<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES AND EXCHANGE ACT OF 1934
PAGEACTIVE HOLDINGS, INC.
-------------------------
(Exact name of registrant as specified in its charter)
NEVADA 88-0292249
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(State of organization) (I.R.S. Employer Identification No.)
318 N. CARSON ST., #208, CARSON CITY, NV 89701
--------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (954) 474-8177
Registrant's Agent: ParaCorp Incorporated, 318 N. Carson St., #208, Carson City,
NV 89701
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share
Preferred Stock, $0.001 par value per share
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
BACKGROUND
PageActive Holdings, Inc. (the "Company") is a Nevada corporation formed on
December 18, 1992. Its principal place of business is located at 318 N. Carson
St., #208, Carson City, NV 89701. The Company was originally incorporated as The
Flintlock Company. Later it was necessary for the Company to change its name to
The Old American Flintlock Company when it was reinstated on January 9, 1996.
Then, on February 12, 1998, the Company changed its name to American Flintlock
Company. The latest change occurred on May 18, 1999, when the Company once again
changed its name to Page Active Holdings, Inc. in anticipation of its new
business plan as discussed herein. The Company has been in the developmental
stage since inception and has no operating history other than organizational
matters.
The Company was incorporated by Mr. Lewis Eslick, who was a former director,
officer, and shareholder of the Company. Mr. Eslick was an officer and director
of the Company from December 18, 1992 through February 16, 1998 and a
shareholder from December 18, 1992 through March 11, 1993. He no longer holds
any position with the Company, and holds none of the Company's stock.
Initially, shares of common stock of the Company were issued to Mr. Lewis Eslick
and Mrs. Leslie Eslick, both of whom constituted the original board of the
Company. Mrs. Eslick was issued 1,950,000 shares of common stock, while Mr.
Eslick received 2,150,000 shares. On March 11, 1993, Mr. Eslick sold his shares
to six friends and business acquaintances in transactions exempt from
registration pursuant to section 4(1) of the Securities Act of 1933, as amended
(the "Act"). During July 1993, three of those individuals sold or gifted shares
to a total of 30 individuals in transactions that were also exempt from
registration pursuant to section 4(1). Beginning in July, 1999 to October, 1999,
the shareholders made a series of transfers, which resulted in 1,120
shareholders, as of October 4, 1999. These 1999 transfers were made in
open-market transactions on the OTC-Bulletin Board. As of the date of this
Registration Statement, the Company has 1,207 shareholders.
Originally, the Company's Articles of Incorporation authorized 5,000,000 shares
of Common Stock with a par value of $0.001 per share, and 1,000,000 shares of
Preferred Stock with a par value of $0.001 per share. On February 12, 1998, the
Company amended its Articles of Incorporation to increase the authorized capital
stock to 50,000,000 shares of Common Stock with the same par value, and
10,000,000 shares of Preferred Stock with the same par value.
Upon her resignation from all positions with the Company and agreement, the
Company cancelled the certificate issued to Mrs. Leslie Eslick for the 1,950,000
restricted shares on May 14, 1999, which made the then issued and outstanding
stocks 2,150,000. This decision was later ratified by the Company on June 8,
1999. On May 18, 1999, Company approved a forward stock split to be applied to
the 2,150,000 issued and outstanding shares on a 5:1 basis, increasing the total
issued and outstanding shares to 10,750,000.
In May 1999, the Company raised $418,946 through the private sale of 8,378,920
shares to one entity at a purchase price of $0.05 per share. The shares have no
registration rights and were issued in accordance with Rule 144. There are
currently 19,128,920 shares issued and outstanding, of which 9,378,920 shares
are restricted securities under Rule 144.
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On June 8, 1999, the Company designated 5,000,000 shares of the preferred stock
as Series "A." The Series "A" preferred stock is entitled to eleven votes,
noncumulative dividends as determined by the board, is not entitled to any
distributions of the assets of the Company in the event of any liquidation,
dissolution, or winding up, and will have limited registration rights. None of
the Series "A" has been issued.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules, and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions.
BUSINESS OF THE COMPANY
The Company's plan is to seek, investigate, and if such investigation warrants,
acquire an interest in one or more business opportunities presented to it by
persons or firms desiring the perceived advantages of a publicly held
corporation. At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or company for
investigation and evaluation. Management is actively seeking acquisition
candidates. The Company will not restrict its search to any specific business,
industry, or geographical location, and may participate in business ventures of
virtually any kind or nature. Discussion of the proposed business under this
caption and throughout this Registration Statement is purposefully general and
is not meant to restrict the Company's virtually unlimited discretion to search
for and enter into a business combination.
The Company may seek a combination with a firm which only recently commenced
operations, or a developing company in need of additional funds to expand into
new products or markets or seeking to develop a new product or service, or an
established business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to be easier to
raise by a public company. In some instances, a business opportunity may involve
acquiring or merging with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statutes) for all
shareholders, and other items. Potentially available business opportunities may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Management believes that the Company may be able to benefit from the use of
"leverage" to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available funds
to acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities. The borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired business. If that business
is not able to generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender would be able
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to exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquire a business, may correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms or availability of financing
for any acquisition by the Company. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as during periods
of lower interest rates, because the investment in the business held on a
leveraged basis will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders from which the
Company may obtain funds for purposes of a leveraged buy-out may impose
restrictions on the future borrowing, distribution, and operating policies of
the Company. It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the Company.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the Company
will offer owners of businesses the opportunity to acquire a controlling
ownership interest in a public company at substantially less cost than is
required to conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing financial statements, agreements, and related reports and
documents. Nevertheless, the officers and directors of the Company have not
conducted market research and are not aware of statistical data which would
support the perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any loans to any
prospective merger or acquisition candidates or to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer.
SOURCES OF OPPORTUNITIES
The Company will seek a potential business opportunities from all known sources,
but will rely principally on personal contacts of its officers and directors as
well as indirect associations between them and other business and professional
people. It is not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or reorganizations.
Management will rely upon their own efforts and, to a much lesser extent, the
efforts of the Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be utilized by the
Company to effectuate its business purposes described herein. There have been no
discussions, understandings, contracts or agreements with any outside
consultants and none are anticipated in the future.
As is customary in the industry, the Company may pay a finder's fee for locating
an acquisition prospect. If any such fee is paid, it will be approved by the
Company's Board of Directors and will be in accordance with the industry
standards. Such fees are customarily between 1% and 10% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 10% on a $1,000,000 transaction ratably down to 1% in
a $4,000,000 transaction. Management has adopted a policy that such a finder's
fee or real estate brokerage fee could, in certain circumstances, be paid to any
employee, officer, director or 5% shareholder of the Company, if such person
plays a material
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role in bringing a transaction to the Company. While the Company presently has
no agreements to pay finder's fees, it may in the future enter into such
agreements and may pay finder's fees in cash or securities (equity or debt).
