As filed with the Securities and Exchange Commission on June 10, 1998
Registration No. ________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRANTS OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
LIL MARC, INC.
(Name of Small Business Issuer in its charter)
Nevada 84-1417774
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
149 East 900 South, Salt Lake City, Utah 84111
(Address of principal executive officers) (Zip Code)
Issuer's telephone number: (801) 322-0253
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
<PAGE>
LIL MARC, INC.
FORM 10-SB
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business. . . . . . . . . . . . . . . . . 3
ITEM 2. Management's Discussion and Analysis or
Plan of Operation. . . . . . . . . . . . . . . . . . . 8
ITEM 3. Description of Property. . . . . . . . . . . . . . . . . 11
ITEM 4. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . 11
ITEM 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . . 12
ITEM 6. Executive Compensation . . . . . . . . . . . . . . . . . 14
ITEM 7. Certain Relationships and Related Transactions . . . . . 14
ITEM 8. Description of Securities. . . . . . . . . . . . . . . . 15
PART II
ITEM 1. Market Price of and Dividends on Registrant's
Common Equity and Other Shareholder Matters. . . . . . 16
ITEM 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 19
ITEM 3. Changes in and Disagreements with Accountants. . . . . . 19
ITEM 4. Recent Sales of Unregistered Securities. . . . . . . . . 19
ITEM 5. Indemnification of Directors and Officers. . . . . . . . 20
PART F/S
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 21
PART III
ITEM 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . . S-1
ITEM 2. Description of Exhibits. . . . . . . . . . . . . . . . . S-1
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
<PAGE>
FORM 10-SB
PART I
Except as otherwise indicated, the information in this
Registration Statement reflects the two (2) shares for (1) share
forward stock split of the Common Stock on September 4, 1997.
ITEM 1. Description of Business
LiL Marc, Inc. (the "Company") is a development stage company
primarily engaged in developing, manufacturing and marketing the
"LiL Marc," a plastic porcelain toilet training device for young
boys. The Company was incorporated under the laws of the State of
Nevada on April 22, 1997, is a start-up enterprise in the baby
products industry, has had no significant business operations, and
is considered a development stage company.
On November 10, 1997, the Company acquired the U.S. patent
rights to the "Training Urinal" (U.S. Patent Number 318,325),
issued July 16, 1991, the trade name "LiL Marc," and the right to
manufacture the product. The Company has submitted the Patent
Assignment to the United States Patent Office in Washington, D.C.
to be recorded. In connection with the assignment of the patent,
the Company paid to James Curt McKiney, the inventor, the sum of
$30,000 and agreed to pay to the inventor an ongoing royalty of
$0.25 per urinal sold, due each year on March 31 beginning in 1998.
As of the date hereof, no royalty has been paid to the inventor.
On November 30, 1997, the Company completed an offering of its
Common Stock pursuant to the provisions of Regulation D, Rule 504
of the Securities Act of 1934, as amended (the "Act"). Under the
offering, the Company sold 540,000 shares of its Common Stock and
realized gross proceeds of $54,000. A portion of the funds from
the offering were used to complete the acquisition from the
inventor of the U.S. patent rights to the "Training Urinal" and the
trade name "LiL Marc".
Product
The LiL Marc Training Urinal (the "LiL Marc") is a simple to
use plastic urinal used in the bathroom ("potty") training of young
boys. The LiL Marc is constructed from high quality, recyclable,
high density, white polyethylene plastic and looks like the full-
sized urinals found in public restrooms, only on a smaller scale
designed for a young boy. It is intended to assist in the training
of daytime bladder control of young boys By using the LiL Marc, a
male child can be potty trained standing up like a little boy,
instead of being trained "sit down" fashion like a little girl.
The LiL Marc is marketed as a "stand alone" unit with a
removable support to stand the unit at the proper height for young
boys. It can be easily transported to another room or used when
traveling. The LiL Marc may also be attached to a wall or door
using the mounting bracket and screws, both provided with the unit.
The mounting bracket holds the unit securely and slides off easily
to empty and clean with any detergent or bathroom cleaner. The LiL
Marc features a built-in pour spout that makes it easy to empty and
clean. The LiL Marc is a one-time purchase and does not need any
other supplies. It is designed so that young boys of all sizes can
comfortably stand while facing the unit. It has a height of 24
inches and a width of just over 10 inches.
Production
With the acquisition of the patent rights to the LiL Marc, the
Company also acquired the production air mold and rotational mold
used to manufacture the training unit and its stand. The molds are
located at the Flambeau Corporation "Flambeau"), a production
facility located in Ontario, California. Using the air mold the
Company has the ability to produce large or small orders and,
during test marketing by the inventor, the air mold produced over
3,000 units with a high quality finish. The Company has an
arrangement with Flambeau whereby Flambeau will use the air mold to
manufacture the LiL Marc for a specified production price. The
Company will use sub-contractors to manufacture the stands.
Cost of production, based on a projected 5,000 LiL Marcs
manufactured, is $5.72 per urinal and $2.00 per stand. Due to the
size and shape of the LiL Marc, packaging and shipping initially
required a special order box. However, the Company has developed
a "shrink wrap" package which will cost approximately $1.50 per
unit. This brings the total manufacturing and packaging cost to
approximately $9.22 per finished LiL Marc, with a suggested retail
price of $29.95.
Marketing
Products such as the LiL Marc are typically marketed through
retail outlets and by mail order. A manufacturer usually works
through major wholesalers and distributors to get its products into
retail outlets. The Company will attempt to sell the LiL Marc
directly to retail outlets as well as to distributors. The Company
has made preliminary contacts with several distributors and retail
outlets although no agreements have been reached for the marketing
of the LiL Marc.
Initially, the Company plans to attend and display its product
at key trade shows for the baby/infant industry at which major
retail outlets are represented. In the United States there are
generally between three to five major trade shows for baby products
held annually, with the largest being in Dallas, Texas. The
Company presently plans to attend the JPMA National Trade Show in
Dallas to be held in August 1998.
The Company is also exploring the possibility of using mail
order marketing and advertising in major parenting magazines and in
baby home and child care retail catalogs. The Company intends to
manage this type of marketing with orders going directly to the
customer. However, the Company's ability to engage in this sort of
marketing will be limited due to limited capital. Management
intends to delay mail order marketing until the Company can raise
additional funds, although there can be no assurance that the
Company will be successful in securing new and additional funding.
The Company has the benefit of the limited prior test
marketing performed by the inventor of LiL Marc, including pricing
information, product layout suggestions, and some mail order
product introduction. The inventor arranged for the LiL Marc, on
a limited scale, to be advertised in the 1993 July and August
editions of Parenting magazine and in Twins magazine the 1993
May/June edition featuring the product in color and black and white
ads in dimensions ranging from 4" and 5" (inch) adds offering the
product for sale at prices between $19.95 and $24.95. The inventor
also arranged for the product to be advertised in a 4.25" by 2.5"
(inch) add in the 1994 spring issue of One Step, a baby care mail
order catalog at a featured price of $19.95. In reliance upon the
best information available to the Company as provided by the
inventor, approximately 3,500 units were sold, primarily during the
period from 1992 through 1994.
Competition
Presently, there are several companies marketing products
similar to the LiL Marc. Most of these companies are larger than
the Company with longer histories of operation and greater
financial and personnel resources. Also, most of these competitors
have established some market share in the same market in which the
Company will be competing. The ability of the Company to penetrate
these markets will depend on many factors including, but not
limited to, its ability to obtain sufficient capital to enhance and
broaden its marketing of its products, to develop new and improved
products, to obtain and retain necessary management and advisory
personnel, and the establishment of a comprehensive marketing plan.
Management is not aware of another product on the market that,
like the LiL Marc, is designed solely for bladder training of
little boys. The principal competition to the LiL Marc is a wide
variety of standard potty trainers designed for either little boys
or girls. These trainers are available in a wide variety of sizes
and color and are able to stand alone or attach to the toilet
basin.
Research and Development
The Company has not allocated funds for conducting research
and development activities to develop new products or technology.
Currently, management does not anticipate that funds will be
allocated for primary research in the immediate future.
