As filed with the Securities and Exchange Commission on September 10, 1999
Registration No. 000-25843
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
AMENDMENT NO. 1
to
FORM 10-SB
GENERAL FORM FOR REGISTRANTS OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
QUAZON CORP.
(Name of Small Business Issuer in its charter)
NEVADA 87-0570975
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
135 West 900 South, Salt Lake City, Utah 84101
(Address of principal executive officers) (Zip Code)
Issuer's telephone number: (801) 278-2805
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
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
(Title of Class)
QUAZON CORP.
FORM 10-SB
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business. . . . . . . . . . . . . . . . . 3
ITEM 2. Management's Discussion and Analysis or
Plan of Operation. . . . . . . . . . . . . . . . . . . 13
ITEM 3. Description of Property. . . . . . . . . . . . . . . . . 18
ITEM 4. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . 18
ITEM 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . . 19
ITEM 6. Executive Compensation . . . . . . . . . . . . . . . . . 23
ITEM 7. Certain Relationships and Related Transactions . . . . . 23
ITEM 8. Description of Securities. . . . . . . . . . . . . . . . 24
PART II
ITEM 1. Market Price of and Dividends on Registrant's
Common Equity and Other Shareholder Matters. . . . . . 25
ITEM 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 27
ITEM 3. Changes in and Disagreements with Accountants. . . . . . 27
ITEM 4. Recent Sales of Unregistered Securities. . . . . . . . . 27
ITEM 5. Indemnification of Directors and Officers. . . . . . . . 28
PART F/S
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 29
PART III
ITEM 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . . S-1
ITEM 2. Description of Exhibits. . . . . . . . . . . . . . . . . S-1
Signatures . . . . . . . . . . . . . . . . . . . . . . . S-2
PART I
Except as otherwise indicated, the information in this
Registration Statement reflects the one (1) share for two hundred
fifty (250) shares reverse stock split of the common Stock effected
in October 1997, and the one (1)share for fifteen (15) shares
reverse stock split effected in October 1998.
ITEM 1. Description of Business
History
Quazon Corp. (the "Company") was organized on June 26, 1981
under the laws of the State of Utah as The Fence Post, Inc., having
the stated purpose of developing and selling real estate of all
kinds. The Company initially engaged in the business of operating
a retail basket shop and, from the time of its inception, the
Company has undergone several name changes and business changes.
On March 24, 1986, the Company changed its name to Dynamic
Video, Inc. Commencing November 12, 1986 and pursuant to the
exemption provided by Section 3(a)(11) of the Securities Act of
1933, as amended (the "1933 Act"), and the registration provisions
of Section 61-1-10 of the Utah Uniform Securities Act, the Company
publicly offered an aggregate of 3,250,000 shares (pre-split) of
its common stock. The offering was made at a price of two cents
($.02) per share to public investors who were residents of the
State of Utah. The offering was completed with the Company
realizing gross proceeds of $65,000, before payment of legal,
accounting and printing expenses.
Following completion of its stock offering, the Company became
engaged in the business of operating a video rental store.
However, the venture proved unsuccessful and the business closed.
In April 1988, the Company acquired all (10,000 shares) of the
issued and outstanding shares of Loki Holding Corp. in exchange for
1,000,000 shares (pre-split) of the Company's authorized but
previously unissued common stock. On September 6, 1988, the
Company changed its name to Loki Holding Corporation. In October
1989, the Company acquired an additional 52,500 shares of Loki
Holding Corp common stock for the cash consideration of $3,150.
Loki Holding Corp. is now known as Icon Systems, Inc. ("Icon").
Following the unsuccessful video store venture, the Company's
Board of Directors resolved to distribute its shares of Icon common
stock to the Company's shareholders as a partial liquidating
dividend, in the ratio of one (1)share of Icon common stock for
each ten (10) shares of the Company's common stock held as of
May 25, 1990. The Company filed with the Utah Securities Division
(the "Division") a reorganization exemption application under Rule
14.2p-1 of the rules of the Division. No objection was received
from the Division in accordance with its rules and on June 23,
1990, the Company's shareholders approved the partial liquidating
dividend as proposed. Each of the Company's shareholders also
executed a certificate of residency representing that he or she was
a bone fide resident of the State of Utah.
On September 11, 1990, the Company changed its name to
Interactive Development Applications, Inc. and completed the
reverse acquisition of several Belgium corporations. Pursuant to
the acquisitions, the Company was to become engaged in the business
of developing computer software designed for the landscaping
business. However, the Company never engaged in such business and
the Company had no business operations for several years. On May
1, 1997, the Company was involuntarily dissolved by administrative
action by the State of Utah for failure to maintain a registered
agent in the State.
On September 4, 1997, acting in response to the Verified
Application filed by Steven D. Moulton, a shareholder and currently
the President of the Company, the Third Judicial District Court of
the State of Utah (the "Court") entered an Order that an annual
meeting of the Company's shareholders be held. Pursuant to the
Order, the sole purpose of the meeting was to elect, from persons
to be nominated at the meeting, three directors to serve until the
next annual meeting of shareholders or until their successors are
elected (or appointed) and qualified. The Order further provided
that a quorum to conduct the meeting would be determined by those
shares owned by the record registered owners of the Company's
common stock as shown on its then-current stockholder list and
which shares were present in person or by proxy at the meeting. A
majority of the issued and outstanding shares represented at the
meeting, which was held on October 21, 1997, were voted to elect
Steven D. Moulton, James Todd Wheeler and Diane Reed directors of
the Company. The Court issued an Order Confirming Election of
Directors on October 22, 1997.
Also on October 21, 1997, the directors of the Company
unanimously resolved to (i) appoint the following persons as
executive officers, to serve until their successors are elected and
qualified or until their prior resignation or termination: Steven
D. Moulton (President); James Wheeler (Vice President); Diane Reed
(Secretary/Treasurer) ; (ii) authorize Steven D. Moulton to execute
all documents necessary to reinstate the Company in the State of
Utah; (iii) authorize Diane Reed and Steven D. Moulton to open and
maintain a bank account in the Company's name; (iv) change the
principal mailing address of the Company; (v) issue 23,000,000
"unregistered" and "restricted" shares (pre-split) to Wasatch
Consulting Group, for services rendered; and (vi) abandon the
Company's wholly owned subsidiaries New Ham International, N.V.,
Group 92 S.A., and Waretech S.A. The 23,000,000 shares were
issued on October 21, 1997 for services, expenses and court costs
connected with the reinstatement of the Company. However, on
November 11, 1997, the 23,000,000 shares were returned to the
Company and canceled and the transaction was reversed,
retroactively. The Company was reinstated in the State of Utah
on October 23, 1997.