The payment of a finder's fee could become a factor in negotiations for an
acquisition. Further, the payment of a finder's fee could present conflicts of
interest if that payment is made to an affiliate of the Company or an affiliate
of the company to be acquired.
The Company will not have sufficient funds to undertake any significant
development, marketing, and manufacturing of any products which may be acquired.
Accordingly, if it acquires the rights to a product, rather than entering into a
merger or acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for which the
Company would probably be required to give up a substantial portion of its
interest in any acquired product. There is no assurance that the Company will be
able either to obtain additional financing or to interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
At this time, the Company does not plan on using any notices or advertisements
in its search for business opportunities.
EVALUATION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company. Management intends to
concentrate on identifying prospective business opportunities which may be
brought to its attention through present associations with management. In
analyzing prospective business opportunities, management will consider, among
other factors, such matters as the opportunity's:
1. available technical, financial and managerial resources;
2. working capital and other financial requirements;
3. history of operation, if any;
4. prospects for the future;
5. present and expected competition;
6. quality and experience of management services which may be available
and the depth of that management;
7. potential for further research, development or exploration;
8. specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company;
9. the potential for growth or expansion;
10. potential for profit;
11. perceived public recognition or acceptance of products, services or
trades; and
12. name identification and/or branding.
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors.
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Opportunities in which the Company participates will present certain risks, many
of which cannot be identified adequately prior to selecting a specific
opportunity. The Company's shareholders must, therefore, depend on Company
management to identify and evaluate such risks. Promoters of some opportunities
may have been unable to develop a going concern or may present a business in its
development stage (in that it has not generated significant revenues from its
principal business activities prior to the Company's participation). Even after
the Company's participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by the Company and,
therefore, its shareholders.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention as well as
substantial costs for accountants, attorneys, and others. If a decision is made
not to participate in a specific business opportunity, the costs incurred in the
related investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a suitable target.
Management does not believe the Company will generate revenue without finding
and completing a transaction with a suitable target company. If no such target
is found, therefore, no return on an investment in the Company will be realized,
and there will not, most likely, be an active market for the Company's stock.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a transaction is
complete, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the Company's officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors without a vote
of the Company's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the Company's
Common Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such event, the shareholders of the
Company, including investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.
The manner in which the Company participates in an opportunity with a target
company will depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the
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management of the opportunity, and the relative negotiating strength of the
Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their shareholdings
in the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all likelihood, hold
a lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
then shareholders, including purchasers in this offering.
Management may advance funds which shall be used by the Company in identifying
and pursuing agreements with target companies. Management anticipates that these
funds will be repaid from the proceeds of any agreement with the target company,
and that any such agreement may, in fact, be contingent upon the repayment of
those funds.
The Company presently has no plans, proposals, arrangements, or understandings
for the sale or issuance of additional securities by the Company prior to the
location of an acquisition or merger candidate. Additionally, the Company will
not borrow funds and use the proceeds to make payments to any promoters or
management of the Company or their affiliates or associates.
INTELLECTUAL PROPERTY
None.
NEEDED GOVERNMENTAL APPROVALS
The Company is not currently subject to direct regulation by any domestic or
foreign governmental agency, other than regulations applicable to businesses
generally, and laws or regulations directly applicable to access to online
commerce.
COMPETITION
The Company is an insignificant participant among firms which engage in business
combinations with, or financing of, development-stage enterprises. There are
many established management and financial consulting companies and venture
capital firms which have significantly greater financial and personal resources,
technical expertise and experience than the Company. In view of the Company's
limited financial resources and management availability, the Company will
continue to be at significant competitive disadvantage vis-a-vis the Company's
competitors.
EMPLOYEES
The Company's only employee at the present time is Earl T. Shannon, its
President, Secretary, and Treasurer. Mr. Shannon is also a director of the
Company. The Company believes that its employee relationships are satisfactory.
Long term, the Company will attempt to hire additional employees as needed based
on its growth rate.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements of the Company
included herewith.
OVERVIEW.
The Company has had no operations nor revenues since its inception.
PLAN OF OPERATION - GENERAL
The primary activity of the Company currently involves seeking a company or
companies that it can acquire or with whom it can merge. The Company has not
selected any company as an acquisition target or merger partner and does not
intend to limit potential candidates to any particular field or industry, but
does retain the right to limit candidates, if it so chooses, to a particular
field or industry. The Company's plans are in the conceptual stage only. As
such, the Company can be defined as a "shell" company, whose sole purpose at
this time is to locate and consummate a merger or acquisition with a private
entity.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules, and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan.
Mr. Shannon's salary is being paid with the funds raised in the Company's May
1999 private offering. As discussed in Liquidity and Capital Resources below,
the Company will need to raise additional capital in the next twelve months to
support its operations, including Mr. Shannon's salary.
REGULATION AND TAXATION
The Investment Company Act of 1940 defines an "investment company" as an issuer
which is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading securities. While the Company does not intend
to engage in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The Company could be
expected to incur significant registration and compliance costs if required to
register under the Investment Company Act of 1940. Accordingly, management will
continue to review the Company's activities from time to time with a view toward
reducing the likelihood the Company could be classified as an "investment
company".
The Company intends to structure a merger or acquisition in such manner as to
minimize Federal and state tax consequences to the Company and to any target
company.
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RESULTS OF OPERATIONS
The following table set forth, for the last two fiscal years, as well as
cumulative from inception, selected financial information for the Company. The
Company is a development stage company as defined in Statement of Financial
Accounting Standards No. 7, "Accounting and Reporting by Development Stage
Enterprises." The Company is devoting substantially all of its present efforts
to establish a new business and its planned principal operations have not yet
commenced. All losses accumulated since inception have been considered as part
of the Company's development stage activities.
<TABLE>
<CAPTION>
------------------------------- ------------------------- -------------------------- ------------------------------
Year Ended Year Ended Period from Inception
December 31, 1999 December 31, 1998 (December 18, 1992) to
December 31, 1999
------------------------------- ------------------------- -------------------------- ------------------------------
<S> <C> <C> <C>
Net revenue $-0- $ -0- $ -0-
------------------------------- ------------------------- -------------------------- ------------------------------
Cost of revenue $-0- $ -0- $ -0-
------------------------------- ------------------------- -------------------------- ------------------------------
Gross profit $-0- $ -0- $ -0-
------------------------------- ------------------------- -------------------------- ------------------------------
General and $93,368 $960 $98,989
administrative expenses
------------------------------- ------------------------- -------------------------- ------------------------------
Net loss $(93,368) $(960) $(98,989)
------------------------------- ------------------------- -------------------------- ------------------------------
Net loss per share, $(0.01) $-0- $(0.01)
basic and diluted
------------------------------- ------------------------- -------------------------- ------------------------------
Weighted average 16,436,763 11,250,000 16,436,763
shares outstanding, basic and
diluted
------------------------------- ------------------------- -------------------------- ------------------------------
</TABLE>
FISCAL YEAR ENDED DECEMBER 31, 1999 AS COMPARED TO FISCAL YEAR ENDED DECEMBER
31, 1998
REVENUES
The Company had no revenues for the fiscal years ended December 31, 1999 and
December 31, 1998.