Development activities routinely conducted by the Company will
consist of improvements to existing products and developing new or
alternative products. In the future, the Company intends to
investigate and ultimately develop, market and manufacture baby
products complementary to its existing LiL Marc product. However,
no new products will be explored until such time as the Company is
realizing revenues from the sale of the LiL Marc and the Company
has sufficient capital reserves to commence such a venture.
Patents and Trademarks
The inventor of the LiL Marc applied for and on July 16, 1991
was granted a patent relating to the "LiL Marc Training Urinal"
(U.S. Patent Number 318,325). The rights to the patent, the trade
name "LiL Marc" and the right to manufacture the product were
subsequently assigned by the inventor to the Company in November
1997. The Company has submitted the Patent Assignment to the
United States Patent Office in Washington, D.C. to be recorded. In
connection with the assignment of the patent, the Company paid to
James Curt McKiney, the inventor, the sum of $30,000 and agreed to
pay an ongoing royalty to the inventor of $0.25 per urinal sold,
due each year on March 31 beginning in 1998. As of the date
hereof, no royalty has been paid to the inventor. The Company
anticipates filing additional patent applications in the future if
new and/or improved products are developed.
There can be no assurance that any future patent applications
will result in patents being issued or that the Company's existing
patent, or any new patents, if issued, will afford the Company any
meaningful protection from competitors developing and marketing
products competitive with those of the Company. Also, there can be
no assurance that the Company will have the financial resources
necessary to enforce any patent rights it may hold. Although the
Company is not aware of any claim that it infringes or will
infringe any existing patent, in the event that in the future the
Company is unsuccessful against such a claim, it may be required to
obtain licenses to such patents or to other patents or proprietary
technology in order to develop, manufacture or market its products.
There can be no assurance that the Company will be able to obtain
such licenses on commercially reasonable terms or that the patents
underlying the licenses will be valid and enforceable.
Employees
Presently, the Company has no full-time employees. It is
anticipated that the Company's President, George I. Norman III,
will devote approximately 20 to 25 hours per week to the Company's
business. If the Company begins to generate revenues, its
Secretary / Treasurer, Laurie Norman, will devote approximately 10
to 15 hours a week primarily as the Company's office manager. Both
persons are prepared to increase the time they devote to the
Company should such a need arise. Management intends to hire
additional employees only as needed and as funds are available. In
such cases, compensation to management will be consistent with
prevailing wages for the services rendered. It is not anticipated
that the Company will have to increase payroll expenditures until
such time as monthly sales exceed 500 units per month. The Company
does not anticipate in the immediate future to offer any employee
a bonus, profit sharing or deferred compensation plan nor are there
any employment contract with any director or employee. Management
intends to hire additional qualified personnel as business
conditions warrant. In addition to full-time employees, the
Company may use the services of certain outside consultants and
advisors as needed on a contract basis.
Facilities
The Company's principal place of business and corporate
offices are located at the current business office of its President
at 149 East 900 South, Salt Lake City, Utah 84111. The facilities
consist of approximately 640 square feet of office space and will
be leased from Mr. Norman at the rate of $450 per month. The
Company believes that its current facilities are adequate for the
immediate futures.
Presently, the Company is not paying rent to Mr. Norman,
rather the rent is being accrued to be paid at a time when the
Company has sufficient capital to cover such expenses. Mr. Norman
has agreed to accrue the rent payments beginning May 1, 1998, and
will subsequently accept payment in either cash or in shares of the
Company's Common Stock.
Litigation
The Company is not a party to any material pending legal
proceedings and no such action by, or to the best of its knowledge,
against the Company has been threatened.
ITEM 2. Management's Discussion and Analysis or Plan of Operation
The following information should be read in conjunction with
the consolidated financial statements and notes thereto appearing
elsewhere in the Form 10-SB.
Overview
The Company began operations in 1997 by negotiating for and
subsequently acquiring the U.S. patent rights to the LiL Marc
Training Urinal, the trade name "LiL Marc" and the right to
manufacture the product. Although the Company has not realized
revenues as of the date hereof, management anticipates sales to
begin in the third or fourth quarter of 1998.
The Company's current capital was provided by the sale of its
Common Stock in 1997. Management believes that the Company's cash
requirements can be satisfied with existing capital for
approximately the next six months. It is anticipated that this
capital will be used to finalize development of the LiL Marc and
the packaging of the product, preliminary marketing activities and
general business operating expenses. Management anticipates that
the Company will likely require further capital of approximately
$200,000 within the next six to twelve months in order to properly
facilitate production and distribution channels. This additional
capital is expected to come from sales of the LiL Marc, however, if
initial marketing is delayed or revenues are not adequate to
satisfy its capital needs, the Company will have to explore other
alternatives for funding.
In the event outside funding is necessary, the Company will
investigate the possibility of interim financing, either debt or
equity, to provide capital. Although management has not made any
arrangements or definitive agreements, the Company would consider
private funding or the private placement of its securities and/or
a public offering. If the Company experiences a substantial delay
in marketing the LiL Marc and is unable to secure financing from
the sale of its securities or from private lenders, the
continuation of the Company as a going concern would be seriously
jeopardized.
Most of the research and development of the LiL Marc has been
completed. Management does not intend to consider new products
until such time as revenues are realized from the sale of the LiL
Marc and the Company has sufficient capital to commence such a
venture. However, the Company is exploring the possibility of
producing the LiL Marc in various colors in addition to the current
porcelain white and adding plastic chrome attachments to highlight
appearance. The Company is also considering the addition of
complementary accessories such as (a) LiL Marc floor mat for the
user to stand on, (b) LiL Marc "sticky tabs" as goal rewards for
the user, and (c) LIL Marc dye tablets that change color as the
urinal is used. Management believes that the above innovations
could be implemented with minimal capital expenditures and with
little or no research and development. None of these variations
have been incorporated into the product as of the date hereof.
Presently the Company is concentrating on the packaging of the LiL
Marc, which will be in a shrink-wrap design.
The Company does not anticipate making any significant capital
expenditures on plant facilities or equipment. The LiL Marc and
stand will be manufactured by sub-contractors and packaged by an
independent packaging company. There are no current plans for the
Company to become engaged in the manufacturing and packaging of any
of its products.
The Company currently has an inventory of approximately 3,000
LiL Marc units that were acquired from the inventor. As the
Company begins to realize sales, it intends to commence production
of approximately 5,000 additional units. The Company intends to
market the LiL Marc direct to retailers, focusing on specialty baby
store chains, some of which also have mail order programs.
Advertising, other than package layout, will be minimal initially,
and will increase as additional funds become available.
Management does not anticipate hiring additional employees
until warranted by sales of the LiL Marc and is dependent on the
Company having sufficient capital. The Company's two directors
will perform most of the duties associated with final development
of the LiL Marc and preliminary marketing. If adequate sales are
realized, the Company will consider additional employees, primarily
one or two persons with expertise in production/shipping and
marketing, and possibly an administrative assistant.
Net Operating Loss
The Company has accumulated approximately $13,400 of net
operating loss carryforwards as of April 30, 1998, which may be
offset against taxable income and income taxes in future years.
The use of these losses to reduce future income taxes will depend
on the generation of sufficient taxable income prior to the
expiration of the net operating loss carryforwards. The
carry-forwards expire in the year 2013. In the event of certain
changes in control of the Company, there will be an annual
limitation on the amount of net operating loss carryforwards which
can be used. No tax benefit has been reported in the financial
statements for the year ended December 31, 1997 or the four month
period ended April 30, 1998 because there is a 50% or greater
chance that the carryforward will not be used. Accordingly, the
potential tax benefit of the loss carryforward is offset by a
valuation allowance of the same amount.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement
of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per
Share" and Statement of Financial Accounting Standards No. 129
"Disclosures of Information About an Entity's Capital Structure."
SFAS No. 128 provides a different method of calculating earnings
per share than is currently used in accordance with Accounting
Principles Board Opinion No. 15, "Earnings Per Share." SFAS No. 128
provides for the calculation of "Basic" and "Dilutive" earnings per
share. Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the
period. Diluted earnings per share reflects the potential dilution
of securities that could share in the earnings of an entity,
similar to fully diluted earnings per share. SFAS No. 129
establishes standards for disclosing information about an entity's
capital structure. SFAS No. 128 and SFAS No. 129 are effective for
financial statements issued for periods ending after December 15,
1997. Their implementation is not expected to have a material
effect on the financial statements.
