U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
-----------------
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 000-24379
---------
ATLANTICA, INC.
----------------------
(Name of Small Business Issuer in its Charter)
UTAH 43-0976463
- ------------------------------- -------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
80 WALL STREET, SUITE 412
NEW YORK, NEW YORK. 10005
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (212) 344-5519
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----------------------------------------
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Securities Registered under Section 12(g) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes |X| No |_| (2) Yes |X| No |_|
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. | |
State Issuer's revenues for its most recent fiscal year: December 31, 1998 - $0
----------------------
The Exhibit Index commences on page XX.
<PAGE>
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days.
The last available quote for the common stock of the Company was on April
1, 1974. At that time, the quote was $0.02 bid and $0.05 offered. There has been
virtually no trading of the Registrant's common stock over-the-counter since
that time.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes |X| No |_|
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
December 31, 1998
25,000,000
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Item 13 of this Report.
Transitional Small Business Issuer Format Yes |X| No |_|
- THIS SPACE INTENTIONALLY LEFT BLANK -
<PAGE>
PART I
Item 1. Description of Business
ATLANTICA, INC., (hereinafter the "Company") was incorporated under the
laws of the State of Utah on March 3, 1938. The Company name at that time was
RED HILLS MINING COMPANY.,and was formed for the purpose of mining. The Company
went public, with its prospectus becoming effective on March 29, 1938. The
securities were registered in The State of Utah, case#1161. The Company sold
500,000 shares at $0.025 cents per share.
On February 5, 1953 the Company changed its name to ALLIED OIL AND
MINERALS COMPANY., and its business continued to be mining, and Oil exploration.
On January 8, 1971 the Company changed its name to COMMUNITY EQUITIES
CORPORATION., and the Company changed its purpose of business to Real Estate
Development in Kansas City and in the State of Florida. Due to a severe downturn
in the Kansas City housing market, the properties were liquidated for the
mortgage amounts or conveyed to the first mortgagees by Deed in lieu of
foreclosure. In the 1980's the Company acted as a Limited Partner in several
housing developments. In 1990 the Company co-signed a second mortgage for Arena
Square North and South, a general limited partnership, that was controlled by
the Company President at that time, Mr. Harold R. Smith. The Housing
Conservation and Redevelopment Agency of the City of Miami gave the second
mortgage on the Arena Square Apartment project of 550 apartments in the amount
of $885,000. The project was located in Overtown, on the north side of Downtown
Miami. Community Equities Corporation was the original limited partner in the
development, but was replaced by Community Housing of Texas. The Company has not
engaged in any business operation since that time. On March 26, 1996 the
corporate charter was reinstated and the Company name was changed to ATLANTICA,
INC.
At a meeting of the Stockholders held on March 13, 1998, a new Slate of
Directors were elected and their was a reverse stock split of 1 share for every
20 shares held, and the authorized shares were increased to 25,000,000 shares
with a par value of .0001 cents per share. Following the Stockholder Meeting the
new Board of Directors met and elected Officers. The old Board of Directors and
Officers resigned. The new directors issued 24,000,000 shares of common stock to
Gregory Aurre, the new president and Director, for services rendered and
expenses paid. This gave Mr. Aurre the controlling interest in the company. The
Board also issued 50,000 shares to other affiliated parties for services
rendered.
The Company presently has no material tangible assets or property. The
Company intends to continue to seek out the acquisition of assets, property or
business that may be beneficial to the Company and its stockholders. In
considering whether to complete any such acquisition, the Board of Directors
shall make the final determination, and the approval of stockholders will not be
sought unless required by applicable law, the Articles of Incorporation or by
laws of the Company or contract. The Company is a development stage company and
is currently seeking business opportunities believed to hold a potential for
profit. The Company has not presently identified a specific business area of
direction that it will follow. Therefore, no principal operation has yet begun.
The Company has no products and offers no services.
Item 2. Description of Property
The Company has no property or assets; Its principal executive office
address and telephone number are the office and telephone of the President and
provided at no cost. There are no agreements, either expressed or implied
regarding the office space provided. The Company is in a development stage and
has no products or services.
<PAGE>
Item 3. Legal Proceedings
The Registrant is not a party in any litigation and has no knowledge of
any pending legal proceedings in any court or agency of government, or
government authorities.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the security holders during the fourth
quarter of the fiscal year.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The last available quote for the common stock of the Company was on April
1, 1974. At that time, the quote was $0.02 bid and $0.05 offered. There has been
virtually no trading of the Registrant's common stock over-the-counter since
that time.
