--------------------------------------------------------------------------------
Kirt W. James
PRESIDENT
DP Charters, Inc.
34700 Pacific Coast Highway, Suite 303
Capistrano Beach, CA 92656
(Name and Address of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
--------------------------------------------------------------------------------
WITH A COPY TO:
KARL E. RODRIGUEZ, ESQ
24843 Del Prado, #318
Dana Point, CA 92629
(949) 248-9561
fax (949) 248-1688
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1933
DATE OF REPORT: August 25, 2000
COMMISSION FILE NUMBER: 0-27131
DP CHARTERS, INC.
(Exact name of Registrant as specified in its charter)
Nevada 88-0381258
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
34700 Pacific Coast Highway, Suite 303 Capistrano Beach CA 92624
(Address of principal executive offices) (Zip Code)
INTRODUCTION
Our 1934 Securities Exchange Act registration of our common stock has
become effective during 1999 and cleared SEC Staff Comments on August 24, 2000.
This current report is filed in connection with our application to upgrade the
quotation of our common stock from the NQB Pink Sheets to the OTCBB Over the
Counter Bulletin Board. We wish to submit additional financial statements to the
NASD. Current NASD procedures require that financial statements which it reviews
be filed with the Commission, whether required by the Commission to be filed or
not, to facilitate NASD Staff review. The supplemental financial statements
filed herewith are not more current that those filed in our second quarter
Report on Form 10-QSB, or Form 10-KSB-A4 dated August 22, 2000, or our Form
10-SB-A9 also dated August 22, 2000. The financial statements filed herewith are
older and represent historical information only, primarily for the information
of the NASD.
This Current filing also provides current information concerning the
renewal of our original business plan, after a hiatus of about one and one-half
years, of review and comments by NASD and SEC Staff, as reported in more detail
herein.
ITEM 5. OTHER EVENTS.
(A) FORM 10 CLEAR. Our 1934 Securities Exchange Act Registration of our common
stock, as a class of securities, pursuant to Section 12(g) of that Act, has been
effective for reporting purposes since October 23, 1999. It cleared SEC Staff
Comments in its current form (Form 10-SB-A) on August 24, 2000, for purposes of
consideration for eligibility for OTCBB quotability.
(B) HISTORY AND RENEWAL OF OUR BUSINESS PLAN. This Corporation ("the
Registrant") was duly incorporated in Nevada on December 18, 1997, as DP
Charters, Inc., with the intention of initiating a charter yacht service from
1
<PAGE>
the Dana Point Harbor, Orange County, California. The Registrant later expanded
its business plan to include the organization of scuba dive tours at various
world locations. For various reasons, the consummation of this plan required
that our common stock be qualified for quotation on the OTCBB. During the
process of NASD Staff review in 1999, shortly before the conclusion of our
comment period, NASD rules became effective requiring OTCBB companies be SEC
Reporting Companies. As a result our common stock was approved for NQB Pink
Sheets, but not OTCBB. We filed our Form 10-SB in mid 1999 to meet those
requirements. We engaged with the SEC Staff in extensive review, comments and
revisions of our disclosure until August 24, 2000, when our effective 1934 Act
Registration was cleared of comments.
During the approximate year and one half just described, we were unable to
pursue our business plan, and had no assurance when or if our common stock would
be eligible to apply for quotation on the OTCBB. Now clear of comments, we are
eligible to apply, through a submitting NASD member, for such quotation. There
is no assurance when or if our common stock might be accepted for such quotation
for the OTCBB.
Our Management had determined to renew our original business plan, and to
pursue the purposes for which we were incorporated in December of 1997. This
decision means that Management will pursue OTCBB acceptance, will renew contacts
with tour providers, and will develop a new capital formation strategy to fund
an eventual launch of operations. There is never any guarantee that intended
results will be achieved or achievable.
(C) HISTORY OF AUDITED FINANCIAL STATEMENTS. The following financial
information is historical only, and is not current. Its filing is made to
facilitate its disclosure to the NASD.
(1) EXHIBIT FH-1. Audited Financial Statements for the (short) year ended
December 31, 1997, and for the five months ended May 31, 1998.