The Financial Accounting Standards Board has also issued SFAS
No. 130, "Reporting Comprehensive Income" and SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes standards for reporting and
display of comprehensive income, its components and accumulated
balances. Comprehensive income is defined to include all changes
in equity except those resulting from investments by owners and
distributors to owners. Among other disclosures, SFAS No. 130
requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income
be reported in a financial statement that displays with the same
prominence as other financial statements. SFAS No. 131 supersedes
SFAS No. 14 "Financial Reporting for Segments of a Business
Enterprise." SFAS No. 131 establishes standards on the way that
public companies report financial information about operating
segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for
disclosure regarding products and services, geographic areas and
major customers. SFAS No. 131 defines operating segments as
components of a company about which separate financial information
is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in
assessing performance.
SFAS 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and requires comparative
information for earlier years to be restated. Because of the
recent issuance of the standard, management has been unable to
fully evaluate the impact, if any the standard may have on future
financial statement disclosures. Results of operations and
financial position, however, will be unaffected by implementation
of the standard.
Inflation
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking
statements. The Company wishes to advise readers that actual
results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company to
meet its cash and working capital needs, the ability of the Company
to successfully market its product, and other risks detailed in the
Company's periodic report filings with the Securities and Exchange
Commission.
ITEM 3. Description of Property
The information required by this Item 3, Description of
Property, is set forth in Item 1, Description of Business, of this
Form 10-SB/A.
ITEM 4. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth information, to the best of the
Company's knowledge, as of April 30, 1998, with respect to each
person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, each director and all directors and
officers as a group.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class(1)
Alewine Limited 570,833 34.0%
Liability Company (2)
3305 West Spring
Mountain Rd. #60
Las Vegas, NV 89102
Linda M. Bryson 570,833 34.0%
9980-96 Scripps Vista Way
San Diego, CA 92131
All directors and officers 570,833 34.0%
a group (2 persons)
* Director and/or executive officer
Note: Unless otherwise indicated in the footnotes below, the
Company has been advised that each person above has sole
voting power over the shares indicated above.
(1) Based upon 1,681,666 shares of Common Stock outstanding
on April 30, 1998.
(2) Alewine Limited Liability Company is a Nevada limited
liability company ("Alewine") managed by George I. Norman
III, the Company's President, through which his self-
employment consulting business is conducted. Alewine is
principally owned by a Norman family trust. By
resolution of its members, Mr. Norman has voting and
investment control over Alewine.
ITEM 5. Directors, Executive Officers, Promoters and Control
Persons
Executive Officers and Directors
The executive officers and directors of the Company are as
follows:
Name Age Position
George I. Norman III 43 President, Chief Executive
Officer and Director
Laurie J. Norman 35 Secretary / Treasurer and
Director
___________________________
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and
qualified. Directors will be elected at the annual meetings to
serve for one year terms. There are no agreements with respect to
the election of directors. The Company has not compensated its
directors for service on the Board of Directors or any committee
thereof. Any non-employee director of the Company shall be
reimbursed for expenses incurred for attendance at meetings of the
Board of Directors and any committee of the Board of Directors. The
Executive Committee of the Board of Directors, to the extent
permitted under Nevada law, consists of the two directors and
exercises all of the power and authority of the Board of Directors
in the management of the business and affairs of the Company
between meetings of the Board of Directors. Each executive officer
is appointed by and serves at the discretion of the Board of
Directors.
None of the officers and/or directors of the Company are
officers or directors of any other publicly traded corporation, nor
have any of the directors and/or officers, nor have any of the
affiliates or promoters of the Company filed any bankruptcy
petition, been convicted in or been the subject of any pending
criminal proceedings, or the subject or any order, judgment, or
decree involving the violation of any state or federal securities
laws within the past five years.
The directors will initially devote their time to the
Company's affairs on an "as needed" basis, the exact amount of
which is undetermined at this time. George I. Norman III,
currently devotes approximately 20 to 25 hours per week to the
Company's business. If the Company begins to generate revenues,
the Company's Secretary / Treasurer, Laurie Norman, will devote
approximately 10 to 15 hours a week primarily as the Company's
office manager. Both persons are prepared to increase the time
they devote to the Company should such a need arise. Presently,
there are no other persons whose activities are material to the
Company's operations other than the Company's corporate counsel.
The business experience of each of the persons listed above
during the past five years is as follows:
George I. Norman, III, age 43, attended the University of Utah
from 1973 to 1975, studying general education, accounting, business
and finance. Mr. Norman returned to the University in 1979 and
continued his studies in humanities, science, and finance. Mr.
Norman has been self-employed since 1979 in Salt Lake City, Utah,
as a financial and marketing consultant. He is married to Laurie
J. Norman, the Company's Secretary-Treasurer.
Laurie J. Norman, age 35, graduated in 1985 from Adams State
College in Alamosa, Colorado, with a Bachelor of Science degree in
biology. She studied German at the Goethe Institute in Murnau,
Republic of Germany in 1990. Mrs. Norman has worked with children
and adults as a ski instructor in the United States and New
Zealand. She is currently employed at the Alta ski area in Utah,
where she organizes a youth ski club and continues to teach skiing
to adults and children. Mrs. Norman also worked in the main
offices of the Alta ski resort. Laurie J. Norman is the wife of
George I. Norman, III, the Company's president and founder.
ITEM 6. Executive Compensation
The Company does not have a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. Since the Company's inception, it has not paid any
salaries or other compensation to its officers, directors or
employees. Further, the Company has not entered into an employment
agreement with any of its officers, directors or any other persons
and no such agreements are anticipated in the immediate future. It
is intended that the Company's two directors, who are the only
employees, will accrue any compensation until such time as the
Company is generating revenues from the sale of the LiL Marc.
Mr. Norman has agreed beginning May 1, 1998 to accrue his salary
and will subsequently accept payment in either cash or in shares of
the Company's Common Stock.
It is contemplated that the Company will enter into an
employment agreement with its President, George I. Norman III.
Mr. Norman is the founder of the Company and was instrumental in
the Company acquiring the LiL Mar patent rights. He is considered
vital to the ongoing business of the Company and therefore should
be the subject of an employment agreement. It is anticipated that
Mr. Norman's employment agreement will pay him a competitive wage
with comparative benefits and an incentive bonus plan based on the
success of the Company. No agreement has been effected as of the
date hereof.
ITEM 7. Certain Relationships and Related Transactions
During the Company's inception, there have been no
transactions between the Company and any officer, director, nominee
for election as director, or any shareholder owning greater than
five percent (5%) of the Company's outstanding shares, nor any
member of the above referenced individuals' immediate family,
except as set forth below.
Initially, neither Mr. Norman, Mrs. Norman, nor any other
person who may be elected an officer or director of the Company
will devote more than a portion of their time to the affairs of the
Company during their terms in office. Each has, and will continue
to have, employment or business activities outside the Company.
There will be occasions when the time requirements of the Company
may conflict with the demands of the officers' other employment.
In this event, such conflicts may require that the Company attempt
to employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be
obtained upon terms favorable to the Company.
The Company rents office space from its President, George I
Norman III, which facilities serve as the Company's principal place
of business. Rent is payable at the rate of $450 per month which
management believes is based on values relative to the existing
market for similar facilities. Presently, the Company is not
paying rent to Mr. Norman, rather the rent is being accrued to be
paid at a time when the Company has sufficient capital to cover
such expense. Mr. Norman has agreed to accrue the rent payments
beginning May 1, 1998, and will subsequently accept payment in
either cash or in shares of the Company's Common Stock.
Prior to the Company being formed in 1997, Mr. Norman, through
Alewine Limited Liability Company ("Alewine") which is managed by
Mr. Norman, entered into a preliminary agreement with the inventor
of LiL Marc to acquire the patent rights, name and production
rights to LiL Marc. When the Company was formed, Mr. Norman
assigned Alewine's rights to the agreement with the inventor to the
Company in consideration for the Company issuing to Alewine 400,000
shares of the Company's Common Stock. Following the incorporation
of the Company, the Company was able to complete the acquisition of
the patent rights to LiL Marc. Alewine also made a $5,000 cash
investment in the Company in 1997 for which it was issued an
additional 666,666 shares of Common Stock.