GENERAL AND ADMINISTRATIVE EXPENSES
The Company incurred costs of $93,368 for the fiscal year ended December 31,
1999 as compared to costs of $960 for the fiscal year ended December 31, 1998.
The increase in costs is the result of ramping up the Company which was dormant
in 1998. The 1999 costs consist of the following: advertising and marketing:
$1,675; non-cash compensation: $20,000; auto expenses: $4,413; payroll: $35,000;
payroll taxes: $3,150; professional fees: $30,568; travel and entertainment:
$3,329; less interest income of $(4,767).
NET LOSS
As the Company had no revenues and only expenses in 1999 and 1998, the net loss
for each year, consisting entirely of the expenses of the Company, was $93,368
for the fiscal year ended December 31, 1999 and $960 for the fiscal year ended
December 31, 1998.
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LIQUIDITY AND CAPITAL RESOURCES
In May 1999, the Company raised $418,946 through the private sale of the
8,378,920 shares to one entity at a purchase price of $0.05 per share. This
private offering is exempt from the registration requirements of the Act
pursuant to Section 4(2) of the Act.
The Company will need to raise additional capital in the next twelve months to
support its operations. This capital may be raised privately or publicly. As of
the date of this document, the Company has no commitments for raising additional
financing.
At December 31, 1999, the Company had outstanding current liabilities of $9,106,
consisting of accrued expenses.
The Company does not believe that inflation has had a significant impact on its
operations since inception of the Company.
The statements contained in this section include projections of future results
and "forward-looking statements" as that term is defined in Section 27A of the
Act, and Section 21E of the Exchange Act. All statements that are included in
this Registration Statement, other than statements of historical fact, are
forward-looking statements. Although Management believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in these statements.
ITEM 3. DESCRIPTION OF PROPERTY
The Company neither owns nor leases any real property at this time. The Company
does have the use of a limited amount of office space from its Resident Agent,
Paracorp Incorporated, located at 318 N. Carson St., #208, Carson City, NV
89701, at no cost to the Company, and management expects this arrangement to
continue. The Company pays its own charges for long distance telephone calls and
other miscellaneous secretarial, photocopying, and similar expenses. This is a
verbal agreement between the Resident Agent and the Board of Directors. Neither
Paracorp Incorporated nor any of its officers or directors serve as officers or
directors of the Company, or are holders of 5% or more of the Company's common
stock.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the date of this Prospectus by:
(i) each stockholder known by the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock, (ii) each officer and
director of the Company, and (iii) all directors and officers as a group.
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<TABLE>
<CAPTION>
NAME/ADDRESS SHARES BENEFICIALLY
TITLE OF CLASS OF OWNER OWNED PERCENTAGE OWNERSHIP
<S> <C> <C> <C>
Common Earl T. Shannon 500,0001 3%
P.O. Box 7650
Ft. Lauderdale, FL 33338-7650
Common Ronald W. Tupper -0- -0-
P.O. Box 11587,
Bainbridge Island, WA 98110
Common Matthew Gilbert -0- -0-
110 NE 16th Terrace
Ft. Lauderdale, FL 33301
All officers and directors as a group (3 people) 500,000 3%
Common Bekam Investments Ltd.
9461 Charleville Boulevard 8,378,920 44%
Suite 615
Beverly Hills, CA 90212
</TABLE>
-----------------------
1 Consisting of 500,000 options to purchase shares of common stock of the
Company exercisable at $0.01 per share until May 20, 2004.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The members of the Board of Directors of the Company serve until the next annual
meeting of the stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors.
There are no agreements for any officer or director to resign at the request of
any other person, and none of the officers or directors named below are acting
on behalf of, or at the direction of, any other person.
Information as to the directors and executive officers of the Company is as
follows:
<TABLE>
<CAPTION>
NAME/ADDRESS AGE POSITION
<S> <C> <C>
Earl T. Shannon 33 President/Secretary/Treasurer/Director
P.O. Box 7650
Ft. Lauderdale, FL 33338-7650
Ronald W. Tupper 68 Director
P.O. Box 11587,
Bainbridge Island, WA 98110
Matthew Gilbert 30 Director
110 NE 16th Terrace
Ft. Lauderdale, FL 33301
</TABLE>
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EARL T. SHANNON; PRESIDENT/SECRETARY/TREASURER/DIRECTOR. Earl T. Shannon has
been Officer and Director of the Company since June 8, 1999. From January 1997
and continuing through the present, Mr. Shannon has been the President of
Winthrop Venture Management, Inc., an investment management company based in
Fort Lauderdale, Florida. Winthrop Venture Management, Inc. is also the General
Partner of the Winthrop Venture Fund, Ltd., a private investment fund. From
November 1988 and continuing through the present, Mr. Shannon is President of
Esha, Inc.
RONALD W. TUPPER; DIRECTOR. Ronald W. Tupper has been a Director of the Company
since June 8, 1999. Mr. Tupper has been retired for at least the past five
years, in which he devotes his time to investing. Prior to his retirement, Mr.
Tupper has been an investor with a background of experience in a variety of
areas including plastics manufacturing, the music licensing business, retail
clothing, and banking. He was also involved in several federal anti-poverty
programs including the establishing of Head Start programs on Indian
reservations. After receiving his Ph.D in educational psychology he worked with
children with disabilities in the public schools and later went into private
practice specializing in child and family problems.
MATTHEW GILBERT; DIRECTOR. Matthew Gilbert has been a Director of the Company
since June 8, 1999. From May 1999 and continuing through the present, Mr.
Gilbert has been the Chairman and CEO of Broadbandit, Inc., an internet
marketing communications firm based in Ft. Lauderdale, Florida. In December
1997, he was hired to build the interactive media arm of Young & Rubicam in
Asia, as Founder, Vice-President and Regional Director of Brand Dialogue, based
in Singapore. In February 1997, he joined Wit Capital, a start-up company
seeking to "level the investment playing field" by partnering with large
investment banks to offer IPO shares to the public, where he helped set up and
market the world's "first full-service investment bank and brokerage on the
internet." From 1994 through 1996, he was Vice-President for DMB&B Inc., a
national interactive company which produces multimedia marketing assignments.
BLANK CHECK EXPERIENCE
None of the officers or directors have experience with blank-check companies.
The current officers and directors of the Company are not involved in any other
current blank check offerings nor have the current officers and directors of the
Company been involved in any blank check offerings in the past.
FAMILY RELATIONSHIPS
Mr. Earl T. Shannon, President, Secretary, Treasurer, and a Director of the
Company, is the nephew of Mr. Ronald W. Tupper, a Director of the Company. There
are no other family relationships between any of the officers and directors of
the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has not established any committees.
