with the Securities and Exchange Commission, and the Company must receive notice
that the Securities and Exchange Commission has no further comments on the
Company's registration document to remain listed. As such, the Company is
subject to being delisted from the OTC-Bulletin Board on or about May 4, 2000.
In the event the Company is delisted from the OTC-Bulletin Board, there is no
assurance that a new market will develop for the Company's common stock.
Management may seek market makers to apply to quote the Company's shares in the
"pink sheets" published by the National Quotation Bureau, but there are no
assurances that the Company's common stock will be quoted in the "pink sheets".
As soon as practicable after receiving notice that the Securities and Exchange
Commission has no further comments on the Company's registration statement,
management intends to seek to have the Company's common stock relisted on the
OTC-Bulletin Board. There are no assurances as to when, or if, the Securities
and Exchange Commission will finish commenting on the Company's registration
statement.
"PENNY" STOCK REGULATION OF BROKER-DEALER SALES OF COMPANY SECURITIES.
For transactions covered by Rule 15g-9 under the Securities Exchange Act of
1934, a broker-dealer must furnish to all investors in penny stocks, a risk
disclosure document required by the rule, make a special suitability
determination of the purchaser and have received the purchaser's written
agreement to the transaction prior to the sale. In order to approve a person's
account for transactions in penny stock, the broker or dealer must (i) obtain
information concerning the person's financial situation, investment experience
and investment objectives; (ii) reasonably determine, based on the information
required by paragraph (i) that transactions in penny stock are suitable for the
person and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of evaluating
the rights of transactions in penny stock; and (iii) deliver to the person a
written statement setting forth the basis on which the broker or dealer made the
determination required by paragraph (ii) in this section, stating in a
highlighted format that
9
<PAGE>
it is unlawful for the broker or dealer to effect a transaction in a designated
security subject to the provisions of paragraph (ii) of this section unless the
broker or dealer has received, prior to the transaction, a written agreement to
the transaction from the person; and stating in a highlighted format immediately
preceding the customer signature line that the broker or dealer is required to
provide the person with the written statement and the person should not sign and
return the written statement to the broker or dealer if it does not accurately
reflect the person's financial situation, investment experience and investment
objectives and obtain from the person a manually signed and dated copy of the
written statement.
A penny stock means any equity security other than a security (i)
registered, or approved for registration upon notice of issuance on a national
securities exchange that makes transaction reports available pursuant to 17 CFR
11Aa3-1 (ii) authorized or approved for authorization upon notice of issuance,
for quotation on the Nasdaq NMS ; (iii) that has a price of five dollars or more
or . . . . (iv) whose issuer has net tangible assets in excess of $2,000,000
demonstrated by financial statements dated less than fifteen months previously
that the broker or dealer has reviewed and has a reasonable basis to believe are
true and complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities.
TAXATION. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination we may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the target entity;
however, there can be no assurance that such business combination will meet the
statutory requirements of a tax- free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on both parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management believes that any potential business opportunity must
provide audited financial statements for review for the protection of all
parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business combination
with the Company, rather than incur the expenses associated with preparing
audited financial statements.
FORWARD LOOKING STATEMENTS. Because management desires to take
advantage of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 (the "PSLRA"), the Company cautions readers regarding forward
looking statements found in this registration statement and in any other
statement made by, or on the behalf of the Company, whether or not in future
filings with the Securities and Exchange Commission. Forward looking statements
are statements based not on historical information and which relate to future
operations, strategies, financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's control
and many of which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual results and
could cause actual results to differ materially from those expressed in many
forward looking statements made by or on behalf of the Company. The Company
disclaims any obligation to update forward looking statements. Readers should
also understand that under Section 27A(b)(2)(D) of the Securities Act of 1933,
as amended, and Section 21E(b)(2)(D) of the Securities Exchange Act of 1934, as
amended, the "safe harbor" provisions of the PSLRA do not apply to statements
made in connection with an initial public offering.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Since incorporation on January 26, 1998, the Company has not generated
any revenues. For the period from inception through December 31, 1999, the
Company recorded a cumulative net loss of $32,521, which included the following
costs and expenses: legal ($6,025); consulting ($12,406); transfer agent
($3,384); and accounting and audit ($5,653). This factor, among others, raises
substantial and compelling doubt about the Company's ability to continue as a
going concern.
The Company's continued going concern is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis, to
obtain additional financing or refinancing as may be required, and ultimately to
attain profitability. There are no assurances that the Company will be able to
obtain such financing or, if the Company is able to obtain additional financing,
that such financing will be on terms favorable to the Company. The inability to
obtain additional financing when needed will have a material adverse effect on
the Company's operating results.