The Company's officers and directors are subject to the
doctrine of corporate opportunities only insofar as it applies to
business opportunities in which the Company has indicated an
interest, either through its proposed business plan or by way of an
express statement of interest contained in the Company's minutes.
If directors are presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors
and made available to the Company. In the event the Board shall
reject an opportunity so presented and only in that event, any of
the Company's officers and directors may avail themselves of such
an opportunity. Every effort will be made to resolve any conflicts
that may arise in favor of the Company. There can be no assurance,
however, that these efforts will be successful.
ITEM 8. Description of Securities
Common Stock
The Company is authorized to issue 5,000,000 shares of Common
Stock, par value $.01 per share, of which 1,681,666 shares are
issued and outstanding as of the date hereof. On September 4,
1997, the Company effected a forward stock split of its then issued
and outstanding shares of Common Stock on a two (2) shares for one
(1) share basis. All references to the Company's Common Stock
herein are in post-split shares. All shares of Common Stock have
equal rights and privileges with respect to voting, liquidation and
dividend rights. Each share of Common Stock entitles the holder
thereof to (i) one non-cumulative vote for each share held of
record on all matters submitted to a vote of the stockholders; (ii)
to participate equally and to receive any and all such dividends as
may be declared by the Board of Directors out of funds legally
available therefor; and (iii) to participate pro rata in any
distribution of assets available for distribution upon liquidation
of the Company. Stockholders of the Company have no preemptive
rights to acquire additional shares of Common Stock or any other
securities. The Common Stock is not subject to redemption and
carries no subscription or conversion rights. All outstanding
shares of Common Stock are fully paid and non-assessable.
PART II
ITEM 1. Market Price of And Dividends on the Registrant's Common
Equity and Other Shareholder Matters
Prior to the filing of this registration statement, no shares
of the Company's Common Stock have been registered with the
Securities and Exchange Commission (the "Commission") or any state
securities agency of authority. The Company's Common Stock is
eligible to be traded in the over-the-counter market and quotations
are published on the OTC Bulletin Board under the symbol "LILM",
and in the National Quotation Bureau, Inc. "pink sheets" under LiL
Marc, Inc. Inclusion on the OTC Bulletin Board permits price
quotations for the Company's shares to be published by such
service.
The Company's Common Stock became eligible for trading on the
OTC Bulletin Board during the first quarter of 1998. From February
1998 through May 11, 1998, the Company is aware of only four trades
taking place it its Common Stock. The price of the trades ranged
from $.10 to $.20 per share. Because to date there has been no
meaningful trading market for the Company's Common Stock,
historical price information is being omitted. Prices reported by
the NQB represent prices between dealers, do not include retail
markups, markdowns or commissions and do not represent actual
transactions.
The ability of an individual shareholder to trade their shares
in a particular state may be subject to various rules and
regulations of that state. A number of states require that an
issuer's securities be registered in their state or appropriately
exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to
register its securities in any particular state. Further, most
likely the Company's shares will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements
for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act.
The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:
registered and traded on a national securities exchange meeting
specified criteria set by the Commission; authorized for quotation
on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or
exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares will
be subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with assets
in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must
make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the first transaction, of a risk
disclosure document relating to the penny stock market. A broker-
dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current
quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held
in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in the Company's
Common Stock and may affect the ability of shareholders to sell
their shares.
As of May 31, 1998 there were 60 holders of record of the
Company's Common Stock, which figure does not take into account
those shareholders whose certificates are held in the name of
broker-dealers or other nominees. Because of the sparse trading of
the Company's securities and the absence of a meaningful bid and
ask quotation, no trading history is presented herein.
As of the date hereof, the Company has issued and outstanding
1,681,666 shares of common stock. Of this total, 1,066,666 shares
were issued in a private transactions more than one year ago, and
an additional 75,000 shares were issued in a private transaction on
April 30, 1998. These 1,141,666 shares are deemed "restricted
securities" as defined by the Act and certificates representing
such shares bear an appropriate restrictive legend. The remaining
540,000 shares were issued in December 1997 following the Company's
offering pursuant to Regulation D, Rule 504 of the Act.
Certificates representing these 540,000 shares do not bear
restrictive legends.
Of the Company's total outstanding shares, 540,000 shares may
be sold, transferred or otherwise traded in the public market
without restriction, unless held by an affiliate or controlling
shareholder of the Company. Of these 540,000 shares, the Company
has identified no shares as being held by affiliates of the
Company.
The 1,141,666 shares considered restricted securities are held
presently by affiliates and/or controlling shareholders of the
Company. Of this total, 495,833 shares may be sold pursuant to
Rule 144, subject to the volume and other limitations set forth
under Rule 144. In general, under Rule 144 as currently in effect,
a person (or persons whose shares are aggregated) who has
beneficially owned restricted shares of the Company for at least
one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined
under the Act), is entitled to sell, within any three-month period,
an amount of shares that does not exceed the greater of (i) the
average weekly trading volume in the Company's Common Stock, as
reported through the automated quotation system of a registered
securities association, during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding. A person who
is not deemed to be an "affiliate" of the Company and has not been
an affiliate for the most recent three months, and who has held
restricted shares for at least two years would be entitled to sell
such shares without regard to the resale limitations of Rule 144.
The remaining 645,833 restricted shares may not be sold or
otherwise transferred unless first registered under the Act or
unless there is an appropriate exemption from registration
available.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that
it will pay cash dividends or make distributions in the foreseeable
future. The Company currently intends to retain and invest future
earnings to finance its operations.
ITEM 2. Legal Proceedings
There are presently no material pending legal proceedings to
which the Company or any of its subsidiaries is a party or to which
any of its property is subject and, to the best of its knowledge,
no such actions against the Company are contemplated or threatened.
ITEM 3. Changes in and Disagreements With Accountants
There have been no changes in or disagreements with
accountants.
ITEM 4. Recent Sales of Unregistered Securities
On November 30, 1997, the Company completed an offering of its
Common Stock pursuant to the provisions of Regulation D, Rule 504
of the Act. Under the offering, the Company sold 540,000 shares of
its Common Stock to a total of 58 persons and realized gross
proceeds of $54,000. This offering was not registered under the
Act, or registered or qualified under the securities laws of any
state. All purchasers of the shares reside outside the United
States. The offering of the shares was made in reliance upon the
limited offering exemption from registration with the Securities
and Exchange Commission as set forth in Rule 504 of Regulation D.
Each purchaser was required to complete and sign a written
Subscription Agreement representing that they had read the
Disclosure Statement and that the offering was subject to various
risks. Pursuant to Rule 504(b)(1) of Regulation D, the provisions
of Rule 502(c) and (d) shall not apply to offers and sales made
under Rule 504. Generally, Rule 502(d) provides that: "except as
provided in Rule 504(b)(1), securities acquired in a transaction
under Regulation D shall have the status of securities acquired in
a transaction under Section 4(2) of the Act and cannot be resold
without registration under the Act or an exemption therefrom...."
Because the Company's intent and good faith belief was that
the offering qualified under Rule 504(b)(1) of Regulation D,
purchasers of the Company's Common Stock may be permitted to resell
their shares without registration under the Act pursuant to Rule
502(d). As such, certificates representing these shares do not
bear any restrictive legends.
The Company also issued 1,066,666 shares of its Common Stock
to Alewine Limited Liability Company on April 25, 1997 in exchange
for the right to acquire LiL Marc from the inventor and for cash.
Alewine Limited Liability Company purchased for cash an additional
75,000 shares of Common Stock on April 30, 1998.
With respect to the 1,141,666 shares issued to Alewine Limited
Liability Company, the Company relied on the exemption from
registration under the Act provided by Sections 4(2) and 4(6) of
the Act. Certificates representing these shares must bear
appropriate restrictive legends preventing their transfer except in
accordance with the Act and the regulations promulgated thereunder.