The last price quoted reflects inter-dealer prices, without retail
markups, markdowns or commission, and may not necessarily represents actual
transactions. The quotation was derived from the National Quotation Bureau
library..
Dividends
There have been no cash dividends declared at any time, and no dividends
are contemplated to be paid in the foreseeable future, particularly in view of
the uncertainty of generating revenue from future operations.
Item 6. Managements Discussion and Analysis or Plan of Operation
Liquidity
The Registrant has no assets, no cash, and no liquidity. Its president has
personal paid all expenses for the Company. The Company plans no operations, and
has no source of funds required to meet its obligations. The President of the
Registrant plans to pay the expenses of the Company until such time that the
Company acquires or mergers with an active business. Their is no assurance the
President will continue this relationship.
Capital Resources
The Registrant has no material commitments for capital expenditures as of
December 31, 1998. The Registrant has no assets, no cash, and no capital
resources. The Registrant has no anticipated source of funds needed to fulfill
its commitments. The Registrant has had no business operations since 1990. The
Registrant's President has been the primary entity funding the Company's
operation.
Results of Operations
The Registrant has had no business operations since 1990. It is not
anticipated that any business operation will develop unless and until the
Company acquires or merges with an operating company. There is no assurance that
such an acquisition or merger will occur. The Registrant has no revenues. The
general trend in the Registrant's lack of operation is expected to continue, and
no revenue is expected.
<PAGE>
Item 7. Financial Statements
The information called for by this item is included in the financial
statements or notes thereto at Exhibit A.
The following discussion should be read in conjunction with the Financial
Statements and related notes included elsewhere in this Registration Statement.
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------
Revenue -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income (loss) -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income (loss) -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
Per Common Share
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Assets -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Long Term Obligation -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Redeemable Preferred Stock -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Long Term Debt -0- -0- -0- -0- -0-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Registrant has not paid a cash dividend since inception, and does not
anticipate doing so in the foreseeable future.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
The Registrant retained the services of:
Jones, Jense & Company
Certified Public Accountants
There are no disagreements with any accounting or financial disclosure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons:
Compliance with section 16(a) of the Exchange Act
The following table sets forth the names and ages of all the Directors and
executive Officers of the Registrant. Further more, the table shows the
positions held by each such person, length of service, date of initial
appointment of election to office, and the term of office:
<PAGE>
First Elected Director Term
Name and Age Position Or Appointed of Office
- ------------ -------- ------------ ---------
Gregory Aurre President 13-Mar-98 Until 1999
Age 50 Director Shareholders Meeting
Gregory Aurre III Secretary, 13-Mar-98 Until 1999
Age 26 Treasurer & Shareholders Meeting
(Son of Gregory Director
Aurre)
Amerika Aurre Director 13-Mar-98 Until 1999
Age 27 Shareholders Meeting
(Daughter of
Gregory Aurre)
Gregory Aurre, Director and President
Mr. Aurre is 50 years old and is an independent financial consultant. From
1990 to present he has acted as a financial consultant. From 1986 to 1990, Mr.
Aurre was the President of Texas Coastal Exploration, Inc., a company involved
in oil and gas exploration. From 1981 to 1986, Mr. Aurre was the President of
United Petroleum Corporation, a company involved in oil and gas exploration.
From 1970 to 1981, Mr. Aurre was the President of Aurre Management Co., Inc., a
company involved in financial consulting.
Amerika Aurre, Director
Ms. Aurre is 27 years old and the daughter of the President of the
Company, Gregory Aurre. She has been employed in the fashion merchandising
industry for six years.
Gregory Aurre III, Director and Secretary-Treasurer
Mr. Aurre is 26 years old and the son of the President of the Company,
Gregory Aurre. He is a Licensed Securities Sales Person with an N.A.S.D. member
firm.
Family Relationships
Amerika Aurre is the daughter of Gregory Aurre. Gregory Aurre III is the
son of Gregory Aurre.Gregory Aurre, Director and President
Experience of Management
Mr. Aurre is the only member of management that has any experience with
"Blank Check" or "Shell" companies. It will be his sole responsibility to locate
and negotiate a merger for the Company. Mr. Aurre is the only member of
management that will devote any time to locate and negotiate a merger. He will
devote fifty percent of his time to this effort. The Company does not intend to
use consultants, outside advisors or finders to locate and negotiate a merger.