(2) EXHIBIT FH-2. Audited Financial Statements for the years ended
December 31, 1998 and 1997, and for the three months ended March 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Dated: August 25, 2000
DP CHARTERS, INC.
by
/s/Kirt W. James /s/J. Dan Sifford, Jr.
Kirt W. James J. Dan Sifford, Jr.
president/director secretary/director
2
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT FH-1
AUDITED FINANCIAL STATEMENTS
FOR THE (SHORT) YEAR ENDED DECEMBER 31, 1997,
AND FOR THE FIVE MONTHS ENDED MAY 31, 1998.
--------------------------------------------------------------------------------
3
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
FINANCIAL STATEMENTS
May 31, 1998 and December 31, 1997
4
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . .6
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . 7
Statements of Operations . . . . . . . . . . . . . . . . 8
Statements of Stockholders' Equity . . . . . . . . . . . 9
Statements of Cash Flows . . . . . . . . . . . . . . . 10
Notes to the Financial Statements . . . . . . . . . . .11
5
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
D P Charters, Inc.
We have audited the accompanying balance sheets of D P Charters, Inc. (a
Development Stage Company) as of May 31, 1998 and December 31, 1997 and the
related statements of operations, stockholders' equity and cash flows for the
five months ended May 31, 1998 and from inception on December 18, 1997 through
December 31, 1997 and May 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
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 D P Charters, Inc. (a
Development Stage Company) as of May 31, 1998 and December 31, 1997 and the
results of its operations and cash flows for the five months ended May 31, 1998
and from inception on December 18, 1997 through December 31, 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no operations and is dependent upon
financing to continue operations. These factors raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in the Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/Crouch, Bierwolf & Chisholm
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
October 16, 1998
6
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Balance Sheets
ASSETS
May 31, December 31,
1998 1997
--------------------------------------------------------------------------------
Current assets
Cash $ 44,956 $ 118,848
--------------------------------------------------------------------------------
Total Current Assets 44,956 118,848
--------------------------------------------------------------------------------
Other Assets
Organizational Costs (Net of
Amortization)(Note 1) 18,333 20,000
--------------------------------------------------------------------------------
Total Other Assets 18,333 20,000
--------------------------------------------------------------------------------
Total Assets $ 63,289 $ 138,848
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 0 $ 0
--------------------------------------------------------------------------------
Stockholders' Equity
Common Stock, authorized
100,000,000 shares of $.001 par value,
issued and outstanding 26,400,000
and 23,808,000 shares respectively 26,400 23,808
Additional Paid in Capital 193,600 115,192
Deficit Accumulated During the
Development Stage (156,711) (152)
--------------------------------------------------------------------------------
Total Stockholders' Equity 63,289 138,848
--------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $ 63,289 $ 138,848
================================================================================
The accompanying notes are an integral part of these financial statements
7
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statements of Operations
From inception
For the on December Deficit
Five Months 18, 1997 Accumulated
Ended through during the
May 31, December 31, development
1998 1997 Stage
--------------------------------------------------------------------------------
Revenues: $ 0 $ 0 $ 0
Expenses:
General & Administrative (156,559) (152) (156,711)
--------------------------------------------------------------------------------
Total Expenses (156,559) (152) (156,711)
--------------------------------------------------------------------------------
Net (Loss) $ (156,559) $ (152) $ (156,711)
--------------------------------------------------------------------------------
Net Loss Per Share $ (0.01) $ (0.00) $ (0.01)
--------------------------------------------------------------------------------
Weighted average shares
outstanding 25,104,000 21,904,000 24,570,667
================================================================================
The accompanying notes are an integral part of these financial statements
8
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statement of Stockholders' Equity
Additional Deficit
Paid-in Accumulated
Capital During the
Common Stock (Discount on Development
Shares Amount Stock) Stage
--------------------------------------------------------------------------------
Balance at beginning
of development stage-
December 18, 1997 0 $ 0 $ 0 $ 0
Shares issued for
organizational costs 20,000,000 20,000 0 0
Shares issued for cash at
$.03125 per share 3,808,000 3,808 115,192 0
Net loss
December 31, 1997 0 0 0 (152)
--------------------------------------------------------------------------------
Balance, December 31,
