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 December 31, 1999.
__Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________ to
_____________.
Commission File No: 0-27699
FIRST CMA, INC.
(Name of small business in its charter)
Colorado 84-1474837
__________________________________________________________
(State or other (IRS Employer Identification
jurisdiction of Incorporation) No.)
7331 S. Meadow Court
__________________________________________________________
Address of Principal Executive Office (street and number)
Boulder, Colorado 80301
__________________________________________________________
City, State and Zip Code
(Issuer's telephone number: (303) 530-3353
Securities to be registered under Section 12(b) of the Act:
Title of each class
__________________________________________________________
N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
(Title of Class)
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 ____
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
Rule 12b-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.
(Issuers involved in bankruptcy proceedings during the past five
years) Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes ____ No ____
(Applicable only to corporate registrants) State the number of shares
outstanding of each of the issuer's classes of common equity, as of the
latest practicable date: 12,000,000 as of February 29, 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.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
The Company was incorporated under the laws of the State of
Colorado on December 30, 1994. It was formed with the intent that
it would become a public "blind pool" or "blank check" company
through the voluntary filing of a registration statement under the
Securities Exchange Act of 1934, and that it would thereafter seek,
investigate, and, if warranted, acquire one or more properties or
businesses through a reverse merger or other similar type of
transaction.
The Company was organized by two individuals, J.A. Garcia
and Mark DiSalvo, and Mr. DiSalvo was its sole initial shareholder.
At the time that they formed the Company, Mr. DiSalvo and Mr.
Garcia also organized four other corporations with the same business
plan.
Except for its organizational activities, from the date of its
incorporation in December, 1994, until September, 1997, the
Company was inactive. During this period, Mr. DiSalvo remained as
the sole shareholder of the Company, and Mr. DiSalvo and his
spouse, Leah DiSalvo, acted as the Company's sole officers and
directors. Although it had been intended that Mr. Garcia would
supervise the implementation of the Company's business plan, during
the period from December, 1994 until September, 1997, he had many
other business dealings related to blind pool or blank check
companies, and was unable to devote time to the Company or to the
four other corporations formed at the same time as the Company.
In September, 1997, Mr. DiSalvo sold or transferred 80% of
the issued and outstanding capital stock of the Company, and of each
of the four corporations which were formed simultaneously with the
Company, to three individuals, Gary S. Joiner, Grant W. Peck and
Dean F. Sessions. These transfers were made in consideration of the
agreement of the transferees to assist with implementation of the
business plan for the Company and the other entities. Concurrently
with the sale or transfer of a controlling interest, Mr. DiSalvo and his
spouse resigned as officers and directors of the Company and each of
the four other corporations and appointed Grant Peck and Dean
Sessions as successor officers and directors.
Following the change of control in September, 1997, the
Company and the four other corporations again became inactive for
approximately eighteen months because Mr. Joiner, Mr. Peck and Mr.
Sessions were each involved with several other blind pool or blank
check companies during this time period and did not want to create a
conflict of interest between the various entities. Finally in
approximately March, 1999, the Company decided to proceed with the
process of raising capital and obtaining the audited financial statements
required for filing of its registration statement on Form 10-SB. During
the first quarter of 1999, Mr. Joiner, Mr. Peck and Mr. Sessions each
made gift transfers of a portion of the shares he had acquired from Mr.
DiSalvo, but such transfers did not result in a further change in control
of the Company or of the four other corporations formed
simultaneously with the Company.
Except for the organizational activities described above, the
Company has not engaged in any other business activities since the
date of its incorporation. The Company has no full-time employees,
owns no real estate and has not commenced any commercial
operations.
As of the end of its fiscal year December 31, 1999, the
Company had not identified any business opportunity that it planned to
pursue, nor had the Company reached any agreement or definitive
understanding with any person concerning an acquisition.
No assurance can be given that the Company will be successful
in finding or acquiring a desirable business opportunity, given the
limited funds that are expected to be available for acquisitions, or that
any acquisition that occurs will be on terms that are favorable to the
Company or its stockholders.
The Company's search has been directed toward enterprises
which have a desire to be become a public corporation and which
have a business plan designed to allow them to take advantage of
opportunities available to public entities. This includes entities which
have been recently organized, with no operating history, or a history
of losses attributable to under-capitalization or other factors, entities
in need of funds to develop a new product or service or to expand
into a new market, entities which desire to use their securities to make
acquisitions, and entities which have a combination of these
characteristics.