In 1970, Mr. Aurre took Aurre Management Co., Inc. public with a Reg.A
offering.
In 1981, Mr. Aurre merged Aurre Management Co., Inc. with Fluid Lift
International, Inc. (Texas). Aurre Management Co., Inc. was at the time a shell
or blank check company and was not a reporting company at the time of the
merger. The name of Aurre Management Co., Inc. was subsequently changed to Fluid
Lift International, Inc. (Delaware).
<PAGE>
In 1982, Mr. Aurre located a the public shell or blank check company, Don
Reid Productions, Inc., and merged it with a private company, United Petroleum
Corp. (Delaware). The surviving company's name was changed to United Petroleum
Corporation (Delaware).
In 1992, Mr. Aurre merged United Petroleum Corporation, which was a shell
or blank check company at that time, with Calibur-United Petroleum Corporation
(Tennessee). United Petroleum Corporation filed an 8K on April 22, 1993 (The
commission number was 002-38375).
In 1993, Mr. Aurre once again took control of Fluid Lift International,
Inc. (formerly Aurre Management Co., Inc.) which was at the time a shell or
blank check company. Mr. Aurre contacted some of the old Officers and Directors
of Fluid Lift International. Mr. Aurre traveled to Fort Worth, Texas to meet
with and persuaded them to vote their shares at a special meeting of the
stockholders which was held on September 24, 1993. At that meeting a new slate
of Directors was elected which Mr. Aurre headed. Then in November of 1994, Mr.
Aurre merged the company with Odessa Foods, Inc.
In 1994, Mr. Aurre located a public shell or blank check company, Ram-Z
Enterprises, Inc., and at a special meeting on April 21, 1994 he took control of
the company. Then on August 15, 1996 the company merged with Hyperdynamics, Inc.
and Mr. Aurre resigned.
Mr. Aurre is no longer an Officer, Director or affiliate of any of the
above mentioned companies. He resigned from each of them as soon as the above
mentioned mergers took place. There are no agreements or understandings for any
of the Officers or Directors to resign at the request of another person, but it
should be noted that the two Directors other than Mr. Aurre are his son and his
Daughter. It is assumed that once a merger is concluded that all the present
Directors and Officers will resign.
Item 10. Executive Compensation
None of the officers or directors of the Registrant has been, or is being
paid any cash compensations, or otherwise is subject to any deferred
compensation plan, bonus plan, or is the subject of any option agreement or any
other arrangement or understanding whereby such person would obtain any cash or
non-cash compensation for their services for and on behalf of the Registrant,
except for the common stock that the directors have received as set forth in
Item 1.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of December 31, 1998, certain
information regarding the ownership of the common stock, $0.0001 par value,
which is the only class of securities authorized, issued and outstanding of the
Registrant by its Officers and Directors, and as a group.
Name of Beneficial Amount & Nature of Percent of
Title of Class Owner Beneficial Ownership Class
- -------------- ----- -------------------- -----
Common Gregory Aurre 24,000,000 96%
Common Amerika Aurre 25,000 .001%
Gregory Aurre
Common III 25,000 .001%
Officers &
Common Directors 24,050,000 96%
as a Group
To the best knowledge of the Registrant, there are no arrangements,
understanding or agreements relative to the disposition of any of the
Registrant's securities, the operation of which would at a subsequent date
result in a change in control of the Registrant.
<PAGE>
Item 12. Certain Relationships and Related Transactions
Transactions with Management and Others:
On March 13, 1998, the date under which present management took control of
the Registrant, and Mr. Aurre, the Registrant's President, acquired controlling
interest of the Company, as 24,000,000 shares of common stock were issued to him
for services rendered and expenses paid.
On March 13, 1998, the Board of Directors acquired an additional 50,000
shares of common stock for services rendered, whereby the directors as a group
control 96.002% of the common voting shares of the company.
Certain Business Relationships
Mr. Gregory Aurre, the Registrant's President, director and owner of the
controlling interest in the company (96%) is the father of the Registrant's
Secretary-Treasurer and director, Gregory Aurre III. Mr. Gregory Aurre is also
the father of the only other director of the Registrant, Amerika Aurre.
Indebtedness of Management
None of the Registrants officers and directors are indebted to the
Company, and have not been at any time.