On October 24, 1997, the Board of Directors resolved to call
for a special meeting of shareholders for November 7, 1997, at
which meeting the Company's shareholders would be asked to approve
the following resolutions: (a) To amend the Company's Articles of
Incorporation to (i) change the corporate name to Quazon Corp.,
(ii) increase the authorized capital of the Company from 50,000,000
shares of common stock to 100,000,000 shares of common stock, and
(iii) decrease the par value of the Company's common stock from
$.02 per share to $.001 per share, with appropriate adjustments in
the stated capital and additional paid in capital accounts of the
Company; (b) to effect a reverse of the Company's outstanding
common stock on a one (1) share for two hundred fifty (250) shares
basis, with the provision that no shareholder's holdings be reduced
below 100 shares as a result of such reverse split; and (c) to
change the domicile of the Company from the State of Utah to the
State of Nevada.
At the November 7, 1997 meeting, the Company's shareholders
ratified all of the above proposals. Shareholders also approved
the issuance of 7,000,000 shares of the Company's authorized, but
previously unissued common stock, adjusted to reflect the 250
shares for one share reverse split, to Steven D. Moulton, the
Company's President (equivalent to 466,667 shares following the one
share for fifteen shares reverse split effected in October 1998).
The shares were in consideration for services rendered to the
Company by Mr. Moulton in connection with bringing the Company's
status current with the State of Utah and for the payment to the
Company of $5,000.
On November 14, 1997, the Company filed with the State of
Nevada Articles of Merger whereby the Company was merged with and
into Quazon Corp., a newly formed Nevada corporation ("Quazon-
Nevada"), for the sole purpose of changing the Company's domicile
from the State of Utah to the State of Nevada. This action was
taken pursuant to the joint consent of the Boards of Directors of
the Company and the new Nevada corporation. Each outstanding share
of the Company's common stock was exchanged for one share of common
stock of Quazon-Nevada. Accordingly, the Utah corporate entity was
dissolved. For purposes of this Registration Statement, the
Company shall be deemed to be Quazon-Nevada for all events
occurring after November 14, 1997.
On September 28, 1998, the Company filed with the State of
Nevada a Certificate of Correction to the Articles of Merger to
clarify an error in the Articles of Merger filed November 14, 1997.
The Articles of Merger inadvertently state that the surviving
corporation was to become Quazon Mountain Holdings, Inc. instead of
Quazon Corp. The Certificate of Correction corrected this error by
stating that the name of the surviving corporation was to be Quazon
Corp.
On October 23, 1998, pursuant to action by unanimous consent
of the Board of Directors and majority shareholders of the Company,
the company effected a reverse stock split of its issued and
outstanding shares of common stock on a one (1) share for fifteen
(15) shares basis. The reverse stock split was subject to the
provision that no shareholder's holdings be reduced below 100
shares as a result of such reverse split.
On October 30, 1998, the Company's Board of Directors
authorized the issuance of 500,000 shares of common stock to Diane
Reed and 1,000,000 shares of common stock to Steven D. Moulton for
services rendered to the Company. Both Ms. Reed and Mr. Moulton
are directors and executive officers of the Company. Also, the
Company issued 1,500,000 shares to Mr. Moulton for the cash price
of $5,000. All share figures are post-split.
Business of Issuer
Since October 1997, the Company has been active in seeking
potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses. The Company is
considered a development stage company and, due to its status as a
"shell" corporation, its principal purpose is to locate and
consummate a merger or acquisition with a private entity. Because
of the Company's current status having only nominal assets and no
recent operating history, in the event the Company does
successfully acquire or merge with an operating business
opportunity, it is likely that the Company's current shareholders
will experience substantial dilution and there will be a probable
change in control of the Company.
The Company is voluntarily filling this registration statement
on Form 10-SB in order to make information concerning itself more
readily available to the public. Management believes that being a
reporting company under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), could provide a prospective merger or
acquisition candidate with additional information concerning the
Company. Further, management believes that this could possibly
make the Company more attractive to an operating business
opportunity as a potential merger or acquisition candidate. As a
result of filing its registration statement, the Company is
obligated to file with the Securities and Exchange Commission (the
"Commission") certain interim and periodic reports including an
annual report containing audited financial statements. The Company
intends to continue to voluntarily file its periodic reports under
the Exchange Act in the event its obligation to file such reports
is suspended under applicable provisions of the Exchange Act.
Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any merger or acquisition. Thus, in the event
the Company successfully completes the acquisition of or merger
with an operating business opportunity, that business opportunity
must provide audited financial statements for at least the two most
recent fiscal years or, in the event the business opportunity has
been in business for less than two years, audited financial
statements will be required from the period of inception. This
could limit the Company's potential target business opportunities
due to the fact that many private business opportunities either do
not have audited financial statements or are unable to produce
audited statements without undo time and expense.
The Company's principal executive offices are located at 135
West 900 South, Salt Lake City, Utah 84101, and its telephone
number is (801) 278-2805.
The Company has no recent operating history and no
representation is made, nor is any intended, that the Company will
be able to carry on future business activities successfully.
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. Accordingly, the Company's independent
accountants have included in the Company's financial statements a
going concern qualification footnote. Further, there can be no
assurance that the Company will have the ability to acquire or
merge with an operating business, business opportunity or property
that will be of material value to the Company.
Management plans to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or
business opportunities. The Company currently has no commitment or
arrangement, written or oral, to participate in any business
opportunity and management cannot predict the nature of any
potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and
negotiations with any potential business or business opportunity.
Sources of Business Opportunities
Management of the Company intends to use various resources in
the search for potential business opportunities including, but not
limited to, the Company's officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists,
members of the financial community and others who may present
management with unsolicited proposals. Because of the Company's
lack of capital, it may not be able to retain on a fee basis
professional firms specializing in business acquisitions and
reorganizations. Rather, the Company will most likely have to rely
on outside sources, not otherwise associated with the Company, that
will accept their compensation only after the Company has finalized
a successful acquisition or merger. To date, the Company has not
engaged or entered into any discussion, agreement or understanding
with a particular consultant regarding the Company's search for
business opportunities. Presently, no final decision has been made
nor is management in a position to identify any future prospective
consultants for the Company.
If the Company elects to engage an independent consultant, it
will look only to consultants that have experience in working with
small companies in search of an appropriate business opportunity.
Also, the consultant must have experience in locating viable merger
and/or acquisition candidates and have a proven track record of
finalizing such business consolidations. Further, the Company
would like to engage a consultant that will provide services for
only nominal up-front consideration and is willing to be fully
compensated only at the close of a business consolidation.
