U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 0-25171
-----------
FIN SPORTS U.S.A., INC.
-------------
(Name of Small Business Issuer in its Charter)
NEVADA 84-1385529
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 South 900 East #110
Salt Lake City, UT 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
N/A
----------------------------
(Former Name or Former Address, if changed since last Report)
<PAGE>
Securities Registered under Section 12(b) of the Exchange Act: None.
Name of Each Exchange on Which Registered: None.
Securities Registered under Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
------------------------------------
Title of Class
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year:
December 31, 1998 - $0
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
December 31, 1998 - $53.63 There are approximately 53,631 shares of common
voting stock of the Company held by non-affiliates. Because there has been no
"public market" for the Company's common stock during the past five years, the
Company has arbitrarily valued these shares at par value of $0.001 per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None; Not applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of outstanding shares of each of the Issuer's classes of
common equity, as of the latest practicable date:
March 15, 1999
common - 1,083,324
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in
Item 13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
Business Development.
- ---------------------
Organization and Charter Amendments.
-----------------------------------
Fin Sports U.S.A., Inc. (the "Company") was organized under the laws of the
State of Nevada on June 18, 1987, to engage in any lawful purpose, activity or
pursuit. Its primary operations were to be comprised of marketing "FIN" tennis
racquets and sports equipment pursuant to a Distribution Agreement with Fin
Sports, Ltd. of London, England ("FSL").
The Company's initial authorized capital was $10,000.00 consisting of
1,000,000 shares of One Cent ($0.01) par value common voting stock.
On October 11, 1995, the Articles of Incorporation were amended to reflect
a forward split of the 2,800 outstanding voting securities of the Company on a
basis on 2500 for one, while increasing the authorized shares to 50,000,000, and
reducing the par value to $0.001 per share.
On February 10, 1999, the Articles of Incorporation were amended to reflect
a 6.5 to 1 reverse split, while retaining par value of $0.001 per share with
appropriate adjustments being made in the additional paid in capital and stated
capital accounts. A copy of the Articles of Amendment to the Articles of
Incorporation is attached hereto and is incorporated herein by reference.All
computations below take into account this forward split.
Material Changes of Control Since Inception and Related Business History.
------------------------------------------------------------------------
All of the outstanding voting securities of the Company were acquired in
October, 1987, by Commercial Ventures, Ltd., a Delaware corporation, Securities
and Exchange Commission File No. 0-23806 (the "Parent"), and the Company's name
was changed to "Fin USA, Inc." This transaction was deemed to be a "reverse
reorganization."
Until September, 1993, the Company manufactured and marketed the "Fin"
tennis racquets and sports equipment, as a wholly-owned subsidiary of the
Parent, without commercial success.
On September 17, 1993, the Board of Directors of the Parent resolved to
declare a dividend of 100% of the shares of the Company to stockholders of
record of the Parent as of September 23, 1993, as part of a reorganization with
I/NET, Inc., a Michigan corporation. This dividend was a requirement of the
reorganization, and was intended to separate the then pending litigation
involving FSL from the parent and to hopefully benefit and stockholders who had
purchased securities of the parent in reliance on its tennis racquet and sports
equipment business. The Company's shares were issued in the name of the Parent's
record holders as of this date and have been held by the transfer agent for the
Company, American Registrar & Transfer Co. in Salt Lake City, Utah, pending the
filing of a Registration Statement of Form 10-SB with the Securities and
Exchange Commission. All of these stock certificates bear an appropriate
"restricted" legend indicating that these stock certificates and the shares of
common stock represented thereby cannot be sold without registration under the
Securities Act of 1933, as amended (the "1933 Act"), or pursuant to an available
exemption from such registration. Following the completion of all comments on
the Company's Registration Statement on Form 10 by the Securities and Exchange
Commission, it is managements intention to deliver these stock certificates to
these stockholders. No stock certificate, except those owned by "affiliates,"
will be imprinted with the "restricted" legend referred to above, as these
shares have been beneficially owned since 1993. The Company currently has three
beneficial holders; Duane S. Jenson, Leonard W. Burningham, Esq. and Sheryl
Ross. See the caption "Security Ownership of Certain Beneficial Owners and
Management," Part III, Item 2.
