<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
2nd Amendment
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
WHITE ROCK ENTERPRISES, LTD.
----------------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 88-0407246
------ ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12507 Campo Road, Spring Valley, CA 91978
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619)699-1758
- ---------------------------
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
-----------------------------
(TITLE OF CLASS)
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PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
General
White Rock Enterprises, Ltd. is filing this Form 10-SB on a voluntary basis in
order to make White Rock Enterprises' financial information equally available to
any interested parties or investors and meet certain listing requirements for
publicly traded securities on the OTC Electronic Bulletin Board which is
sponsored by the National Association of Securities Dealers (NASD). The Company
anticipates filing an information statement with a sponsoring NASD Broker-Dealer
for listing of its securities on the OTC Electronic Bulletin Board upon
completion of the Company's comment period for this Form 10-SB filing.
Business Development
White Rock Enterprises, Ltd. was incorporated in Nevada on October 8, 1998 for
the purpose of developing and marketing its only product, a boot dryer that
dries both boots and shoes for commercial and consumer use. In December 1998 the
board of directors voted to raise capital and implement the Company's business
plan. During February and March 1999 the Company raised capital through the sale
of common stock to investors in order to meet its minimum operating expense
obligations.
There have been no bankruptcy, receivership or similar proceedings.
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
Business of the Issuer
In 1996, Mr. Crooks developed the boot dryer concept and applied for a United
States Patent for the boot dryer that the Company intends to market. The patent
was granted to Mr. Crooks on October 13, 1998. On October 19, 1998, Mr. Crooks
accepted the position of President of the Company. On October 28, 1998, the
Company signed an exclusive license agreement with its President for use of his
United States Patent in exchange for 50,000 shares of the Company's common
stock. Mr. Crooks used his engineering experience and knowledge of electrical
commercial products and mold design in developing and testing the boot dryer
prototypes and master molds during evenings and weekends in his personal spare
time. This product development and testing were done as an avocational exercise
by Mr. Crooks, not the Company. Neither Mr. Crooks nor the Company were able to
accurately estimate the total development and testing costs of the product or
the market value of the product. When Mr. Crooks and the Board of Directors met
to determine the value of the license, there was a meeting of the minds based
upon individual judgement rather than quantifiable methods that 50,000 shares of
common stock were fair consideration for the license of a product that, while
ready to produce, had no precise accounting of development costs and no
guaranteed customer market. This valuation was arbitrary and bears no
relationship to assets, earnings, or market values or any other traditional
economic value.
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The Company's current consumer boot dryer product is considered by Management to
be ready for marketing to retail mass marketers and sporting goods stores in
regions that receive considerable amounts of rain and snow in the Northern
United States and Canada. The Company's current commercial boot dryer product
version is considered by Management to be ready for marketing to ski and sports
rental shops in the Northern United States and Canada. The Company's product is
unique in that it circulates massive amounts of room temperature air, thereby
utilizing circulation evaporation to quickly remove the moisture from wet boots
and shoes. Other boot dryers use heat in their drying process or utilize much
slower air circulation. Utilizing the Company's evaporation boot dryer at room
temperature, drying times are much faster than heated boot dryers, while
eliminating all of the heat damage to boot and shoe leather associated with
heated boot dryers.
Product Development
In exchange for 50,000 shares of the Company's common stock, the Company
received from the patent holder (the Company's current President) exclusive
manufacturing and marketing license agreement rights for the boot dryer that
included the completed product component designs, final master plastic injection
molds, materials sourcing, prototype models, and completed product testing for
durability, reliability, and performance. During the next twelve months the
Company intends to accomplish the following milestones: during months one
through six raise capital of $800,000 to $900,000 through the sale of securities
through a private placement offering; during months three through nine market
the Company's consumer product to retail mass marketers and sporting goods
stores and market its commercial product to ski and sports rental shops; during
month seven choose the manufacturing supplier and ship master molds and wiring
schematics to manufacturer, during months eight through ten test prototypes,
during months ten and eleven provide quality assurance review to manufacturer
and complete product modifications, during month twelve final test and approve
all components for product delivery beginning in the first quarter after month
twelve.