In searching for investment opportunities, the Company is not
restricted to any particular geographical area or industry. Therefore,
subject to economic conditions, limitations on its ability to locate
available business opportunities, and other factors, the Company has
substantial discretion in selecting an appropriate business opportunity.
In connection with any acquisition, it is highly likely that an
amount of stock constituting control of the Company would be issued
by the Company or purchased from the Company's current principal
shareholders by the target entity or its controlling shareholders.
Other Entities
The officers, directors and principal shareholders of the
Company are also the officers, directors and principal shareholders of
four other corporations which were formed at the same time as the
Company. Each of these other corporations has the same business
plan as the Company.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis of the
quality of the other company's management and personnel, the anti-
cipated acceptability of new products or marketing concepts, the merit
of technological changes, and numerous other factors which are
difficult, if not impossible, to analyze through the application of any
objective criteria. In many instances, it is anticipated that the
historical operations of a specific firm may not necessarily be
indicative of the potential for the future because of the possible need
to shift marketing approaches substantially, expand significantly,
change product emphasis, change or substantially augment manage-
ment, or make other changes.
Because the Company may participate in a business
opportunity with a newly organized firm or with a firm which is
entering a new phase of growth, it should be emphasized that the
Company will incur further risks, because management in many
instances will not have proved its abilities or effectiveness, the
eventual market for such company's products or services will likely
not be established, and such company may not be profitable when
acquired.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to one such venture because of the
Company's limited financing. This lack of diversification will not
permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's
securities.
It is emphasized that management of the Company may effect
transactions having a potentially adverse impact upon the Company's
shareholders pursuant to the authority and discretion of the
Company's management to complete acquisitions without submitting
any proposal to the stockholders for their consideration. Company
management does not generally anticipate that it will provide holders
of the Company's securities with financial statements, or any other
documentation, concerning a target company or its business prior to
any merger or acquisition. In some instances, however, the proposed
participation in a business opportunity may be submitted to the
stockholders for their consideration, either voluntarily by Company
management which elects to seek the stockholders' advice and
consent, or because state law so requires.
The analysis of business opportunities will be undertaken by or
under the supervision of the Company's executive officers and
directors. Although there are no current plans to do so, Company
management might hire an outside consultant to assist in the
investigation and selection of business opportunities, and in that event,
might pay a finder's fee. Since Company management has no current
plans to use any outside consultants or advisors to assist in the
investigation and selection of business opportunities, no policies have
been adopted regarding use of such consultants or advisors, the
criteria to be used in selecting such consultants or advisors, the
services to be provided, the term of service, or regarding the total
amount of fees that may be paid. However, because of the limited
resources of the Company, it is likely that any such fee the Company
agrees to pay would be paid in stock and not in cash. Otherwise, the
Company anticipates that it will consider, among other things, the
following factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) Strength and diversity of existing management, or
management prospects that are scheduled for recruitment;
(3) Capital requirements and anticipated availability of
required funds, to be provided from operations, through the sale of
additional securities, through joint ventures or similar arrangements,
or from other sources;
(4) The Company's perception of how any particular business
opportunity will be received by the investment community and by the
Company's stockholders;
(5) The availability of audited financial statements for the
business opportunity; and
(6) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a
significant prospect in the foreseeable future of becoming sufficient to
enable the securities of the Company to qualify for listing on an
exchange or on a national automated securities quotation system, such
as NASDAQ.
No one of the factors described above will be controlling in
the selection of a business opportunity, and management will attempt
to analyze all factors appropriate to the opportunity and make a
determination based upon reasonable investigative measures and
available data. Potential investors must recognize that, because of the
Company's limited capital available for investigation and
management's limited experience in business analysis, the Company
may not discover or adequately evaluate adverse facts about the
opportunity to be acquired.
The Company is unable to predict when it may participate in a
business opportunity and it has not established any deadline for
completion of a transaction. It expects, however, that the process of
seeking candidates, analysis of specific proposals and the selection of
a business opportunity may require several additional months or more.
Company management believes that various types of potential
merger or acquisition candidates might find a business combination
with the Company to be attractive. These include acquisition
candidates desiring to create a public market for their shares in order
to enhance liquidity for current shareholders, acquisition candidates
which have long-term plans for raising equity capital through the
public sale of securities and believe that the possible prior existence of
a public market for their securities would be beneficial, and
acquisition candidates which plan to acquire additional assets through
issuance of securities rather than for cash, and believe that the
possibility of development of a public market for their securities will
be of assistance in that process. Acquisition candidates which have a
need for an immediate cash infusion are not likely to find a potential
business combination with the Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company
may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs and
desires of the Company and the promoters of the opportunity and,
upon the basis of that review and the relative negotiating strength of
the Company and such promoters, the legal structure or method
deemed by management to be suitable will be selected. Such structure
may include, but is not limited to leases, purchase and sale agree-
ments, licenses, joint ventures and other contractual arrangements.