1997 23,808,000 23,808 115,192 (152)
Shares issued for cash at
$.03125 per share 2,592,000 2,592 78,408 0
Net loss for the five months ended
May 31, 1998 0 0 0 (156,559)
--------------------------------------------------------------------------------
Balance,
May 31, 1998 26,400,000 $ 26,400 $ 193,600 $ (156,711)
================================================================================
The accompanying notes are an integral part of these financial statements
9
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statement of Cash Flows
December
18,1997
For the From inception (inception
Five on December of the
Months 18, 1997 development
Ended through stage) to
May 31, December 31, May 31,
1998 1997 1998
--------------------------------------------------------------------------------
Cash Flows form Operating
Activities
Net loss $ (156,559) $ (152) $(156,711)
Adjustments to reconcile
net loss to net cash
provided by operations
Amortization 1,667 0 1,667
--------------------------------------------------------------------------------
Net Cash Flows used in
Operating Activities (154,892) (152) (155,044)
--------------------------------------------------------------------------------
Cash Flows from Investment
Activities: 0 0 0
--------------------------------------------------------------------------------
Cash Flows from Financing
Activities:
Proceeds from Issuance of stock 81,000 119,000 200,000
--------------------------------------------------------------------------------
Net increase (decrease) in cash (73,892) 118,848 44,956
Cash, beginning of year 118,848 0 0
--------------------------------------------------------------------------------
Cash, end of year $ 44,956 $ 118,848 $ 44,956
================================================================================
Supplemental Cash Flow Information
Cash Paid for:
Interest $ 0 $ 0 $ 0
Taxes $ 0 $ 0 $ 0
The accompanying notes are an integral part of these financial statements
Supplemental Non-cash Disclosure:
In 1997, the shareholders paid $20,000 of organizational costs for the Company.
The Company reimbursed the $20,000 by issuing 20,000,000 shares of common stock.
10
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
May 31, 1998, December 31, 1997
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
D P Charters, Inc., ("the Company") is a Nevada corporation organized on
December 18, 1997. The Company was formed to provide a charter yacht service
from the Dana Point harbor located in Dana Point, Orange County, California. It
is the intent of management to acquire and operate small to medium sized fishing
and pleasure motor yachts.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating losses
totaling approximately $156,000 that will be offset against future taxable
income. These NOL carryforwards begin to expire in the year 2012. No tax
benefit has been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforward will expire unused.
Accordingly, per FASB 109 the potential tax benefits of the loss carryforward
are offset by the valuation of the same amount.
Deferred tax assets and the valuation account is as follows at May 31, 1998
and December 31, 1997.
May 31, December 31,
1998 1997
--------------------------------------------------------------------------------
NOL carrryforward $ 44,308 $ 23
Valuation allowance (44,308) (23)
--------------------------------------------------------------------------------
Total $ 0 $ 0
f. Organizational Costs
In 1997, the shareholders paid $20,000 in organizational costs. The Company
reimbursed the shareholders by issuing 20,000,000 shares of common stock at
$.001 par value. These costs are being amortized on a straight-line method over
a 60 month period beginning January 1, 1998. These costs will be recovered only
if the Company is able to generate a positive cash flow from operations.
11
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
May 31, 1998, December 31, 1997
NOTE 1 - Summary of Significant Accounting Policies (continued)
g. Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements and other
assets involve extensive reliance on management's estimates. Actual results
could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon raising
capital to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to raise additional funds to begin its intended operations.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and developing its business operations in
order to generate significant revenues.
NOTE 4 - Related Party Transactions
During 1998, $32,000 was paid in consulting fees to a company owned by
shareholders of the Company.
12
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT FH-2
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997,
AND FOR THE THREE MONTHS ENDED MARCH 31, 1999.
--------------------------------------------------------------------------------
13
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
FINANCIAL STATEMENTS
March 31, 1999 and December 31, 1998 and 1997
14
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . 16
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . 17
Statements of Operations. . . . . . . . . . . . . . . . .18
Statements of Stockholders' Equity . . . . . . . . . . .19
Statements of Cash Flows . . . . . . . . . . . . . . . .20
Notes to the Financial Statements . . . . . . . . . . .21
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
D P Charters, Inc.
