U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-KSB
(Mark One)
X Annual report under section 13 or 15(d) of the Securities
---------- Exchange Act of 1934 for the fiscal year ended July 30, 2000
Transition report under section 13 or 15(d) of the Securities
---------- Exchange Act of 1934 for the transition period from ____ to ____.
Commission File No: 000-29313
----------
Asphalt Paving International, Inc.
----------------------------------
(Name of small business in its charter)
Florida 59-3461879
-------- ----------
(State or other jurisdiction (IRS Employer
of Incorporation) Identification No.)
10125 West Colonial Drive, Suite 212
------------------------------------
Address of Principal Executive Office (street and number)
Ocoee, FL 34761
------------------
City, State and Zip Code
Issuer's telephone number: (407) 822-3664
--------------
Securities registered under Section 12(b) of the Act:
-----------------------------------------------------
None
Securities to be registered under Section 12(g) of the Act:
---------------------------------------------------------
Common Stock, par value $.01
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes X
No ____
<PAGE>
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S_B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10_KSB
or any amendment to this Form 10_KSB. ___
State issuer's revenue for its most recent fiscal year: $ 0
---
State the aggregate market value of the voting stock held by
non_affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked priced of such stock, as of a specified date within
the past 60 days (See definition of affiliate in Rule12b_2): 0
---
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non_affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
(Applicable only to corporate registrants) State the number of shares
outstanding of each of the issuer's classes of common equity, as of the latest
practicable date: 4,238,600 as of September 30, 2000.
(Documents incorporated by reference. If the following documents are
incorporated by reference, briefly describe them and identify the part of the
Form 10_KSB (e.g. Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) of the Securities Act of 1933 ("Securities Act"). The listed documents
should be clearly described for identification purposes.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business of Issuer.
The Company was incorporated in the state of Florida on January 14,
1998. The Company was formed for the purpose of design and manufacture of
asphalt related equipment. Although initially the Company was not successful in
achieving its goals, the Company is one again continuing in its plans to compete
in the asphalt paving business and may seek the acquisition of a paving and
construction company. The Company also moved to 10125 West Colonial Dr., Suite
212, Ocoee, FL 31761 which is the new address.
Competition.
The Company faces competition from other companies in the industry,
most of which are better established and better financed than the Company. There
is no assurance that the Company will be able to successfully compete with these
companies.
Intellectual Property.
We have no patents, trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts.
Government Regulation.
Our operations will be subject to extensive and ever-changing federal,
state and local laws and regulation by government agencies, such as the United
States Occupational Safety and Health Administration ("OSHA"). We are subject to
significant compliance burdens from this extensive regulatory framework that may
substantially increase our operational costs.
Research and development
We have spent no time or money on research or development since our
inception.
Employees.
We currently have only two employees. Our president and director,
Jackie McBride will be responsible for implementing our proposed plan of
operations and directing our operations. Our secretary and treasurer, Joseph
Camillo, will be responsible for back office operations.
1
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.
We currently occupy a small portion of office space leased by an
associate of our directors at 10125 West Colonial Drive, Ocoee, Florida 34167,
without charge. There are no preliminary agreements or understandings regarding
the office facility after the business opportunity is completed. Upon closure of
a business opportunity, we plan to relocate to the office of our business
opportunity.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or security holder is a party
adverse to the Company or has a material interest adverse to the Company in
reference to pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the security holders of the
Company during the fourth quarter of the fiscal year which ended July 31, 2000.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's shares are not currently trade in any medium and as such,
no trading of our shares has occurred and no bid or asked prices have been
posted. The Company's securities are currently held of record by a total of
approximately 103 persons.
No dividends have been declared or paid on the Company's securities,
and it is not anticipated that any dividends will be declared or paid in the
foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION.
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity.
Results of Operations
---------------------
2
<PAGE>
The Company was formed for the purpose of design and manufacture of
asphalt related equipment. Although initially the Company was not successful in
achieving its goals, the Company is once again continuing in its plans to
compete in the asphalt paving business and may seek the acquisition of a paving
and construction company. To date, the Company has not entered into any
agreement to purchase and such company.
Need for Additional Financing
-----------------------------
The Company will require additional capital in order to meet its cash
needs for the next year, including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act of 1934, as amended.