Manufacturing and Distribution
The Company intends to utilize available product manufacturers to produce its
boot dryer. The initial marketing efforts will require Management and
commissioned sales representatives to market the boot dryer to retail outlets
and ski and sports rental shops. Management estimates that boot dryer packaging
artwork will cost approximately $15,000 based upon discussions with local
commercial artists. Product manufacturing costs are approximately $10.00 in Asia
to approximately $15.00 in the United States per boot dryer based upon
non-binding discussions with manufacturers. Manufacturers will drop ship the
Company's product to retailers for approximately $1.50 per boot dryer based upon
non-binding discussions with manufacturers. Management estimates direct
marketing costs to be approximately $2.00 per boot dryer. Management may use
product representatives and pay them between 10% and 15% of sales to market its
product. The Company anticipates charging a wholesale price of $25.00 to $30.00,
depending on actual direct manufacturing costs. The Company cannot predict if it
will raise sufficient equity financing to commence boot dryer product
production. The Company cannot predict when it will be able to generate
significant revenues and profits from operations to continue in business or fund
anticipated growth.
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Management intends to market its consumer boot dryer through retail outlets such
as WalMart, K-Mart, Target, Sportsmart, and The Sports Authority stores.
Management has no market or distribution agreements with the above retail
outlets or any other retail outlets. Management also intends to market its
commercial boot dryer through independent ski and sports rental shops in
recreational areas. Management has no market or distribution agreements with any
ski or sports rental shops. Once the Company is sufficiently funded, management
will seek out distribution agreements with retail outlets and ski and sports
rental shops.
Risk Factors
Investors in the Company should be particularly aware of the inherent risks
associated with the Company's plans and product. These risks include a lack of
independent market testing of the Company's product, lack of a proven market for
the Company's product, lack of an assured manufacturer of its product, lack of
equity funding, the limited experience of management, and the size of the
Company compared to the size of its competitors. Although Management intends to
implement its business plan through the foreseeable future and will do its best
to mitigate the risks associated with its business plan, there can be no
assurance that such efforts will be successful. Currently, Management is
concentrating on positioning itself to advance its business plan. Management has
no liquidation plans should the Company be unable to receive funding. Should the
Company be unable to implement its business plan, Management would investigate
all options available to retain value for the shareholders. Among the options
that would be considered are: the sale of the rights to the boot dryer,
acquisition of another product or technology, or a merger or acquisition (as a
parent or target) of another business entity that has revenue and/or long-term
growth potential. There are no pending arrangements, understandings or
agreements with outside parties for acquisitions, mergers or any other material
transactions.
The current officers, Mr. Crooks and Ms. Boyd, are the sole officers, directors
and founders of the company and have control in directing the activities of the
company. They are involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific business
opportunity becomes available, the officers and directors of the company may
face a conflict of interest. The Company has not formulated a plan to resolve
any conflicts that may arise.
New Products or Services
The Company has no new product or service planned or announced to the public.
Competition
The size and financial strengths of the Company's competitors, such as Air Dry
Systems, PEET, and Snap Dry, are substantially greater than those of the
Company. However, management believes that the Company can effectively compete
with those other companies because of the unique nature of its product. The
Company's uniqueness is based upon its evaporation design which uses only room
temperature and forced air movement, unlike other competitors using heat
processes or much slower air circulation. This unique feature, Management
believes, will allow the Company's boot dryer to compete effectively in the
market. Management is not aware of any significant barriers to the Company's
entry into the retail boot dryer market, however, the Company at this time
cannot ascertain its exact market share of the boot dryer product category.
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Manufacturers and Suppliers
Boot dryer manufacturing is available through various suppliers such as Pegasus
in China or Avery Molding in the United States. At this time the Company has no
formal contracts with any suppliers or manufacturers and will not initiate
negotiations with any potential suppliers or manufactures until such time as the
Company has sufficient funding per its business plan.