In connection with this dividend, the Parent assigned all of its right,
title and interest in the following to the Company: all tangible and intangible
rights in any way related to FSL including rights or claims under the
Distributorship Agreement for unlawful termination, and the rights under a
pending civil action against FSL in the United States District Court for the
District of Utah, Central Division; and claims against FSL and its manufacturing
agent for defective racquets. In early 1994, the United States District Court
subsequently found that the Distribution Agreement's "arbitration" clause was
controlling, and stayed the civil action pending arbitration; this action has
since been dismissed because the Company did not have the funds to pursue FSL in
London, England, and the statute of limitations has run in favor of FSL on all
of the Company's claims. This left the Company with no assets or business.
Pursuant to the Company's Bylaws and the Nevada Revised Statutes, on
September 25, 1998, Duane S. Jenson, the Company's President and a director who
owned a majority of the outstanding voting securities of the Company, designated
Wayne Bassham as President and a director, Todd Albiston as Vice President and a
director and Kent Faulkner as Secretary and a director. These persons will serve
in these capacities until the next annual meeting of the stockholders of the
Company and until their successors are elected and qualified or until their
prior resignations or terminations. Information regarding these person is
contained in Part III, Item 9.
Sales of "Unregistered" & "Restricted" Securities Over The Past Three Years.
- ----------------------------------------------------------------------------
There have been no sales of any securities of the Company during the past
three years. See Part III, Item 10.
Business.
- ---------
Other than the above-referenced matters and seeking and investigating
potential assets, property or businesses to acquire, the Company has had no
material business operations for over five years. To the extent that the Company
intends to continue to seek the acquisition of assets, property or business that
may benefit the Company and its stockholders, it is essentially a "blank check"
company. Because the Company has limited assets and conducts no material
business, management anticipates that any such venture would require it to issue
shares of its common stock as the sole consideration to acquire the venture.
This may result in substantial dilution of the shares of current stockholders.
The Company's Board of Directors shall make the final determination whether to
complete any such venture; the approval of stockholders will not be sought
unless required by applicable laws, rules and regulations, its Articles of
Incorporation or Bylaws, or contract. The Company makes no assurance that any
future enterprise will be profitable or successful.
<PAGE>
The auditor's discussion on the Company's liquidity, Note 2 of the audited
financial statements herein, is as follows: "The Company has accumulated losses
through December 31, 1998 amounting to $10,419, and does not anticipate
generating sufficient cash flows from operations to meet the Company's cash
requirements. These factors raise substantial doubt about the Company's ability
to continue as a going concern. Management plans include finding a
well-capitalized merger candidate to commence operations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty."
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that the number of suitable potential business ventures that may be available to
it may be extremely limited, and may be restricted to entities who desire to
avoid what these entities may deem to be the adverse factors related to an
initial public offering ("IPO"). The most prevalent of these factors include
substantial time requirements, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the lack
of or the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other conditions
or requirements imposed by various federal and state securities laws, rules and
regulations. Any of these types of entities, regardless of their prospects,
would require the Company to issue a substantial number of shares of its common
stock to complete any such acquisition, reorganization or merger, usually
amounting to between 80 and 95 percent of the outstanding shares of the Company
following the completion of any such transaction; accordingly, investments in
any such private entity, if available, would be much more favorable than any
investment in the Company.
Further, the National Association of Securities Dealers, Inc. (the "NASD")
has adopted regulations requiring that all "non-reporting" companies whose
shares of common stock are quoted on the NASD's OTC Bulletin Board be dropped
from such quotations, and the quotation will not be accepted from
"non-reporting" Company. See the heading "Risk Factors," specifically "No Market
for Common Stock, No Market for Shares," herein.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as pro
forma financial information consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.
<PAGE>
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company anticipates
that proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Current Company policy does
not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. In the event that
such fees are paid, they may become a factor in negotiations regarding any
potential acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.
<PAGE>
Year 2000.