In addition, stop transfer instructions pertaining to these shares
have been lodged with the Company's transfer agent. On March 30,
1998, Alewine transferred 570,833 shares to Linda M. Bryson in a
private transaction. This transfer was not deemed to be a
distribution and therefore exempt from the registration provisions
of the Act pursuant to Section 4(1) of the Act. The 570,833 shares
remain restricted securities.
ITEM 5. Indemnification of Directors and Officers
As permitted by the provisions of the Nevada Revised Statutes
(the "NRS"), the Company has the power to indemnify any person made
a party to an action, suit or proceeding by reason of the fact that
they are or were a director, officer, employee or agent of the
Company, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection
with any such action, suit or proceeding if they acted in good
faith and in a manner which they reasonably believed to be in, or
not opposed to, the best interest of the Company and, in any
criminal action or proceeding, they had no reasonable cause to
believe their conduct was unlawful. Termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good
faith and in a manner which they reasonably believed to be in or
not opposed to the best interests of the Company, and, in any
criminal action or proceeding, they had no reasonable cause to
believe their conduct was unlawful.
The Company must indemnify a director, officer, employee or
agent of the Company who is successful, on the merits or otherwise,
in the defense of any action, suit or proceeding, or in defense of
any claim, issue, or matter in the proceeding, to which they are a
party because they are or were a director, officer employee or
agent of the Company, against expenses actually and reasonably
incurred by them in connection with the defense.
The Company may provide to pay the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding as the expenses are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the
amount if it is ultimately determined by a court of competent
jurisdiction that they are not entitled to be indemnified by the
Company.
The NRS also permits a corporation to purchase and maintain
liability insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent
of the Company, or is or was serving at the request of the
corporation as a director, officer, employee or agent, of another
corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against them and liability and expenses
incurred by them in their capacity as a director, officer, employee
or agent, or arising out of their status as such, whether or not
the Company has the authority to indemnify them against such
liability and expenses. Presently, the Company does not carry such
insurance.
Transfer Agent
The Company has designated Pacific Stock Transfer Company,
P.,O. Box 93385, Las Vegas, Nevada 89193, as its transfer agent.
PART F/S
The Company's financial statements for the fiscal year ended
December 31, 1997 and the four month period ended April 30, 1998
have been examined to the extent indicated in their reports by
Jones, Jensen & Company, independent certified public accountants,
and have been prepared in accordance with generally accepted
accounting principles and pursuant to Regulation S-B as promulgated
by the Securities and Exchange Commission and are included herein
in response to Item 15 of this Form 10-SB.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report . . . . . . . . . . . . . . . . .F-2
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . F-3
Statements of Operations . . . . . . . . . . . . . . . . . . F-4
Statements of Stockholders' Equity . . . . . . . . . . . . . F-5
Statements of Cash Flows . . . . . . . . . . . . . . . . . . F-6
Notes to the Financial Statements . . . . . . . . . . . . . F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Lil Marc, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheets of Lil Marc, Inc.
(a development stage company) as of April 30, 1998 and December 31,
1997, and the related statements of operations, stockholders'
equity, and cash flows for the four months ended April 30, 1998 and
for the period from inception on April 22, 1997 through December
31, 1997 and April 30, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects the financial position of Lil
Marc, Inc. (a development stage company) as of April 30, 1998 and
December 31, 1997 and the results of its operations and its cash
flows for the four months ended April 30, 1998 and for the period
from inception April 22, 1997 through December 31, 1997 and April
30, 1998, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going . As discussed in Note
4 to the financial statements, the Company has no operations and
limited capital which together raise substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to this matter are also described in Note 4. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Jones, Jensen & Company
May 11, 1998
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
April 30, December 31,
1998 1997
Cash and cash equivalents $ 24,640 $ 20,762
Inventory (Note 2) - -
Total Current Assets 24,640 20,762
OTHER ASSETS
Patent (Note 2) 22,442 24,352
Organization cost 119 129
Total Other Assets 22,561 24,481
TOTAL ASSETS $ 47,201 $ 45,243
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ - $ 1,337
Total Current Liabilities - 1,337
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY
Common stock; 5,000,000 shares authorized of $0.01
par value, 1,681,666 and 1,606,666 shares issued
and outstanding, respectively 16,816 16,066
Additional paid-in capital 43,841 37,091
Deficit accumulated during the development stage (13,456) (9,251)
Total Stockholders' Equity 47,201 43,906
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 47,201 $ 45,243
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Statements of Operations
From From
For Inception Inception
the Four on April 22, on April 22,
Months Ended 1997 Through 1997 Through
April 30, December 31, April 30,
1998 1997 1997
SALES $ - $ - $ -
COST OF SALES - - -
GROSS MARGIN - - -
OPERATING EXPENSES
General and administrative 2,285 4,032 6,317
Amortization 1,920 4,319 6,239
Total Operating Expenses 4,205 8,351 12,556
Loss from Operations (4,205) (8,351) (12,556)
OTHER INCOME (EXPENSE)
Interest expense - (900) (900)
Total Other Income (Expense) - (900) (900)
NET LOSS $ (4,205) $ (9,251) $(13,456)
LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,606,871 1,606,666
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Balance at inception - $ - $ - $ -
Common stock issued for
cash at $0.00 per share 666,666 6,666 (1,666) -
Issuance of shares to acquire
patent rights recorded at
predecessor cost of $0.00 per
share 400,000 4,000 (1,000) -
Issuance of 540,000 shares of
common stock at $0.10 per share 540,000 5,400 48,600 -
Net loss from inception on
April 22, 1997 through
December 31, 1997 - - - (9,251)
Balance, December 31, 1997 1,606,666 16,066 37,091 (9,251)
Issuance of 75,000 shares of
common stock at $0.10 per
share 75,000 750 6,750 -
Net loss for the four months
ended April 30, 1998 - - - (4,205)
Balance, April 30, 1998 1,681,666 $ 16,816 $ 43,841 $(13,456)
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Statements of Cash Flows
From From
For Inception Inception
the Four on April 22, on April 22,
Months Ended 1997 Through 1997 Through
April 30, December 31, April 30,
1998 1997 1997
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (4,205) $ (9,251) $ (13,456)
Adjustments to reconcile net income
(loss) to net cash:
Amortization 1,920 4,319 6,239
Changes in assets and liabilities:
(Increase) decrease in inventory - - -
Increase (decrease) in accounts payable (1,337) 1,337 -
Increase in organization cost - (150) (150)
Net Cash Provided by Operating Activities(3,622) (3,745) (7,367)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of patent rights - (28,650) (28,650)
Net Cash Used by Investing Activities - (28,650) (28,650)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock offering costs - (5,843) (5,843)
Common stock issued for cash 7,500 59,000 66,500
Net Cash Provided by Financing Activities 7,500 53,157 60,657
NET INCREASE (DECREASE) IN CASH 3,878 20,762 24,640
CASH AT BEGINNING OF PERIOD 20,762 - -
CASH AT END OF PERIOD $ 24,640 $ 20,762 $ 24,640
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON CASH FINANCING ACTIVITIES:
Patent rights and deferred interest
acquired for common stock
and assumption of note payable $ - $ - $ 30,000
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 1998 and December 31, 1997
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Lil Marc, Inc. (a development stage company) (The Company)
was incorporated under the laws of the State of Nevada on
April 22, 1997. The Company was organized to engage in the
marketing of the "Lil Marc" training urinal. The Company is
considered a development stage company as defined in SFAS
No. 7.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has elected a
calendar year end.
b. Loss Per Share
The computation of loss per share of common stock is based
on the weighted average number of shares outstanding during
the period of the financial statements.
c. Provision for Taxes
At April 30, 1998, the Company has not accrued income taxes
because it has net operating loss carryovers of
approximately $13,400 which expires in 2013.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
e. Patents
The Company purchased the patent for the "Lil Marc" training
urinal. Amortization is computed on the straight line
method over the estimated life of the patent of 5 years.
Accumulated amortization at April 30, 1998 is $6,208.
April 30, December 31,
1998 1997
Patent $ 28,650 $ 28,650
Amortization 6,208 4,298
Net $ 22,442 $ 24,352
f. Organization Cost
The Company incurred $150 of organization costs. The
organization cost is amortized using the straight-line
method over five years. Accumulated amortization at April
30, 1998 is $31.