Major Customers
The Company intends to sell its products through a variety of retail outlets to
the public and will not depend on any one or a few major customers.
Licenses
On October 28, 1998, the Company signed an exclusive license agreement with its
President for use of United States Patent number 5,819,433 for the boot dryer
product. The Company issued 50,000 shares of its common stock in exchange for a
ten year exclusive right to development, manufacturing, marketing, sale,
sublicensing, and any and all usages of the boot dryer in the United States and
throughout the world. After ten years the license is subject to automatic
renewal each year thereafter, subject to written notification, sixty days in
advance to the renewal, by both parties of the license agreement. The Company
was formed by its two directors for the purpose of having a corporate entity in
order to design, produce, and market the boot dryer product. The President was
the creating force to design the boot dryer and the company is the sole holder
of the rights to the intellectual property per its licensing agreement with the
President.
Research & Development
All research and development costs since inception have been immaterial in cost
and will not be passed on to customers.
Government Approval
The Company does not need any governmental approval of its principal product.
The Company's business is not subject to material regulation by federal, state,
or local governmental agencies.
Employees
The Company's only employees are its two officers who will devote as much time
as the board of directors determines is necessary to manage the affairs of the
Company. The officers intend to work on a full time basis when the Company is
able to provide proper remuneration as discussed in Item 6, "Executive
Compensation".
Year 2000 Disclosure
Computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business activities.
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The Company's Management has hands-on familiarity with all of the software that
will be utilized in its business plan and has confirmation from third party
suppliers that its proposed software is certified Year 2000 compatible for all
of its computing requirements. In addition, proposed suppliers of office
equipment for the Company's business plan have confirmed that embedded
technology systems such as micro processors in telephone systems and other
non-computer devices that will be purchased per the Company's business plan are
already Year 2000 compatible.
While the Company has made what it believes to be adequate inquiries of the its
software suppliers as to Year 2000 compliance, there can be no guarantee that
the software suppliers will be adequately prepared for every possible contingent
Year 2000 software problem, which could have minor or material adverse effects
on the Company's results of operations. In a most likely worst case scenario of
moderate software problems, the Company may experience minor or material adverse
cash flow effects depending on the length of the worst case scenario. The
company's contingency plan in a most likely worst case scenario would be to rely
upon its software suppliers such as Microsoft and IBM to provide software
corrections via Internet and telephone support systems. Based upon the extent of
adverse cash flow, Management may decide to reduce operations to match the
adverse cash flow or seek additional equity funding. As per the company's
business plan, actual production and distribution of its products is not
scheduled to commence until the first quarter of month twelve, well beyond any
anticipated adverse effects of January 2000.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by the first quarter of 2000, which is prior to any
anticipated impact on its operating systems. The total cost of this new software
is not anticipated to be a material expense to the Company at this time.
ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Plan of Operation
The Company maintains a cash balance sufficient to sustain corporate operations
until such time as Management can raise the funding necessary to advance its
business plan. The losses of $111 through May 1999 were due to operating
expenses including management fees for bookkeeping services. Sales of the
Company's equity securities have allowed the Company to maintain a positive cash
flow balance.
During the next twelve months, Management's business plan is for the Company to
take the following steps to market its boot dryer product: during months one
through six raise capital of $800,000 to $900,000 through the sale of securities
via a private placement; during months three through nine market the Company's
consumer product to retail mass marketers and sporting goods stores and market
its commercial product to ski and sports rental shops with a budget of $200,000;
during months seven through twelve complete contracts with suppliers to produce
the Company's product for delivery beginning in the first quarter after month
twelve with a budget of $400,000 and provide funding for operating expenses with
a budget of $100,000. Cash flow from sales is estimated to begin after the end
of the next twelve months. The Company will face considerable
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risk in reaching each of its business plan milestones, such as cost overruns in
each step, production delays in manufacturing, a lack of interest in the
Company's product on the part of retailers and consumers, and a shortfall of
funding due to the Company's inability to raise capital in the equity securities
market. If no funding is received during the next twelve months, the Company
will be forced to rely on its existing cash in the bank and funds loaned by the
directors and officers. The Company's officers and directors have no formal
commitments or arrangements to advance or loan funds to the Company and no
restrictions or limits have been discussed or considered, other than the loans
shall be interest free. In such a restricted cash flow scenario, the Company
would be unable to complete its business plan steps, and would, instead, delay
all cash intensive activities. Without necessary cash flow as detailed above,
the Company may be dormant during the next twelve months, or until such time as
necessary funds could be raised in the equity market.