We have audited the accompanying balance sheets of D P Charters, Inc. (a
Development Stage Company) as of March 31, 1999 and December 31, 1998 and 1997
and the related statements of operations, stockholders' equity and cash flows
for the three months ended March 31, 1999 and the years ended December 31, 1998
and 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
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 D P Charters, Inc. (a
Development Stage Company) as of March 31, 1999 and December 31, 1998 and 1997
and the results of its operations and cash flows for the three months ended
March 31, 1999 and the years ended December 31, 1998 and 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no operations and is dependent upon
financing to continue operations. These factors raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in the Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/Crouch, Bierwolf & Chisholm
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
July 8, 1999
16
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Balance Sheets
ASSETS
March 31, December 31,
1999 1998 1997
--------------------------------------------------------------------------------
Current assets
Cash . . . . . . . . . . . . . . . $ 5,996 $ 12,321 $ 118,848
----------- ----------- -------------
Total Current Assets . . . . . . . . . . 5,996 12,321 118,848
----------- ----------- -------------
Other Assets
Organizational Costs (Net of
Amortization)(Note 1) . . . . . . . . . 0 16,000 20,000
----------- ----------- -------------
Total Other Assets . . . . . . . . . . . . . 0 16,000 20,000
----------- ----------- -------------
Total Assets . . . . . . . . . $ 5,996 $ 28,321 $ 138,848
=========== =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities . . . . . . . . $ 0 $ 0 $ 0
----------- ----------- -------------
Stockholders' Equity
Common Stock, authorized
100,000,000 shares of $.001 par value,
issued and outstanding 26,400,000,
26,400,000 and 23,808,000 shares,
respectively . . . . . . . . . . . . 26,400 26,400 23,808
Additional Paid in Capital . . . . 193,600 193,600 115,192
Deficit Accumulated During the
Development Stage . . . . . . . . (214,004) (191,679) (152)
----------- ----------- -------------
Total Stockholders' Equity . . . . 5,996 28,321 138,848
----------- ----------- -------------
Total Liabilities and
Stockholders' Equity . . . . . . . . $ 5,996 $ 28,321 $ 138,848
=========== =========== =============
The accompanying notes are an integral part of these financial statements
17
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statements of Operations
From inception
For the Three For the on December Deficit
Months Year 18, 1997 Accumulated
Ended Ended through during the
March 31, December 31, December 31 development
1999 1998 1997 Stage
--------------------------------------------------------------------------------
Revenues: $ 0 $ 0 $ 0 $ 0
Expenses:
General & Administrative (7,325) (191,527) (152) (199,004)
---------- ---------- ----------- ----------
Total Expenses (7,325) (191,527) (152) (199,004)
---------- ---------- ----------- ----------
Net (Loss) Before Cumulative
Effect of Accounting Change (7,325) (191,527) (152) (199,004)
---------- ---------- ----------- ----------
Cumulative Effect
of Accounting Change (15,000) 0 0 (15,000)
---------- ---------- ----------- ----------
Net (Loss) $ (22,325) $(191,527) $ (152) $(214,004)
---------- ---------- ----------- ----------
Net (Loss) Per Share:
Loss before cumulative effect
of accounting change 0 0 0 (0.01)
Cumulative Effect
of Accounting Change 0 0 0 0
---------- ---------- ----------- ----------
Net (Loss) Per Share $ 0 $ 0 $ 0 $ (0.01)
========== ========== =========== ==========
Weighted average
shares outstanding 26,400,000 26,272,000 21,904,000 25,960,123
========== ========== =========== ==========
The accompanying notes are an integral part of these financial statements
18
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statement of Stockholders' Equity
Additional Deficit
Paid-in Accumulated
Capital During the
Common Stock (Discount on Development
Shares Amount Stock) Stage
--------------------------------------------------------------------------------
Balance at beginning of development
stage-December 18, 1997 0 $ 0 $ 0 $ 0
Shares issued for
organizational costs 20,000,000 20,000 0 0
Shares issued for cash at
$.03125 per share 3,808,000 3,808 115,192 0
Net loss December 31, 1997 0 0 0 (152)
---------- -------- -------- ---------
Balance, December 31, 1997 23,808,000 23,808 115,192 (152)
Shares issued for cash
at $.03125 per share 2,592,000 2,592 78,408 0
Net loss December 31, 1998 0 0 0 (191,527)
---------- -------- -------- ---------
Balance, December 31, 1998 26,400,000 26,400 193,600 (191,679)
Net loss for the three months
ended March 31, 1999 0 0 0 (22,325)
---------- -------- -------- ---------
Balance, March 31, 1999 26,400,000 $26,400 $ 193,600 $ (214,004)