- ----------
Because the Company is not presently engaged in any substantial business
operations, management does not believe that computer problems associated with
the change of year to the year 2000 will have any material effect on its
operations. However, the possibility exists that the Company may merge with or
acquire a business that will be negatively affected by the "year 2000" problem.
The effect of such problem or the Company in the future can not be predicted
with any accuracy until such time as the Company identifies a merger or
acquisition target.
Principal Products and Services.
- ---------------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted by
the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -----------------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- -----------------------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- -----------------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company; many
of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a private
entity may have access to the public capital markets. There is no reasonable way
to predict the competitive position of the Company or any other entity in the
strata of these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of any
substantive operations by the Company for the past several years.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
- -----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions,
Royalty Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
<PAGE>
Need for any Governmental Approval of Principal Products or Services.
- ---------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company engages in a merger or acquisition transaction with an
entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on Business.
- ---------
The integrated disclosure system for small business issuers adopted by the
Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however, an entity is not a small business issuer if it has a public float (the
aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an interest
in adopting policies that will streamline the registration process and make it
easier for a small business issuer to have access to the public capital markets.
The present laws, rules and regulations designed to promote availability to the
small business issuer of these capital markets and similar laws, rules and
regulations that may be adopted in the future will substantially limit the
demand for "blank check" companies like the Company, and may make the use of
these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Number of Employees.
- --------------------
None.
<PAGE>
Item 2. Description of Property.
------------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the home address and telephone number of
Duane S. Jenson, and are provided at no cost. Because the Company has no current
business operations, its activities have been limited to keeping itself in good
standing in the State of Nevada, and with preparing this Registration Statement
and the accompanying financial statements. These activities have consumed an
insignificant amount of management's time; accordingly, the costs to Mr. Jenson
of providing the use of his office and telephone have been minimal.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the calendar year covered by this Report or during the
seven previous calendar years.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
There is no "public market" for shares of common stock of the Company. The
Company plans to submit for quotation regarding its common stock on the OTC
Bulletin Board of the National Association of Securities Dealers ("NASD");
however, management does not expect any public market to develop unless and
until the Company completes an acquisition, reorganization or merger. In any
event, no assurance can be given that any market for the Company's common stock
will develop or be maintained.
Sale of "Restricted Shares"
- --------------------------
Of the 1,083,324 outstanding shares of the Company's common stock,
1,029,693 are deemed to be "Restricted" securities within the meaning of Rule
144 of the Securities Act of 1933 (the "1933 Act"). If a market for the
Company's common stock ever develops, Leonard W. Burningham, Duane Jenson and
Sheryl Ross, the owners of these securities, may begin selling them as early as
90 days after any acquisition, reorganization or merger. Such sales may have a
negative effect on the Company's stock price.
Holders
- -------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 188.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two fiscal years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit the Company and its stockholders.
Because the Company has virtually no resources, management anticipates that to
achieve any such acquisition, the Company will be required to issue shares of
its common stock as the sole consideration for such venture.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing or the payment of
expenses associated with reviewing or investigating any potential business
venture, which may be the Company expects to pay from its cash resources. As of
December 31, 1998, it had minimal cash and no cash equivalents. If additional
funds are required during this period, such funds may be advanced by management
or stockholders as loans to the Company. Because the Company has not identified
any such venture as of the date of this Report, it is impossible to predict the
amount of any such loan. However, any such loan should not exceed $25,000 and
will be on terms no less favorable to the Company than would be available from a
commercial lender in an arm's length transaction. As of the date of this Report,
the Company is not engaged in any negotiations with any person regarding any
such venture.
<PAGE>
Results of Operations.
- ----------------------
The Company has had no material operations for over five years.
At December 31, 1998, the Company's had $795 in cash. See the Index to
Financial Statements, Item 7 of this Report.
During the fiscal year ended December 31, 1998, the Company had a net loss
of ($2,679), due to general and administrative expenses. This compares to a net
loss of ($270), also attributable to general and administrative expenses during
the fiscal year ended December 31, 1997. The Company has received no revenues in
either of its two most recent calendar years. See the Index to Financial
Statements, Item 7 of this Report.