The Company does not intend to limit its search to any
specific kind of industry or business. The Company may investigate
and ultimately acquire a venture that is in its preliminary or
development stage, is already in operation, or in various stages of
its corporate existence and development. Management cannot predict
at this time the status or nature of any venture in which the
Company may participate. A potential venture might need additional
capital or merely desire to have its shares publicly traded. The
most likely scenario for a possible business arrangement would
involve the acquisition of or merger with an operating business
that does not need additional capital, but which merely desires to
establish a public trading market for its shares.
Management believes that the Company could provide a potential
public vehicle for a private entity interested in becoming a
publicly held corporation without the time and expense typically
associated with an initial public offering.
Evaluation
Once the Company has identified a particular entity as a
potential acquisition or merger candidate, management will seek to
determine whether acquisition or merger is warranted or whether
further investigation is necessary. Such determination will
generally be based on management's knowledge and experience, or
with the assistance of outside advisors and consultants evaluating
the preliminary information available to them. Management may
elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities. However,
because of the Company's lack of capital it may not have the
necessary funds for a complete and exhaustive investigation of any
particular opportunity.
In evaluating such potential business opportunities, the
Company will consider, to the extent relevant to the specific
opportunity, several factors including potential benefits to the
Company and its shareholders; working capital, financial
requirements and availability of additional financing; history of
operation, if any; nature of present and expected competition;
quality and experience of management; need for further research,
development or exploration; potential for growth and expansion;
potential for profits; and other factors deemed relevant to the
specific opportunity.
Because the Company has not located or identified any specific
business opportunity as of the date hereof, there are certain
unidentified risks that cannot be adequately expressed prior to the
identification of a specific business opportunity. There can be no
assurance following consummation of any acquisition or merger that
the business venture will develop into a going concern or, if the
business is already operating, that it will continue to operate
successfully. Many of the potential business opportunities
available to the Company may involve new and untested products,
processes or market strategies which may not ultimately prove
successful.
Form of Potential Acquisition or Merger
Presently, the Company cannot predict the manner in which it
might participate in a prospective business opportunity. Each
separate potential opportunity will be reviewed and, upon the basis
of that review, a suitable legal structure or method of
participation will be chosen. The particular manner in which the
Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and
desires of the Company and management of the opportunity, and the
relative negotiating strength of the parties involved.
Actual participation in a business venture may take the form of an
asset purchase, lease, joint venture, license, partnership, stock
purchase, reorganization, merger or consolidation. The Company may
act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, the Company
does not intend to participate in opportunities through the
purchase of minority stock positions.
Because of the Company's current situation, having only
nominal assets and no recent operating history, in the event the
Company does successfully acquire or merge with an operating
business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will be
a probable change in control of the Company. Most likely, the
owners of the business opportunity which the Company acquires or
mergers with will acquire control of the Company following such
transaction. Management has not established any guidelines as to
the amount of control it will offer to prospective business
opportunities, rather management will attempt to negotiate the best
possible agreement for the benefit of the Company's shareholders.
Management does not presently intend to borrow funds to
compensate any persons, consultants, promoters or affiliates in
relation to the consummation of a potential merger or acquisition.
However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the
Company to attempt to raise additional funds. As of the date
hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any
capital. In the event the Company does need to raise capital, most
likely the only method available to the Company would be the
private sale of its securities. These possible private sales would
most likely have to be to persons known by the directors of the
Company or to venture capitalists that would be willing to accept
the risks associated with investing in a company with no current
operations.
Because of the nature of the Company as a development stage
company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender. Management will attempt to acquire
funds on the best available terms for the Company. However, there
can be no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms reasonable or acceptable to the
Company. The Company does not anticipate using Regulation S under
the Securities Act of 1933, as amended (the "Act"), to raise any
funds prior to consummation of a merger or acquisition. Although
not presently anticipated, there is a remote possibility that the
Company could sell securities to its management or affiliates.
In the case of a future acquisition or merger, there exists a
possibility that a condition of such transaction might include the
sale of shares presently held by officers and/or directors of the
Company to parties affiliated with or designated by the potential
business opportunity. Presently, management has no plans to seek
or actively negotiate such terms. However, if this situation does
arise, management is obligated to follow the Company's Articles of
Incorporation and all applicable corporate laws in negotiating such
an arrangement. Under this scenario of a possible sale by officers
and directors, it is unlikely that similar terms and conditions
would be offered to all other shareholders of the Company or that
the shareholders would be given the opportunity to approve such a
transaction.
In the event of a successful acquisition or merger, a finder's
fee, in the form of cash or securities, may be paid to persons
instrumental in facilitating the transaction. The Company has not
established any criteria or limits for the determination of a
finder's fee, although it is likely that an appropriate fee will be
based upon negotiations by the Company and the appropriate business
opportunity and the finder. Management cannot at this time make an
estimate as to the type or amount of a potential finder's fee that
might be paid. It is unlikely that a finder's fee will be paid to
an affiliate of the Company because of the potential conflict of
interest that might result. If such a fee was paid to an
affiliate, it would have to be in such a manner so as not to
compromise an affiliate's possible fiduciary duty to the Company or
to violate the doctrine of corporate opportunity. Further, in the
unlikely event a finder's fee was to be paid to an affiliate, the
Company would have such an arrangement ratified by the shareholders
in an appropriate manner.
Presently, it is highly unlikely that the Company will acquire
or merge with a business opportunity in which the Company's
management, affiliates or promoters have an ownership interest.
Any possible related party transaction of this type would have to
be ratified by a disinterested Board of Directors and by the
shareholders. Management does not anticipate that the Company will
acquire or merge with any related entity. Further, as of the date
hereof, none of the Company's officers, directors, or affiliates or
associates have had any preliminary contact or discussions with any
specific business opportunity, nor are there any present plans,
proposals, arrangements or understandings regarding the possibility
of an acquisition or merger with any specific business opportunity.
Rights of Shareholders
It is presently anticipated by management that prior to
consummating a possible acquisition or merger, the Company, if
required by relevant state laws and regulations, will seek to have
the transaction ratified by shareholders in the appropriate manner.