Transaction with Promoters
The names of the Promoters and the nature and amount of anything of value
received are as follows:
Property, Contracts,
Common Stock Cash Options Received or
Names Received Received Due in the Future
- ----- -------- -------- -----------------
Gregory Aurre 24,000,000 -0- -0-
Amerika Aurre 25,000 -0- -0-
Gregory Aurre III 25,000 -0- -0-
The promoters of the Registrant received no cash compensation. The only
compensation was the shares of common stock listed above.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
EXHIBITS
The exhibits referred to here in above are more particularly described
below. In addition to these exhibits, certain other exhibits have been attached
hereto as supplementary information, and may assist in a further understanding
of the information presented.
Exhibit No. Pages Description of Exhibits
- ----------- ----- -----------------------
A 10-19 Audited Financial Statements for Year 1998
B 20-26 Settlement with City of Miami
C 27 US Bankruptcy Court: Notice of Dismissal
Signatures
Pursuant to the requirements of Section 15d of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
(Registrant) ATLANTICA, INC.
----------------------------------------
Date March 15, 1999
------------------------------------------------
By (Signature) /s/ Gregory Aurre
---------------------------------------
Gregory Aurre - President
5
ATLANTICA, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998 and 1997
<PAGE>
CONTENTS
Independent Auditors' Report ............................................. 3
Balance Sheet ............................................................ 4
Statements of Operations ................................................. 5
Statements of Stockholders' Equity (Deficit) ............................. 6
Statements of Cash Flows ................................................. 7
Notes to the Financial Statements ........................................ 8
<PAGE>
[LETTERHEAD OF JONES, JENSEN & COMPANY, LLC]
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Atlantica, Inc.
(A Development Stage Company)
New York, New York
We have audited the accompanying balance sheet of Atlantica, Inc. (a development
stage company) as of December 31, 1998 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the years ended December 31,
1998 and 1997 and from inception of the development stage on January 1, 1997
through December 31, 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 Atlantica, Inc. (a
development stage company) as of December 31, 1998 and the results of its
operations and its cash flows for the years ended December 31, 1998 and 1997
and from inception of the development stage on January 1, 1997 through
December 31, 1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 6. The financial statements do not
include any adjustments that might result from the outcome of the uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
February 26, 1999
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
December 31,
1998
----
CURRENT ASSETS
Cash $ --
-----------
Total Current Assets --
-----------
TOTAL ASSETS $ --
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accrued interest (Note 2) $ 477,900
Mortgage payable (Note 3) 885,000
-----------
Total Current Liabilities 1,362,900
-----------
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 25,000,000 share authorized
of $0.0001 par value, 24,581,422 shares issued
and outstanding (Note 4) 2,458
Additional paid-in capital (Note 5) 46,760
Deficit accumulated prior to January 1, 1997 (1,256,700)
Deficit accumulated during the development stage
(from January 1, 1997) (155,418)
-----------
Total Stockholders' Equity (Deficit) (1,362,900)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ --
===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Statements of Operations
From
Inception of
Development
For the Stage on
Years Ended January 1,
December 31, 1997 Through
----------------------- December 31,
1998 1997 1998
--------- --------- ---------
REVENUES $ -- $ -- $ --
EXPENSES
General and administrative 9,261 39,957 49,218
Interest expense 53,100 53,100 106,200
--------- --------- ---------
Total Expenses 62,361 93,057 155,418
--------- --------- ---------
NET LOSS $ (62,361) $ (93,057) $(155,418)
========= ========= =========
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
========= =========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Common Stock Additional
------------------- Paid-In Accumulated
Shares Amount Capital Deficit
------ ------ ------- -------
Inception of development stage,
January 1, 1997 531,422 $53 $(53) $(1,256,700)
Expenses paid on the
Company's behalf -- -- 39,957 --
Net loss for the year ended
December 31, 1997 -- -- -- (93,057)
---------- ------ ------- -----------
Balance, December 31, 1997 531,422 53 39,904 (1,349,757)
March 1, 1998, liquidating
dividend (Note 1a) -- -- -- --
March 13, 1998, common
stock issued for services
at $0.0001 per share 24,050,000 2,405 -- --
Expenses paid on the
Company's behalf -- -- 6,856 --
Net loss for the year ended
December 31, 1998 -- -- -- (62,361)
---------- ------ ------- -----------
Balance, December 31, 1998 24,581,422 $2,458 $46,760 $(1,412,118)