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 1998 and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. Concentrations of Risk
Sales
The Company expects to generate revenue from sales of its
products throughout the United States.
h. Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
i. Revenue Recognition
Revenue is recognized upon and delivery of the "Lil Marc"
training urinals.
j. Inventory
The Company's inventory of "Lil Marc" training urinals has
been recorded at predecessor cost of $ -0-.
k. Stock Offering Costs
Costs incurred in connection with the Company's proposed
stock offering have been capitalized and were charged to the
proceeds of the offering upon its completion.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company has issued 400,000 shares of its common stock to its
shareholders for the assignment of the patent rights to the "Lil
Marc" training urinal.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the realization of assets
and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its
inception on April 22, 1997 through April 30, 1998. The
Company plans to significantly increase sales of its urinal
training products. The officers of the Company have
committed to covering its operating expenses in the interim.
NOTE 5 - COMMITMENTS AND CONTINGENCIES - ROYALTY PAYABLE
The Company has agreed to pay a royalty of $0.25, for each
training urinal sold, to the inventor of the "Lil Marc"
product.
<PAGE>
LIL MARC, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 1998 and December 31, 1997
NOTE 6 - FORWARD STOCK SPLIT
On September 4, 1997, the shareholders' meeting approved a
2-for-1 forward stock split. The forward stock split is
reflected in these financial statements on a retroactive
basis.
NOTE 7 - PUBLIC OFFERING
The Company offered to the public 1,000,000 shares of its
authorized common stock at $0.10 per share. The costs of
the offering have been charged to the proceeds of the
offering. 540,000 shares were issued for $54,000 cash.
NOTE 8 - PRIVATE PLACEMENT
The Company issued 75,000 shares of its common stock at
$0.10 per share. 75,000 shares were issued for $7,500 cash.
<PAGE>
PART III
ITEM 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3.1 Articles of Incorporation
3.2 By-Laws of Registrant
4. See Exhibit No. 3.1, Articles of Incorporation,
Article IV
10.1 Patent Assignment Agreements
27. Financial Data Schedule
________________
* Previously filed
2. Description of Exhibits
See Item I above.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange
Act of 1934, the registrant caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
organized.
LIL MARC, INC.
(Registrant)
Date: June 10, 1998 By: /S/ George I. Norman III
(Signature)
GEORGE I. NORMAN III
President
ARTICLES OF INCORPORATION
OF
LIL MARC, INC.
THE UNDERSIGNED person, acting as the sole incorporator under
applicable provisions of the Nevada Business Corporation Act, does
hereby adopt the following Articles of Incorporation for said
corporation.
ARTICLE I
NAME
The name of the corporation is LIL MARC, INC.
ARTICLE II
DURATION
The duration of the corporation is perpetual.
ARTICLE III
PURPOSES
The specific purpose for which the corporation is organized is
to acquire, manufacture and market the "LIL MARC" a porcelain
plastic toilet training device. (a) To engage in any and to
develop, market and manufacture complimentary baby products and all
activities as may be reasonably related to the foregoing and
following purposes.
(b) To enter into leases, contracts and agreements, to open
bank accounts and to conduct financial transactions.
(c) To engage in any all other lawful purposes, activities
and pursuits, which are substantially similar to the foregoing, or
which would contribute to accomplishment of the expressed purposes
of the corporation.
<PAGE>
(d) To change its primary business purpose from time to time
as may be deemed advisable by the Board of Directors.
(e) To engage in any other lawful business authorized by the
laws of Nevada or any other state or other jurisdiction in which
the corporation may be authorized to do business
ARTICLE IV
CAPITAL
The corporation shall have authority to issue Five Million
(5,000,000) common shares, one cent (.01) par value. There shall
be only one class of authorized shares, to wit: common voting
stock. The common stock shall have unlimited voting rights
provided in the Nevada Business Corporation Act.
None of the shares of the corporation shall carry with them
the pre-emptive right to acquire additional or other shares of the
corporation. There shall be no cumulative voting of shares.
ARTICLE V
INDEMNIFICATION AND NUMBER OF DIRECTORS
No shareholders or directors of the corporation shall be
individually liable for the debts of the corporation or for
monetary damages arising from the conduct of the corporation. The
corporation shall consist of no less than one (1) officer and
director and no more than seven (7) officers and directors.
ARTICLE VI
BY-LAWS
Provisions for the regulation of the internal affairs of the
corporation not provided for in these Articles of Incorporation
shall be set forth in the By-Laws.
ARTICLE VII
RESIDENT OFFICE AND AGENT
The address of the corporation's initial resident office shall
be 3350 West, Spring Mountain Road Suite #60, Las Vegas, NV 89102.
The corporation's initial registered agent at such address shall be
Alewine Limited Liability Company. '
I hereby acknowledge and accept appointment as corporation
registered agent:
Alewine Limited Liability Company, Inc.
By:
ARTICLE VIII
INCORPORATORS
The identity and address of the sole incorporator is:
George 1. Norman III (President)
3305 West Spring Mountain Road #60
Las Vegas, Nevada 89102
The aforesaid incorporator shall be the initial Director of
the corporation and shall act as such until the corporation shall
have conducted its organizational meeting or until one or more
successors shall have been elected and accepted their election as
directors of the corporation.
______________________
GEORGE I. Norman III
<PAGE>
IN WITNESS WHEREOF, George I. Norman III, has executed these
Articles of Incorporation in duplicate this 14th day of April,
1997, and say:
That I am the sole incorporator herein; that I have read the
above and foregoing Articles of Incorporation; that I know the
contents thereof and that the same is true to the best of my
knowledge and belief, excepting as to matters herein alleged on
information and belief, and as to those matters I believe them to
be true.
_______________________
George I. Norman III
State of Nevada
ss
County of Clark
Subscribed and sworn before me this 14th day of April,
1997 by George I. Norman III.
______________________
Notary Public
BY-LAWS
of
LIL MARC, INC.
ARTICLE I - OFFICES
Section 1. The principal office of the corporation in the
State of Nevada shall be at 3305 West Spring Mountain Road, #60,
Las Vegas, NV 89102. The officer in charge thereof is George I.
Norman Ill.
Section 2. The corporation may have such other offices
within or without the state as the board of directors may from time
to time designate.
ARTICLE II - STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of the
stockholders shall be held at the corporate office on the third
Friday of April of each year beginning in 1998, at the hour of
10:00 am., or at such other time as may be rued by the board of
directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting.
If the election of directors shall not be held on the day
designated herein for the annual meeting or at any adjournment
thereof, the board of directors shall cause the election to be held
at a special meeting of the stockholders as soon thereafter as May
be convenient.
Section 2. Special Meetings. of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute,
May be called by the president or by any director, and shall be
called by the president at the written request of fifteen percent
(15%) of all outstanding shares of the corporation entitled to vote
at the meeting. Unless requested by stockholders entitled to cast
a majority or all the votes entitled to be cast at the meeting, a
special meeting need not be called to consider any matter which is
substantially the same as a matter voted on at any meeting of
stockholders held during the preceding twelve months.
Section 3. Place of Meeting. The board of directors may
designate any place, either in the State of Nevada or elsewhere, as
the place of any annual or special meeting of stockholders.
Section 4. Notice of Meeting. Written notice stating
the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall, unless otherwise prescribed by statute, be delivered not
less than ten (10) nor more than fifty (50) days before the
meeting, either personally or by mail to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered ten days (10) after it has been deposited in
the United States Mail, addressed to the stockholder at his address
as it appears m the share registry of the corporation, with
postage, thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record
Date. For any purpose requiring identification of shareholders,
the record date shall be established by the board of directors, and
shall be not more than fifty (50) days from the date on which any
such purpose is to be accomplished. Absent a resolution
establishing any such date, the record date shall be deemed to be
the date on which any such action is accomplished.
Section 6. Voting List. The corporation shall maintain
a stock ledger which contains
(1) The name and address of each stockholder.
(2) The number of shares of stock of each class
which the stockholder holds.
The stock ledger shall be in written form and available for visual
inspection. The original or a duplicate of the stock ledger shall
be kept at the principal office of the corporation.