Liquidity.
- ---------
During the fiscal years ended December 31, 1998, and 1997, a shareholder
and consultant paid general and administrative expenses on behalf of the Company
totaling $2,559 and $185, respectively. The unsecured loan bears no interest and
is due on demand.
The Company has limited assets and total liabilities of $3,214 for the year
ended December 31, 1998.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
December 31, 1998 and 1997
Independent Auditors' Report
Balance Sheets - December 31, 1998
Statements of Operations for the years ended
December 31, 1998 and 1997
Statements of Stockholders' Equity for the
years ended December 31, 1998 and 1997
Statements of Cash Flows for the years ended
December 31, 1998 and 1997
Notes to the Financial Statements
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountant in the past two calendar years or as of the date of this Report.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
No reports required to be filed during the preceding two calendar years
were required to be filed by directors of executive officers of the Company have
not been timely filed except the Form 3's filed by the officers and directors
and majority shareholdern that were filed on 3/1/99.
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ---------- --------------
<TABLE>
<S> <C> <C> <C>
Duane Jenson Director and 9/93 9/98
President
Sheryl Ross Director and 9/93 9/98
Secretary
Wayne Bassham Director and 9/98 *
President
Kent Faulkner Director and 9/98 *
Secretary
Todd Albiston Director and 9/98 *
Vice President
</TABLE>
* These persons presently serve in the capacities indicated.
<PAGE>
Business Experience.
- -------------------
Wayne Bassham, President and a director is 40 years of age. He has been
employed as a manager for Harley-Davidson of Salt Lake City for the past seven
years.
Kent Faulkner, Secretary and a director is 37 years of age. Mr. Faulkner
has been employed by Eco Labs, a manufacturer and distributor of commercial
cleaners, for the previous 14 years, as a district manager from 1993 to present;
as a sales distribution specialist from 1991 to 1993; and as a territory manager
from 1984 to 1991.
Todd Albiston, Vice President and a director is 40 years of age. Mr.
Albiston has been employed as a account manager for Bergen Medical Corporation,
a medical device company, for the past nine years. Previously, Mr. Albiston was
employed by Great Western Savings and Loan from 1978 to 1990.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business.
Family Relationships.
- ---------------------
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
<PAGE>
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
No reports required to be filed during the preceding two calendar years
were required to be filed by directors of executive officers of the Company have
not been timely filed except the Form 3's filed by the officers and directors
and majority shareholder was filed on 3/1/99.
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Years or Other Restricted Option/ LTIP All
Principal Periods $ $ Annual Stock SAR's Payouts Other
Position Ended Salary Bonus Compenstion($) Awards ($) ($) ($) Comp-
ensation
Wayne
Bassham, 12/31/98 0 0 0 0 0 0 0
President
Kent
Faulkner, 12/31/98 0 0 0 0 0 0 0
Secretary
Todd
Albiston, 12/31/98 0 0 0 0 0 0 0
V.P.,
Sheryl
Ross, 12/31/97 0 0 0 0 0 0 0
Secretary 12/31/96 0 0 0 0 0 0 0
Duane
Jenson, 12/31/97 0 0 0 0 0 0 0
President, 12/31/96 0 0 0 0 0 0 0
</TABLE>
<PAGE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ending December 31, 1998, 1997, or 1996, or the period ending on the date
of this Report.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's directors
are compensated for any services provided as director. No additional amounts are
payable to the Company's directors for committee participation or special
assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
- -------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of this Report, with the computations being based upon 1,083,324 shares of
common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
- ---------------- -------------- --------
<S> <C> <C>
Duane S. Jenson 844,491 78%
5525 S. 900 E. #110
SLC, UT 84117
Leonard W. Burningham, Esq. 101,231 9.3%
455 S. 500 E. #100
SLC, UT 84107
Sheryl Ross 84,616 7.8%
455 S. 500 E. #100
SLC, UT 84107
------ ----
1,030,338 95.1%
</TABLE>
<PAGE>
Security Ownership of Management.
