<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended March 31, 1999
Commission File Number 0-25671
SACIO, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
<TABLE>
<CAPTION>
DELAWARE 88-0414076
<S> <C>
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8320 O'CONNELL ROAD
EL CAJON, CA 92021
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619)699-1721
(ISSUER'S TELEPHONE NUMBER)
</TABLE>
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock -- .001 Par Value
(TITLE OF CLASS)
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Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10 KSB
or any amendment to this Form 10-KSB.
Yes [X] No [ ]
The corporation had no revenues for the year ended March 31, 1999.
The approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of March 31, 1999, based on the average
selling price of one share of the Common Stock of the Company, was $4,300.
PART I
ITEM 1
DESCRIPTION OF THE BUSINESS
Business Development
Sacio, Inc. was incorporated in Delaware on May 31, 1994. The Company was formed
in order to develop a chain of English Pub theme-based restaurants and bars
tentatively called "The Old Coach Inn", starting with an initial Pub in the
downtown redevelopment area of San Diego, California. During 1996 the Company
raised funds necessary to pay the Company's state fees and taxes by the sale of
stock to investors. In January of 1999 the board of directors voted to seek
capital and began development of the Company's business plan.
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
Beginning in 1998, Management determined the Company should complete the
development of it's neighborhood English Pub restaurant and bar. Management's
decision was based primarily on
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the following factors; 1) the success of downtown redevelopment including a new
ballpark district, 2) the popularity of theme-based restaurants and
patron-involved music (such as Karaoke), and 3) the resurgence of the San Diego
economy.
The Company will utilize existing locations that fit general restaurant layout
requirements or acquire the leasehold interest and equipment of existing
restaurants and bars. The overall design of each Pub is intended to create an
ambiance which will be an authentic representation of an old English Inn.
Management intends to take advantage of the availability of existing older
buildings and historical sites in downtown redevelopment areas, including areas
that are designated as Empowerment Zones. Use of the existing wooden floors,
bricks, and architecture will help to create the ambiance as well as retain the
historical significance of these older buildings. Management intends to offer a
simple, international menu with five or six daily main course selections with
variations between lunch and dinner. Location selection will involve proximity
to downtown office businesses for maximum lunch and after work customer traffic.
Management intends to market its restaurants through direct marketing, print,
and local visitor's bureaus. The Pubs will offer V.I.P. cards for frequent
customers and direct marketing at local area sporting events for pre and post
game discounts. Once the Company is sufficiently funded, management will secure
firm bids to build out its first Pub site in San Diego and begin its marketing
and advertising plan. While no construction contract or lease has been
completed, management's current estimate for total construction build-out for
5,000 square feet of Pub space is approximately $500,000. In addition, food and
beverage inventory is estimated by management at approximately $25,000, and a
full liquor license is estimated to cost approximately $50,000 in the San Diego
area. Following the opening of the first Pub, management will have definite data
in order to refine its projected costs of Pub construction and operating costs.
Subject to commercial acceptance by the public and availability of working
capital, management will investigate expansion into additional cities in
California and other Western states.
The Company has no new product or service planned or announced to the public.
The restaurant and bar industry is highly competitive with respect to price,
service, quality and location, and as a result, has a high failure rate. There
are numerous well-established competitors, including national, regional and
local chains, possessing substantially greater financial, marketing, personnel
and other resources than the Company. There can be no assurance that the Company
will be able to respond to various competitive factors affecting the restaurant
industry. However, Management believes that the Company can effectively compete
with those other companies utilizing its unique "pub" concept. Management also
considers it significant that the target market will be downtown redevelopment
areas. The restaurant and bar industry is also generally effected by changes in
consumer preferences, national, regional and local economic conditions and
demographic trends. The performance of restaurant and bar facilities may also be
effected by factors such as traffic patterns, demographic considerations and the
type, number and location of competing facilities. Other factors over which the
Company has no control, which may adversely effect the industry, are inflation,
increased labor and employee benefit costs, increase in minimum hourly wage,
unemployment tax rates and similar matters. Management is not aware of any
significant barriers to the Company's entry into the restaurant and bar
industry, however, the Company at this time cannot ascertain its exact share of
this market.