The Company may act directly or indirectly through an interest in a
partnership, corporation or other form of organization. Implementing
such structure may require the merger, consolidation or reorganization
of the Company with other corporations or forms of business
organization. In addition, the present management and stockholders
of the Company most likely will not have control of a majority of the
voting shares of the Company following a reorganization transaction.
As part of such a transaction, the Company's directors may resign and
new directors may be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other
securities of the Company. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisi-
tion is a so-called "tax free" reorganization under the Internal
Revenue Code of 1986, depends upon the issuance to the stockholders
of the acquired company of up to 80% of the common stock of the
combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions
rather than other "tax free" provisions provided under the Internal
Revenue Code, the Company's stockholders in such circumstances
would retain in the aggregate 20% or less of the total issued and
outstanding shares. This could result in substantial additional dilution
in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might
also be done simultaneously with a sale or transfer of shares
representing a controlling interest in the Company by the current
officers, directors and principal shareholders. (See "Description of
Business - General").
It is anticipated that any securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available,
from registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities either
at the time the transaction is consummated, or under certain
conditions or at specified times thereafter. The issuance of substantial
additional securities and their potential sale into any trading market
that might develop in the Company's securities may have a depressive
effect upon such market.
The Company will participate in a business opportunity only
after the negotiation and execution of a written agreement. Although
the terms of such agreement cannot be predicted, generally such an
agreement would require specific representations and warranties by all
of the parties thereto, specify certain events of default, detail the
terms of closing and the conditions which must be satisfied by each of
the parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default,
and include miscellaneous other terms.
Competition
The Company expects to encounter substantial competition in
its efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies,
small investment companies, and wealthy individuals. Many of these
entities will have significantly greater experience, resources and
managerial capabilities than the Company and will therefore be in a
better position than the Company to obtain access to attractive
business opportunities. The Company also will experience competition
from other public "blind pool" companies, many of which may have
more funds available than does the Company.
Employees
The Company is a development stage company and currently
has no employees. Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does not anti-
cipate a need to engage any full-time employees so long as it is
seeking and evaluating business opportunities. The need for em-
ployees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities. No remuneration will be paid to the Company's
officers except as set forth under "Executive Compensation" and
under "Certain Relationships and Related Transactions."
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. Except for historical
matters, the matters discussed in this Form 10-KSB are forward-
looking statements based on current expectations, and involve risks
and uncertainties. Forward-looking statements include, but are not
limited to, statements under the following headings:
(i) "Description of Business - General" - the general
description of the Company's plan to seek a merger or acquisition
candidate, and the types of business opportunities that may be
pursued.
(ii) "Description of Business - Investigation and Selection
of Business Opportunities" - the steps which may be taken to
investigate prospective business opportunities, and the factors which
may be used in selecting a business opportunity.
(iii) "Description of Business - Form of Acquisition" - the
manner in which the Company may participate in a business
acquisition.
The Company wishes to caution the reader that there are many
uncertainties and unknown factors which could affect its ability to
carry out its business plan in the manner described herein.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company currently maintains a mailing address at 7331 S.
Meadow Court, Boulder, CO 80301 which is the address of its
President. The Company pays no rent for the use of this mailing
address. The Company does not believe that it will need to maintain
an office at any time in the foreseeable future in order to carry out its
plan of operations described herein. The Company's telephone
number is (303) 530-3353.
The Company currently has no investments in real estate, real
estate mortgages, or real estate securities, and does not anticipate
making any such investments in the future. However, the policy of
the Company with respect to investment in real estate assets could be
changed in the future without a vote of security holders.
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 last quarter of the fiscal year which ended
December 31, 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
As of December 31, 1999, there was not currently a public
trading market for the Company's shares. As of December the
Company's securities were held of record by a total of approximately
47 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.