- --------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
- ---------------- ------------------------- --------
<S> <C> <C>
Wayne Bassham 0 0%
Todd Albiston 0 0%
Kent Faulkner 0 0%
--------- ------
All directors and executive
officers as a group 0 0%
(3 persons)
</TABLE>
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
For a description of transactionss between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years"
of Item I.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
- ---------------------------------
Reports on Form 8-K
- -------------------
None.
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------- ------------
<S> <C>
3.1 Certificate of Amendment to the Articles
of Incorporation dated February 4, 1999
respecting a reverse split of 1 for 6.5
27 Financial Data Schedule
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIN SPORTS U.S.A., INC.
Date:3/26/99 /S/ WAYNE BASSHAM
Wayne Bassham
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
FIN SPORTS U.S.A., INC.
Date: 3/26/99 /S/ WAYNE BASSHAM
Wayne Bassham
President and Director
Date: 3/26/99 /S/ TODD ALBISTON
Todd Albiston
Vice President and Director
<PAGE>
FIN SPORTS U.S.A., INC.
FINANCIAL STATEMENTS
December 31, 1998
[WITH INDEPENDENT AUDITORS' REPORT]
<PAGE>
Fin Sports U.S.A., Inc.
TABLE OF CONTENTS
Page
Independent Auditors' Report. . . . . . . . . . . . . 1
Balance Sheet - December 31, 1998 . . . . . . . . . . 2
Statements of Operations for the
years ended December 31, 1998 and
December 31, 1997 . . . . . . . . . . . . . . . . . . 3
Statements of Stockholders' Equity for
the years ended December 31, 1998 and
December 31, 1997 . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows for the
years ended December 31, 1998 and
December 31, 1997 . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-8
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Fin Sports U.S.A., Inc.:
We have audited the accompanying balance sheet of Fin Sports U.S.A., Inc. as of
December 31, 1998, and the related statements of operations, stockholders'
equity, and cash flows for the years ended December 31, 1998 and December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
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 Fin Sports U.S.A., Inc. as of
December 31, 1998, and the results of their operations and their cash flows for
the years ended December 31, 1998 and December 31, 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Fin
Sports U.S.A., Inc. will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has accumulated losses from operations and
has minimal assets which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustment that
might result from the outcome of this uncertainty.
MANTYLA, McREYNOLDS & ASSOCIATES
Salt Lake City, Utah
January 29, 1999
Except for Note 5 as to which the date is February 8, 1999.
<PAGE>
<TABLE>
<CAPTION>
Fin Sports U.S.A., Inc.
Balance Sheet
December 31, 1998
ASSETS
<S> <C>
Assets
Current Assets
Cash .................................................................... $ 795
Total Current Assets .................................................. 795
Total Assets ...................................... $ 795
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current liabilities
Payable to Stockholders ......................................... $ 3,214
Total Liabilities ........................................ 3,214
Stockholders' Equity: (Note 5)
Common stock, $.001 par value;
authorized 50,000,000 shares; issued
and outstanding 7,000,000 shares ............................... 7,000
Additional paid in capital ...................................... 1,000
Accumulated deficit ............................................. (10,419)
Total Stockholders' Equity ............................... (2,419)
Total Liabilities and
Stockholders Equity ............................. $ 795
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
Fin Sports U.S.A., Inc.
Statements of Operations
For the Years Ended December 31, 1998 and December 31, 1997
1998 1997
<S> <C> <C>
Revenue:
Revenues from operations ................................ $ -0- $ -0-
Total Revenue .................................... -0- -0-
General and Administrative Expenses ............................. 2,679 270
Net Income Before Taxes .......................... (2,679) (270)
Income/franchise taxes ........................... -0- -0-
Net income ....................................... $ (2,679) $ (270)
Loss per share .................................................. $ (.01) $ (.01)
Weighted Average Shares Outstanding ............................. 7,000,000 7,000,000
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
Fin Sports U.S.A., Inc.