No specific commitments to provide additional funds have been made by
management or other stockholders, and the Company has no current plans,
proposals, arrangements or understandings with respect to the sale or issuance
of additional securities prior to the location of a merger or acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its expenses. Notwithstanding
the foregoing, to the extent that additional funds are required, the Company
anticipates receiving such funds in the form of advancements from current
shareholders without issuance of additional shares or other securities, or
through the private placement of restricted securities rather than through a
public offering. The Company does not currently contemplate making a Regulation
S offering.
ITEM 7.
See attached Financial Statements.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
3
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The directors and executive officers currently serving the Company are
as follows:
Name Age Positions Held
Jackie McBride 55 President/Director
Joseph Camillo 53 Secretary/Director
The directors named above will serve until the next annual meeting of
the Company's stockholders. Thereafter, directors will be elected for one_year
terms at the annual stockholders' meeting. Officers will hold their positions at
the pleasure of the board of directors, absent any employment agreement, of
which none currently exists or is contemplated. There is no arrangement or
understanding between any of the directors or officers of the Company and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.
The directors and officers will devote their time to the Company's
affairs on an "as needed" basis, which, depending on the circumstances, could
amount to as little as two hours per month, or more than forty hours per month,
but more than likely will fall within the range of five to ten hours per month.
Biographical Information
------------------------
Mr. Jackie McBride, 55 years of age, is our President and Director. Mr.
McBride has served as President and Director of our Company since our inception.
His current term as Director expires, subject to re_election, on December 16th,
2000. For the last five years, Mr. McBride has been a highway independent
contractor for heavy highway construction and excavation of roadway and bridges,
as well as an owner of eight Sonic Drive_in Restaurants. He currently holds no
directorships in any reporting companies.
Mr. Joseph Camillo, has been an officer and director of the Company
since September 1, 1997. From 1991 to 1996, Mr. Camillo was employed as a
registered representative with Kober Financial, a securities broker-dealer. From
1996 to present, Mr. Camillo has been a consultant to private and public
corporations. Mr. Camillo has served as one or our Directors since inception.
His current term as Director expires, subject to reelection, on December 1,
2000. From July 14, 1998 to the present, Mr. Camillo has also served as
Secretary and Director of Power Fluids, Inc.
Employees
Other than those mentioned above, we have no employees. We do not
anticipate hiring any additional employees until our revenues or demand for our
products reaches a sufficient level to mandate hiring additional employees.
There are no family relationships among our officers, directors, or nominees for
such positions. None of our directors, executive officers, promoters or control
persons has been involved in any legal proceedings material to the evaluation of
the ability or integrity of any of the aforementioned persons.
4
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director received any remuneration from the Company
during the fiscal year. Until the Company acquires additional capital, it is not
intended that any officer or director will receive compensation from the Company
other than reimbursement for out_of_pocket expenses incurred on behalf of the
Company. See "Certain Relationships and Related Transactions." The Company has
no stock option, retirement, pension, or profit_sharing programs for the benefit
of directors, officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of September 30, 2000, there were 4,238,600 shares of our common
stock, $.001 par value outstanding. The following tabulates holdings of our
shares by each person who, subject to the above, at the date of this
registration, holds of record or is known by our management to own beneficially
more than 5.0% of the common shares and, in addition, by all of our directors
and officers individually and as a group. To the best of our knowledge, each
named beneficial owner (1) has sole voting and investment power with respect to
the shares set forth opposite his name.
<TABLE>
<CAPTION>
Title of Class Beneficial Owner Amount of Nature of Percent
Ownership Ownership of Class
<S> <C> <C> <C> <C>
Common Jackie D. McBride 4,000,000 Shares Direct 94%
10125 West Colonial Drive
Suite 212
Ocoee, FL 34761
Common Joseph Camillo 15,000 Direct 0.35%
10125 West Colonial Drive
Suite 212
Ocoee, FL 34761
All officers and
directors as a Group 4,015,000 Shares Direct 94.35%
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
5
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The Exhibits listed below are filed as part of this Annual
Report.
Exhibit No. Document
3.1 Articles of Incorporation (incorporated by reference from
Registration Statement on Form 10-SB filed with the Securities
and Exchange Commission under File No. 000-29313.
3.2 Bylaws (incorporated by reference from Registration Statement
on Form 10_SB filed with the Securities and Exchange under
File No. 000-29313.
27 Financial Data Schedule
(b) Form 8-K as filed by the Company on June 30, 2000 is
incorporated by reference.