The Company had a working capital surplus of $191 at December 31, 1999,
as compared to $11,431 at December 31, 1998. Management believes the Company has
sufficient working capital to fund the Company's operations through June 2000.
The Company's primary source of working capital has been through sales
of common stock. To acquire the Mineral Exploration Permit Number 08-103044
issued by the State of Arizona, the Company issued 500,000 shares of common
stock in a private offering. To provide working capital, the Company conducted a
subsequent private offering and sold 8,000,000 shares of common stock at a price
of $0.0025 per share. The Company then conducted another private offering and
sold 50,000 shares of common stock at a price of $0.30 per share. See Part II -
Item 4. Recent Sales of Unregistered Securities. Since incorporation, the
Company has received $26,462 of net proceeds from sales of Common Stock.
Since inception, the Company has a Federal net operating loss
carryforward of $32,521, which will expire in the year 2019.
Since the Company's inception, Mr. Halterman has spent approximately
seventy (70) hours on organizing documentation, property acquisitions and
seeking capital for the Company. The Company is currently occupying a minimal
amount of office space. Management believes that Mr. Halterman's time and the
minimal amount of office space are immaterial to the financial position of the
Company.
The above financial data was derived from the financial statements of
the Company as audited by Stark Tinter & Associates, LLC. See Part F/S Financial
Statements.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company is currently using the office of its sole officer and
director, Mr. Leroy Halterman, at 11930 Menaul Boulevard, N.E., Suite 107,
Albuquerque, New Mexico 87112, without charge.
The Company does not own any property.
11
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table provides certain information as to the officers and
directors individually and as a group, and the holders of more than 5% of the
common stock of the Company, as of May 4, 2000:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF OWNER NUMBER OF SHARES PERCENT OF
OWNED CLASS (1)<F1>
<S> <C> <C> <C>
Leroy Halterman Sole Officer and
11930 Menaul Blvd., N.E., Suite 107 Director 500,000 5.9%
Albuquerque, New Mexico 87112
Abney Trading S A Lillian Deleveaux
94 Dowdeswell Street President and 700,000 8.2%
P.O. Box N-3114 Sole Director
Nassau, Bahamas
Sheila Andrews
Bluf Coil Samares Inner Road 700,000 8.2%
St. Clement FOR
Jersey Channel Islands
Heath T. Ellingham
7919 Woodhurst Drive 700,000 8.2%
Burnaby, British Columbia V5A 4C5
Canada
Phyllis Grant
c/o #103-1140 Castle Crescent 700,000 8.2%
Port Coquitlam, British Columbia
Canada
Dave S A Jeffrey
1633 West 8th Avenue, Apt. 801 700,000 8.2%
Vancouver, British Columbia V6J 5H7
Canada
Scott Larson
334 Strand Avenue 700,000 8.2%
New Westminister, British Columbia
V3L 3J2 Canada
Charles Phillips
55 Lateward Road 700,000 8.2%
Brentford Middlesex TW8 0PL
England
Sheldon Silverman
#700-1190 Melville Street 700,000 8.2%
Vancouver, British Columbia
V6E 3W1 Canada
Carey Whitehead
7117 Antrim Avenue, Apt. 201 700,000 8.2%
Burnaby, British Columbia V5J
Officers and Directors as a group 500,000 5.9%
(1 person)
<FN>
<F1>
(1) This table is based on 8,550,000 shares of common stock outstanding
on May 4, 2000. Where the persons listed on this table have the right to obtain
additional shares of common stock within 60 days from May 4,
12
<PAGE>
2000, these additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such persons, but are not deemed to
be outstanding for the purpose of computing the percentage of any other person.
This table does not include the 15.8% of shares being held by Cede & Co.,
located in New York, New York.
</FN>
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of the Company are as follows:
NAME AGE POSITION
Leroy Halterman 54 Sole Officer and Director
The term of office of the director of the Company ends at the next
annual meeting of the Company's stockholders or when the director's successor is
elected and qualified. No date for the next annual meeting of stockholders is
specified in the Company's Bylaws, nor has a meeting been fixed by the Board of
Directors. The term of office of the sole officer of the Company ends at the
next annual meeting of the Company's Board of Directors, which is expected to
take place immediately after the next annual meeting of stockholders, or when
such officer's successor is elected and qualified.
LEROY HALTERMAN, SOLE OFFICER AND DIRECTOR. Mr. Halterman has been a
certified professional geologist for 21 years. In 1968, Mr. Halterman graduated
from the Missouri School of Mines, Rolla, with a Bachelor of Science degree in
Geology. Mr. Halterman performed additional work at the University of New Mexico
from 1969-70, focusing on hydrology and submarine geology. However, Mr.