There are no current plans for additional product research and development.
There are no current plans to purchase or sell any significant amount of fixed
assets. The Company's business plan provides for an increase of thirty two
employees during the next twelve months.
Results of Operations
There were no revenues from sales for the period ended May 31, 1999. The Company
sustained a net loss of $111 for the period ended May 31, 1999. Losses were
primarily attributable to expenditures for the operations of the corporation.
Liquidity and Capital Resources
As of May 31, 1999, the Company had $5,989 cash on hand and in the bank. At the
current stage of the Company's development, costs and operating expenses are
negligible.
ITEM 3
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 12507 Campo Road, Spring
Valley, CA 91978. The principal executive office and telephone number are
provided by an officer of the corporation. The costs associated with the use of
the telephone and mailing address were deemed by management to be immaterial as
the telephone and mailing address were almost exclusively used by the officer
for other business and personal purposes. Management considers the Company's
current principal office space arrangement adequate for current and short-term
estimated growth.
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ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - May 31,1999:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
- -------- ---------------- ------------- -------
<S> <C> <C> <C>
Common Dennis J. Crooks 2,550,000 (a) 31.3%
13983 Humo Drive
Poway, CA 92064
Common Sharon A. Boyd 2,550,000 (b) 31.3%
12507 Campo Road
Spring Valley, CA 91978
Total 5,100,000 62.6%
</TABLE>
(a) Mr. Crooks individually received for exclusive license rights 50,000
shares of the Company's common stock on October 28, 1998, an additional
2,500,000 shares of the Company's common stock were issued to him per a
stock split on May 15, 1999.
(b) Ms. Boyd individually received for bookkeeping and administrative
services 50,000 shares of the Company's common stock on October 28,
1998, an additional 2,500,000 shares of the Company's common stock were
issued to her per a stock split on May 15, 1999.
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose terms will expire
10/15/99, or at such a time as their successors shall be elected and qualified
are as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected
- -------------- --- -------- ------------------
<S> <C> <C> <C>
Dennis J. Crooks 54 President, 10/19/98
13983 Humo Drive Director
Poway, CA 92064
Sharon A. Boyd 52 Sec/Treas 10/19/98
12507 Campo Road Director
Spring Valley, CA 91978
</TABLE>
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Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities nor has any such person been the subject of
any Order of a State authority barring or suspending for more than sixty (60)
days, the right of such a person to be engaged in such activities or to be
associated with such activities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Dennis J. Crooks, President & Director
1991 - Current Owner and president, Q.R.I. Corporation. Engineering and
design consulting contractor providing engineering
services in the fields of manufacturing, automotive,
electrical, mechanical, plastics, and mold construction.
Responsible for marketing, engineering certifications,
engineering design, and mold design. Supervise a staff of
two to five employees in product design and testing and
prototype mold construction.
B.A. in Industrial Technology
Sharon A. Boyd, Secretary, Treasurer & Director
1994 - Current Owner and president, B.G. Consultants, Inc. Providing
bookkeeping, income tax services and sales and payroll tax
compliance to a variety of business clients including,
engineering companies, contractors, and manufacturers.
Supervise a staff of two. Her clients range in size from
$100,000 to $2,000,000 in annual revenues. Provides
bookkeeping and administrative services to Q.R.I.
Corporation owned by Dennis J. Crooks.