Liquidity and Capital Resources
As of December 31, 1999, the Company remains in the devel-
opment stage. Since inception, it has experienced no significant
change in liquidity or capital resources or stockholder's equity other
than the receipt of proceeds in the amount of $255 from its inside
capitalization funds and receipt of additional paid in capital totaling
$5,849, which included both additional cash contributions totaling
$5,000 as well as the direct payment of a total of $849 in Company
expenses by existing shareholders. Consequently, for the fiscal year
ended December 31, 1999, the Company's balance sheet reflects
current and total assets of $2,419, in the form of cash, and current
liabilities of $1,131, including $201 payable to a related party.
The Company will carry out its plan of business as discussed
above. The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations
During the period from December 30, 1994 (inception)
through December 31, 1999, the Company has engaged in no signifi-
cant operations other than organizational activities, acquisition of
capital and preparation and filing of its registration statement on Form
10-SB under the Securities Exchange Act of 1934, as amended,
compliance with its periodical reporting requirements and initial
efforts to locate a suitable merger or acquisition candidate. No
revenues were received by the Company during this period.
Plan of Operations
For the fiscal year ending December 31, 2000, the Company
expects to continue its efforts to locate a suitable business acquisition
candidate and thereafter to complete a business acquisition transaction.
The Company anticipates incurring a loss for the fiscal year as a
result of expenses associated with compliance with the reporting
requirements of the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The
Company does not expect to generate revenues until it completes a
business acquisition, and, depending upon the performance of the
acquired business, it may also continue to operate at a loss after
completion of a business combination.
Need for Additional Financing
The Company believes it will require additional capital in the
amount of approximately $5,000 in order to pay the costs associated
with completion and filing of this report on Form 10-KSB and the
costs associated with compliance with its continuing reporting obliga-
tions under the Securities Exchange Act of 1934, as amended, for the
fiscal year ending December 31, 2000. This additional capital will be
required whether or not the Company is able to complete a business
combination transaction during the current fiscal year. Furthermore,
once a business combination is completed, the Company's needs for
additional financing are likely to increase substantially.
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 to raise
additional capital through the sale or issuance of additional securities
prior to the location of a merger or acquisition candidate. According-
ly, there can be no assurance that any additional funds will be avail-
able to the Company to allow it to cover its expenses. Notwithstand-
ing the foregoing, however, to the extent that additional funds are
required, the Company anticipates receiving such funds in the form of
advancements from current shareholders without the issuance of
additional shares or other securities, or through the private placement
of restricted securities. In addition, in order to minimize the amount
of additional cash which is required in order to carry out its business
plan, the Company might seek to compensate certain service providers
by issuances of stock in lieu of cash.
Another issue which may arise in conjunction with the question
of whether additional funds will be available to the Company in the
future, is the issue of establishing priorities for funding between the
Company and the four other corporations which are under common
control and which were formed simultaneously with the Company.
Management does have a stated policy of presenting business opportu-
nities to the blind pool or blank check company under common
control which has had its securities registered under the Securities
Exchange Act of 1934 for the longest period of time. In the event
that none of the entities under common control is more mature than
the others, the policy of Management is to arbitrarily assign business
opportunities to such entities. (See "Directors, Executive Officers,
Promoters and Control Persons - Conflicts of Interest"). Management
intends to apply the same policies to issues related to obtaining addi-
tional funding for the Company or for the other blind pools under
common control.
ITEM 7. FINANCIAL STATEMENTS.
FIRST CMA, INC.
(A Development Stage Company)
December 31, 1999
Index to Financial Statements
[C]
Report of Independent Certified Public Accountant 16
Balance Sheet 17
Statements of Operations 18
Statement of Stockholders' Equity 19
Statements of Cash Flows 23
Notes to Financial Statements 25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
First CMA, Inc.
We have audited the accompanying balance sheet of First CMA, Inc.,
a development stage company) as of December 31, 1999, and the
related statement of operations, stockholders' equity, and cash flows
for each of the two years then ended, and for the period from
inception (December 29, 1994) to December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First CMA, Inc.
as of December 31, 1999, and the results of its operations and its cash
flows for each of the two years then ended and for the period from
inception (December 29, 1994) to December 31, 1999 in conformity
with generally accepted accounting principles.
/s/Comiskey & Company
Denver, Colorado
January 10, 2000
PROFESSIONAL CORPORATION
FIRST CMA, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 2,419
Total current assets 2,419
TOTAL ASSETS 2,419
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 930
Accounts payable - related party 201
Total current liabilities 1,131
STOCKHOLDERS' EQUITY
Preferred stock, no par value,
10,000,000 shares authorized;
no shares issued and outstanding -
Common stock, no par value;
100,000,000 shares authorized;
12,000,000 shares issued and
outstanding 2,400
Additional paid-in capital 5,849
Deficit accumulated during the
development stage (6,961)
Total stockholders' equity 1,288
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,419
</TABLE>
The accompanying notes are an integral part of the financial statements.