Halterman did not receive a graduate degree. Since 1985 , Mr. Halterman has been
a consulting geologist for MinSearch, Inc., located in Albuquerque, New Mexico
("MinSearch"). Mr. Halterman's responsibilities at MinSearch include the
evaluation of mineral and petroleum deposits, and accumulations in various
geological environments. Mr. Halterman's evaluations included all phases of the
projects from generation through exploration, reserve estimating, testing, and
mine planning. He has similar experience in petroleum, including prospect
generation and exploration, as well as all phases of well completion and
production. His production specialties include computerized reserve estimation
(both volumetic and decline), production records, and production and transport
agreements for both oil and gas. Mr. Halterman is also the president, director,
and a principal shareholder of Consolidated North American Resources, a private
company in the oil and gas industry, and is the sole officer and director of
Tiberon Resources Ltd., a Nevada corporation, which is also a "shell" company.
In addition to consulting, Mr. Halterman has emphasized in natural
resource appraisals, and damage calculations, both of which included
environmental evaluations and site assessments. Environmental problems and
potential problems encompassed in these type of assessments included hazardous
material and chemicals located in abandoned dumps, mills, mines and other
structures, ground and surface water contamination and pathways, underground
storage tanks, and above ground storage tanks, kinetic and structural hazards,
unstable surfaces, induced erosion problems, and explosives. Within the past six
years, Mr. Halterman perfomed a total of 20 natural resource evaluations and
appraisals according to Uniform Appraisal Standards for Federal Land
Acquisitions for such clients as the United States Park Service, the United
States Department of Justice, the Nature Conservatory, Wellington Financial, and
Maximum Resources.
From 1983 to 1985, Mr. Halterman was the Vice President of Exploration
for Goldsill Mining and Milling, Inc., a corporation located in Denver,
Colorado. Mr. Halterman was responsible for coordination, evaluation,
acquisition, and management of the company's exploration programs and budgets
for both precious metals and petroleum. The company focused its precious metals
efforts in Saskatchewan, Canada, and in Arizona, Montana and Nevada. Prior to
becoming the Vice President, Mr. Halterman was responsible for a district office
engaged in the exploration and acquisition of commercial uranium deposits. He
was thereafter promoted to Minerals Manager, and was responsible for overseeing
the company's precious metals programs and budgets in the Western United States
and locations in Canada. Mr. Halterman began working with Goldsill Mining and
Milling, Inc. in 1979.
13
<PAGE>
From 1975 to 1979, Mr. Halterman was the Senior Exploration Geologist
for Philips Petroleum Corporation. He was responsible for generating,
recommending, acquiring, and administering uranium prospects in New Mexico,
Arizona, Colorado, Utah, Nevada, California and Texas. From 1968 to 1975, Mr.
Halterman was a Geologist for Gulf Oil Corporation. His duties included geologic
evaluation of uranium, coal base and precious metal prospects.
Mr. Halterman is a member of the American Association of Petroleum
Geologists and the Society for Mining, Metallurgy and Exploration.
As shown above, however, Mr. Halterman does not have direct or indirect
experience in identifying emerging companies for investment and/or business
combinations. Mr. Halterman is also associated with other entities involved in a
range of business activities. Consequently, there are potential inherent
conflicts of interest in his acting as an officer and director of the Company.
Mr. Halterman may be deemed to be the "promoter" and "parent" of the
Company within the meaning of the Rules and Regulations promulgated under the
Act. Mr. Kenneth Cabianca may be deemed to be a "promoter" of the Company within
the meaning of the Rules and Regulations promulgated under the Act.
ITEM 6. EXECUTIVE COMPENSATION.
Mr. Halterman is serving without any compensation. If the Company
generates revenues from operations after consummation of a merger or
acquisition, it is anticipated that executive officers will be compensated by
the Company. The following table sets forth information for the sole officer of
the Company, Mr. Halterman:
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
OTHER RESTRICTED
NAME AND ANNUAL STOCK OP- LTIP ALL OTHER
PRINCIPAL COMPEN- AWARD(S) TIONS/SARS PAYOUTS ($) COMPEN-
POSITION YEAR SALARY BONUS SATION ($) ($) ($) SATION ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leroy 1998 -0-(1)<F1> -0- -0- -0- -0- -0- -0-
Halterman, 1999 -0- -0- -0- -0- -0- -0- -0-
President
<FN>
<F1>
(1) Does not indicate consulting fees paid to Mr. Halterman. See Item 7.
Certain Relationships and Related Transactions.