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ITEM 6
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name & Year Salary Bonus Other Restricted Options LTIP All other
principle ($) ($) annual stock SARs Payouts compen-
position compen- awards ($) ($) sation ($)
sation ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
D. Crooks 1998 -0- -0- -0- -0- -0- -0- -0-
President
S Boyd 1998 -0- -0- -0- -0- -0- -0- -0-
Director
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
The Directors and Principal Officers have worked with no remuneration until such
time as the Company receives sufficient revenues necessary to provide proper
salaries to all Officers and compensation for Directors' participation. The
Officers and the Board of Directors have the responsibility to determine the
timing of remuneration for key personnel based upon such factors as positive
cash flow to include stock sales, product sales, estimated cash expenditures,
accounts receivable, accounts payable, notes payable, and a cash balance of not
less than $12,000 at each month end. When positive cash flow reaches $12,000 at
each month end and appears sustainable the board of directors will readdress
compensation for key personnel and enact a plan at that time which will that
benefits the Company as a whole. At this time, management cannot accurately
estimate when sufficient revenues will occur to implement this compensation, or
the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.
ITEM 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Crooks received for an exclusive license agreement 50,000 shares of the
Company's common stock on October 28, 1998, an additional 2,500,000 shares of
the Company's common stock were issued to him per a stock split on May 15, 1999.
Ms. Boyd received for services 50,000 shares of the Company's common stock on
October 28, 1998, an additional 2,500,000 shares of the Company's common stock
were issued to her per a stock split on May 15, 1999.
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ITEM 8
DESCRIPTION OF SECURITIES
The Company's Certificate of Incorporation authorizes the issuance of 50,000,000
Shares of Common Stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of Common Stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of Common Stock
have cumulative voting rights. Holders of shares of Common Stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor. In
the event of a liquidation, dissolution, or winding up of the Company, the
holders of shares of Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of Common Stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares. All of the
outstanding Common Stock is, and the shares offered by the Company pursuant to
this offering will be, when issued and delivered, fully paid and non-assessable.
The Securities and Exchange Commission has adopted Rule 15g-9 which established
the definition of a "penny stock", for the purposes relevant to the Company, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require:
(I) that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (I) obtain financial
information and investment experience objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks are suitable for
that person and the person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form, (I) sets forth the basis on which the
broker or dealer made the suitability determination; and (ii) that the broker or
dealer received a signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
PART II
ITEM 1
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
The Company plans to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers (NASD). The OTC
Electronic Bulletin Board is a network of security dealers who buy and sell
stock. The dealers are connected by a computer
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network which provides information on current "bids" and "asks" as well as
volume information.
As of the date of this filing, there is no public market for the Company's
securities. As of May 31, 1999, the Company had 56 shareholders of record. The
Company has paid no cash dividends. The Company has no outstanding options. The
Company has no plans to register any of its securities under the Securities Act
for sale by security holders. There is no public offering of equity and there is
no proposed public offering of equity.
ITEM 2
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
On October 28, 1998, the shareholders authorized the issuance of 50,000 shares
of common stock for services to each of the officers and directors of the
Company for a total of 100,000 Rule 144 shares. The Company relied upon Section
4(2) of Securities Act of 1993, as amended (the "Act"). The Company issued the
shares in satisfaction of management services rendered to officers and
directors, which does not constitute a public offering.
From the period of approximately January 1, 1999 until March 31, 1999, the
Company offered and sold 60,000 shares at $0.10 per share to non-affiliated
private investors. Each prospective investor was given a private placement
memorandum designed to disclose all material aspects of an investment in the
Company, including the business, management, offering details, risk factors and
financial statements. Each investor also completed a subscription confirmation
letter and private placement subscription agreement whereby the investors
certified that they were purchasing the shares for their own accounts, with
investment intent. Each investor was either accredited as defined, or were
"sophisticated" purchasers, having prior investment experience or education, and
having adequate and reasonable opportunity and access to corporate information.