FIRST CMA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the period
from inception For the year ended
(December 29, 1994) December 31,
to December 31, 1999 1999 1998
<S> <C> <C> <C>
REVENUES $ - - -
EXPENSES
Amortization 200 40 40
Accounting 1,836 1,836 -
Office Supplies 50 50 -
Rent 150 150 -
Consulting Fees 2,145 - -
Legal Fees 2,580 2,323 202
Total expenses 6,961 4,399 242
NET LOSS (6,961) (4,399) (242)
Accumulated deficit
Balance,
beginning of period - (2,562) (2,320)
Balance,
end of period $(6,961) $(6,961) $(2,562)
NET LOSS PER SHARE $ NIL $ NIL $ NIL
WEIGHTED AVERAGE
NUMBER OF SHARES
OF COMMON STOCK
OUTSTANDING 12,000,000 12,000,000 12,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
FIRST CMA, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (December 29, 1994) to December 31, 1999
(Page 1 of 2)
<TABLE>
<CAPTION>
Common Stock Additional
Number of paid-in
shares Amount capital
<S> <C> <C> <C>
Common stock issued for cash
and services, December 1994
at $0.0002 per share 12,000,000 2,400 -
Net loss for the year ended
December 31, 1994 - - -
Balance,
December 31, 1994 12,000,000 2,400 -
Net loss for the year ended
December 31, 1995 - - -
Balance,
December 31, 1995 12,000,000 2,400 -
Net loss for the year ended
December 31, 1996 - - -
Balance,
December 31, 1996 12,000,000 2,400 -
Net loss for the year ended
December 31, 1997 - - -
Balance,
December 31, 1997 12,000,000 2,400 -
Company expenses paid by
shareholders, 1998 - - 574
Net loss for the year ended
December 31, 1998 - - -
Balance,
December 31, 1998 12,000,000 2,400 574
Expenses paid and capital
contributed by shareholders
in 1999 - - 5,275
Net loss for the period ended
December 31, 1999 - - -
Balance,
December 31, 1999 12,000,000 $ 2,400 $ 5,849
</TABLE>
The accompanying notes are an integral part of the financial statements.
FIRST CMA, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (December 29, 1994) to December 31, 1999
(Page 2 of 2)
<TABLE>
<CAPTION>
Deficit accumulated
during the Total
development stockholders'
stage equity
<S> <C> <C>
Common stock issued for cash
and services, December 1994
at $0.0002 per share - $ 2,400
Net loss for the year ended
December 31, 1994 (2,200) (2,200)
Balance,
December 31, 1994 (2,200) 200
Net loss for the year ended
December 31, 1995 (40) (40)
Balance,
December 31, 1995 (2,240) 160
Net loss for the year ended
December 31, 1996 (40) (40)
Balance,
December 31, 1996 (2,280) 120
Net loss for the year ended
December 31, 1997 (40) (40)
Balance,
December 31, 1997 (2,320) 80
Company expenses paid by
shareholders, 1998 - 574
Net loss for the year ended
December 31, 1998 (242) (242)
Balance,
December 31, 1998 (2,562) 412
Expenses paid and capital
contributed by shareholders
in 1999 - 5,275
Net loss for the period ended
December 31, 1999 (4,399) (4,399)
Balance,
December 31, 1999 $ (6,961) $ 1,288
</TABLE>
The accompanying notes are an integral part of the financial statements.
FIRST CMA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the period
from inception For the year ended
(December 29, 1994) December 31,
to December 31, 1999 1999 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (6,961) (4,399) (242)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization 200 40 40
Rent 150 150 -
Stock issued for
consulting fees 2,145 - -
Decrease (increase) in
prepaid expenses - 372 (372)
Increase in accounts
payable 930 930 -
Increase in accounts payable
- related party 201 201 -
Net cash flows from
operating activities (3,335) (2,706) (574)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization
costs (200) - -
Net cash flows from
investing activities (200) - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash provided by
shareholders 5,000 5,000 -
Cash paid for expenses by
shareholders 699 125 574
Issuance of common stock 255 - -
Net cash flows from
financing activities 5,954 5,125 574
NET CHANGE IN CASH
AND CASH EQUIVALENTS 2,419 2,419 -
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD - - -
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 2,419 2,419 -
</TABLE>
The accompanying notes are an integral part of the financial statements
FIRST CMA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. Summary of Significant Accounting Policies
Development Stage Company
First CMA, Inc. (a development stage company) (the "Company") was
initially incorporated under the laws of the State of Colorado on
December 29, 1994. After engaging in minimal activity related to its
business plan, the Company's activities ceased in early 1995, and the
Company became inactive until its reinstatement by the Colorado
Secretary of State on September 25, 1998. The principal office of the
corporation is 7331 South Meadow Court, Boulder, Colorado 80301.