However, under Nevada law, certain actions that would routinely be
taken at a meeting of shareholders, may be taken by written consent
of shareholders having not less than the minimum number of votes
that would be necessary to authorize or take the action at a
meeting of shareholders. Thus, if shareholders holding a majority
of the Company's outstanding shares decide by written consent to
consummate an acquisition or a merger, minority shareholders would
not be given the opportunity to vote on the issue. The Board of
Directors will have the discretion to consummate an acquisition or
merger by written consent if it is determined to be in the best
interest of the Company to do so. Regardless of whether an action
to acquire or merge is ratified by written consent or by holding a
shareholders' meeting, the Company will provide to its shareholders
complete disclosure documentation concerning a potential target
business opportunity including the appropriate audited financial
statements of the target. This information will be disseminated by
proxy statement in the event a shareholders' meeting is held, or by
subsequent report to the shareholders if the action is taken by
written consent.
Competition
Because the Company has not identified any potential
acquisition or merger candidate, it is unable to evaluate the type
and extent of its likely competition. The Company is aware that
there are several other public companies with only nominal assets
that are also searching for operating businesses and other business
opportunities as potential acquisition or merger candidates. The
Company will be in direct competition with these other public
companies in its search for business opportunities and, due to the
Company's lack of funds, it may be difficult to successfully
compete with these other companies.
Employees
As of the date hereof, the Company does not have any
full-time employees and has no plans for retaining employees
until such time as the Company's business warrants the expense, or
until the Company successfully acquires or merges with an operating
business. The Company may find it necessary to periodically hire
part-time clerical help on an as-needed basis. All of the
Company's present directors devote only such time to the Company as
necessary to maintain its viability. It is estimated that each
director will devote less than ten hours per month to the Company's
activities.
Facilities
The Company is currently using as its principal place of
business the business office and address of a principal
shareholder, Lane Clissold, located in Salt Lake City, Utah.
Although the Company has no written agreement and pays no rent
for the use of this facility, it is contemplated that at such
future time as the Company acquires or merges with an operating
business, the Company will secure commercial office space from
which it will conduct its business. However, until such time as
the Company completes an acquisition or merger, the type of
business in which the Company will be engaged and the type of
office and other facilities that will be required is unknown. The
Company has no current plans to secure such commercial office
space.
Industry Segments
No information is presented regarding industry segments. The
Company is presently a development stage company seeking a
potential acquisition of or merger with a yet to be identified
business opportunity. Reference is made to the statements of
income included herein in response to Part F/S of this Form 10-SB
for a report of the Company's operating history for the past two
fiscal years.
ITEM 2. Management's Discussion and Analysis or Plan of Operation
The following information should be read in conjunction with
the consolidated financial statements and notes thereto appearing
elsewhere in the Form 10-SB.
The Company is considered a development stage company with
only nominal assets and with no significant operations or income.
The costs and expenses associated with the preparation and filing
of this registration statement have been paid for by funds advanced
to the Company by an officer pursuant to a note payable and the
private sale of shares of common stock. It is anticipated that the
Company will require only nominal capital to maintain the corporate
viability of the Company and necessary funds, including funds to
cover expenses associated with being a public company, will
most likely be provided by the Company's officers and directors in
the immediate future. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business
or is able to obtain significant outside financing, there is
substantial doubt about its ability to continue as a going concern.
At December 31, 1998 and June 30, 1999, the Company
had total assets consisting of cash of $2,884 and $1,001,
respectively. Total liabilities at December 31, 1998 were
$10,823, consisting primarily of $10,000 in notes payable to an
officer of the Company. Total liabilities at June 30, 1999 were
$17,667, consisting primarily of $15,000 in notes payable to the
same officer. The notes are unsecured and due upon demand.
Interest is imputed at the rate of ten percent (10%) per annum,
which is contributed by the officer to the capital of the Company.
The Company has not had any significant revenues since its
inception. For the years ended December 31, 1998 and 1997, the
Company recorded general and administrative expenses of $16,709 and
$16,230, respectively. The Company's net loss for the years ended
December 31, 1998 and 1997 were $17,292 and $16,286, respectively.
For the three and six months ended June 30, 1999, general and
administrative expenses were $0 and $7,987 respectively, compared
to $1,500 and $4,100 for the three and six months ended June 30,
1998, respectively. The 1999 expenses are primarily the legal and
accounting expenses related to the filing of the Company's
registration statement. The Company's net loss for the three and
six months ended June 30, 1999 were $375 and $8,737, respectively,
compared with a net loss of $1,646 and $4,391 for the three and six
months ended June 30, 1998, respectively. No revenues are
anticipated prior to the Company consummating an acquisition or
merger agreement and, during this period of time, the Company
anticipates its expenses to be level.
In the opinion of management, inflation has not and will not
have a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition
or merger. At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.
Plan of Operation
During the next 12 months, the Company will actively seek out
and investigate possible business opportunities with the intent to
acquire or merge with one or more business ventures. In its search
for business opportunities, management will follow the procedures
outlined in Item 1 above. Because the Company lacks funds, it may
be necessary for the officers and directors to either advance funds
to the Company or to accrue expenses until such time as a
successful business consolidation can be made. Management intends
to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's directors
will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business
opportunity provide their remuneration. However, if the Company
engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Company to attempt to
raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital. In the event the
Company does need to raise capital, most likely the only method
available to the Company would be the private sale of its
securities. Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender. There can be no assurance that the
Company will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.
The Company does not intend to use any employees, with the
possible exception of part-time clerical assistance on an as-needed
basis. Outside advisors or consultants will be used only if they
can be obtained for minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this
manner and to continue its search for business opportunities during
the next twelve months.
Net Operating Loss
The Company has accumulated approximately $33,000 of net
operating loss carryforwards as of December 31, 1998 and
approximately $42,000 as of June 30,1999, which may be offset
against taxable income and income taxes in future years. The use
of these losses to reduce future income taxes will depend on the
generation of sufficient taxable income prior to the expiration of
the net operating loss carryforwards. The carry-forwards expire in
the year 2013. In the event of certain changes in control of the
Company, there will be an annual limitation on the amount of net
operating loss carryforwards which can be used. No tax benefit has
been reported in the financial statements for the year ended
December 31, 1998 because there is a 50% or greater chance that the
carryforward will not be used. Accordingly, the potential tax
benefit of the loss carryforward is offset by a valuation allowance
of the same amount.
Recent Accounting Pronouncements
The Financial Accounting Standards Board ("FASB") has issued
Statement of Financial Accounting Standard ("SFAS") No. 128,
"Earnings Per Share" and Statement of Financial Accounting
Standards No. 129 "Disclosures of Information About an Entity's
Capital Structure." SFAS No. 128 provides a different method of
calculating earnings per share than is currently used in accordance
with Accounting Principles Board Opinion No. 15, "Earnings Per
Share." SFAS No. 128 provides for the calculation of "Basic" and
"Dilutive" earnings per share. Basic earnings per share includes
no dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted earnings per share.