Statements of Stockholders' Equity
For the Years Ended December 31, 1998 and December 31, 1997
Additional Net
Common Common Paid in Accumulated Stockholders'
Shares Stock Capital Deficit Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 7,000,000 $ 7,000 $ -0- $ (7,185) $ (185)
Net loss for the year ended
December 31, 1996 ........ (285) (285)
Balance, December 31, 1996 7,000,000 7,000 -0- (7,470) (470)
Cash contributed by
shareholder .............. 1,000 1,000
Net loss for the year ended
December 31, 1997 ........ (270) (270)
Balance, December 31, 1997 7,000,000 7,000 1,000 (7,740) 260
Net loss for the year ended
December 31, 1998 ........ (2,679) (2,679)
Balance, December 31, 1998 7,000,000 $7,000 $ 1,000 $(10,419) $(2,419)
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
Fin Sports U.S.A., Inc.
Statements of Cash Flows
For the Years Ended December 31, 1998 and December 31, 1997
1998 1997
<S> <C> <C>
Cash Flows Provided by/(Used for)
Operating Activities:
Net Loss ....................................... $(2,679) $ (270)
Adjustments to reconcile net income
to net cash used for operating
activities:
Expenses paid on behalf
of company by a
stockholder .......................... 2,559 185
Net Cash Used for Operating
Activities .................................... (120) (85)
Cash Flows provided by
Financing Activities:
Cash contributed by stockholder ................ -0- 1,000
Net Increase/(decrease)in cash ................. (120) 915
Beginning Cash ................................. 915 -0-
Ending Cash .................................... $ 795 $ 915
Supplemental Disclosure of Cash Flow Information
Cash paid during the periods for:
Interest ...................................... $ -0- $ -0-
Taxes ......................................... $ -0- $ -0-
</TABLE>
See accompanying notes to financial statements
<PAGE>
Fin Sports U.S.A., Inc.
Notes to Financial Statements
December 31, 1998
Note 1 Organization and Summary of Significant Accounting Policies
(a) Organization
Fin Sports U.S.A., Inc. [Company] incorporated under the laws of the
State of Nevada. The Company was a subsidiary of Fin U.S.A., Inc.
until September 17, 1993, when it was spun off to the shareholders of
its parent.
The Company was originally organized to engage in any lawful purpose,
activity and pursuit. In 1987, the Company began importing and selling
sports racquets and other sporting goods equipment. In May of 1989,
the Company's distribution agreement with a manufacturer was
terminated, inventory was liquidated, and the company ceased its
business operations.
(b) Income Taxes
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the Statement],
"Accounting for Income Taxes." The Statement requires an asset and
liability approach for financial accounting and reporting for income
taxes, and the recognition of deferred tax assets and liabilities for
the temporary differences between the financial reporting bases and
tax bases of the Company's assets and liabilities at enacted tax rates
expected to be in effect when such amounts are realized or settled.
The cumulative effect of this change in accounting for income taxes as
of December 31, 1998 is $0 due to the valuation allowance established
as described below.
(c) Net Loss Per Common Share
Net loss per common share is based on the weighted average number of
shares outstanding.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company has $795 cash at
December 31, 1998.
<PAGE>
Note 1 Organization and Summary of Significant Accounting Policies [continued]
(e) Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Note 2 Liquidity
The Company has accumulated losses through December 31, 1998 amounting
to $10,419, and does not anticipate generating sufficient cash flows
from operations to meet the Company's cash requirements. These factors
raise substantial doubt about the Company's ability to continue as a
going concern.
<PAGE>
Fin Sports U.S.A., Inc.
Notes to Financial Statements
December 31, 1998
[continued]
Management plans include finding a well-capitalized merger candidate
to commence operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Note 3 Income Taxes
The Company adopted Statement No. 109 as of January 1, 1993. Prior
years' financial statements have not been restated to apply the
provisions of Statement No. 109. No provision has been made in the
financial statements for income taxes because the Company has
accumulated substantial losses from operations.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax asset at December 31, 1998 have no impact
on the financial position of the Company. A valuation allowance is
provided when it is more likely than not that some portion of the
deferred tax asset will not be realized.