</FN>
</TABLE>
There are no employment agreements with the executive officer of the
Company. The Company does not pay compensation to its director, nor does the
Company compensate its director for attendance at meetings. The Company does
reimburse the director for reasonable expenses incurred during the course of his
performance. The Company does not offer stock options or similar incentive
compensation to its officer or director. The Company anticipates that some form
of incentive based compensation may be offered in the future.
It is possible that, after the Company successfully consummates a
merger or acquisition, that entity may desire to employ or retain one or a
number of members of the Company's management for the purposes of providing
services to the surviving entity or otherwise provide other compensation to such
persons. However, the Company has adopted a policy whereby the offer of any
post-transaction remuneration to members of management will not be a
consideration in the Company's decision to undertake any proposed transaction.
Management has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them by any entity
which proposes to undertake a transaction with the Company.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. The amount of such finder's fee cannot
14
<PAGE>
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finder's fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Carey Whitehead, Scott Larson and Sarah Cabianca, shareholders of the
Company, advanced $5,000 to the Company to pay for the Company's legal retainer.
The Company reimbursed them through the issuance of its common stock in 1998.
Sarah Cabianca is the daughter of Kenneth Cabianca, a promoter of the Company.
On March 28, 1998, the Company entered into an Assignment of Lease and
Purchase Option agreement with Mr. Leroy Halterman, the Company's sole officer
and director, to acquire a mineral exploration permit. See Exhibit 10.1.
According to the agreement, Mr. Halterman assigned to the Company all of his
rights and interests in the Mineral Exploration Permit Number 08-103044 issued
by the State of Arizona in exchange for 500,000 shares of the Company's common
stock. See Exhibit 10.2. The Company assumed all of the terms and obligations of
the permit, and the deemed value of the permit was $1,250.
In determining the Company's prior plan of operations, the Company used
the report and evaluation of the Goldstone Prospect created by Mr. Halterman on
December 15, 1997. Please see Exhibit 10.3.
During 1998 the Company paid $3,287 to Downtown Consulting, a company
owned and controlled by Sarah Cabianca. Sarah Cabianca is the daughter of
Kenneth Cabianca, a promoter of the Company. Sarah Cabianca is also a principal
shareholder of the Company.
From inception through December 31, 1999, Mr. Halterman has provided
consulting services to the Company in the amount of $4,579. On August 11, 1999,
the Company also paid an amount of $2,000 in consulting fees to 465628 B.C.
Ltd., a separate company controlled by Sheldon Silverman, a shareholder of the
Company, and Kenneth Cabianca, a promoter of the Company.
On February 17, 1999, the Company paid an expense in the amount of $142
on behalf of MinSearch, a related company owned and operated by Mr. Halterman.
MinSearch repaid the Company on June 11, 1999.
Mr. Halterman posted a $3,000 cash bond on the property, which has been
repaid to Mr. Halterman.
Mr. Halterman may be deemed to be the "promoter" and "parent" of the
Company within the meaning of the Rules and Regulations promulgated under the
Act. Mr. Kenneth Cabianca may be deemed to be a "promoter" of the Company within
the meaning of the Rules and Regulations promulgated under the Act.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 50,000,000
shares of common stock, each with $0.001 par value per share, and 5,000,000
shares of preferred stock, each with $.001 par value per share.
COMMON STOCK
Each share of common stock has one vote with respect to all matters
voted upon by the shareholders. The shares of common stock do not have
cumulative voting rights.
Holders of common stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds of the Company legally
available therefor. The Company has never declared a dividend on its common
stock and has no present intention of declaring any dividends in the future.
Holders of common stock do not have any preemptive rights or other
rights to subscribe for additional shares, or any conversion rights. Upon a
liquidation, dissolution, or winding up of the affairs of the Company, holders
of the common stock will be entitled to share ratably in the assets available
for distribution to such stockholders after the payment of all liabilities.
The outstanding shares of the common stock of the Company are fully
paid and non-assessable.
15
<PAGE>
The registrar and transfer agent for the Company's Common Stock is
American Securities Transfer & Trust, Inc., 12309 W. Alameda Parkway, Suite Z-2,
Lakewood, Colorado 80228.
PREFERRED STOCK
The Articles of Incorporation permit the Board of Directors, without
further shareholder authorization, to issue preferred stock in one or more
series and to fix the price and the terms and provisions of each series,
including dividend rights and preferences, conversion rights, voting rights,
redemption rights, and rights on liquidation, including preferences over the
common stock, all of which could adversely affect the rights of the holders of
the common stock. The Board of Directors has not issued nor established a series
of preferred stock.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock has traded on the OTC-Bulletin Board
operated by the NASD since October 2, 1998. From October 2, 1998 until April 3,
2000, the Company's common stock traded under the symbol "RIMP". On April 4,
2000, the Company's symbol was changed to "RIMPE" to indicate that the Company
was subject to being delisted based upon the NASD's rules regarding the
registration status of quoted companies.