========== ====== ======= ===========
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Statements of Cash Flows
From
Inception of
Development
Stage on
For the January 1,
Years Ended 1997 Through
December 31, December 31,
----------------- ------------
1998 1997 1998
---- ---- ----
CASH FLOWS FROM
OPERATING ACTIVITIES $ (62,361) $ (93,057) $(155,418)
Adjustments to Reconcile Net
Loss to Net Cash Used by
Operating Activities:
Common stock issued for services 2,405 -- 2,405
Increase in accrued interest 53,100 53,100 106,200
--------- --------- ---------
Net Cash (Used) by
Operating Activities (6,856) (39,957) (46,813)
--------- --------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES -- -- --
--------- --------- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES
Capital contributed by shareholder 6,856 39,957 46,813
--------- --------- ---------
Net Cash Provided by
Financing Activities 6,856 39,957 46,813
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS -- -- --
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD -- -- --
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ -- $ -- $ --
========= ========= =========
CASH PAID FOR
Interest $ -- $ -- $ --
Taxes $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Atlantica, Inc. is
presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management, which is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
a. Organization and Business Activities
The name of the Company is Atlantica, Inc (the Company). The Company was
incorporated in the State of Utah on March 3, 1938. The Company name at
that time was Red Hills Mining Company. On February 5, 1953, the Company
changed its name to Allied Oil and Minerals Company. On January 8, 1971,
the Company changed its name to Community Equities Corporation. On March
26, 1996, the Company changed its name to Atlantica, Inc.
The Company had two subsidiaries. Keys Equities, Inc. (Keys), a Florida
corporation was incorporated July 31, 1996. There are no assets,
liabilities or operations in this Company. Allied Equities, Inc. (Allied),
a Florida corporation was incorporated July 15, 1996. On March 1, 1998,
the Company transferred its right, title and interest in a mining claim in
Utah to Allied. The mining claim had a book value of $-0-. On March 1,
1998, the Company distributed the shares of the two subsidiaries to its
shareholders in a liquidating dividend.
The Company has not engaged in any business operations since 1990, and it
was reclassified as a development stage company as of January 1, 1997. The
Company's only activity since that time has consisted of taking actions
necessary to restore and preserve its good standing in the State of Utah.
The Company presently has no assets. The Company intends to continue to
seek out the acquisition of assets, property or a business that may be
beneficial to the Company and its stockholders. In considering whether to
complete any such acquisition, the Board of Directors shall make the final
determination and the approval of stockholders will not be sought unless
required by applicable law, the articles of incorporation or bylaws of the
Company or contract.
b. Reorganization
On February 20, 1998, an agreement and plan of reorganization between
Gregory Aurre and Michael Oliver was made; whereby Mr. Aurre would take
over control of the Company, and Mr. Oliver, the principal stockholder,
sold control of the Company.
On March 13, 1998, a Board of Directors meeting was held to install the
above-mentioned February 20, 1998 agreement. In the meeting, new directors
were voted on making Gregory Aurre President and Director, Amerika Aurre
and Gregory Aurre III as new directors and Gregory Aurre III as secretary
and treasurer.
8
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Bankruptcy
To dismiss the $885,000 mortgage liability and the related accrued
interest of $438,075, which the Company has on its books, the Company
filed for Chapter 7 bankruptcy on March 13, 1998. The Company has been in
negotiations with the mortgagee in hopes of eliminating the liability (see
Note 3).
d. Fiscal Year
The Company operates on a calendar year basis.
e. Basis of Operation
The Company prepares its financial statements and federal income taxes on
the accrual basis of accounting.
f. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
g. Income Taxes
No provision for income taxes has been accrued because the Company has net
operating losses from inception. The net operating loss carryforwards of
approximately $155,000 at December 31, 1998 will expire in 2013. No tax
benefit has been reported in the financial statements because the Company
is uncertain if the carryforwards will expire unused. Accordingly, the
potential tax benefits are offset by a valuation account of the same
amount.
NOTE 2 - ACCRUED INTEREST
Accrued interest has been booked at a rate of six percent (6%) per annum
from January 1, 1990 when the Company guaranteed the mortgages. As of
December 31, 1998, $477,900 had accrued. No demand has been made on the
interest accrued. Management believes that the likelihood that the
interest will need to be paid by the Company is remote as the Company is
not the primary mortgagee.