CONFLICTS OF INTEREST
Insofar as the officers and directors are engaged in other business activities,
the officers and directors of the Company may in the future become shareholders,
officers or directors of other companies which may be formed for the purpose of
engaging in business activities similar to those conducted by the Company. The
Company does not currently have a right of first refusal pertaining to
opportunities that come to
11
<PAGE>
management's attention insofar as such opportunities may relate to the Company's
proposed business operations.
The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director.
The current officers and directors have no present plans to work with or promote
any other blank check entities.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act of
1933 and the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company has entered into an Employment Agreement with Mr. Earl T. Shannon,
the Director and sole Officer, who is also the only employee of the Company.
Within the terms of the Agreement, the Company shall pay Mr. Shannon a yearly
salary, as noted in the table below, as well as a stock option right to purchase
up to 500,000 shares of common stock of the Company for $0.01 per share. Mr.
Shannon is to devote a reasonable amount of his time and attention to the
Company. Mr. Shannon's salary is being paid with the funds raised in the
Company's May 1999 private offering.
12
<PAGE>
Summary Compensation Table
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------------------------------------------------------
AWARDS PAYOUTS
------------------------------------------
SECURITIES
OTHER RESTRICTED UNDERLYING LTIP ALL
ANNUAL STOCK AWARDS OPTIONS / PAYOUTS OTHER
NAME AND POSITION YEAR SALARY ($) BONUS ($) COMP. ($) ($) SARS (#) ($) COMP. ($)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earl T. Shannon, President,
Secretary and Treasurer 1999 $60,000(2) -0- -0- -0- 500,000 -0- -0-
</TABLE>
----------------
(2) Under the terms of the Employment Agreement, the Company is obligated to
pay Mr. Earl T. Shannon a reasonably monthly automobile allowance as well
as paying for the reasonable costs of medical insurance coverage on behalf
of Mr. Shannon.
OPTION /SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF TOTAL OPTIONS
NUMBER OF SECURITIES / SARS GRANTED TO EXERCISE OR
UNDERLYING OPTIONS / EMPLOYEES IN LAST FISCAL BASE PRICE
NAME SARS GRANTED (#) YEAR ($/SH) EXPIRATION DATE
<S> <C> <C> <C> <C>
Earl T. Shannon, President and
Director 500,000 100% $.01/sh May 20, 2004
</TABLE>
13
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of 50,000,000
shares of Common Stock, $0.001 par value per share, of which 19,128,920 are
issued and outstanding. The shares are non-assessable, without pre-emptive
rights, and do not carry cumulative voting rights. Holders of common shares are
entitled to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without pre-emptive
rights, and do not carry cumulative voting rights. Holders of common shares are
entitled to share ratably in dividends, if any, as may be declared by the
Company from time-to-time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the holders of shares of
common stock are entitled to share on a pro-rata basis all assets remaining
after payment in full of all liabilities.
Management is not aware of any circumstances in which additional shares of any
class or series of the Company's stock would be issued to management or
promoters, or affiliates or associates of either.
PREFERRED STOCK
The Company's Articles of Incorporation authorizes the issuance of 10,000,000
shares of preferred stock, $0.001 par value per share, none of which have been
issued. The Company currently has no plans to issue any preferred stock. The
Company's Board of Directors has the authority, without action by the
shareholders, to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other rights
of such series. The preferred stock, if and when issued, may carry rights
superior to those of common stock; however no preferred stock may be issued with
rights equal or senior to the preferred stock without the consent of a majority
of the holders of then-outstanding preferred stock.
The Company considers it desirable to have preferred stock available to provide
increased flexibility in structuring possible future acquisitions and
financings, and in meeting corporate needs which may arise. If opportunities
arise that would make the issuance of preferred stock desirable, either through
public offering or private placements, the provisions for preferred stock in the
Company's Certificate of Incorporation would avoid the possible delay and
expense of a shareholder's meeting, except as may be required by law or
regulatory authorities. Issuance of the preferred stock could result, however,
in a series of securities outstanding that will have certain preferences with
respect to dividends and liquidation over the common stock which would result in
dilution of the income per share and net book value of the common stock.
Issuance of additional common stock pursuant to any conversion right which may
be attached to the terms of any series of preferred stock may also result in
dilution of the net income per share and the net book value of the common stock.
The specific terms of any series of preferred stock will depend primarily on
market conditions, terms of a proposed acquisition or financing, and other
factor existing at the time of issuance. Therefore it is not possible at this
time to determine in what respect a particular series of preferred stock will be
superior to the Company's common stock or any other series of preferred stock
which the Company may issue. The Board of Directors does not have any specific
plan for the issuance of preferred stock at the present time, and does not
intend to issue any preferred stock at any time except on terms which it deems
to be in the best interest of the Company and its shareholders.
14
<PAGE>
The issuance of preferred stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. Further, certain provisions of Nevada law could delay or
make more difficult a merger, tender offer, or proxy contest involving the
Company. While such provisions are intended to enable the Board of Directors to
maximize shareholder value, they may have the effect of discouraging takeovers
which could be in the best interests of certain shareholders. There is no
assurance that such provisions will not have an adverse effect on the market
value of the Company's stock in the future.
On June 8, 1999, the Company designated 5,000,000 shares of the preferred stock
as Series "A." The Series "A" preferred stock is entitled to eleven votes,
noncumulative dividends as determined by the board, is not entitled to any
distributions of the assets of the Company in the event of any liquidation,
dissolution, or winding up, and will have limited registration rights. None of
the Series "A" has been issued.
SHARES ELIGIBLE FOR FUTURE SALE
Of the 19,128,920 shares of Common Stock issued and outstanding as of the date
of this document, 9,378,920 shares are "restricted securities" as that term is
defined under Rule 144 promulgated under the Act, and will become eligible for
sale in the public market subject to the provisions of Rule 144. In general,
under Rule 144, a person (or persons whose shares are aggregated) who has
satisfied a one-year holding period may sell restricted securities in ordinary
brokerage transactions or in transactions directly with a market maker within
any three-month period limited to a number of shares which does not exceed the
greater of one percent of the Company's then-outstanding Common Stock or the
average weekly trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits the sale (without any quantity limitations) of "restricted
securities " by a person who is not an affiliate of the issuer and who has
satisfied a two-year holding period. Future sales of such shares could have an
adverse effect on the market price of the Common Stock of the Company.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
A. MARKET INFORMATION
The Company's common stock began being quoted on the over-the-counter bulletin
board system under the symbol "AFLK" on October 7, 1998. The Company's stock
symbol was changed to "PAHI" concurrent with the Company's name change on
approximately May 20, 1999. On August 1, 1999, the Company's common stock began
being quoted on the over-the-counter "Pink Sheets."
The following table sets forth the high ask and low bid prices for the Company's
common stock as reported on the OTC Bulletin Board until August 1, 1999, and as
reported on the Pink Sheets after August 1, 1999.