The range of high and low bid prices for each fiscal quarter for 1998
and 1999, as reported by the OTC-Bulletin Board, is as follows:
<TABLE>
BID OR TRADE PRICES
<CAPTION>
1999 FISCAL YEAR HIGH LOW
<S> <C> <C>
Quarter Ending 03/31/99................................... $0.375 $0.125
Quarter Ending 06/30/99................................... $0.750 $0.450
Quarter Ending 09/30/99................................... $1.320 $0.750
Quarter Ending 12/31/99................................... $1.000 $0.750
<CAPTION>
1998 FISCAL YEAR HIGH LOW
<S> <C> <C>
Quarter Ending 12/31/98................................... $1.063 $0.375
</TABLE>
As of May 3, 2000, there were five market makers in the Company's
shares. The last reported trade by the OTC-Bulletin Board was on April 17, 2000
at $1.375 per share.
The above quotations reflect inter-dealer prices, without retail
mark-up, mark-down, or commission and may not necessarily represent actual
transactions.
As of May 2, 2000, there were 14 record holders of the Company's Common
Stock, including shares held by the Company as treasury shares.
During the last two fiscal years, no cash dividends have been declared
on the Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS.
None.
16
<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCING DISCLOSURE.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since the Company's inception, it has sold shares of common stock which
were not registered under the Securities Act of 1933, as amended.
On February 5, 1998, in exchange for the Mineral Exploration Permit
Number 08-103044, the Company issued 500,000 shares of common stock to Mr. Leroy
Halterman, at a deemed price of $0.0025 per share, pursuant to Section 3(b) and
4(2) of the Securities Act of 1933, as amended, and Rule 504 of Regulation D
promulgated thereunder.
On March 25, 1998, the Company conducted a private offering and sold
8,000,000 shares of common stock at a price of $0.0025 per share pursuant to
Section 3(b) and 4(2) of the Securities Act of 1933, as amended, and Rule 504 of
Regulation D promulgated thereunder. The shares were sold to 12 purchasers who
were solicited by Mr. Halterman. The purchasers were friends, family and
associates of Mr. Halterman or Mr. Cabianca.
On May 14, 1998, the Company conducted another private offering and
sold 50,000 shares of common stock at a price of $0.30 per share pursuant to
Section 3(b) and 4(2) of the Securities Act of 1933, as amended, and Rule 504 of
Regulation D promulgated thereunder. The shares were sold to 30 purchasers who
were solicited by Mr. Halterman. The purchasers were friends, family and
associates of Mr. Halterman or Mr. Cabianca.
No underwriting discounts or commissions were paid in either offering
in that such transactions did not involve any public offering.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.7502 of the General Corporation Law of Nevada and Article V
and Article VI of the Company's Articles of Incorporation permit the Company to
indemnify its officers and directors and certain other persons against expenses
in defense of a suit to which they are parties by reason of such office, so long
as the persons conducted themselves in good faith and the persons reasonably
believed that their conduct was in the Company's best interests or not opposed
to the Company's best interests, and with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Indemnification is not permitted in connection with a proceeding by or in the
right of the corporation in which the officer or director was adjudged liable to
the corporation or in connection with any other proceeding charging that the
officer or director derived an improper personal benefit, whether or not
involving action in an official capacity.
17
<PAGE>
PART F/S
FINANCIAL STATEMENTS.
BALANCE SHEET DATED DECEMBER 31, 1999
STATEMENT OF OPERATIONS FOR THE PERIOD JANUARY 26, 1998 (INCEPTION) TO
DECEMBER 31, 1999
STATEMENT OF STOCKHOLDER EQUITY FOR THE PERIOD JANUARY 26, 1998
(INCEPTION) TO DECEMBER 31, 1999
STATEMENT OF CASH FLOWS FOR THE PERIOD JANUARY 26, 1998 (INCEPTION) TO
DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD FROM JANUARY 26, 1998
(INCEPTION) TO DECEMBER 31, 1999
18
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
As of and for the year ended
December 31, 1999,
the period January 26, 1998 (inception)
to December 31, 1998 and
the period January 26, 1998 (inception)
to December 31, 1999
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Table of Contents
PAGE
Report of Independent Auditors 1
Balance Sheet 2
Statements of Operations 3
Statement of Changes in Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-10
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Rimpac Resources Ltd.