SFAS No. 129 establishes standards for disclosing information about
an entity's capital structure. SFAS No. 128 and SFAS No. 129 are
effective for financial statements issued for periods ending after
December 15, 1997. Their implementation is not expected to have a
material effect on the financial statements.
The FASB has also issued SFAS No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting
from investments by owners and distributions to owners. Among
other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as
components of comprehensive income be reported in a financial
statement that displays with the same prominence as other financial
statements. SFAS No. 131 supersedes SFAS No. 14 "Financial
Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards on the way that public companies report
financial information about operating segments in annual financial
statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public. It also establishes standards for disclosure regarding
products and services, geographic areas and major customers. SFAS
No. 131 defines operating segments as components of a company about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.
SFAS 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and requires comparative
information for earlier years to be restated. Management believes
the adoption of this statement will have no material impact on the
Company's financial statements.
The FASB has also issued SFAS No 132. "Employers' Disclosures
about Pensions and other Postretirement Benefits," which
standardizes the disclosure requirements for pensions and other
Postretirement benefits and requires additional information on
changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis. SFAS No. 132 is effective
for years beginning after December 15, 1997 and requires
comparative information for earlier years to be restated, unless
such information is not readily available. Management believes the
adoption of this statement will have no material impact on the
Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" which requires
companies to record derivatives as assets or liabilities, measured
at fair market value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge
accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. Management believes the adoption of this statement
will have no material impact on the Company's financial statements.
Inflation
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Year 2000
Year 2000 issues may arise if computer programs have been
written using two digits (rather than four) to define the
applicable year. In such case, programs that have time-sensitive
logic may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations or system
failures.
Because the Company currently does not have any operations
except for its search for viable business opportunities, it does
not own or use any computer equipment. The Company does not
anticipate doing a full assessment of the potential Year 2000 issue
until it has made an acquisition of or merged with an operating
entity. The Company does not believe that the cost of addressing
the issue will have a material adverse impact on its financial
position. Further, the Company believes that no third parties with
whom it may have a material relationships will be materially
affected by the Year 2000 issues.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking
statements. The Company wishes to advise readers that actual
results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company
search for appropriate business opportunities and subsequently
acquire or merge with such entity, to meet its cash and working
capital needs, the ability of the Company to maintain its existence
as a viable entity, and other risks detailed in the Company's
periodic report filings with the Commission.
ITEM 3. Description of Property
The information required by this Item 3, Description of
Property, is set forth in Item 1, Description of Business, of this
Form 10-SB/A.
ITEM 4. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth information, to the best of the
Company's knowledge, as of March 15, 1999, with respect to each
person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, each director and all directors and
officers as a group.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class(1)
Steven D. Moulton* 2,719,526 68.1%
4848 So. Highland Dr. #353
Salt Lake City, UT 84117
Diane Reed* 500,000 12.5%
4848 So. Highland Dr. #353
Salt Lake City, UT 84117
Lane Clissold 333,341 8.4%
2413 Butternut Circle
Salt Lake City, UT 84117
Access Properties Group, L.L.C. 83,334(2) 2.1%
2176 South Bear Lake Blvd.
Garden City, UT 84028
Wasatch Consulting Group 66,667(3) 1.7%
4848 South Highland Dr. #353
Salt Lake City, UT 84117
All directors and officers as 3,369,527(4) 84.4%
a group (3 persons)
* Director and/or executive officer
Note: Unless otherwise indicated in the footnotes below, the
Company has been advised that each person above has sole
voting power over the shares indicated above.
(1) Based upon 3,991,180 shares of common stock outstanding
on March 15, 1999.
(2) Mr. Moulton owns 10% of Access Properties Group,
L.L.C. ("Access"), his wife, Claudia Moulton, owns 50% of
Access, and Collett Hicken owns 40% of Access.
Therefore Mr. Moulton is considered an affiliate of such
entity.
(3) Mr. Moulton is a shareholder, director and executive
officer of Wasatch Consulting Group and is deemed to be
an affiliate of such entity. Mr. Moulton owns 9% of
the outstanding capital shares and various family
members, none of which are otherwise associated with the
Company, own the remaining 91%.
(4) Includes 66,667 shares owned by Wasatch Consulting Group
and 83,334 shares owned by Access Properties Group,
L.L.C., of which Mr. Moulton is deemed an affiliate.
ITEM 5. Directors, Executive Officers, Promoters and Control
Persons
Executive Officers and Directors
The executive officers and directors of the Company are as
follows:
Name Age Position
Steven D. Moulton 37 President, Chief Executive
Officer and Director
James T. Wheeler 36 Vice President and Director
Diane Reed 28 Secretary / Treasurer and
Director
___________________________
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and
qualified. There are no agreements with respect to the election of
directors. The Company has not compensated its directors for
service on the Board of Directors or any committee thereof, but
directors are entitled to be reimbursed for expenses incurred for
attendance at meetings of the Board of Directors and any committee
of the Board of Directors. However, due to the Company's lack of
funds, the directors will defer their expenses and any compensation
until such time as the Company can consummate a successful
acquisition or merger. As of the date hereof, no director has
accrued any expenses or compensation. Officers are appointed
annually by the Board of Directors and each executive officer
serves at the discretion of the Board of Directors. The Company
does not have any standing committees.
The Company's President, Steven D. Moulton, is presently and
has been since February 1996 President and a director of Sierra
Holding Group, Inc., a "shell" or "blank check" company that is
actively pursuing an acquisition or merger. Additionally, from
1984 to 1990, Mr. Moulton served as a director and executive
officer of several publicly-held development stage companies
including Safron, Inc. (director and Vice President); Sagitta
Ventures (director and President); Jasmine Investments (director
and President); Java, Inc. (Secretary / Treasurer); Onyx Holdings
Corporation (director and President); XEBec International Corp
(director and President); Rocky Mountain Fudge Company, Inc.
(director and Vice President); and Bear lake Recreation, Inc.
(director and President).
From 1991 to 1994, Mr. Moulton was a director and President of
Omni International Corporation, which is currently known as
Beachport Entertainment Corporation. From 1995 to July 1996, he
served as director and President of Wasatch International
Corporation, formerly Java, Inc. In addition, Mr. Moulton was the
President and a director of Icon Systems, Inc. from its inception
in 1987 to July 31, 1991. He was also a director and
Secretary/Treasurer of Icon Systems, Inc. from 1995 to December
1998, at which time it acquired Prospero Investments Limited, a
United Kingdom company Each of these companies may be deemed to
have been a "blind pool" or "blank check" company at the times of
Mr. Moulton's association.