Note 3 Income Taxes [continued]
Because of the lack of taxable earnings history, the Company has
established a valuation allowance for all future deductible temporary
differences. The company has available net operating loss (NOL)
carryforwards of approximately $10,419, the benefits of which will
expire in various amounts through 2014. NOLs will only be usable to
the extent that the Company is successful in obtaining future
profitability, or incurring profitable transactions.
Note 4 Stockholder Loan
<PAGE>
Fin Sports U.S.A., Inc.
Notes to Financial Statements
December 31, 1998
[continued]
A stockholder has paid expenses on behalf of the Company in the amount
of $2,559 during the year ended December 31, 1998 and $185 during the
year ended December 31, 1997. The Company has recorded a liability for
these expenses to the stockholder. The unsecured loan bears no
interest and is due on demand.
Note 5 Subsequent Event
On February 4, 1999 the Company resolved to effect a 1 for 6.5 reverse
split of its outstanding 7,000,000 shares while retaining the
authorized shares at 50,000,000 and the par value at one mill ($.001)
per share, provided that no shareholder owning 100 or more shares
shall be reduced to less than 100 shares as a result of this action.
The shares required to provide the minimum of 100 shares are to be
conveyed to the Company by a principal stockholder. The transaction as
described in the Certificate of Amendment to the Articles of
Incorporation will affect the Balance Sheet approximately as shown
below:
Stockholders' Equity
Common stock, $.001 par value;
authorized 50,000,000 shares; issued
an outstanding 1,077,000 1,077
Additional paid in capital 6,923
Accumulated deficit (10,419)
Total Stockholders' Equity (2,419)
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
FIN SPORTS U.S.A., INC.
We, the undersigned, Wayne Bassham, President and Director, of Fin Sports
U.S.A., Inc., a Nevada corporation (the "Company"), do hereby certify:
I
Pursuant to Section 78.390 of the Nevada Revised Statutes, the Articles of
Incorporation of the Corporation shall be amended as outlined in Section III
hereof.
II
The foregoing amendment was adopted by Unanimous Consent of the Board of
Directors pursuant to Section 78.315 of the Nevaa Revised Statutes, and by
Consent of Majority Stockholder pursuant to Section 78.320 of the Nevada Revised
Statutes.
III
Puruant to the resolutions adopted by the Board of directors and Majority
Stockholder as set forth in Paragraph II above, the 7,000,000 outstanding shares
of the Corporation were reverse split on a basis of 1 for 6.5, effective
February 10, 1999, retaining the authorized shares at 50,000,000 and par value
at one mill ($0.001) per share, with appropriate adjustments being made in the
additional paid in capital and stated capital accounts of the Corporation;
<PAGE>
provided, however, that no stockholder, computed on a per stock certificate of
record basis on the effective date hereof, currently owning 100 or more shares
shall be reduced to less than 100 shares as a result of the reverse split and
that no stockholder owning less than 100 shares, on the per stock certificate
basis on the effective date hereof, shall be affected by the reverse split; such
additional shares required to provide the minimum of 100 shares to be conveyed
to the Company by a principal stockholder of the Company; and provided, further,
that all fractional shares shall be rounded to the nearest whole share.
IV
The number of shares entitled to vote on the amendment was 7,000,000.
V
The number of shares voted in favor of the amendment was 5,489,188, with
none opposing and none abstaining.
/S/WAYNE BASSHAM
Wayne Bassham, President and Director
STATE OF UTAH )
)SS
COUNTY OF SALT LAKE )
On the 4 day of February, 1999, personally appeared before me, a Notary
Public, Wayne Bassham, who acknowledged that he is the President and Director of
Fin Sports U.S.A., Inc., and that he is authroized to and did execute the above
instrument.
/S/KATHLEEN L. MORRISON
NOTARY PUBLIC
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001072914
<NAME> FIN SPORTS U.S.A., Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 795
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 795
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 795
<CURRENT-LIABILITIES> 3,214
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> (9,419)
<TOTAL-LIABILITY-AND-EQUITY> 795
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (2,679)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,679)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