9
<PAGE>
ATLANTICA, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 3 - MORTGAGE PAYABLE
In 1990, the Company signed as a guarantor of a mortgage. The primary
mortgagee has defaulted on the loan so the Company has recorded the
liability on its books. At no time has the Company been notified to pay
the loan as the guarantor. Management believes the likelihood that the
Company will have to pay the mortgage to be remote.
On February 18, 1999, the Company entered into negotiations with the City
of Miami for a settlement agreement which would release the Company from
the mortgage payable. Under the terms of the agreement, which has not yet
been finalized, the City of Miami agreed to execute and to deliver the
Company a release of lien. In return, the Company has agreed to pay the
City of Miami $10,000 and issue the City 25,000 shares of its common
stock. The agreement is not final and has not been executed.
NOTE 4 - COMMON STOCK
On March 13, 1998, the Company approved a 20-for-1 stock split. After the
split, the Company authorized 25,000,000 shares and changed the par value
from $0.01 to $0.0001. 24,050,000 shares, on this same date, were issued
to the directors of the Company for services rendered, valued at $0.0001
per share. The reverse stock split is reflected on a retroactive basis.
NOTE 5 - RELATED PARTY TRANSACTIONS
Expenses incurred by the Company and its subsidiaries, Allied and Keys,
for reinstatement, legal and filing fees were paid out of pocket by its
former majority shareholder and director. The funds were booked to
additional paid-in capital and are approximately $40,000. No reimbursement
for these expenses paid will be made by the Company. On May 11, 1998, the
shareholders of the Company completed a quasi- reorganization whereby the
accumulated deficit of the Company was offset against paid-in capital to
the extent possible. The quasi-reorganization has been reflected on a
retro-active basis.
Expenses during the years ended December 31, 1998 and 1997 were paid by
the Company's President. Expenses were paid out of pocket by the President
and a contribution of capital was booked at approximately $6,856 and
$34,957, respectively.
NOTE 6 - 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 not established revenues sufficient to cover
its operation costs. The Company is seeking the acquisition of, or merger
with, an existing operating company. Currently management has committed to
covering all operating and other costs until sufficient revenues are
generated.
10
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement") is entered into this 23 day of
Nov., 1998 ("Effective Date"), by and between the City of Miami, a municipal
corporation of the State of Florida ("City")' whose address is P 0 Box 330708,
Miami, Florida 3 3233-0708, and Atlantica, Inc ("Atlantica"), formerly known as
Community Equities Corporation ("Community Equities"), with offices located at
80 Wall Street, Suite 412, New York, New York 10005.
RECITALS
WHEREAS, pursuant to a Loan Agreement dated May 1, 1989 the Housing
Finance Authority of Dade County ("Authority") provided a loan in the amount of
$12,500,000.00 to Arena Square North & South, Ltd. ("Arena Square"), which was
secured by a mortgage ("Authority Mortgage"), for the rehabilitation of multiple
multifamily housing units ("Project"); and
WHEREAS, the City also provided a loan to Arena Square in the amount of
$885,210.00 ("City Loan") for the Project, which was secured by a second
mortgage (City Mortgage"), dated May 14, 1990; and
WHEREAS, Community Equities guaranteed the City Loan ("Guarantee"); and
WHEREAS, Arena Square defaulted under the Authority Mortgage. resulting in
a foreclosure action being brought against Arena Square ("Foreclosure"); and
WHEREAS, as a consequence of the Foreclosure the City Mortszage was
extinguished; and
WHEREAS, notwithstanding the Foreclosure, the Guarantee remained a
liability of Community Equities, and
WHEREAS, Atlantica acquired the assets and liabilities of Community
Equities; and
WHEREAS, on or about March 13, 1998, Atlantica commenced bankruptcy
proceedings (Case No. 98-41 809); and
WHEREAS, according to the trustee in the bankruptcy matter, there are no
assets of Atlantica from which payment may be made to the City; therefore, upon
the conclusion of the bankruptcy proceedings, the City Loan would be discharged;
and
<PAGE>
WHEREAS, although bankruptcy proceedings have commenced, Atlantica is able and
willing to settle this matter with the City,
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, City and Atlantica agree as follows:
1 RECITALS The recitals are true and correct and are hereby incorporated into
and made a part of this Agreement.
2 TERMS:
A ATLANTICA OBLIGATIONS
(i) Atlantica shall pay to the City, the sum of Ten Thousand Dollars
($10,000.00) in two (2) equal payments ("Payments") of Five Thousand Dollars
($5,000.00), the first of such Payments to be made on the Effective Date of this
Agreement The second Payment shall be made to the City on or before December 3
1, 1 998. The Payments shall be made in cash or by cashier's check.