Safron, Inc., a Utah corporation, sold 3,000,000 units of its
securities at a price of $.10 per unit, pursuant to a Registration
Statement on Form S-18 filed with the Commission with an effective
date of July 17, 1985. A total of $300,000 was raised under this
offering for the purpose of acquiring or participating in a then
unidentified business opportunity. Mr. Moulton resigned his
positions with Safron, Inc. in November 1987.
Sagitta Ventures, Inc., a Utah corporation, filed a
Registration Statement on Form S-18 with the Commission with an
effective date of April 30, 1987. This Registration Statement
provided for the sale of 12,000,000 units at a price of $0.02 per
unit. The offering was closed on July 8, 1987, after 7,479,500
units were sold for an aggregate price of $149,590. Sagitta
acquired all of the issued and outstanding common stock of Onyx
Holding Corporation, with the proceeds from its offering, and
subsequently distributed the Onyx shares as a partial liquidating
dividend to its stockholders. Mr. Moulton was the President and a
director of Onyx from July 10, 1987 through May 1, 1989.
On August 19, 1987, Jasmine Investments completed the sale of
2,338,390 units to the public pursuant to a Registration Statement
on Form S-18, at a price of $0.10 per share. A total of $233,839
was raised under this offering. After Mr. Moulton's resignation,
Jasmine consummated a merger transaction and became known as
"Audioventures Corporation."
Java, Inc. sold 1,320,350 shares of its common stock at $0.10
per share pursuant to a Registration Statement on Form S-18, which
became effective on April 22, 1986. on November 7, 1986, the
stockholders of Java approved the acquisition of Quazon
Communications, Inc., an Illinois corporation, which was engaged in
the business of manufacturing and marketing computer terminals.
Mr. Moulton resigned his position as Secretary/Treasurer on
November 7, 1986, and resigned from the Board of Directors in
August 1987.
Mr. Moulton resigned his positions with Omni International
Corporation before its securities offering and had no involvement
therein.
Since December 1997, Mr. Moulton has been associated with
XEBec International Corp (director and President), a shell or blank
check company that is actively pursuing an acquisition or merger.
The Company's Secretary/Treasurer, Diane M. Reed, is presently
and has been since December 1997 Secretary/Treasurer and a director
of XEBec International Corp a "shell" or "blank check" company that
is actively pursuing an acquisition or merger. Additionally, from
October 1995 to September 1996, Ms. Reed served as Vice President
and a director of Icon Systems, Inc.
Other than the Company, James T. Wheeler has not been involved
as a director, executive officer or five percent stockholder of any
"blank check" company in the last ten years.
No director, officer, affiliate or promoter of the Company
has, within the past five years, filed any bankruptcy petition,
been convicted in or been the subject of any pending criminal
proceedings, or is any such person the subject or any order,
judgment, or decree involving the violation of any state or federal
securities laws.
All of the Company's present directors have other full-time
employment and will routinely devote only such time to the Company
necessary to maintain its viability. It is estimated that each
director will devote less than ten hours per month to the Company's
activities. The directors will, when the situation requires,
review potential business opportunities or actively participate in
negotiations for a potential merger or acquisition on an as-needed-
basis.
Currently, there is no arrangement, agreement or understanding
between the Company's management and non-management shareholders
under which non-management shareholders may directly or indirectly
participate in or influence the management of the Company's
affairs. Present management openly accepts and appreciates any
input or suggestions from the Company's shareholders. However, the
Board of Directors is elected by the shareholders and the
shareholders have the ultimate say in who represents them on the
Board of Directors. There are no agreements or understandings for
any officer or director of the Company to resign at the request of
another person and none of the current offers or directors of the
Company are acting on behalf of, or will act at the direction of
any other person.
The business experience of each of the persons listed above
during the past five years is as follows:
Steven D. Moulton is a graduate of Olympus High School in Salt
Lake City, Utah in 1980. From 1984 to 1990, Mr. Moulton served as
a director and executive officer of several publicly-held
development stage companies including Safron, Inc. (director and
Vice President);Sagitta Ventures (director and President; Jasmine
Investments (director and President; Java, Inc. (director and
Secretary / Treasurer); and Onyx Holdings Corporation (director and
President). From 1991 to 1994, Mr. Moulton was a director and
President of Omni International Corporation, which is currently
known as Beachport Entertainment Corporation. From 1987 to 1991,
he was President and a director of Icon Systems, Inc. and served as
Secretary / Treasurer of the same company from 1995 to 1998. From
1995 to July 1996, he served as director and President of Wasatch
International Corporation, formerly Java, Inc. From February 1996
to the present, he has also been the President and a director of
Sierra Holding Group, Inc. From December 1997 to the present, Mr.
Moulton has been associated with Rocky Mountain Fudge Company, Inc.
(director and Vice President), a public candy company, and Bear
lake Recreation, Inc. (director and President), a public snowmobile
rental company. Also from December 1997 to the present, Mr.
Moulton has been a director and President of XEBec International,
Inc., a shell company looking for a merger or acquisition. With
the exception of Sagitta Ventures, Omni International Corporation,
Wasatch International, Icon Systems, Inc. and Sierra Holding Group,
Inc., none of these companies was subject to the reporting
requirements of the Commission. Mr. Moulton owned and operated a
Chem-Dry carpet cleaning franchise from 1991 to 1995. Mr. Moulton
is the brother of the Company's Secretary/Treasurer, Diane Reed.
James T. Wheeler earned a B.S. Degree in communications and
public relations from the University of Utah in 1991. From 1991 to
1997, Mr. Wheeler was a quality specialist and brokerage analyst
with Fidelity Investments retail customer services in Salt Lake
City, Utah. From 1997 to 1998, Mr. Wheeler was a loan officer with
FirstPlus Freedom Mortgage and from 1998 to the present, he has
been a retail loan officer with Premier Mortgage, both companies
being located in Salt Lake City.
Diane Reed graduated from Olympus High School in Salt Lake
City, Utah in 1989. From 1998 to the present, she has worked for
Utah Cleaning and Maid Service, and from 1997 to the present she
has also worked as a private day care provider, also in Salt Lake
City. From 1996 to 1997, Ms. Reed was the manager of Red's Frozen
Yogurt in Salt Lake City, and from 1994 to 1996, she worked as a
travel agent for Morris Trave, also in Slat Lake City. From 1992
to 1994, Ms. Reed was a reservation agent for Continental Airlines.