The Company is a new enterprise in the development stage as defined
by Statement No. 7 of the Financial Accounting Standards Board and
has not engaged in any business other than organizational efforts. It
has no full-time employees and owns no real property. The Company
intends to operate as a capital market access corporation by registering
with the U.S. Securities and Exchange Commission under the
Securities Exchange Act of 1934. After this, the Company intends to
seek to acquire one or more existing businesses which have existing
management, through merger or acquisition. Management of the
Company will have virtually unlimited discretion in determining the
business activities in which the Company might engage.
The Company currently does not own any properties or an interest in
any business. Moreover, it has not identified any properties or
business opportunities that it shall seek to acquire, has no
understanding or arrangement to acquire any properties or business
interests, and has not identified any specific geographical area,
industry, or type of business in which it intends to operate.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal Year
The fiscal year of the corporation is December 31.
Loss per Share
Loss per share was computed using the weighted average number of
shares of common stock outstanding during the period.
Organization Costs
Costs to incorporate the Company were originally capitalized to be
amortized over a sixty-month period. With the adoption of SOP 98-5,
the unamortized portion of these costs was written off to expense
during the year ended December 31, 1999.
Financial Instruments
Unless otherwise indicated, the fair value of all reported assets and
liabilities which represent financial instruments (none of which are
held for trading purposes) approximate the carrying values of such
amounts.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with an original maturity
of three months or less to be cash equivalents.
Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that effect the
amounts reported in these financial statements and accompanying
notes. Actual results could differ from those estimates.
Consideration of Other Comprehensive Income Items
SFAF 130 Reporting Comprehensive Income, requires companies to
present comprehensive income (consisting primarily of net income plus
other direct equity changes and credits) and its components as part of
the basic financial statements. For the year ended December 31, 1999,
the Company's financial statements do not contain any changes in
equity that are required to be reported separately in comprehensive
income.
Stock Basis
Shares of common stock issued for other than cash have been assigned
amounts equivalent to the fair value of the service or assets received in
exchange.
2. Stockholders' Equity
As of December 31, 1999, 12,000,000 shares of the Company's no par
value common stock had been issued for a combination of cash and
consulting services provided. The services were converted to shares at
$0.0002 per share and valued at a total of $2,145.
3. Related Party Transactions
As of the date hereof, the Company's officers and directors own
approximately 5,000,000 shares of common stock, constituting
approximately 42% of the Company's issued and outstanding shares.
An individual related to a director of the company is owed for services
rendered and expenses incurred on behalf of the company during the
year in the amount of $201.
4. Income Taxes
The Company has Federal net operating loss carryforwards of
approximately $7,000 expiring during the years 2009 and 2019. The
tax benefit of these net operating losses is approximately $1,340, and
has been offset by a full allowance for realization. This carryforward
may be limited upon the consummation of a business combination
under IRC Section 381. For the years ended December 31, 1999 and
1998, the valuation allowance increased by approximately $840 and
$50, respectively.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
The Company has had no change in, or disagreements with, its
principal independent accountant since the date of inception.
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:
<TABLE>
<CAPTION>
Positions Held and
Name Age Tenure
<S> <C> <C>
Grant W. Peck 45 President and a Director
since September, 1997
Dean F. Sessions 49 Secretary, Treasurer, and a
Director since September, 1997
</TABLE>
The directors named above will serve until the first 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, and there is no arrangement, plan or
understanding as to whether non-management shareholders will
exercise their voting rights to continue to elect the current directors to
the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management shareholders may directly
or indirectly participate in or influence the management of the
Company's affairs.
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. There are no agreements or
understandings for any officer or director to resign at the request of
another person, and none of the officers or directors are acting on
behalf of, or will act at the direction of, any other person.
Biographical Information
Grant W. Peck.
Mr. Peck has served as President and a Director of the
Company since September, 1997. He is also currently the President
and a Director of four other blind pool or blank check companies (i.e.