6
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Asphalt Paving, Inc.
/s/ Jackie McBride
-------------------
By: Jackie McBride
(Principal Executive Officer and Director)
Date: October 16, 2000
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
/s/ Jackie McBride President/Director 10/17/00
------------------
Jackie McBride
/s/ Joseph Camillo Secretary/Director 10/17/00
-------------------
Joseph Camillo
7
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Asphalt Paving International, Inc.
We have audited the balance sheet of Asphalt Paving International, Inc. as of
July 31, 2000 and 1999 and the related statements of operations, changes in
stockholders' equity, and cash flows for the and each of the years in the two
year period ended July 31, 2000 and for the period from inception to July 31,
2000. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position Asphalt Paving International, Inc.
as of July 31, 2000 and 1999 and the results of its operations and cash flows
for each of the years in the two year period ended July 31, 2000 and for the
period from inception to July 31, 2000, in conformity with generally accepted
accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
September 14, 2000
F-1
<PAGE>
Asphalt Paving International, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
------
July 31, July 31,
2000 1999
-------- --------
Current assets:
Cash $ 23,548 $ 24,348
-------- --------
Total current assets 23,548 24,348
-------- --------
Total assets $ 23,548 $ 24,348
======== ========
STOCKHOLDERS' EQUITY
--------------------
Current liabilities:
Accounts payable $ -- $ 500
-------- --------
Total current liabilities -- 500
-------- --------
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 4,238,600 shares
issued and outstanding 4,239 4,239
Additional paid in capital 27,821 24,571
(Deficit) accumulated during
development stage (8,512) (4,962)
-------- --------
23,548 23,848
-------- --------
$ 23,548 $ 24,348
======== ========
See accompanying notes to financial statements.
F-2
<PAGE>
Asphalt Paving International, Inc.
(A Development Stage Company)
Statements of Operations
Years Ended July 31, 2000 and 1999
and Period From Inception (January 14, 1998) to July 31, 2000
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
July 31, July 31, July 31,
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Operating expenses:
Office expenses and salary contributed
by corporate officer $ 600 $ 600 $ 1,550
Professional fees 2,950 -- 2,950
Organization expenses -- -- 4,000
Bank charges -- 12 12
----------- ----------- -----------
3,550 612 8,512
----------- ----------- -----------
(Loss) from operations and net (loss) $ (3,550) $ (612) $ (8,512)
=========== =========== ===========
Per share information:
Basic and diluted (loss) per common share $ -- $ -- $ --
=========== =========== ===========
Weighted average shares outstanding 4,238,600 4,083,342 4,160,971
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
Asphalt Paving International, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (January 14, 1998) to July 31, 2000
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Paid-in During Develop-
Shares Amount Capital ment Stage Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ACTIVITY
--------
Shares issued for services
at inception at $.001 per share 4,000,000 $ 4,000 $ -- $ -- $ 4,000
Contribution of capital by
major shareholder 350 350
Net loss for the period ended
July 31, 1998 -- -- -- (4,350) (4,350)
--------- --------- --------- --------- ---------
Balance July 31, 1998 4,000,000 4,000 350 (4,350) --
Common shares sold for cash:
February 1999 at $.10 77,600 78 7,682 7,760
April 1999 at $.10 51,500 51 5,099 5,150
May 1999 at $.10 109,500 110 10,840 10,950
Contribution of capital by
major shareholder 600 600
Net (loss) for the year
ended July 31, 1999 -- -- -- (612) (612)
--------- --------- --------- --------- ---------
Balance, July 31, 1999 4,238,600 4,239 24,571 (4,962) 23,848
Contribution of capital by
major shareholder 3,250 3,250
Net (loss) for the year
ended July 31, 2000 -- -- -- (3,550) (3,550)
--------- --------- --------- --------- ---------
Balance, July 31, 2000 4,238,600 $ 4,239 $ 27,821 $ (8,512) $ 23,548
========= ========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
Asphalt Paving International, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended July 31, 2000 and 1999
and Period From Inception (January 14, 1998) to July 31, 2000
Year Year Period From
Ended Ended Inception To
July 31, July 31, July 31,
2000 1999 2000
-------- -------- --------
Net income (loss) $ (3,550) $ (612) $ (8,512)
Adjustments to reconcile net income to net
cash provided by operating activities:
Services provided as capital contribution 3,250 600 8,200
Increase (decrease) in accounts payable (500) 500 --
-------- -------- --------
Total adjustments 2,750 1,100 8,200
-------- -------- --------
Net cash provided by (used in)
operating activities (800) 488 (312)
Cash provided by financing activities:
Sale of common stock for cash -- 23,860 23,860
-------- -------- --------
Net cash provided by financing activities -- 23,860 23,860
-------- -------- --------
Increase (decrease) in cash (800) 24,348 23,548
Cash and cash equivalents,
beginning of period 24,348 -- --
-------- -------- --------
Cash and cash equivalents,
end of period $ 23,548 $ 24,348 $ 23,548
======== ======== ========
See accompanying notes to financial statements.