While the Company has initiated preliminary discussions with restaurant design
and construction companies and restaurant suppliers, it currently has no firm
commitments or contracts for services and supplies. Until such time as the
Company has firm commitments and contracts for design,
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construction of facilities, and wholesalers of restaurant supplies, there is no
assurance that goods and services can be acquired at desired costs on a timely
basis. Management at this time cannot estimate when the Company will have the
sufficient funding necessary to secure commitments and contracts for goods and
services required for the success of its Pub business.
The Company intends to begin its initial operations in San Diego. California is
the nation's largest restaurant market with sales 60% higher than either of the
next two largest states (Texas and Florida). The Company's primary market will
be the businessperson for lunch and the casual diner for dinner. By combining
the complimentary mix of entertainment and dining, a large and diverse segment
of the population will be attracted. Thus, the Company will not be dependant on
any one or a few major customers. When the Company has sufficient funding it
will begin marketing to these potential consumers. Management at this time
cannot estimate when the Company will have the sufficient funding necessary to
begin marketing its restaurant.
When the Company has sufficient funding, management will seek legal council to
determine if copyright or trademark protection is required.
The Company does not need any governmental approval of its principal product or
service.
The Company's business is subject to various federal, state, or local government
regulations, including those related to sanitation, safety, fire and the sale of
food and alcoholic beverages. The failure to maintain food and liquor licenses
would have a material adverse effect on the Company's operating results. The
Company may also be subject to statutes in certain states regarding the recovery
of damages for persons injured by an intoxicated patron of an establishment. As
appropriate, the Company shall seek to obtain liability insurance against such
potential liability. Management will procure all necessary licenses, permits,
and insurance when sufficient funds are raised for working capital.
The Federal Americans With Disabilities Act prohibits discrimination on basis of
disability in public accommodations. The Company could be required to expend
substantial funds to modify the existing historical buildings in order to
provide service or make reasonable accommodations for disabled persons.
The Company currently has no employees.
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.
Based on a recent and ongoing assessment, the Company has determined that any
purchased software will be off-the-shelf software that will be certified Year
2000 compatible for all of its computing requirements. The Company presently
believes that with modifications to existing off-the-shelf software or
conversions to new software, the Year 2000 issue will not pose significant
operational problems and will not materially affect future financial results.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by October 31, 1999, which is prior to any anticipated
impact on operating systems. The total cost
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of this new software is not anticipated to be a material expense to the Company
at this time. If, in spite of management's best efforts, these new off-the-shelf
software products are not adequately modified, resulting date-induced systems
failures could have a material adverse effect on the Company's results of
operations.
ITEM 2
DESCRIPTION OF PROPERTY
The Company's principal executive office address and telephone number are
provided by a Director of the Company at no cost. Management considers the
Company's current principal office space arrangement adequate for current and
short-term estimated growth.
ITEM 3
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of the security holders, through the solicitation of
proxies or otherwise.
PART II
ITEM 5
MARKET FOR COMMON EQUITY AND OTHER RELATED STOCKHOLDER MATTERS
The Company, upon approval of the SEC, will 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
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 March 31, 1999, the Company had 43 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 current public offering of equity. The
Board will be seeking methods of raising additional working capital during the
next twelve months. Methods under consideration by the Board include a loan from
a financial institution or a private equity or debt offering.
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ITEM 6
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
The Company's current cash is sufficient in management's opinion for the next
twelve months as it currently has no direct or indirect operating expenses.
During the next twelve months, the Company plans to raise additional funds in
order to implement its business plan to include design and construction
build-out of its first facility, securing all inventory, supplies, licenses,
permits, insurance, and hiring of Pub staff. There are no current plans for
research and development. There are no current plans to purchase or sell any
significant amount of fixed assets.
Results of Operations
There were no revenues from sales for the twelve months ended March 31, 1999.
The Company sustained a net loss of $3,862 for the twelve months ended March 31,
1999. Losses were primarily attributable to expenditures for operating expenses
of the corporation.