This offering was not accompanied by general advertisement or general
solicitation. The Company relied on Rule 504 of Regulation D as the basis of
exemption from registration, as identified on Form D filed with the Commission
on February 9, 1999. Blue Sky filings were made (where required) in each state
that the shares were offered and sold.
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On May 15, 1999, the Board of Directors authorized a forward stock split of 50
shares for each outstanding shares (51:1) resulting in a total of 8,160,000
shares of common stock issued and outstanding.
ITEM 5
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The
By-Laws also allow for reimbursement of certain legal defenses.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
PART F/S
The audited financial statements of the Company and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
-13-
<PAGE> 14
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
MAY 31, 1999
<PAGE> 15
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
<S> <C>
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-10
</TABLE>
<PAGE> 16
BARRY L. FRIEDMAN
Certified Public Accountant
1582 Tulita Drive, Las Vegas, NV 89123
Phone 702-361-8414 Fax 702-896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors June 14, 1999
White Rock Enterprises, Ltd.
Spring Valley, California
I have audited the accompanying Balance Sheets of White Rock
Enterprises, Ltd. (A Development Stage Company), as of May 31, 1999 and the
related statements of operations, stockholders' equity and cash flows for the
period October 8, 1998 (inception) to May 31, 1999. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of White Rock
Enterprises, Ltd. (A Development Stage Company), as of May 31, 1999, and the
results of its operations and cash flows for the period October 8, 1998
(inception) to May 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
- ---------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE> 17
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
May 31, 1999
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS:
Cash $5,989
------
TOTAL CURRENT ASSETS $5,989
------
OTHER ASSETS $ 0
------
TOTAL OTHER ASSETS $ 0
------
TOTAL ASSETS $5,989
------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 0
------
TOTAL CURRENT LIABILITIES $ 0
------
STOCKHOLDERS' EQUITY: (Note #4)
Common stock
Par value $0.001
Authorized 50,000,000 shares
Issued and outstanding at
May 31, 1999 -
8,160,000 shares: $8,160
Additional Paid-In Capital -2,060
Deficit accumulated during
Development stage: -111
TOTAL STOCKHOLDERS' EQUITY: $5,989
------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $5,989
------
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE> 18
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
October 8, 1998 (inception), to May 31, 1999
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C>
INCOME:
Revenue $ 0
----------
EXPENSES:
Management Fee $ 100
Bank Charges 11
----------
TOTAL EXPENSES $ 111
----------
NET PROFIT/LOSS (-): $-111
----------
Net Profit/Loss(-)
per weighted share
(Note 1): $NIL
----------
Weighted average
Number of common
shares outstanding: 8,160,000
----------
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE> 19
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- --------- ---------- --------
<S> <C> <C> <C> <C>
October 28, 1998s
Issued for Services 100,000 $ 100 $ 0
March 31, 1999
Issued for Cash 60,000 60 5,940
May 15, 1999
Forward Stock Split
51:1 8,000,000 8,000 -8,000
Net loss October 8,
1998 (inception) to
May 31, 1999 -111
--------- --------- --------- -------
Balance,
May 31, 1999 8,160,000 $ 8,160 $ -2,060 $ -111
========= ========= ========= =======
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE> 20
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
October 8, 1998 (inception), to May 31, 1999
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
CASH FLOWS FROM
OPERATING ACTIVITIES
<S> <C>
Net Loss $ -111
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services +100
Changes in assets and
Liabilities 0
-------
NET CASH USED IN
OPERATING ACTIVITIES $ -11
CASH FLOWS FROM
INVESTING ACTIVITIES 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of Common
Stock for Cash +6,000
-------
Net Increase (decrease) $ 5,989
Cash,
Beginning of period 0
Cash, End of Period $ 5,989
------
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE> 21
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized OCTOBER 8, 1998, under the laws of the State
of Nevada as WHITE ROCK ENTERPRISES, LTD. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of May 31, 1999.
-6-
<PAGE> 22
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of May 31, 1999, the Company had no dilative common
stock equivalents such as stock options.