F-5
<PAGE>
Asphalt Paving International, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended July 31, 2000 and 1999
and Period From Inception (January 14, 1998) to July 31, 2000
Year Year Period From
Ended Ended Inception To
July 31, July 31, July 31,
2000 1999 2000
---- ---- ----
Supplemental cash flow information:
Cash paid for interest $-- $-- $--
Cash paid for income taxes $-- $-- $--
See accompanying notes to financial statements.
F-6
<PAGE>
Asphalt Paving International, Inc.
Notes to Financial Statements
July 31, 2000
Note 1. Organization and Summary of Significant Accounting Policies.
------------------------------------------------------------
The Company was incorporated in Florida on January 14, 1998. The Company is in
its development stage and to date its activities have been limited to
organization and capital formation.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the Company has
no potentially dilutive securities outstanding.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with maturity of three months or less to be
cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximate fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration of
credit risk consist principally of cash. During the year the Company did not
maintain cash deposits at financial institutions in excess of the $100,000 limit
covered by the Federal Deposit Insurance Corporation. The Company does not hold
or issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
F-7
<PAGE>
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996. Upon adoption of FAS 123, the Company continued to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees. The Company paid stock based compensation during the periods
presented as described in Note 2.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions that
would result in any significant difference between its reported net loss and
comprehensive net loss as defined in the statement.
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers.
The adoption of SFAS 131 did not affect results of operations or financial
position. To date, the Company has not operated in any business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No. 132,
Employers' Disclosures about Pensions and Other Post-retirement Benefits ("SFAS
132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting for
Post-retirement Benefits Other Than Pensions. The overall objective of SFAS 132
is to improve and standardize disclosures about pensions and other
post-retirement benefits and to make the required information more
understandable. The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date that would require
disclosure under the statement.
F-8
<PAGE>
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. Stockholders' Equity.
At inception the Company issued 4,000,000 shares of its common stock to its
founder and president in exchange for services valued at $4,000.
During February 1999 the Company began a private placement of its restricted
common stock to a limited group of individuals. During the period from February
to July 1999, the Company sold an aggregate of 238,600 shares for gross proceeds
of $23,860.
Note 3. Income Taxes
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classifications of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or non-current depending on
the periods in which the temporary differences are expected to reverse. The
deferred tax asset related to the operating loss carryforward has been fully
reserved.
The Company has not provided current or deferred income taxes for the period
presented due to a loss from operations.
The Company currently has a net operating loss carryforward aggregating
approximately $8,500 that expires $4,300 in 2013, $600 in 2014 and $3,600 in
2015. The tax benefit of the loss, estimated to be approximately $1,275, has
been fully reserved as its realization in future periods is not assured as it is
more likely than not that future earnings will not be available to utilize the
loss carryforward. The reserve increased by approximately $540 during the year
ended July 31, 2000.
F-9
<PAGE>
Note 4. Related Party Transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer of the Company and certain
expenses of the Company have been paid for by the officer. Such costs and the
fair value of the services provided to the Company for the years ended July 31,
2000 and 1999 amounted to $3,250 and $600, respectively.
The expenses paid by the officer have been accounted for as capital
contributions to the Company by the officer as the Company is not obligated to
make repayment to the officer.
The officers and directors of the Company are involved in other business
activities and may become involved in other business activities in the future.
Such business activities may conflict with the activities of the Company. The
Company has not formulated a policy for the resolution of any such conflicts
that may arise.
To date, the Company has engaged in no significant operations and has minimal
expected operating costs forecasted for its next fiscal year. The Company's
officers plan to continue the support the limited operations of the Company as
needed.
F-10