Liquidity and Capital Resources
As of March 31, 1999, the Company had $439 cash on hand and in the bank. The
primary costs and operating expenses for the twelve months ended March 31, 1999
were $2,300 in professional fees, and $980 in licenses and fees.
Currently, the Company maintains a sufficient positive cash balance for working
capital. The losses through March 1999 were due to a lack of revenues and
operating expenses incurred.
ITEM 7
FINANCIAL STATEMENTS
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.
ITEM 8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
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PART III
ITEM 9
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The Directors and Officers of the Company, all of those whose terms will expire
at the 1999 shareholder meeting, 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>
Nancy J. Davis 38 President, 6/14/94
8320 O'Connell Road Secretary,
El Cajon, CA 92021 Director
Stephen P. Huntley 45 Director 6/14/94
8320 O'Connell Road Treasurer
El Cajon, CA 92021
</TABLE>
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 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.
Neither Ms. Davis nor Mr. Huntley hold directorships in any other reporting
company.
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.
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No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Nancy J. Davis, President, Secretary & Director
Owner and operator of Fast Time Bar & Grill, a "racing" theme restaurant and bar
for three years until it's successful sale. Responsible for all aspects of
restaurant management including front of the house operations, personnel
supervision, purchasing and bar management. Background also includes extensive
Inventory, Quality Control, and Purchasing for two large manufacturing
companies, drafting and design layout for an Architectural and Civil Engineering
firm, and Public Accounting experience.
Stephen P. Huntley, Treasurer & Director
Specialist in production of mass-market advertising graphics and multi-media
display presentation campaigns, primarily for scientific, technical
manufacturing, and biological companies. Services include production of graphic
materials for public advertising, and presentation materials for initial public
offerings, national exhibits, scientific conventions and large-scale corporate
seminars. Twelve years prior extensive contracting experience in commercial and
residential construction including interior build-out and painting.
ITEM 10
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other Restricted
Name & annual stock LTIP All other
principle Salary Bonus compen- awards Options Payouts compen-
position Year ($) ($) sation($) ($) SARs ($) sation($)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
N Davis 1996 -0- -0- -0- -0- -0- -0- -0-
President 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- 1 -0- -0- -0-
S Huntley 1996 -0- -0- -0- -0- -0- -0- -0-
Treasurer 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- 1 -0- -0- -0-
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
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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 based upon a 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 $10,000 at each
month end. At this time, management cannot accurately estimate when sufficient
revenues will occur to implement this 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 11
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 - March 31,1999:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
- -------- ------- --------------- -------
<S> <C> <C> <C>
Common Nancy J. Davis 4,500,000(a) 41.2%
8320 O'Connell Road
El Cajon, CA 92021
Common Stephen P. Huntley 4,500,000(b) 41.2%
8320 O'Connell Road
El Cajon, Ca 92021
</TABLE>
- ----------
(a) Ms. Davis received 50,000 shares of the Company's common stock in 1994 for
services, another 50,000 shares were issued to her for services in August
1998. 4,400,000 shares of the Company's common stock were issued to her per
a stock split on August 2, 1998.
(b) Mr. Huntley received 50,000 shares of the Company's common stock in 1994
for services, another 50,000 shares were issued to him for services in
August 1998. 4,400,000 shares of the Company's common stock were issued to
him per a stock split on August 2, 1998.
ITEM 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ms. Davis (Director, President & Secretary) received 50,000 shares of the
Company's common
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stock in 1994 for services, another 50,000 shares were issued to her for
services in August 1998. 4,400,000 shares of the Company's common stock were
issued to her per a forward stock split on August 2, 1998.
Mr. Huntley (Director & Treasurer) received 50,000 shares of the Company's
common stock in 1994 for services, another 50,000 shares were issued to him for
services in August 1998. 4,400,000 shares of the Company's common stock were
issued to him per a forward stock split on August 2, 1998.