Albuquerque, New Mexico
We have audited the accompanying balance sheet of Rimpac Resources Ltd. (a
development stage company) as of December 31, 1999 and the related statements of
operations, stockholders' equity, and cash flows for the year ended December 31,
1999, the period from January 26, 1998 (inception) to December 31, 1998, and the
period from January 26, 1998 (inception) to December 31, 1999. 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 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 Rimpac Resources Ltd. (a
development stage company) as of December 31, 1999, and the results of its
operations, and its cash flows for the year ended December 31, 1999, the period
from January 26, 1998 (inception) to December 31, 1998, and the period from
January 26, 1998 (inception) to December 31, 1999, 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 1 to the
financial statements, the Company has suffered recurring losses from operations.
This factor raises substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
discussed in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/Stark Tinter & Associates, LLC
Stark Tinter & Associates, LLC
Denver, Colorado
March 20, 2000
1
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Balance Sheet
December 31, 1999
ASSETS
Current assets:
Cash $ 2,203
================
$ 2,203
================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,012
================
Stockholders' equity
Preferred stock, $0.01 par value,
1,000,000 undesignated shares authorized -
Common stock, $0.001 par value,
50,000,000 shares authorized,
8,550,000 shares issued and outstanding 8,550
Additional paid in capital 24,162
Deficit accumulated during the
development stage (32,521)
Total stockholders' equity 191
================
$ 2,203
================
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
<TABLE>
Rimpac Resources Ltd.
(A Development Stage Company)
Statements of Operations
<CAPTION>
January 26, January 26,
1998 1998
(inception) (inception)
Year Ended Through Through
December December December
31, 1999 31, 1998 31, 1999
=============== ================ ================
<S> <C> <C> <C>
Revenue $ - $ - $ -
Costs and expenses:
General and administrative 11,352 17,968 29,320
Amortization 1,026 257 1,283
=============== ================ ================
(Loss) from operations (12,378) (18,225) (30,603)
=============== ================ ================
Other income (expense):
Foreign currency transaction gain (loss) 112 (780) (668)
(Loss) on mineral claims (1,250) - (1,250)
=============== ================ ================
(1,138) (780) (1,918)
=============== ================ ================
Net (loss) $ (13,516) $ (19,005) $ (32,521)
=============== ================ ================
Per share information:
Weighted average number
of common shares outstanding - basic and diluted 8,550,000 5,193,175 6,871,588
=============== ================ ================
Net (loss) per common share - basic and diluted $ (0.00) $ (0.00) $ (0.00)
=============== ================ ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
<TABLE>
Rimpac Resources Ltd.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period January 26, 1998 (Inception) through December 31, 1999
<CAPTION>
Deficit
Accumulated
Common Stock During the
---------------------------- Additional Development
Shares Amount Paid in Capital Stage Total
=======================================================================================
<S> <C> <C> <C> <C> <C>
Balance, January 26, 1998 (inception) - $ - $ - $ - $ -
Issuance of stock for
cash at $0.0025 per share
(net of issuance costs) 6,000,000 6,000 5,462 - 11,462
Issuance of stock for
repayment of advances
at $0.0025 per share 2,000,000 2,000 3,000 - 5,000
Issuance of stock in exchange for
assignment of mineral property rights 500,000 500 750 1,250
Issuance of stock for
cash at $0.30 per share 50,000 50 14,950 15,000
Net (loss) for the period ended
December 31, 1998 - - - (19,005) (19,005)
============= =========== =================== =================== =============
Balance, December 31, 1998 8,550,000 8,550 24,162 (19,005) 13,707
Net (loss) for the year ended
December 31, 1999 (13,516) (13,516)
============= =========== =================== =================== =============
Balance, December 31, 1999 8,550,000 $ 8,550 $ 24,162 $ (32,521) $ 191
============= =========== =================== =================== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
<TABLE>
Rimpac Resources Ltd.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
January 26, January 26,
1998 1998
(Inception) (Inception)
Year Ended Through Through
December December December
31, 1999 31, 1998 31, 1999
================== ================= =================
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (13,516) $ (19,005) $ (32,521)
Adjustments to reconcile net (loss) to net
cash used in operating activities:
Amortization 1,026 257 1,283
Write off of mineral claims 1,250 - 1,250
Increase in accounts payable 317 1,695 2,012
Common stock issued for assignment
of mineral property rights - 1,250 1,250
Net cash (used in) operating activities (10,923) (15,803) (26,726)
================== ================= =================
Cash flows from investing activities:
Investment in mineral claims - (1,250) (1,250)
Organization costs - (1,283) (1,283)
Net cash (used in) investing activities - (2,533) (2,533)
================== ================= =================
Cash flows from financing activities:
Proceeds from stock issuance, net of
issuance costs - 26,462 26,462
Proceeds from advances - 5,000 5,000
Net cash provided by financing activities - 31,462 31,462
================== ================= =================
Net increase (decrease) in cash (10,923) 13,126 2,203
Beginning cash 13,126 - -
Ending cash $ 2,203 $ 13,126 $ 2,203
================== ================= =================
Supplemental cash flow information:
Cash paid for: interest - - -
income taxes - - -
Non-cash investing and financing activities:
Issuance of common stock as repayment of
advances $ - $ 5,000 $ 5,000
Issuance of common stock for assignment of
mineral property rights $ - $ 1,250 $ 1,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Notes to the Financial Statements
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on January 26, 1998, in the State of Nevada. On
September 20, 1999, the Company announced that it discontinued its efforts in
the gold mining business due to low commodity prices and the lack of financial
commitments. The Company is actively seeking other business opportunities.