========== ======== ========= ============
The accompanying notes are an integral part of these financial statements
19
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Statement of Cash Flows
December 18,
1997 inception
For the three of the
Months development
Ended stage) to
March 31, December 31, March 31,
1999 1998 1997 1998
--------------------------------------------------------------------------------
Cash Flows form Operating
Activities
Net loss $ (22,325) $ (191,527) $ (152) $ (214,004)
Adjustments to reconcile
net loss to net cash
provided by operations
Amortization 16,000 4,000 0 20,000
--------------------------------------------------------------------------------
Net Cash Flows used in
Operating Activities (6,325) (187,527) (152) (194,004)
--------------------------------------------------------------------------------
Cash Flows from Investment
Activities: 0 0 0 0
Cash Flows from Financing
Activities:
Proceeds from Issuance of stock 0 81,000 119,000 200,000
--------------------------------------------------------------------------------
Net increase (decrease) in cash (6,325) (106,527) 118,848 5,996
Cash, beginning of year 12,321 118,848 0 0
--------------------------------------------------------------------------------
Cash, end of year $ 5,996 $ 12,321 $118,848 $ 5,996
================================================================================
Supplemental Cash Flow Information
Cash Paid for:
Interest $ 0 $ 0 $ 0 $ 0
Taxes $ 0 $ 0 $ 0 $ 0
Supplemental Non-cash Disclosure:
In 1997, the shareholders paid $20,000 of organizational costs for the Company.
The Company reimbursed the $20,000 by issuing 20,000,000 shares of common stock.
The accompanying notes are an integral part of these financial statements
20
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
March 31, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
D P Charters, Inc., ("the Company") is a Nevada corporation organized on
December 18, 1997. The Company was formed to provide a charter yacht service
from the Dana Point harbor located in Dana Point, Orange County, California but
operations never commenced. It is the intent of management to seek a viable
business operation to acquire or to merge with.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating losses
totaling approximately $199,004 that will be offset against future taxable
income. These NOL carryforwards begin to expire in the year 2012. No tax
benefit has been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforward will expire unused.
Accordingly, per FASB 109 the potential tax benefits of the loss carryforward
are offset by the valuation of the same amount.
Deferred tax assets and the valuation account is as follows at March 31,
1999 and December 31, 1998 and 1997.
March 31, December 31,
1999 1998 1997
--------------------------------------------------------------------------------
NOL carrryforward $ 60,860 $ 58,005 $ 23
Valuation allowance (60,860) (58,005) (23)
--------------------------------------------------------------------------------
Total $ 0 $ 0 $ 0
================================================================================
f. Organizational Costs
In 1997, the shareholders paid $20,000 in organizational costs. The Company
reimbursed the shareholders by issuing 20,000,000 shares of common stock at
$.001 par value. These costs were being amortized on a straight-line method
over a 60 month period beginning January 1, 1998, however, during January 1999
the remaining balance was written off in connection with a change in accounting
principle (See Note 5). These costs will be recovered only if the Company is
able to generate a positive cash flow from operations.
21
<PAGE>
D P CHARTERS, INC.
(a Development Stage Company)
Notes to The Financial Statements
March 31, 1999, December 31, 1998 and 1997
NOTE 1 - Summary of Significant Accounting Policies (continued)
g. Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements and other
assets involve extensive reliance on management's estimates. Actual results
could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon raising
capital to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to raise additional funds to begin its intended operations.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and developing its business operations in
order to generate significant revenues.
NOTE 4 - Related Party Transactions
During 1999 and 1998, $5,000 and $58,500, respectively was paid in consulting
fees to a company owned by shareholders of the Company.
NOTE 5 - Change in Accounting Principles
During the three months ended March 31, 1999, the Company changed its method of
amortization of organizational costs in accordance with SOP 98-5 and expensed
the remaining balance. The effect of this change was to decrease net income for
the three months ended March 31, 1999 by $15,000 ($0.00 per share).
22
<PAGE>