From October 1995 to September 1996, Ms. Reed was a director and
Vice President of Icon Systems, Inc. and from December 1997 to the
present, she has been a director and Secretary/Treasurer of XEBec
International, Inc., a shell company looking for a merger or
acquisition Ms. Reed is the sister of the Company's President,
Steven D. Moulton.
ITEM 6. Executive Compensation
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. Further, the Company has not entered into an employment
agreement with any of its officers, directors or any other persons
and no such agreements are anticipated in the immediate future.
In 1997, the Company issued to Steven D. Moulton, the
Company's President and a director, 466,667 shares of the Company's
common stock in consideration bringing the Company's status current
with the State of Utah and for the payment to the Company of
$5,000. In 1998, the Company issued 1,000,000 shares to
Mr. Moulton and 500,000 shares to Diane M. Reed, a director and
Secretary / Treasurer of the Company, for services rendered to the
Company. The shares were valued at $.003 per share.
ITEM 7. Certain Relationships and Related Transactions
Except as set forth below, during the past two fiscal years
there have been no transactions between the Company and any
officer, director, nominee for election as director, or any
shareholder owning greater than five percent (5%) of the Company's
outstanding shares, nor any member of the above referenced
individuals' immediate family.
In November 1997, the Company issued to Steven D. Moulton, the
Company's President, 466,667 shares in consideration for bringing
the Company's status current with the State of Utah and for the
payment to the Company of $5,000. Also in November 1997, the
Company issued an aggregate of 499,999 shares to a total three
persons for the aggregate cash purchase price of $8,000. One of
the purchasers (of 83,334 shares) was Access Properties Group,
L.L.C., a company affiliated with Mr. Moulton. All funds realized
from the sale of shares was used for general and administrative
expenses of the Company.
In October 1998, the Company issued 1,000,000 shares to Mr.
Moulton and 500,000 shares to Diane Reed, a director and Secretary
/ Treasurer of the Company, for services rendered to the Company,
and an additional 1,500,000 shares to Mr. Moulton for the cash
price of $5,000. The proceeds were used for general and
administrative expenses of the Company.
The Company's officers and directors are subject to the
doctrine of corporate opportunities only insofar as it applies to
business opportunities in which the Company has indicated an
interest, either through its proposed business plan or by way of an
express statement of interest contained in the Company's minutes.
If directors are presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors
and made available to the Company. In the event the Board shall
reject an opportunity so presented and only in that event, any of
the Company's officers and directors may avail themselves of such
an opportunity. Every effort will be made to resolve any conflicts
that may arise in favor of the Company. There can be no assurance,
however, that these efforts will be successful.
ITEM 8. Description of Securities
Common Stock
The Company is authorized to issue 100,000,000 shares of
Common Stock, par value $.001 per share, of which 3,991,180 shares
are issued and outstanding as of the date hereof. In October 1997,
the Company effected the one (1) share for two hundred fifty (250)
shares reverse stock split of its common stock, and in October
1998, the Company effected the one (1) share for fifteen (15)
shares reverse stock split. Pursuant to the terms of both reverse
stock splits, no shareholder's holdings were to be reduced below
100 shares as a result of such splits. Additional shares were
issued in lieu of fractional shares and to restore a shareholder to
100 shares if their shares were reduced below 100 shares as a
result of the splits. Accordingly, 18,984 additional shares were
issued pursuant to the splits.
All references to the Company's common stock herein are in
post-split shares. All shares of common stock have equal rights
and privileges with respect to voting, liquidation and dividend
rights. Each share of Common Stock entitles the holder thereof to
(i) one non-cumulative vote for each share held of record on all
matters submitted to a vote of the stockholders; (ii) to
participate equally and to receive any and all such dividends as
may be declared by the Board of Directors out of funds legally
available therefor; and (iii) to participate pro rata in any
distribution of assets available for distribution upon liquidation
of the Company. Stockholders of the Company have no preemptive
rights to acquire additional shares of common stock or any other
securities. The common stock is not subject to redemption and
carries no subscription or conversion rights. All outstanding
shares of common stock are fully paid and non-assessable.
PART II
ITEM 1. Market Price of And Dividends on the Registrant's Common
Equity and Other Shareholder Matters
No shares of the Company's common stock have previously been
registered with the Commission or any state securities agency or
authority. The Company intends to make an application to the NASD
for the Company's shares to be quoted on the OTC Bulletin Board.
The Company's application to the NASD will consist of current
corporate information, financial statements and other documents as
required by Rule 15c2-11 of the Securities Exchange Act of 1934, as
amended. Inclusion on the OTC Bulletin Board permits price
quotations for the Company's shares to be published by such
service. The Company is not aware of any established trading
market for its common stock nor is there any record of any reported
trades in the public market in recent years. Although the Company
intends to submit its application to the OTC Bulletin Board
contemporaneously with the filing of this registration statement,
the Company does not anticipate its shares to be traded in the
public market until such time as a merger or acquisition can be
consummated. Also, secondary trading of the Company's shares may
be subject to certain state imposed restrictions regarding shares
of shell companies. Except for the application to the OTC Bulletin
Board, there are no plans, proposals, arrangements or
understandings with any person concerning the development of a
trading market in any of the Company's securities. The Company's
common stock last traded in a public market in 1991.
The ability of an individual shareholder to trade their shares
in a particular state may be subject to various rules and
regulations of that state. A number of states require that an
issuer's securities be registered in their state or appropriately
exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to
register its securities in any particular state. Further, most
likely the Company's shares will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements
for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act.
The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:
registered and traded on a national securities exchange meeting
specified criteria set by the Commission; authorized for quotation
on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or
exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares will
be subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with assets
in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must
make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the first transaction, of a risk
disclosure document relating to the penny stock market. A broker-
dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current
quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held
in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in the Company's
common stock and may affect the ability of shareholders to sell
their shares.
As of March 15, 1999 there were 221 holders of record of the
Company's common stock, which figure does not take into account
those shareholders whose certificates are held in the name of
broker-dealers or other nominees. Because there has been no
established public trading market for the Company's securities, no
trading history is presented herein.
As of the date hereof, the Company has issued and outstanding
3,991,180 shares of common stock. Of the Company's total
outstanding shares, approximately 204,978 shares may be sold,
transferred or otherwise traded in the public market without
restriction, unless held by an affiliate or controlling shareholder
of the Company. Of these 204,978 shares, the Company has not
identified any shares as being held by affiliates of the Company.