(ii) Within thirty (30) days after the Effective Date, Atlantica
shall transfer and deliver to the City, twenty-five thousand (25,000) shares of
unregistered common stock in Atlantica ("Stock").
(iii) On or before December 31, 1998, Atlantica shall file a form
10SB registration statement with the Securities and Exchange Commission,
thereafter, shares of stock in Atlantica will be traded on the OTC Bulletin
Board
(iv) After such time as Atlantica's stock is traded on the OTC
Bulletin Board, Atlantica shall take whatever steps are necessary to merge
Atlantica with another company ("Merger Company"). Upon the identification of
the Merger Company, Atlantica shall notify the City in writing of the pending
merger and provide the City with any and all documents pertaining to the merger
(v) Within five (5) days after the Effective Date, Atlantica shall
withdrew its bankruptcy petition in Case No. 98-4 1809 (brl).
B CITY OBLIGATIONS
(i) Upon the City's receipt of the Payments in flaIl and the Stock,
the City shall execute and deliver to Atlantica a Release of Lien in favor of
Atlantica, evidencing the full, final and complete satisfaction of the City
Loan, provided the City has received written confirmation from the Bankruptcy
Court that Atlantica's case (Case No. 98-41809 (brl) has been dismissed.
2
<PAGE>
(ii) After such time as Atlantica's stock is traded on the OTC
Bulletin Board and the City is notified by Atlantica that a merger with the
Merger Company is contemplated, City shall provide Atlantica with written
notification of the City's intent to retain ownership of the Stock.
3. NOTICES: All notices or other communications required under this Agreement
shall be in writing and shall be given by hand-delivery or by registered or
certified U.S Mail, return receipt requested, addressed to the other party at
the address indicated herein or to such other address as a party may designate
by notice given as herein provided. Notice shall be deemed given on the day on
which personally delivered, or, if by mail, on the fifth day after being posted
or the date of the actual receipt, whichever is earlier
TO: ATLANTICA, INC. TO: THE CITY
Gregory Aurre, President Office of the City Manager
80 Wall Street 444 SW. 2nd Avenue
Suite 412 10th Floor
New York, New York 10005 Miami, Florida 33130
4. MISCELLANEOUS PROVISIONS:
A. This Agreement shall be construed and enforced according to the laws of
the State of Florida.
B. No waiver or breach of any provision of this Agreement shall constitute
a waiver of any subsequent breach of the same or any other provision hereof and
no waiver shall be effective unless in writing and executed by the appropriate
party(ies) hereto.
C. Should any provision, paragraph, sentence, word or phrase contained in
this Agreement be determined by a court of competent jurisdiction to be invalid,
illegal or otherwise unenforceable under the laws of the State of Florida or the
City of Miami, Florida, such provision, paragraph, sentence, word or phrase
shall be deemed modified to the extent necessary in order to conform with such
laws, or if not modifiable, then same shall be deemed severable, and either
event, the remaining terms and provisions of the Agreement shall remain
unmodified and in full force and effect or limitation of its use.
D. This Agreement shall be binding upon the parties hereto, their heirs,
executors, legal representatives, successors, or assigns
F. This instrument constitutes the sole and only agreement of the parties
relating to the subject matter hereof and correctly sets forth the rights,
duties and obligations of each to the other as of its date. Any prior
agreements, promises,
3
<PAGE>
negotiations, or representations not expressly set forth in this Agreement
are of no force or effect
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their respective officials thereunto duly authorized, this day and
year first above written.