The prices below reflect inter-dealer quotations, without retail mark-up,
mark-down or commissions and may not represent actual transactions:
15
<PAGE>
<TABLE>
<CAPTION>
Period Reported High Ask Low Bid
<S> <C> <C>
Quarter ended September 30, 1999(3) $ 20.00 $ 0.50
Quarter ended December 31, 1999 $ 1.50 $ 0.25
Quarter ended March 31, 2000 $ 1.00 $ 0.15
Quarter ended June 30, 2000 $ 0.50 $ 0.14
</TABLE>
------------
(3) Price statistics are not available for the full period.
On August 9, 2000, the high ask price for the Company's common stock was $0.41
and the low bid was $0.16.
Management is not aware of any firms that currently make a market for the
Company's securities.
B. HOLDERS
As of August 9, 2000 there were approximately 1,207 holders of Company Common
Stock, as reported by our transfer agent.
C. DIVIDENDS
The Company has not paid any dividends on its Common Stock. The Company intends
to retain any earnings for use in its business, and therefore does not
anticipate paying cash dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Registrant terminated Barry L. Friedman, P.C., Certified Public Accountant,
as its principal accountant as of March 1, 2000 ("Barry L. Friedman"). The
principal accountant's report on the financial statements of the Registrant
contained no adverse opinion or a disclaimer of opinion, or was qualified nor
modified as to uncertainty, audit scope, or accounting principles, other than a
going concern opinion. The termination of Barry L. Friedman was approved by the
Board of Directors.
During the Registrant's two most fiscal years and any subsequent interim period
preceding such registration, declination, or dismissal, there were no
disagreements with the former accountant on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.
There is nothing to report under Item 304 (a) (1) (v) (A) through (D).
A copy of this disclosure was sent to Barry L. Friedman and a letter from Barry
L. Friedman stating that he agrees with the disclosures contained herein is
attached to the Registration Statement as Exhibit 16.
The Registrant has engaged the firm of Stonefield Josephson, Inc., 1620 26th
Street, Suite 400 South, Santa Monica, California, 90404, as its new accounting
firm.
16
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section 4(2) of the
Act. No advertising or general solicitation was employed in offering the shares.
The securities were offered for investment only and not for the purpose of
resale or distribution, and the transfer thereof was appropriately restricted.
Of the 19,128,920 shares issued and outstanding, 9,378,920 shares are restricted
and may not be sold other than pursuant to a registration statement being in
effect, pursuant to an exemption from registration, or in accordance with Rule
144. In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its shareholders for errors
in judgment or other acts or omissions not amounting to intentional misconduct,
fraud, or a knowing violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability. The Articles of
Incorporation and By-laws also provide for indemnification of the officers and
directors of the Company in most cases for any liability suffered by them or
arising from their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing violation of the
law. Therefore, purchasers of these securities may have a more limited right of
action than they would have except for this limitation in the Articles of
Incorporation and By-laws.
The officers and directors of the Company are accountable to the Company as
fiduciaries, which means such officers and directors are required to exercise
good faith and integrity in handling the Company's affairs. A shareholder may be
able to institute legal action on behalf of himself and all others similarly
stated shareholders to recover damages where the Company has failed or refused
to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be able to
bring a class action or derivative suit to enforce their rights, including
rights under certain federal and state securities laws and regulations.
Shareholders who have suffered losses in connection with the purchase or sale of
their interest in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of the proceeds
from the sale of these securities, may be able to recover such losses from the
Company.
PART F/S
The following financial statements are included herein:
Independent Auditors' Report, dated February 25, 2000
Balance Sheet of the Company as of December 31, 1999 (audited)
Statements of Operations of the Company for the fiscal year ended December 31,
1999, the fiscal year ended December 31, 1998, and from inception on December
18, 1992 to December 31, 1999(audited)
Statement of Stockholders' Equity (Deficit) from inception to December 31, 1999
(audited)
17
<PAGE>
Statement of Cash Flows of the Company for the fiscal year ended December 31,
1999, the fiscal year ended December 31, 1998, and from inception on December
18, 1992 to December 31, 1999(audited)
Notes to Financial Statements
Predecessor Accountant's Financial Statements:
Independent Auditors' Report, dated October 25, 1999
Balance sheet as of September 30, 1999 and December 31, 1998
Statement of Operations for the three months and nine months ended September 30,
1999 and 1998, the years ended December 31, 1998 and 1997, and the period from
December 18, 1992 (inception) through September 30, 1999.
Statement of Changes in Stockholders' Equity.
Statement of Cash Flow for the three months and nine months ended September 30,
1999 and 1998, the years ended December 31, 1998 and 1997, and the period from
December 18, 1992 (inception) through September 30, 1999.
Notes to Financial Statements.
18
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
3.1 Articles of Incorporation, dated December 18, 1992*
3.2 Amendment to Articles of Incorporation, dated October 31, 1996*
3.3 Amendment to Articles of Incorporation, dated February 12, 1998*
3.4 Amendment to Articles of Incorporation, dated May 18, 1999*
3.5 By-Laws, dated December 18, 1992*
10 Employment Agreement between the Company and Earl T. Shannon, dated May
20, 1999*
13 Form 10-QSB, Quarterly Report for the Period Ended June 30, 2000
16 Letter from Barry L. Friedman
24 Power of Attorney (See Signature Page)
27 Financial Data Schedule
* Previously filed
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 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.
PAGEACTIVE HOLDINGS, INC.
By: *
--------------------------------------
Earl T. Shannon, President, Secretary,
Treasurer, and Director
POWER OF ATTORNEY
Each person whose signature appears appoints Earl T. Shannon as his
agent and attorney-in-fact, with full power of substitution to execute for him
and in his name, in any and all capacities, all amendments (including
post-effective amendments) to this Registration Statement to which this power of
attorney is attached. In accordance with the requirements of the Securities
Exchange Act of 1934, this Registration Statement was signed by the following
persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* President, Secretary, Treasurer, August 11, 2000
--------------------------------------- Director
Earl T. Shannon
* Director August 11, 2000
---------------------------------------
Ronald W. Tupper
* Director August ,11 2000
---------------------------------------
Matthew Gilbert
</TABLE>
*By: /s/ Earl T. Shannon
---------------------------------
Earl T. Shannon, Attorney in Fact
20
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(FORMERLY KNOWN AS AMERICAN FLINTLOCK COMPANY)
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<PAGE>
CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Balance Sheet 2
Statements of Operations 3
Statement of Stockholders' Equity (Deficit) 4
Statements of Cash Flows 5
Notes to Financial Statements 6-9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
PageActive Holdings, Inc.
Fort Lauderdale, Florida
We have audited the accompanying balance sheet of PageActive Holdings, Inc., (a
development stage enterprise) as of December 31, 1999, and the related
statements of operations, stockholders' equity and cash flows for the year then
ended. 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. The financial statements as of December 31, 1998
and for the year then ended, were audited by other auditors whose report dated
October 25, 1999, included an explanatory paragraph which expressed substantial
doubt about the Company's ability to continue as a going concern.
We conducted our audit 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 audit provides 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 PageActive Holdings, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Stonefield Josephson, Inc.