Basis of reporting
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced recurring losses from operations as a result of its
investment in professional and consulting fees necessary to achieve its
operating plan which is long-range in nature. For the year ended December 31,
1999 and for the periods January 26, 1998 (inception) to December 31, 1998 and
1999 the Company realized net losses of $13,516, $19,005 and $32,521,
respectively.
The Company's ability to continue as a going concern is contingent upon its
ability to secure financing, increase ownership equity and attain profitable
operations. In addition, the Company's ability to continue as a going concern
must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets.
The Company is pursuing financing for its operations and seeking additional
private placement investment. The Company then intends to invest in a business
and begin operations. Failure to secure such financing or to raise additional
private placement investment may result in the Company depleting its available
funds and not being able pay its obligations or begin operations.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
Net loss per common share
The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128"). Basic earnings per common share ("EPS")
calculations are determined by dividing net income by the weighted average
number of shares of common stock outstanding during the year. Diluted earnings
per common share calculations are determined by dividing net income by the
weighted average number of common shares and dilutive common share equivalents
outstanding.
6
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Notes to the Financial Statements
Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ from
those estimates.
Cash and cash equivalents
For purposes of balance sheet classification and the statements of cash flows,
the Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Financial instruments
The carrying amounts for the company's cash and cash equivalents and accounts
payable approximate fair value.
Revenue recognition
The Company recognizes revenue when earned.
Foreign currency exchange and translation
The functional currency of the Company is the U.S. dollar. The Company also has
a Canadian dollar bank account it uses for some operations. For reporting
purposes, the financial statements are presented in U.S. dollars in accordance
with Statement of Financial Accounting Standards No. 52, Foreign Currency
Translation. The balance sheet is translated into U.S. dollars at the exchange
rates prevailing at the balance sheet date and the statement of operations and
cash flows at the average rates for the relevant periods. The Company does not
use foreign exchange contracts, interest rate swaps, or option contracts.
Foreign currency transaction gains and losses, for the year ended December 31,
1999, the period from January 26, 1998 (inception) to December 31, 1998, and the
period from January 26, 1998 (inception) to December 31, 1999 were $112, $(780),
and $(668), respectively and are included in other income (expense).
Comprehensive income
The Company follows Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income." SFAS 130 establishes standards for reporting
and displaying comprehensive income, its components and accumulated balances.
SFAS 130 is effective for periods beginning after December 15, 1997. The Company
adopted SFAS 130 in 1998.
7
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Notes to the Financial Statements
Recent Pronouncements
The FASB recently issued Statement No 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement
No. 133". The Statement defers for one year the effective date of FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities". The
rule now will apply to all fiscal quarters of all fiscal years beginning after
June 15, 2000. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which is required to be adopted
in years beginning after June 15, 1999. The Statement permits early adoption as
of the beginning of any fiscal quarter after its issuance. The Statement will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company has not
yet determined if it will early adopt and what the effect of SFAS No. 133 will
be on the earnings and financial position of the Company.
Note 2. STOCKHOLDERS' EQUITY
During the period ended December 31, 1998, the Company issued 6,000,000 shares
of its $0.001 par value common stock to various investors at $0.0025 per share
for cash of $15,000. Issuance costs were $3,538.
Additionally, during the period ended December 31, 1998 50,000 shares of $0.001
par value common stock were issued at $0.30 per share for cash of $15,000.
Note 3. RELATED PARTY TRANSACTIONS
On March 22, 1998, the sole officer and director ("the officer") of the Company
assigned his rights and interests in mineral property to the Company in exchange
for 500,000 shares of $0.001 common stock at a value of $0.0025 per share or
$1,250.