National CMA, Inc., Capmacco Corp., Second CMA, Inc.and Pacific
CMA, Inc.) which were formed at the same time as the Company and
have a capital structure which is identical to that of the Company.
From 1994 to the present, Mr. Peck has been engaged in the
business of managing commercial real estate which he owns and in the
business of mergers or acquisitions involving blind pool or blank
check companies. Mr. Peck was the principal shareholder, the
President and a Director of J. S. Grant's, Inc., doing business as Just
Squeezed Juices, from its inception in 1985 until January, 1995, when
the Company was sold. J.S. Grant's distributed fresh juices from
Denver, Colorado, to five states, and had approximately $3.5 million
in annual sales and 36 employees. Between 1977 and 1984, Mr. Peck
was an owner and Director of Operations for the Harvest Restaurant
and Bakery, a restaurant company that catered to the then emerging
health-conscious market. During his tenure with Harvest Restaurant
and Bakery, Mr. Peck was responsible for the growth and daily
operation of the restaurant company, employing over 385 employees
and staffing 28 managers.
Mr. Peck is also currently the President and a director of
Buffalo Capital VIII, Ltd (formed September 1997), which is a blind
pool or blank check company, and has been an officer and director of
several other blind pool or blank check companies.
Mr. Peck attended the University of Colorado and Macalester
College in St. Paul, Minnesota, but did not receive a degree from
either institution.
Dean F. Sessions.
Mr. Sessions has served as Secretary and Treasurer, and as a
Director of the Company since September 1997. He is also currently
the Secretary, Treasurer and a Director of four other blind pool or
blank check companies (i.e. National CMA, Inc., Capmacco Corp.,
Second CMA, Inc.,and Pacific CMA, Inc.) which were formed at the
same time as the Company and have a capital structure which is
identical to that of the Company.
From 1973 through 1982 Mr. Sessions was employed as an
investment broker by E.F. Hutton & Co., in its Boulder, Colorado
office. From 1982 through 1986 Mr. Sessions was an officer, director
and principal shareholder of A. S. Food Company, Inc., a Colorado
corporation formed to acquire the franchise rights for Round The
Corner restaurants in Oregon, Washington and British Columbia.
A. S. Food Company, Inc., opened and operated two Round The
Corner restaurants in the Seattle, Washington area, but in 1986 it filed
bankruptcy and ceased operations.
In October 1986, Mr. Sessions renewed his securities license
with the NASD and simultaneously joined the Boulder, Colorado
office of E. F. Hutton as an account executive. From June of 1987
through March of 1988, Mr. Sessions was a registered representative
of L. T. Securities, the securities division of Lincoln Trust Corporation
of Denver, Colorado. From March, 1988, to August, 1990, Mr.
Sessions was a registered representative with Cohig Securities, Inc. of
Denver, Colorado, and from January, 1991 to June, 1994, Mr. Sessions
was a registered representative with Walford and Company, of
Boulder, Colorado.
From 1994 to the present, Mr. Sessions has been engaged in
the business of mergers and acquisitions involving blind pool or blank
check companies. In addition, from August, 1990, to the present, Mr.
Sessions has been actively engaged in attempting to acquire his
Professional Golf Association (PGA) tour card.
Mr. Sessions is also currently the Secretary, Treasurer and a
director of Buffalo Capital VIII (formed in September, 1997), Ltd,
which is a blind pool or blank check company, and has been an officer
and director of several other blind pool or blank check companies.
Mr. Sessions has a B.S. degree from the University of
Colorado.
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director has received any remuneration or
compensation from the Company. Until the Company acquires
additional capital, it is not anticipated that any officer or director will
receive additional 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.
The following table sets forth, as of the date of this Registration
Statement, the number of shares of Common Stock owned of record
and beneficially by executive officers, directors and persons who hold
5% or more of the outstanding Common Stock of the Company. Also
included are the shares held by all executive officers and directors as a
group.
<TABLE>
<CAPTION>
Number of % of
Name and Shares Owned Class
Address Beneficially Owned
<S> <C> <C>
Grant W. Peck <F1>
7331 S. Meadow Court
Boulder, CO 80301 2,491,250<F2> 20.76%
Dean F. Sessions <F1>
P. O. Box 17881
Boulder, CO 80308 2,498,000<F3> 20.82%
Gary S. Joiner
4750 Table Mesa Drive
Boulder, CO 80303 2,491,000<F4> 20.76%
Mark DiSalvo
192 Searidge Court
Shell Beach, CA 93449 2,400,000 20.00%
All directors and executive
officers (2 persons) 4,989,250 41.58%
<FN>
<F1> The person listed is an officer, a director, or both, of the Company.