CERTIFIED PUBLIC ACCOUNTANTS
Santa Monica, California
February 25, 2000
1
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET - DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
CURRENT ASSETS -
cash $ 353,163
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES -
accrued expenses $ 9,106
STOCKHOLDERS' EQUITY:
Preferred stock; $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding $ -
Common stock; $0.001 par value, 50,000,000 shares
authorized, 19,128,920 shares issued and outstanding 10,529
Additional paid-in capital 432,517
Deficit accumulated during development stage (98,989)
---------------
Total stockholders' equity 344,057
--------------
$ 353,163
==============
</TABLE>
See accompanying independent auditors' report and notes to financial statements.
2
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From inception on
Year ended Year ended December 18, 1992 to
December 31, 1999 December 31,1998 December 31, 1999
----------------- ---------------- ---------------
<S> <C> <C> <C>
NET REVENUES $ - $ - $ -
COST OF REVENUES - - -
================= ================ ===============
GROSS PROFIT - - -
GENERAL AND ADMINISTRATIVE
EXPENSES 93,368 960 98,989
----------------- ---------------- ---------------
NET LOSS $ (93,368) $ (960) $ (98,989)
================= ================ ===============
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.01) $ - $ (0.01)
================= ================ ===============
WEIGHTED AVERAGE SHARES OUTSTANDING,
basic and diluted 16,436,763 11,250,000 16,436,763
================= ================ ===============
</TABLE>
See accompanying independent auditors' report and notes to financial statements.
3
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
accumulated
Common stock Additional during Total
----------------------------- paid-in development stockholders'
Shares Amount capital stage equity
------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock at inception
on December 18, 1992 for cash
(post 5:1 stock split) 10,750,000 $ 2,150 $ 1,950 $ $ 4,100
Net loss for the period from inception
on December 18, 1992 to
December 31, 1997 (4,661) (4,661)
------------- -------------- -------------- ------------- --------------
Balance at December 31, 1997 10,750,000 2,150 1,950 (4,661) (561)
Net loss for the year ended
December 31, 1998 (960) (960)
------------- -------------- -------------- ------------- --------------
Balance at December 31, 1998 10,750,000 2,150 1,950 (5,621) (1,521)
Issuance of common stock during
private placement offering 8,378,920 8,379 410,567 418,946
Stock options granted to officer 20,000 20,000
Net loss for the year ended
December 31, 1999 (93,368) (93,368)
------------- -------------- -------------- ------------- --------------
Balance at December 31, 1999 19,128,920 $ 10,529 $ 432,517 $ (98,989) $ 344,057
============= ============== ============== ============= ==============
</TABLE>
See accompanying independent auditors' report and notes to financial statements.
4
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
From inception on
Year ended Year ended December 18, 1992 to
December 31, 1999 December 31,1998 December 31, 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net loss $ (93,368) $ (960) $ (98,989)
--------- --------- ---------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES -
services in exchange for stock options 20,000 -- 20,000
INCREASE (DECREASE) IN LIABILITIES -
accrued expenses 7,585 960 9,106
--------- --------- ---------
Total adjustments 27,585 960 29,106
--------- --------- ---------
Net cash used for operating activities (65,783) -- (69,883)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES -
proceeds from issuance of common stock 418,946 -- 423,046
--------- --------- ---------
NET INCREASE IN CASH 353,163 -- 353,163
CASH, beginning of period/year -- -- --
CASH, end of period/year $ 353,163 $ -- $ 353,163
========= ========= =========
</TABLE>
See accompanying independent auditors' report and notes to financial statements.
5
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:
The Company was organized on December 18, 1992, under the laws of
the State of Nevada as The Flintlock Company. The Company
currently has no operations and in accordance with Statement of
Financial Accounting Statement No. 7, is considered a development
stage company.
On January 9, 1996, the name of the Company was changed to the Old
American Flintlock Company.
On February 11, 1998, the name of the Company was changed to
American Flintlock Company.
On May 18, 1999, the name of the Company was changed to PageActive
Holdings, Inc.
BUSINESS ACTIVITY:
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by individuals and other
companies desiring the perceived advantages of a publicly held
corporation. As of February 25, 2000, the Company has no plan,
proposal, agreement, understanding, or arrangement to acquire or
merge with any specific business or company, and the Company has
not identified any specific business or company for investigation
and evaluation.
USE OF ESTIMATES:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain 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.
CASH:
EQUIVALENTS
For purposes of the statement of cash flows, cash equivalents
include all highly liquid debt instruments with original
maturities of three months or less which are not securing any
corporate obligations.
CONCENTRATION
The Company maintains its cash in bank deposit accounts which, at
times, may exceed federally insured limits. The Company has not
experienced any losses in such accounts.
See accompanying independent auditors' report.
6
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1999 AND 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
INCOME TAXES:
The Company uses the liability method of accounting for income taxes
pursuant to SFAS No. 109, "Accounting for Income Taxes." Deferred income
tax assets result from temporary differences when certain amounts are
deducted for financial statement purposes and when they are deducted for
income tax purposes.
The principal temporary difference is the federal net operating loss
carryforwards, which was approximately $90,000 and immaterial at December
31, 1999 and 1998, respectively. A deferred tax asset has been provided
and is completely offset by a valuation allowance because its utilization
does not appear to be reasonably assured. Federal net operating loss
carryforward starts to expire on December 31, 2018. In the event of a
business combination, the utilization of the available net operating loss
carryforward may be significantly limited.
NET LOSS PER SHARE:
The Company computes net loss per share following SFAS No. 128, "Earnings
Per Share". Under the provisions of SFAS No. 128, basic net income (loss)
per share is computed by dividing the net income (loss) available to
common shareholders for the period by the weighted average number of
common shares outstanding during the period. Diluted net income (loss)
per share is computed by dividing the net income (loss) for the period by
the weighted average number of common and common equivalent shares
outstanding during the period. Common equivalent shares are not included
in the computation of diluted loss per share for the periods presented
because the effect would be anti-dilutive.
(2) STOCKHOLDERS' EQUITY:
On December 18, 1992, the Company issued 4,100,000 shares (pre-split of
5:1) of its $0.001 par value common stock in consideration for $4,100 in
cash.
On February 12, 1998, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased its capitalization from
5,000,000 common shares to 50,000,000 common shares. The par value of the
common shares was unchanged at $0.001. In addition, the preferred shares
were increased from 1,000,000 shares to 10,000,000 shares. The par value
of the preferred shares was unchanged at $0.001.
On May 14, 1999, shareholders tendered for no consideration and the
corporation cancelled 1,950,000 shares of common stock, thus reducing the
total issued and outstanding common stock of the corporation to 2,150,000
(prior to stock split of 5:1).
On May 14, 1999, after the cancellation of 1,950,000 shares of common
stock, the corporation forward split its common stock on a 5:1 basis,
thus increasing the number of issued and outstanding common shares from
2,150,000 to 10,750,000.