PART III
EXHIBITS
Exhibit A Financial Statements
1 Audited financial statements for the years ended March 31, 1997,
1998, 1999
Exhibit 11 Statement re: computation of per share earnings See Exhibit A
Exhibit 23 Consent of Barry L. Friedman, P.C. Included
Exhibit 27 Financial Data Schedule Included
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.
Sacio, Inc.
Date June 22, 1999 By /s/ Nancy J. Davis
--------------- -------------------------------------
Nancy J. Davis, President & Director
Date June 22, 1999 By /s/ Stephen P. Huntley
--------------- -------------------------------------
Stephen P. Huntley, Director
10
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EXHIBIT A
11
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SACIO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
MARCH 31, 1999
MARCH 31, 1998
MARCH 31, 1997
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
------
<S> <C>
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-11
</TABLE>
<PAGE> 14
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors May 28, 1999
Sacio, Inc.
El Cajon, California
I have audited the accompanying Balance Sheets of Sacio, Inc. (A
Development Stage Company), as of March 31, 1999, March 31, 1998, and March 31,
1997, and the related statements of operations, stockholders' equity and cash
flows for the three years ended March 31, 1999, March 31, 1998, and March 31,
1997 and the period May 31, 1994 (inception) to March 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 Sacio, Inc. (A Development
Stage Company), as of March 31, 1999, March 31, 1998, and March 31, 1997, and
the results of its operations and cash flows for the three years ended March 31,
1999, March 31, 1998, and March 31, 1997 and the period May 31, 1994 (inception)
to March 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
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SACIO, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
MARCH MARCH MARCH
31, 1999 31, 1998 31, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT ASSETS:
CASH $ 439 $ 4,300 $ 4,300
------- -------- --------
TOTAL CURRENT ASSETS: $ 439 $ 4,300 $ 4,300
------- -------- --------
OTHER ASSETS: $ 0 $ 0 $ 0
------- -------- --------
TOTAL OTHER ASSETS: $ 0 $ 0 $ 0
------- -------- ---------
TOTAL ASSETS $ 439 $ 4,300 $ 4,300
------- -------- --------
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE> 16
SACIO, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH MARCH MARCH
31, 1999 31, 1998 31, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES: $ 0 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT LIABILITIES: $ 0 $ 0 $ 0
-------- -------- --------
STOCKHOLDERS' EQUITY: (Note #4)
Common stock
Par value $0.00001
Authorized 20,000,000 shares
Issued and outstanding at
March 31, 1997 --
143,000 shares: $ 2
March 31, 1998 --
143,000 shares: $ 2
Common stock
Par value $0.001
Authorized 20,000,000 shares
Issued and outstanding at
March 31, 1999 --
10,935,000 shares: $ 10,935
Additional Paid-In Capital -6,633 +4,299 +4,299
Deficit accumulated during
Development stage: -3,863 -1 -1
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY: $ 439 $ 4,300 $ 4,300
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $ 439 $ 4,300 $ 4,300
-------- -------- --------
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE> 17
SACIO, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Year Year May 31,1994
Ended Ended Ended (Inception)
Mar. 31, Mar. 31, Mar. 31, to Mar. 31,
1999 1998 1997 1999
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- -------------
EXPENSES:
General, Selling and
Administrative: $ 3,862 $ 0 $ 0 $ 3,863
---------- ---------- ---------- -------------
TOTAL EXPENSES: $ 3,862 $ 0 $ 0 $ 3,863
---------- ---------- ---------- -------------
NET PROFIT/LOSS (-): $ -3,862 $ 0 $ 0 $ -3,863
---------- ---------- ---------- -------------
Net Profit/Loss(-)
per weighted share
(Note 1): $ -.0004 $ NIL $ NIL $ -.0004
---------- ---------- ---------- -------------
Weighted average
Number of common
shares outstanding: 10,935,000 10,935,000 10,935,000 10,935,000
---------- ---------- ---------- -------------
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE> 18
SACIO, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Balance,
March 31, 1996 143,000 $ 2 $ 4,299 $ -1
Net loss year ended
March 31, 1997: 0
---------- ---------- ---------- -------
Balance,
March 31, 1997: 143,000 $ 2 $ 4,299 $ -1
Net loss year ended 0
March 31, 1998: ---------- ---------- ---------- -------
Balance,
March 31, 1998: 143,000 $ 2 $ 4,299 $ -1
August 2, 1998
Stock Issued
For Services 100,000 +1 0
August 2, 1998
Forward Stock Split