Section 7. Quorum. A majority of the outstanding shares
of the corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of stockholders. If
less than a majority of the outstanding shares are represented at
a meeting, a majority of the shares so represented may adjourn the
meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be represented, any
business may be transacted which might have been transacted at the
meeting as originally noticed. The stockholders present at a duly
organized meeting may continue to transact business until
adjournment, notwithstanding the withdr4awal of enough stockholders
to reduce the number of stockholders present to less than a quorum.
Section 8. Proxies. At all meetings of stockholders, a
stockholder may vote in person or
by proxy executed in writing by the stockholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the
secretary of the corporation before or at the time of the meeting.
A proxy shall be void one year after it is executed unless it
shall, prior to the expiration of one year have been renewed in
writing. All proxies shall be revocable.
Section 9. Voting of Shares. Each outstanding share entitled
to vote shall be entitled to one vote upon each matter submitted to a
vote at a meeting of stockholders.
Section 10. Informal Action by Stockholders. Any action
required or permitted to be taken at a meeting of the stockholders,
except matters as to which dissenting stockholders may hold a
statutory right of appraisal, may be taken without a meeting
if a consent in writing, setting forth the action so take, shall
be signed by a majority of the stockholders entitled to vote
with respect to the subject matter thereof. Notice of any such
action shall be provided to stockholders in the manner set forth
in Section 4 of these By-laws, within ten (10) days of the effective
date of the action.
Section 11. Cumulative Voting. There shall be no
cumulative voting of shares.
Section 12. Removal of Directors. At a meeting called
expressly for that purpose, directors may be removed with or
without cause, by a vote of the holders of a majority of the shares
entitled to vote at an election of directors.
ARTICLE III - DIRECTORS
Section 1. The business and affairs of this corporation
shall be managed by its Board of Directors, which may be no less
than two (2) nor more than seven (7) in number. The directors need
not be residents of this state or stockholders in the corporation.
They shall be elected by the stockholders at the annual meeting of
stockholders of the corporation. Each director shall be elected
for the term of one (1) year, and until his successor shall have
been elected and accepted his election to the Board in writing.
Section 2. The number of directors may be increased or
decreased from time to time by
the vote of a majority of the outstanding shares of the
corporation.
Section 3. Regular meetings. A regular meeting of the
board of directors shall be held without any notice other than this
by-law immediately after, and at the same time as, the annual
meeting of stockholders. The board of directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
Section 4. Special Meetings. Special meetings of the board
of directors may be Called by or at the request of the president or
any director. The person or persons calling any such meeting may
fix the time and place of the meeting.
Section 5. Notice. Notice of any special meeting shall be
given at least five (5) days previously thereto by written notice
delivered personally, mailed or delivered by fax to each director
at his business address. Notices shall be deemed to have been
delivered when transmitted personally or by fax, and two days after
mailed. Any director may waive notice of any meeting so long as
such waiver is in writing. The business to be conducted at any
special meeting need not be specified in the notice.
Section 6. Quorum. A majority of the duly elected board of
directors shall constitute a
quorum of the board of directors for the transaction o business at
any meeting of the board of directors.
Section 7. Manner of Acting. The act of the majority of the
directors present at a meeting
at which a quorum is present shall be the act of the board of
directors.
Section 8. Informal Action by Directors. Action consented
to by a majority of the board of directors without a meeting is
nevertheless board action so long as (a) a written consent to the
action is signed by all the directors of the corporation and (b) a
certificate or resolution detailing the action taken is filed with
the minutes of the corporation. Any one or more directors may
participate in any meeting of the board of directors by means of
conference telephone or other similar communication device which
permits all directors to hear the comments made by the others at
the meeting.
Section 9. Executive and other Committees. The board of
directors may, from time to time, as the business of the
corporation may demand, delegate its authority to committees of the
board of directors under such terms and conditions as it may deem
appropriate. The appointment of any such committee, the delegation
of authority to it or action by its under that authority does not
constitute of itself, compliance by any director not a member of
the committee, with the standard provided by statute for the
performance of duties of directors.
Section 10. Compensation. By resolution of the board of
directors, each director may be paid his expenses, if any, of
attendance at each meeting of the board of directors, and may be
paid a stated salary as a director or a fixed per diem for
attendance at each such meeting of the board of directors, or both.
No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation
therefor.
Section 11. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors
at which action on any corporate action is taken, shall be presumed
to have assented to the action taken unless he shall announce his
dissent at the meeting and his dissent is entered in the minutes
and he shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of
the meeting.
Section 12. Certificates of Resolution. At any such time
as there shall be only one duly elected and qualified director,
actions of the corporation may be manifest by the execution by such
director of a Certificate of Resolution specifying the corporate
action taken and the effective date of such action.
ARTICLE IV - OFFICERS
Section 1. Number. Officers of the corporation shall be a
president and a secretary, each of whom shall be elected by the
board of directors. Such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the board of
directors. Any two or more offices may be held by the same person,
except that no officer may act in more than one capacity where
action of two or more officers is required by law.
Section 2. Election and Term of Office. The officers of
the corporation shall be elected annually by the board of directors
after each annual meeting of the stockholders. Each officer shall
hold office for a period of one (1) year and until his successor
shall have been duly elected and shall have accepted his election
as an officer of the corporation in writing.
Section 3. Removal. Any officer or agent may be removed
by the board of directors whenever in its judgment, the best
interests of the corporation will be served thereby. Election to
an office in the corporation shall not create any contractual right
of any type or sort in the person elected.
Section 4. Vacancies. A vacancy in any office may be
filled by the board of directors for the unexpired portion of the
term.
Section 5. President. The president shall be a director of
the corporation and shall be the principal executive officer of the
corporation, and subject to the control of the board of directors,
shall in general supervise and control all of the business and
affairs of the corporation. The president shall have authority to
institute or defend legal proceedings when the directors are
deadlocked. He shall, when present, preside at all meetings of the
stockholders and of the board of directors. He may sign, with the
secretary or any other proper officer of the corporation thereunto
authorized by the board of directors, certificates for shares of
the corporation, any deeds, mortgages, bonds, contracts, or other
instruments which the board of directors has authorized to be
executed, except in cases where the and execution thereof shall be
expressly delegated by the board of directors or by these by-laws
to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of president and
such other duties as may be prescribed by the board of directors
from time to time.
Section 6. Secretary. The secretary shall (a) keep the
minutes of the proceedings of the
stockholders and of the board of directors in one or more books
provided for that purpose; (b) see that all notices are duty given
in accordance with the provisions of these by-laws or as required
by law; (c.) be custodian of the corporate records and of the seal
of the corporation, if any; (d) keep a register of the post office
address of each stockholder which shall be furnished to the
secretary by such stockholder, (e) sign, with the president,
certificates for shares of the corporation, the issuance of which
shall have been authorized by resolution of the board of directors;
(f) have general charge of the stock registry of the corporation,
(g) have charge and custody of and be responsible for all funds and
securities of the corporation; (h) Receive and give receipts for
moneys due and payable to the corporation and deposit all such
moneys in the name of the corporation in such bank accounts as may
be established for that purposed, and (i) in general, perform all
duties incident to the office of secretary, as well as such duties
as generally required upon treasurers of corporation.
Section 7. Salaries. The salaries of the officers shall be
fixed from time to time by the board of directors and no officer
shall be prevented from receiving such salary by reason of the fact
that he is also a director of the corporation.
ARTICLE V - INDEMNIFICATION OF DIRECTORS
AND OFFICERS OF THE CORPORATION.
Section 1. The corporation shall indemnify any person who was
or is a party or threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative (other than an action by or in the right
of the corporation) by reason of the fact that he is or was a
director or officer of the corporation, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not, without more, create a presumption that
the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of
the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful
ARTICLE VI - CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The board of directors may authorize
any officer or officers or agents to enter into any contract or
execute and deliver any instrument, including loans, mortgages,
checks, drafts, deposits, deeds and documents evidencing other
transactions, in the name of the corporation. Such authority may
be general or confined to specific instances.
ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing
shares of the corporation shall be in the form approved in the
organizational resolutions of the corporation. They shall be
signed by the president and secretary of the corporation. Each
certificate shall be consecutively numbered
or otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on each certificate and
on the stock registry of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and
no new certificate shall be issued until the former certificate for
a like number shall have been surrendered and canceled, except in
the case of a lost, destroyed or mutilated certificate, a new one
may be issued therefor upon such terms of indemnity to the
corporation as the board of directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
corporation shall be made only on the stock registry of the
corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the
corporation, and on surrender for cancellation of the certificate
for such shares. The person in whose name shares stand on the
books of the corporation shall be deemed by the corporation to be
the owner thereof for all purposes.
ARTICLE VIII - FISCAL YEAR
Section 1. The fiscal year of the corporation shall begin on
the first day of January of each year and expire on the thirty-
first day of December of each year.
ARTICLE IX - CORPORATE SEAL
Section 1. Use of the corporate seal adopted by the board of
directors shall be optional with the officer or agent of the
corporation signing any document on behalf of the corporation. No
duly executed corporate document shall be void because it does not
bear the imprint of a seal.
ARTICLE X - WAIVER OF NOTICE
Section 1. Whenever any notice is required to be given to any
stockholder or director or the corporation under these By-laws, by
provisions of the Articles of Incorporation, or by the State of
Nevada, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE XI - AMENDMENTS
Section 1. The board of directors shall have the power to
make, alter and repeal by-laws; but by-laws made by the board may
be altered or repealed, or new by-laws made, by the stockholders.
ADOPTED by order of the directors of the corporation on April 25, 1997.
LIL MARC, INC.
George I. Norman III, Director
Laurie J. Norman, Director
ASSIGNMENT
WHEREAS, I, James C. McKiney, a citizen of the United States
of America, and residing at 255 Quandt Ranch Road, San Jacinto,
California 92583, am the owner of United States Design Patent No.
318,325 issued July 16, 1991,and entitled
TRAINING URINAL
and in and to the invention described and claimed therein, and
WHEREAS, LiL Marc, Inc., a corporation of the State of Nevada,
with principal offices located at 149 East 900 South, Salt Lake
City, Utah 841ll, is desirous of acquiring the entire right, title,
and interest in and to said United States Design Patent No. 318,325
and the invention described and claimed therein;
NOW, THEREFORE, for and in consideration of One Dollar ($1.00)
and of other good and valuable consideration, receipt of which is
hereby acknowledged, I. James C. McKiney, by these presents do
hereby sell, assign, and transfer to the said LiL Marc, Inc. my
entire right, title and interest in and to the invention for the
United States of America, its territories and possessions and for
all foreign countries, in and to the said United States, Design
Patent No. 318,325, and in and to any reissues or extensions of
said Design Patent, including the right to recover for any past
infringement; said invention and said Design Patent, and any
reissues or extensions thereof and right to recover for any past
infringement to be held and enjoyed by the said LiL Marc, Inc. for
its own use and behalf and for its legal representatives, succes-
sors, or assigns to the full end of the term or terms for which
said Design Patent and any reissues or extensions thereof may be
granted, as fully and entirely as the same would have been held by
me had this assignment and sale not been made.
And I covenant and agree that, at the request of the said LiL
Marc, Inc. , its legal representatives, successors, or assigns, I
will, without demanding any further consideration therefor and
without expense to me, do all lawful and just acts, including the
execution and acknowledgment of instruments which may be or may
become necessary for sustaining, reissuing or extending said Design
Patent, and for maintaining and perfecting the said LiL Marc,
Inc.'s right to the invention and Letters Patent and will testify
in cases of interference and litigation when requested to do so by
the said LiL Marc, Inc.
Executed this 10th day of November, 1997.
________________________________
James C. McKiney
STATE OF CALIFORNIA
ss
County of
On this ____day of November, 1997, personally appeared before
me, James C. McKiney, the signer of the above instrument, who duly
acknowledged to me that he executed the same.
_____________________________
Notary Public
2
<PAGE>
ASSIGNMENT
This agreement is entered into by and between LiL Marc,
Incorporated, and James Curt McKiney. P.O. Box 325, San Jacinto,
CA 92581, acting individually and as President of LiL Marc,
Incorporated, (sellers) and, Alewine Limited Liability, 3305 West
Spring Mountain Road #60, Las Vegas, NV 89102, manager George I.
Norman III, (buyer), this 31st day of March 1997.
In consideration of payment of $3,000 down balance of $27,000
to be pay within 6 months the sellers sell, assign, and convey to
the buyer all rights and title to the "Training Urinal"(invention),
U.S. Patent Number 318,325 issued July 16, 1991 and trade name "LiL
Marc."
In addition Sellers also agree that the purchase includes (1)
approximately 3,000 boxed finished urinals and 1,700 stands located
in Prescott, Arizona, (2) all rights to an custom blow urinal mold
held by Flambo Corporation, and (3) delivery of a urinal stand
rotational mold.
As part of the consideration to Sellers Buyer will pay an
ongoing royalty of $.25 per urinal sold at the anniversary date of
this agreement unless otherwise agree to. It is intended that the
award of this royalty shall supersede and survive any other
agreement to the contrary by buyer or buyer assignees.
Sellers hereby covenants and agree to keep all technical
information and know how possessed or developed by sellers
confidential.
Sellers upon receiving final payment of $27,000 agree to
complete and fully acknowledge an Assignment and Form 1595
"Recordation Form Cover Sheet" to sell, assign, and transfer all
interest in invention and trademark for filing with the United
States Patent Office.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this 31 st day of March, 1997.
Buyer:
Alewine Limited Liability Company
a Nevada limited liability company,
3305 West Spring Mountain Road #60
Las Vegas, NV 89102
By:________________________________
Manager
Sellers:
LiL Marc, Incorporated
P.O. Box 26968
Prescott Valley, Arizona 86312
By:____________________________
President
By:____________________________
Secretary
Inventor
By:____________________________
James Curt McKiney
P.O. Box 326
San Jacinto, CA 92581
<PAGE>
ASSIGNMENT
This agreement is entered into by and between Alewine Limited
Liability Company (seller) and LIL MARC, INC., a Nevada corporation
(buyer) this 25th day of April 1997.
In consideration of the issuance of 200,000 shares of buyers
common capital stock $.0l par value, to seller, seller assigns its
rights to an Assignment (attached hereto) of the U.S. Patent rights
of a "Training Urinal" U.S. Patent Number 318,325 issued July 16,
1991 and trade name "LIL MARC" to buyer.
As part of the assignment buyer undertakes to pay an
obligation to James Curt McKiney (inventor) $27,000 due September
30, 1997 per the original Assignment referred to above.
Buyer agrees to pay an ongoing royalty to inventor of $.25 per
unit sold by buyer or buyer's representatives due at an anniversary
date of March 31st of each year beginning in 1998.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement this 25th day of April 1997.
SELLER
Alewine Limited Liability Company
_________________________________
Buyer
LIL MARC, INC.
__________________________________
<PAGE>
ASSIGNMENT
The undersign assigns all rights, title and interest in a
custom blow mold held by Flambo Corporation, California, a urinal
stand rotational mold, 3,000 finished and boxed urinals along with
1700 stands located in Prescott, Arizona to LIL MARC, INC., a
Nevada corporation as a contribution to its capital.
DATED THIS 25th day of April, 1997.
Alewine Limited Liability Company
______________________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE LIL MARC, INC. FINANCIAL
STATEMENTS FOR THE PERIODS ENDED APRIL 30, 1998 AND
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> YEAR 4-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-START> APR-22-1997 JAN-1-1998
<PERIOD-END> DEC-31-1997 APR-30-1998
<CASH> 20,762 24,640
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 20,762 24,640
<PP&E> 0 0
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<TOTAL-ASSETS> 45,243 47,201
<CURRENT-LIABILITIES> 1,337 0
<BONDS> 0 0
0 0
0 0
<COMMON> 16,066 16,816
<OTHER-SE> 37,091 43,841
<TOTAL-LIABILITY-AND-EQUITY> 45,243 47,201
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 8,351 4,205
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 900 0
<INCOME-PRETAX> (9,251) (4,205)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (9,251) (4,205)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (9,251) (4,205)
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