During May and June 1999, the Company sold 8,378,920 shares of restricted
Rule 144 common stock for cash proceeds of $418,946, exempt from
registration pursuant to Regulation D of the Securities and Exchange Act
of 1933.
See accompanying independent auditors' report.
7
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1999 AND 1998
(3) RELATED PARTY TRANSACTIONS:
GENERAL
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officer and directors of the Company are
involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
EMPLOYMENT AGREEMENT
On May 20, 1999, the Company entered into an at-will employment agreement
with its officer. Pursuant to this agreement, the Company will pay an
annual salary of $60,000, payable in equal bi-weekly installments, and
also pay a reasonable monthly automobile and medical insurance allowance.
Additionally, the Company also granted 500,000 common stock options at an
exercise price of $0.01 per share.
See accompanying independent auditors' report.
8
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1999 AND 1998
(4) STOCK OPTIONS:
Pursuant to an employment agreement with an officer, the Company granted
500,000 common stock options (fully exercisable in any increments) to
acquire 500,000 shares of common stock at an exercise price of $0.01 per
share.
The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and related
interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under FASB Statement No.
123, "Accounting for Stock-Based Compensation," requires use of option
valuation models that were not developed for use in valuing employee
stock options. Accordingly, $20,000 has been recognized as compensation
expense relating to the options granted during the year ended December
31, 1999.
The number and weighted average exercise price of options granted during
the year ended December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number Weighted Average
of Options Exercise Price
---------- --------------
<S> <C> <C>
Outstanding at beginning of year - $ -
Outstanding at end of year 500,000 $ 0.01
Exercisable at end of year 500,000 $ 0.01
Granted during year 500,000 $ 0.01
Exercised during year - $ -
</TABLE>
Pro forma information regarding the effect on operations is required by
SFAS 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that statement. Pro
forma information using the Black-Scholes method at the date of grant
based on the following assumptions:
Expected life 5 Years
Risk-free interest rate 6.50%
Dividend yield -
Volatility 70%
This option valuation model requires input of highly subjective
assumptions. Because the Company's employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing model does
not necessarily provide a reliable single measure of fair value of its
employee stock options.
For purposes of proforma disclosures, the estimated fair value of the
options is amortized to expense over the option's vesting period. The
Company's proforma information is as follows:
<TABLE>
<CAPTION>
December 31, 1999
-----------------
<S> <C>
Net loss, as reported $ (93,368)
Proforma net loss $ (98,368)
Basic and diluted historical loss per share $ (.01)
Proforma basic and diluted loss per share $ (.01)
</TABLE>
See accompanying independent auditors' report.
9
<PAGE>
PAGEACTIVE HOLDINGS, INC.
(FORMERLY KNOWN AS AMERICAN FLINTLOCK COMPANY)
(A DEVELOPMENT STAGE ENTERPRISE)
PREDECESSOR AUDITOR'S REPORT FOR
FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND FOR THE YEAR ENDED DECEMBER 31, 1998
<PAGE>
PAGE ACTIVE HOLDINGS, INC.
(FORMERLY AMERICAN FLINTLOCK COMPANY)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
September 30, 1999
December 31, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
----
ACCOUNTANT'S LETTER........................................................3
BALANCE SHEET - ASSETS.....................................................4
BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY.......................5
STATEMENT OF OPERATIONS..................................................6-7
STATEMENT OF STOCKHOLDERS' EQUITY..........................................8
STATEMENT OF CASH FLOWS.................................................9-10
NOTES TO FINANCIAL STATEMENTS..........................................11-14
<PAGE>
BARRY L. FRIEDMAN, P.C.
CERTIFIED PUBLIC ACCOUNTANT
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors October 25, 1999
Page Active Holdings, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of PAGE ACTIVE HOLDINGS,
INC. (FORMERLY AMERICAN FLINTLOCK COMPANY) (A Development Stage Company), as of
September 30, 1999, and December 31, 1998, and the related statements of
stockholders' equity for September 30, 1999, and December 31, 1998, and
statements of operation and cash flows for the three months ending September 30,
1999, and September 30, 1998, for the nine months ended September 30, 1999, and
September 30, 1998, and the two years ended December 31, 1998, and December 31,
1997, and the period December 8, 1992 (inception), to September 30, 1999. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the PAGE ACTIVE
HOLDINGS, INC. (FORMERLY AMERICAN FLINTLOCK COMPANY) (A Development Stage
Company), as of September 30, 1999, and December 31, 1998, and the related
statements of stockholders' equity for September 30, 1999, and December 31,
1998, and statements of operation and cash flows for the three months ending
September 30, 1999, and September 30, 1998, for the nine months ended September
30, 1999, and September 30, 1998, and the two years ended December 31, 1998, and
December 31, 1997, and the period December 18, 1992 (inception), to September
30, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is described in Note #5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Barry L. Friedman
----------------------------
Barry L. Friedman
Certified Public Accountant
3
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
9 Mos. Ending Year Ended
Sept. 30, 1999 Dec. 31, 1998
-------------- -------------
<S> <C> <C>
CURRENT ASSETS $0 $0
----------------------- ----------------------
TOTAL CURRENT ASSETS $0 $0
----------------------- ----------------------
OTHER ASSETS $0 $0
----------------------- ----------------------
TOTAL OTHER ASSETS $0 $0
----------------------- ----------------------
TOTAL ASSETS $0 $0
----------------------- ----------------------
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
9 Mos. Ending Year Ended
SEPT. 30, 1999 DEC. 31, 1998
-------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note #5) $ 2,211 $ 1,521
----------------------- ----------------------
TOTAL CURRENT LIABILITIES $ 2,211 $ 1,521
----------------------- ----------------------
STOCKHOLDERS EQUITY (Note 4)
Preferred Stock, Par Value $0.001
Authorized 10,000,000 shares
Issued and outstanding at
September 30, 1999 - NONE $ 0 $ 0
Common stock, $.001 par value
authorized 50,000,000 shares
issued and outstanding at
December 31, 1998 - 4,100,000 shares 4,100
September 30, 1999 - 10,750,000 shares 10,750
Additional paid in Capital -6,650 0
Accumulated loss -7,311 -5,621
----------------------- ----------------------
TOTAL STOCKHOLDERS' EQUITY $ -3,211 $ -1,521
----------------------- ----------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0
----------------------- ----------------------
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1999 Sept. 30, 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0
------------------ ------------------ ----------------- -----------------
EXPENSES
General, Selling and
Administrative $ 1,000 $ 0 $ 1,690 $ 875
------------------ ------------------ ----------------- -----------------
Amortization 0 0 0 0
------------------ ------------------ ----------------- -----------------
Total Expenses $ 1,000 $ 0 $ 1,690 $ 875
------------------ ------------------ ----------------- -----------------
Net Profit/Loss (-) $ -1,000 $ 0 $ -1,690 $ -875
------------------ ------------------ ----------------- -----------------
Net Profit/Loss (-)
per weighted share (Note #2) $ -.0001 $ NIL $ -.0002 $ -.0001
------------------ ------------------ ----------------- -----------------
Weighted average number of
common shares outstanding 10,750,000 10,750,000 10,750,000 10,750,000
------------------ ------------------ ----------------- -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
STATEMENT OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
Dec. 18, 1993
Year Ended Year Ended (Inception)
Dec. 31, 1998 Dec. 31, 1997 to Sept. 30, 1999
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0
----------------- ----------------- -----------------
EXPENSES
General, Selling and Administrative $ 960 $ 561 $ 7,166
----------------- ----------------- -----------------
Amortization 0 29 145
----------------- ----------------- -----------------
Total Expenses $ 960 $ 590 $ 7,311
----------------- ----------------- -----------------
Net Profit/Loss (-) $ -960 $ -590 $ -7,311
----------------- ----------------- -----------------
Net Profit/Loss (-) per weighted
share (Note #2) $ -.0001 $ -.0001 $ -.0007
----------------- ----------------- -----------------
Weighted average number of common
shares outstanding 10,750,000 10,750,000 10,750,000
----------------- ----------------- -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 4,100,000 $ 4,100 $ 0 $ -4,071
Net loss, Year Ended
December 31, 1997 -590
---------- ---------- ---------- ---------
Balance
December 31, 1997 4,100,000 $ 4,100 $ 0 $ -4,661
Net Loss Year Ended
December 31, 1998 -960
---------- ---------- ---------- ---------
Balance
December 31, 1998 4,100,000 $ 4,100 $ 0 $ -5,621
May 14, 1999
Cancellation of Shares -1,950,000 -1,950 1,950
May 14, 1999
Forward Stock Split 5:1 8,600,000 8,600 -8,600
Net Loss
Jan. 1, 1999, to Sept. 30, 1999 -1,690
---------- ---------- ---------- ---------
Balance
September 30, 1999 10,750,000 $ 10,750 $ -6,650 $ -7,311
---------- ---------- ---------- ---------
</TABLE>
[Note: Auditor (Barry F.) did not record the Private Placement in May and June
of 1999.]