The officer also provided consulting services in the amount of $4,579 to the
Company during the period January 26 (inception) to December 31, 1998.
During 1998 the Company paid $3,287 to Downtown Consulting, a company owned and
controlled by Sarah Cabianca. Sarah Cabianca is the daughter of Kenneth
Cabianca, a promoter of the Company. Sarah Cabianca is also a principal
shareholder of the Company.
During the period from January 26, 1998 (inception) to December 31, 1998, three
shareholders of the Company advanced to the Company $5,000 for a legal retainer
which was reimbursed to the shareholder through the issuance of 2,000,000 shares
of common stock at $0.0025 per share.
8
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Notes to the Financial Statements
On August 11, 1999 the Company paid $1,340 for consulting services provided by a
company controlled by a shareholder and a promoter of the company.
Note 4. INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes", which requires use
of the liability method. FAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined using the currently enacted
tax rates applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
Income tax provision (benefit) for income taxes differs from the amounts
computed by applying the statutory federal income tax rate of 34% as a result of
the following:
<TABLE>
<CAPTION>
Period Period
Jan. 26, 1998 Jan. 26 1998
Year Ended (inception) to (inception) to
DEC. 31, 1999 DEC. 31, 1998 DEC. 31, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Computed "expected" tax (benefit) ($4,595) ($6,462) ($11,057)
Valuation allowance 4,595 6,462 11,057
----- ----- ------
$ - $ - $ -
====== ====== =====
</TABLE>
The net deferred tax assets as of December 31, 1999, in the accompanying balance
sheet includes the following components:
Deferred tax asset $6,504
Less valuation allowance (6,504)
-------
$ -
=======
The net change in valuation allowance for the year ended December 31, 1999 was
$2,703.
The types of temporary differences between the tax basis of assets and their
financial reporting amounts that give rise to a significant portion of the
deferred tax asset are as follows:
Temporary Tax
DIFFERENCE EFFECT
---------- ------
Net operating loss carryforward: $32,521 $6,504
======= ======
The net operating loss carry forward will expire in the years 2019.
9
<PAGE>
Rimpac Resources Ltd.
(A Development Stage Company)
Notes to the Financial Statements
Note 5. INVESTMENT IN MINERAL CLAIMS
The mineral claims asset was written off because the Company let the mineral
exploration permit expire. The asset was carried on the balance sheet valued at
$1,250 and was charged to operations in 1999.
10
<PAGE>
PART III
<TABLE>
ITEM 1. INDEX TO EXHIBITS
<CAPTION>
REGULATION SEQUENTIAL
S-B NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
3.1 Articles of Incorporation filed January 26, 1998(1)<F1> N/A
3.2 Bylaws adopted as of January 27, 1998(1)<F1> N/A
10.1 Assignment of Lease and Purchase Option between the Company and Leroy N/A
Halterman dated March 22, 1998(1)<F1>
10.2 State Land Department, State of Arizona, Mineral Exploration Permit No. N/A
08-103044, dated September 17, 1997(1)<F1>
10.3 Goldstone Prospect, Cochise County, Arizona, Section 28, T20S R23E, A N/A
Gold Prospect, dated December 15, 1997, prepared by Leroy Halterman
CPG, RPG, Consulting Geologist(1)<F1>
11 Statement Regarding Computation of Per Share Earnings See Financial
Statements
27 Financial Data Schedule 32
- ------------------ ----------------------------------------------------------------------------- -------------------
<FN>
<F1>
(1) Previously filed as an exhibit to the Company's Form 10-SB filed with the Commission on February 14, 2000. File number 0-29481.
</FN>
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
RIMPAC RESOURCES LTD.
Date: May 4, 2000 By:/S/LEROY HALTERMAN
Leroy Halterman, President
31
<PAGE>
EXHIBIT 27
Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS, STATEMENTS OF OPERATIONS AND DEFICIT, STATEMENTS OF SHAREHOLDERS'
EQUITY, STATEMENTS OF CASH FLOWS, AND THE NOTES THERETO, WHICH MAY BE FOUND ON
PAGES F-1 THROUGH F-10 OF THE COMPANY'S FORM 10-SB, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 2,203
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,203
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,203
<CURRENT-LIABILITIES> 2,012
<BONDS> 0
0
0
<COMMON> 8,550
<OTHER-SE> (8,359)
<TOTAL-LIABILITY-AND-EQUITY> 2,203
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,516
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (13,516)
<INCOME-TAX> 0
<INCOME-CONTINUING> (13,516)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,516)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