45:1 10,692,000 +106 -106
October 30, 1998
Change Par Value
From $.00001 to
$.001 +10,826 -10,826
Net Loss Year Ended
March 31, 1999 -3,862
---------- ---------- ---------- -------
Balance,
March 31, 1999 10,935,000 $ 10,935 $ -6,633 $-3,863
---------- ---------- ---------- -------
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE> 19
SACIO, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Year Year May 31,1994
Ended Ended Ended (Inception)
Mar. 31, Mar. 31, Mar. 31, to Mar. 31,
1999 1998 1997 1999
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $ -3,862 $ 0 $ 0 $ -3,863
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities:
Issue Common Stock
For Services +1 0 0 +2
Changes in assets and
Liabilities: 0 0 0 0
-------- -------- -------- --------
NET CASH USED IN
OPERATING ACTIVITIES: $ -3,861 $ 0 $ 0 $ -3,861
CASH FLOWS FROM
INVESTING ACTIVITIES: 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES:
Issuance of Common
Stock for Cash 0 0 0 +4,300
-------- -------- -------- --------
Net Increase (decrease) $ -3,861 $ 0 $ 0 $ 439
Cash,
Beginning of period: 4,300 4,300 4,300 0
-------- -------- -------- --------
Cash, End of Period: $ 439 $ 4,300 $ 4,300 $ 439
-------- -------- -------- --------
</TABLE>
See accompanying notes to financial statements
-6-
<PAGE> 20
SACIO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997
NOTE 1 -- HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized MAY 31, 1994, under the laws of the State of
Delaware as SACIO, INC. 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 March 31, 1999.
-7-
<PAGE> 21
SACIO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997
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 March 31, 1999,
the Company had no dilative common stock equivalents such as stock
options.
Year End
The Company has selected March 31st 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.
-8-
<PAGE> 22
SACIO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997
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 March 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 March 31, 1999 is as follows:
Net operation loss carry forward $ 3,863
Valuation allowance $ 3,863
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire in 2014 to 2019.
-9-
<PAGE> 23
SACIO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997
NOTE 4 -- STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 20,000,000
shares with a par value $.001 per share.
Preferred Stock
Sacio, Inc. has no preferred stock.
On June 14, 1994, the Company issued 100,000 shares of its $0.00001 par
value common stock in consideration of $1.00 to its directors.
On April 30, 1996, the Company issued 43,000 shares of its $0.00001 par
value common stock for cash of $4,300.00.
On August 2, 1998, the Company issued 100,000 shares of its $0.00001 par
value common stock for services of $1.00 to its directors
On August 2, 1998, the Company approved a forward stock split on the basis
of 45:1, thus increasing the common stock from 243,000 shares 10,935,000
shares.
On October 30, 1998, the State of Delaware approved the Company's restated
Articles of Incorporation, which changed the par value from $0.00001 to
$0.001.
-10-
<PAGE> 24
SACIO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999, MARCH 31, 1998, and MARCH 31, 1997
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.
NOTE 6 -- RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not
been reflected therein. The officers and directors of the Company are
involved in other business activities and may in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
NOTE 7 -- WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
share of common stock.
-11-
<PAGE> 1
EXHIBIT 23
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
To Whom It May Concern: May 28, 1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents
to the inclusion of their report of May 28, 1999, on the Financial Statements of
SACIO, INC., as of March 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR YEAR ENDING MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH SACIO, INC. 10-KSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 439
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 439
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 439
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10,935
<OTHER-SE> (6,633)
<TOTAL-LIABILITY-AND-EQUITY> 439
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,862
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,862)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,862)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,862)
<EPS-BASIC> (.004)
<EPS-DILUTED> (.004)
</TABLE>