ATTEST: CITY OF MIAMI, a municipal
corporation of the State of Florida
/s/ Walter Foeman, ACC By: /s/ [ILLEGIBLE]
- ----------------------------------- -----------------------------------
Walter Foeman, City Clerk City Manager
ATTEST: ATLANTICA, INC
/s/ [ILLEGIBLE] By: /s/ Gregory Aurre
- ----------------------------------- -----------------------------------
Corporate Secretary Gregory Aurre, President
APPROVED AS TO FORM
AND CORRECTNESS:
/s/ Alejandro Vilarello
- -----------------------------------
Alejandro Vilarello, City Attorney
4
<PAGE>
RELEASE OF LIEN
WHEREAS, the City of Miami, Florida, a municipal corporation of the State
of Florida (hereinafter referred to as "City"), was a subordinate lienholder
defendant in the foreclosure action in Case No. 93-13718 (CA32), Dade County,
Florida ("Foreclosure"), and held a subordinate interest to the foreclosed
mortgage by virtue of the Mortgage Deed dated May 14, 1990, recorded in Official
Records Book 14545, at Page 2948. Public Records of Dade County, Florida (the
"City Mortgage") which encumbered the lands and improvements situated thereon
more particularly described in Official Records Book 14160 on Page 3829 and 3830
(the "Arena Square Project"), all of the Public Records of Dade County, Florida;
and
WHEREAS, the City Mortgage secured a City loan to Arena Square in the
amount of $885,210.00 ("City Loan"); and
WHEREAS, Community Equities Corporation ("Community Equities") guaranteed
the City Loan ("Guarantee"): and
WHEREAS, as a consequence of the Foreclosure the City Mortgage was
extinguished; and
WHEREAS, notwithstanding the Foreclosure, the Guarantee remained a
liability of Community Equities; and
WHEREAS, Atlantica, Inc. ("Atlantica") acquired the assets and liabilities
of Community Equities; and
WHEREAS, on or about March 13, 1998, Atlantica commenced bankruptcy
proceedings; and
WHEREAS, according to the trustee in the bankruptcy matter, there were no
assets of Atlantica from which payment could have been made to the City;
therefore, upon the conclusion of the bankruptcy proceedings, the City Loan
would have been discharged; and
WHEREAS, although bankruptcy proceedings had commenced, Atlantica was able
and willing to settle the matter with the City; and
WHEREAS, pursuant to that certain Settlement Agreement between the City
and Atlantica dated November 23, 1998, the City, inter alia. agreed to execute
and deliver to Atlantica a Release of Lien in favor of Atlantica, evidencing the
full, final and complete satisfaction of the City Loan upon the City's receipt
of Ten Thousand Dollars ($10,000.00), twenty-five thousand (25,000) shares of
unregistered common stock in
1
<PAGE>
Atlantica and written confirmation from the Bankruptcy Court that the bankruptcy
matter had been dismissed (collectively "Conditions Precedent"), and
WHEREAS, all of the Conditions Precedent have been fully and completely
satisfied;
NOW, THEREFORE, the City in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration to the City in hand paid at
the time of execution hereof, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby remises, releases and disclaims of record
any interest or claim the City may have by virtue of the City Mortgage or
Guarantee.
IN WITNESS WHEREOF, the City of Miami, Florida has caused these presents
to be duly executed in its name and its corporate seal to be affixed by its duly
authorized officers this _____ day of _________________, 1999.
ATTEST: CITY OF MIAMI, FLORIDA,
a municipal corporation of the
State of Florida
By:
- ----------------------------------- -----------------------------------
Walter J. Foeman Donald H. Warshaw
City Clerk City Manager
APPROVED AS TO FORM
AND CORRECTNESS:
- -----------------------------------
Alejandro Vilarello
City Attorney
2
<PAGE>
ACKNOWLEDGMENT
STATE OF FLORIDA )
)SS:
COUNTY OF MIAMI-DADE )
Before me, the undersigned authority, personally appeared Donald H.
Warshaw, as City Manager of the City of Miami, Florida, who is personally known
to me or provided ______________________________ as identification, who executed
the foregoing Instrument, who did/did not take an oath, and who acknowledged to
and before me that he executed said instrument for the purposes therein
expressed.
Witnessed my hand and official seal in the County and the State last
aforesaid this ____ day of __________, 1999.
-----------------------------------
Notary Public, State of Florida
-----------------------------------
Printed Name of Notary
-----------------------------------
My Commission Expires:
3
UNITED STATES BANKRUPTCY COURT
Southern District of New York
One Bowling Green
New York, NY 10004-1408
- --------------------------------------------------------------------------------
IN RE: Atlantica, Inc. CASE.: 98-41809
AKA/DBA: Community Equities Corporation
SSN,TAX ID: 43-0976473 Chapter: 7
- --------------------------------------------------------------------------------
NOTICE OF DISMISSAL OF CASE
On December 21, 1998 an order of dismissal was entered by the Honorable Burton
R. Lifland in this Chapter 7 case.
This case is dismissed.
Dated: December 21, 1998 Cecelia G. Morris
Clerk of the Court