Year End
The Company has selected September 30th as its fiscal year-end.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash
transaction is to issue the equivalent amount of stock equal to
the fair market value of the assets or services received.
-7-
<PAGE> 23
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
Computer programs that have time sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing
disruption of normal business activities.
The company's potential software suppliers have verified that
they will provide only certified "Year 2000" compatible software
for all of the company's computing requirements. Because the
company's products and services are sold to the general public
with no major customers, the company believes that the "Year
2000" issue will not pose significant operational problems and
will not materially affect future financial results.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended May 31,
1999, due to the net loss and no state income tax in Nevada, the state
of the Company's domicile and operations. The Company's total deferred
tax asset as of May 31, 1999 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Net operation loss carry forward $ 0
Valuation allowance $ 0
Net deferred tax asset $ 0
</TABLE>
-8-
<PAGE> 24
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1999
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 50,000,000
shares with a par value $.001 per share. Voting rights consist of one
vote for each share of stock. No additional rights or privileges have
been authorized.
Preferred Stock
The corporation has not authorized the issuance of preferred stock.
On October 28, 1998, the Company issued 100,000 shares of its $0.001 par
value common stock to its directors. Fifty thousand (50,000) shares to
one director for a license agreement and Fifty thousand (50,000) to a
director for services.
On March 31, 1999, the Company issued 60,000 shares of its $0.001 par
value common stock for cash of $6,000.00.
On May 15, 1999, the Company approved a forward stock split on the basis
of 51:1, thus increasing the common stock from 160,000 shares to
8,160,000 common shares.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. The stockholders/officers and or directors
have committed to advancing the operating costs of the Company interest
free.
-9-
<PAGE> 25
WHITE ROCK ENTERPRISES, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1999
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides the Company with the use of a
telephone and business mailing address without charge. Such costs are
immaterial to the financial statements as telephone and mailing address
are used almost exclusively by the officer for other business and
personal purposes and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may in the future, become involved in other business
opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and
their other business interests. The Company has not formulated a policy
for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
share of common stock.
NOTE 8 - LICENSE AGREEMENT
On October 28, 1998, the Company signed an exclusive license agreement
with its President for the use of his United States Patent for a boot
dryer product. The Company issued 50,000 shares of its common stock in
exchange for a ten year exclusive right to the development,
manufacturing, marketing, sale, sublicensing, and any and all usages of
the boot dryer in the United States and throughout the world. After ten
years the license is subject to automatic renewal each year thereafter,
subject to written notification, sixty days in advance to the renewal,
by both parties of the license agreement.
-10-
<PAGE> 26
BARRY L. FRIEDMAN
Certified Public Accountant
1582 Tulita Drive, Las Vegas, NV 89123
Phone 702-361-8414 Fax 702-896-0278
To Whom It May Concern: June 14, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of June 14, 1999, on the Financial
Statements of WHITE ROCK ENTERPRISES, LTD., as of May 31, 1999, in any filings
that are necessary now or in the near future with the U.S. Securities and
Exchange Commission.
Very truly yours,
/s/ Barry L. Friedman
- ---------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE> 27
PART III
EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit 1 Underwriting agreement None
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included in Original Filing
Exhibit 3(ii) Bylaws Included in Original Filing
Exhibit 4 Instruments defining the rights of holders Included in Original Filing
Exhibit 7 Opinion re: liquidation preference None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Manufacturing and Marketing Exclusive
License Agreement Included in Original Filing
Exhibit 11 Statement re: computation of per share earnings See Financial Stmts.
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included in Original Filing
Exhibit 24 Power of Attorney None
Exhibit 27 Financial Data Schedule Included in Original Filing
Exhibit 28 Reports furnished to State insurance agencies None
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
White Rock Enterprises, Ltd.
Date 11/29/99 By /s/ Dennis J. Crooks
------------------------ --------------------------------------
Dennis J. Crooks, President & Director
Date 11/29/99 By /s/ Sharon A. Boyd
------------------------ --------------------------------------
Sharon A. Boyd, Sec/Treas & Director