<F2> Includes 3,500 shares owned by family members, of which Mr. Peck
may be deemed to be the beneficial owner.
<F3> Includes 10,000 shares owned by Mr. Sessions' spouse, of which he may
be deemed to be the beneficial owner.
<F4> Includes 5,000 shares owned by family members, of which Mr.
Joiner may be deemed to be the beneficial owner.
</FN>
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of
Incorporation provide that the Company will indemnify its directors
and officers against expenses and liabilities they incur to defend, settle,
or satisfy any civil or criminal action brought against them on account
of their being or having been Company directors or officers unless, in
any such action, they are adjudged to have acted with gross negligence
or willful misconduct. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Colorado Corporation Code, the Company's
Articles of Incorporation exclude personal liability for its directors for
monetary damages based upon any violation of their fiduciary duties as
directors, except as to liability for any breach of the duty of loyalty,
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation of Section
7-5-114 of the Colorado Corporation Code, or any transaction from
which a director receives an improper personal benefit. This exclusion
of liability does not limit any right which a director may have to be
indemnified and does not affect any director's liability under federal or
applicable state securities laws.
Conflicts of Interest
None of the officers of the Company will devote more than a
portion of his time to the affairs of the Company, and it is most likely
that the Company's officers will devote only a minimal portion of
their time to the affairs of the Company and the four other entities
which were formed simultaneously with the Company and are under
common control with the Company. There will be occasions when the
time requirements of the Company's business conflict with the
demands of the officers' other business and investment activities.
Such conflicts may require that the Company attempt to employ
additional personnel. There is no assurance that the services of such
persons will be available or that they can be obtained upon terms
favorable to the Company.
Each of the Company's officers and directors is also an officer
and a director of several other blind pool or blank check companies.
Although these other companies will, in effect, be in direct
competition with the Company for acquisition of available business
opportunities, the potential that such competition will create a conflict
of interest for the officers and directors of the Company is minimized
by the fact that each of the entities currently has substantially the same
shareholders, and is expected to continue to have the same
shareholders until a business acquisition has been completed.
As a way of further minimizing any potential conflict of
interest in the process of acquisition of available business
opportunities, it is the stated policy of the persons who are officers and
directors of the Company and of other blind pool or blank check
companies, to present the opportunity to the available blind pool or
blank check company that has had its securities registered pursuant to
Section 12(g) of the 1934 Act for the longest period of time. In the
event that none of the pools is more mature than the others, the
officers and directors will arbitrarily assign the particular business
opportunity to one of the pool companies. Potential investors should
expect that, because of the policy that will be employed by the
Company's officers and directors as set forth above, whereby more
"mature" pool companies will have business opportunities presented to
them first, the Company and its shareholders may have to wait a
significant amount of time before an appropriate business opportunity
for the Company is identified.
The officers, directors and principal shareholders of the
Company may actively negotiate for the purchase of a portion of their
common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction. Members of management, and other
principal shareholders of the Company, acquired their shares for
consideration totalling $2,400, including $255 in cash, and services
relating to organization of the Company and developing its business
plan, which services were valued at a total of $2,145. This
consideration is the equivalent of $.0002 per share. It is anticipated
that a substantial premium may be paid by the purchaser in
conjunction with any sale of shares by the Company's officers,
directors and principal shareholders made as a condition to, or in
connection with, a proposed merger or acquisition transaction. The
fact that a substantial premium may be paid to members of Company
management to acquire their shares creates a conflict of interest for
them and may compromise their state law fiduciary duties to the
Company's other shareholders. In making any such sale, members of
Company management may consider their own personal pecuniary
benefit rather than the best interests of the Company and the
Company's other shareholders, and the other shareholders are not
expected to be afforded the opportunity to approve or consent to any
particular buy-out transaction involving shares held by members of
Company management.
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
[C]
27 Financial Data Statement
(b) No reports on Form 8-K were filed by the Company
during the last quarter of its fiscal year ending December 31, 1999.
Signatures
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
FIRST CMA, INC.
By: /s/ ________________________________
Grant W. Peck, President and Director
Date: March 8, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,419
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,419
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,419
<CURRENT-LIABILITIES> 1,131
<BONDS> 0
0
0
<COMMON> 2,400
<OTHER-SE> 5,849
<TOTAL-LIABILITY-AND-EQUITY> 2,419
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,399
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,399)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,399)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