The accompanying notes are an integral part of these financial statements
8
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1999 Sept. 30, 1998
--------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $ -1,000 $ 0 $ -1,690 $ -875
Adjustment to reconcile Net Loss
to Net Cash provided by
Operating Activities
Amortization 0 0 0 0
Changes in Assets and
Liabilities
Organization Costs 0 0 0 0
Increase in current Liabilities
Officers Advances 1,000 0 1,690 875
------------------ ----------------- ------------------ -----------------
Net Cash Used in
Operating Activities $ 0 $ 0 $ 0 $ 0
------------------ ----------------- ------------------ -----------------
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from 0 0 0 0
------------------ ----------------- ------------------ -----------------
Financing Activities
Issuance of Common Stock 0 0 0 0
------------------ ----------------- ------------------ -----------------
Net increase (decrease) in cash $ 0 $ 0 $ 0 $ 0
Cash, beginning of period 0 0 0 0
------------------ ----------------- ------------------ -----------------
Cash, end of period $ 0 $ 0 $ 0 $ 0
------------------ ----------------- ------------------ -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
9
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
STATEMENT OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
Dec. 18, 1992
Year Ended Year Ended (Inception) to
Dec. 31, 1998 Dec. 31, 1997 Sept. 30, 1999
------------------- ------------------- ------------------
<S> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $ -960 $ -590 $ -7,311
Adjustment to reconcile
Net Loss to Net Cash
provided by
Operating Activities
Amortization 0 29 145
Changes in Assets and Liabilities
Organization Costs 0 0 -145
Increase in Current Liabilities 960 561 3,211
------------------ ------------------ -----------------
Net cash used in Operating Activities $ 0 $ 0 $ -4,100
Cash Flows from Investing Activities 0 0 0
Cash Flows from Financing Activities
Issuance of Common Stock 0 0 4,100
------------------ ------------------ -----------------
Net Increase (Decrease)
in Cash $ 0 $ 0 $ 0
Cash, beginning of period 0 0 0
------------------ ------------------ -----------------
Cash, end of period $ 0 $ 0 $ 0
------------------ ------------------ -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
10
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized December 18, 1992, under the laws of the State
of Nevada as The Flintlock Company. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
company.
On January 9, 1996, the name of the Company was changed to The Old
American Flintlock Company.
On February 11, 1998, the name of the Company was changed to American
Flintlock Company.
On May 18, 1999, the name of the Company was changed to Page Active
Holdings, Inc.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
CASH AND EQUIVALENTS
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of September 30, 1999.
11
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
INCOME TAXES
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes." A
deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
ORGANIZATION COSTS
Costs incurred to organize the Company were amortized on a
straight-line basis over a sixty-month period.
LOSS PER SHARE
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share." Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number of
common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of September 30, 1999, the Company had no dilative
common stock equivalents such as stock options.
YEAR END
The Company has selected December 31st as its year-end.
YEAR 2000 DISCLOSURE
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the applicable
year. Computer programs that have time sensitive software may
recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations
causing disruption of normal business activities. Since the
Company currently has no operating business and does not use any
computers, and since it has no customers, suppliers or other
constituents, there are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended September 30,
1999, due to the net loss and no state income tax in Nevada, the state of
the Company's domicile and operations. The Company's total deferred tax
asset as of December 31, 1998, is as follows:
Net operation loss carry forward $ 5,621
Valuation allowance $ 5,621
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire in various
amounts from 2012 and 2018.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
12
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
NOTE 4 - STOCKHOLDERS' EQUITY
COMMON STOCK
The authorized common stock of the corporation consists of 50,000,000
shares with a par value of $0.001 per share.
PREFERRED STOCK
The authorized preferred stock of the corporation consists of 10,000,000
shares with a par value of $0.001 per share.
On December 12, 1992, the Company issued 4,100,000 shares of its $0.001
par value common stock in consideration of $4,100.00 in cash.
On February 12, 1998, the State of Nevada approved the company's restated
Articles of Incorporation, which increased its capitalization from
5,000,000 common shares to 50,000,000 common shares. The par value of the
common shares was unchanged at $0.001. In addition, the preferred shares
were increased from 1,000,000 shares to 10,000,000 shares. The par value
of the preferred shares was unchanged at $0.001.
On May 14, 1999, the corporation cancelled for no consideration,
1,950,000 shares of common stock, thus reducing the total issued and
outstanding common stock of the corporation to 2,150,000.
On May 14, 1999, the corporation forward split its common stock on a 5:1
basis, thus increasing the number of issued and outstanding common shares
from 2,150,000 to 10,750,000.
13
<PAGE>
Page Active Holdings, Inc.
(Formerly American Flintlock Company)
(A Development Stage Company)
NOTE 5 - 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. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. It is the intent of the Company to seek a
merger with an existing, operating company. Until that time, the
stockholders/officers and/or directors have committed to advancing the
operating costs of the Company interest free if necessary.
NOTE 6 - RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company are
involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