A total of 3,786,202 shares are considered restricted
securities and are presently held by affiliates and/or controlling
shareholders of the Company, or were issued more than one year but
less than two years from the date hereof. Approximately 786,202 of
the restricted shares are presently eligible for sale pursuant to
Rule 144, subject to the volume and other limitations set forth
under Rule 144. In general, under Rule 144 as currently in effect,
a person (or persons whose shares are aggregated) who has
beneficially owned restricted shares of the Company for at least
one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined
under the Act), is entitled to sell, within any three-month period,
an amount of shares that does not exceed the greater of (i) the
average weekly trading volume in the Company's common stock, as
reported through the automated quotation system of a registered
securities association, during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding. A person who
is not deemed to be an "affiliate" of the Company and has not been
an affiliate for the most recent three months, and who has held
restricted shares for at least two years would be entitled to sell
such shares without regard to the resale limitations of Rule 144.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that
it will pay cash dividends or make distributions in the foreseeable
future. The Company currently intends to retain and invest future
earnings to finance its operations.
ITEM 2. Legal Proceedings
There are presently no material pending legal proceedings to
which the Company or any of its subsidiaries is a party or to which
any of its property is subject and, to the best of its knowledge,
no such actions against the Company are contemplated or threatened.
ITEM 3. Changes in and Disagreements With Accountants
There have been no changes in or disagreements with
accountants.
ITEM 4. Recent Sales of Unregistered Securities
In November 1997, the Company issued to Steven D. Moulton, the
Company's President, 466,667 shares in consideration for services
rendered to the Company in connection with bringing the Company's
status current with the State of Utah and for the payment to the
Company of $5,000. Also in November 1997, the Company issued an
aggregate of 499,999 shares to a total three persons for the
aggregate cash purchase price of $8,000. One of the purchasers was
Access Properties Group, L.L.C. (83,334 shares), a company
affiliated with Mr. Moulton. The other two purchasers were Lane
Clissold (333,334 shares) and Intermountain CD (83,334 Shares). It
should be noted that each of the aforementioned three shareholders
received one additional share as a result of the rounding of
fractional shares pursuant to the reverse stock split in October
1998. Also in October 1998, the Company issued 1,000,000
shares to Mr. Moulton and 500,000 shares to Diane Reed, a director
and Secretary / Treasurer of the Company, for services rendered to
the Company, and an additional 1,500,000 shares to Mr. Moulton for
the cash price of $5,000.
None of the issuances set forth above were registered
with the Commission because they were believed to be exempt from
the registration requirements. All of the issuances were made
in private transactions to persons that possessed knowledge of the
Company and its business. There was no general solicitation and
each of the recipients of the shares accepted restricted shares,
thus representing of the Act under Section 4(2) of the Act.
During 1997 and 1998, the Company issued 18,984 shares
pursuant to the Company's reverse stock splits. These shares were
issued to prevent a person's holdings from being reduced below 100
shares as a result of such splits. Thus, a shareholder was
restored to 100 shares if their shares were reduced below 100
shares because of a split. No other shares of the Company's common
stock have been issued during the preceding three fiscal years.
ITEM 5. Indemnification of Directors and Officers
As permitted by the provisions of the Nevada Revised Statutes
(the "NRS"), the Company has the power to indemnify any person made
a party to an action, suit or proceeding by reason of the fact that
they are or were a director, officer, employee or agent of the
Company, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection
with any such action, suit or proceeding if they acted in good
faith and in a manner which they reasonably believed to be in, or
not opposed to, the best interest of the Company and, in any
criminal action or proceeding, they had no reasonable cause to
believe their conduct was unlawful. Termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good
faith and in a manner which they reasonably believed to be in or
not opposed to the best interests of the Company, and, in any
criminal action or proceeding, they had no reasonable cause to
believe their conduct was unlawful.
The Company must indemnify a director, officer, employee or
agent of the Company who is successful, on the merits or otherwise,
in the defense of any action, suit or proceeding, or in defense of
any claim, issue, or matter in the proceeding, to which they are a
party because they are or were a director, officer employee or
agent of the Company, against expenses actually and reasonably
incurred by them in connection with the defense.
The Company may provide to pay the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding as the expenses are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the
amount if it is ultimately determined by a court of competent
jurisdiction that they are not entitled to be indemnified by the
Company.
The NRS also permits a corporation to purchase and maintain
liability insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent
of the Company, or is or was serving at the request of the
corporation as a director, officer, employee or agent, of another
corporation, partnership, joint venture, trust or other enterprise
for any liability asserted against them and liability and expenses
incurred by them in their capacity as a director, officer, employee
or agent, or arising out of their status as such, whether or not
the Company has the authority to indemnify them against such
liability and expenses. Presently, the Company does not carry such
insurance.
Transfer Agent
The Company has designated Fidelity Transfer Company, 1800
South West Temple, Suite 301, P.O. Box 53, Salt Lake City, Utah
84115, as its transfer agent.
PART F/S
The Company's financial statements for the fiscal years ended
December 31, 1998 and 1997 have been examined to the extent
indicated in their reports by Jones, Jensen & Company, independent
certified public accountants, and have been prepared in accordance
with generally accepted accounting principles and pursuant to
Regulation S-B as promulgated by the Commission and are included
herein in response to Item 15 of this Form 10-SB. Unaudited
financial statements for the period ended June 30, 1999 have been
prepared by the Company.
QUAZON, CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . 3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . 8
Notes to the Financial Statements. . . . . . . . . . . . . . . . . 9
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Quazon, Corp.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheets of Quazon Corp.
(a development stage company) as of December 31, 1998 and the
related statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 1998
and 1997 and from the beginning of the development stage on
January 1, 1994 through December 31, 1998. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Quazon, Corp. (a development stage company) as of
December 31, 1998, and the results of its operations and its
cash flows for the years ended December 31, 1998 and 1997 and
from the beginning of the development stage on January 1, 1994
through December 31, 1998, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 3 to the financial statements, the Company is
a development stage company with no significant operating
results to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans
with regard to these matters are also described in Note 3. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
February 6, 1999
QUAZON, CORP.
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1998
CURRENT ASSETS
Cash $ 2,884
Total Current Assets 2,884
TOTAL ASSETS $ 2,884
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 823
Notes payable - related party (Note 2) 10,000
Total Current Liabilities 10,823
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized: 100,000,000 common shares
at $0.001 par value: 3,991,180 and 991,180 shares
issued and outstanding, respectively 3,991
Capital in excess of par value 1,847,740
Accumulated deficit prior to January 1, 1994 (1,826,092)
Deficit accumulated during the development stage (33,578)
Total Stockholders' Equity (Deficit) (7,939)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 2,884
QUAZON, CORP.
(A Development Stage Company)
Statements of Operations
From the
Beginning of
Development
Stage on
For the January 1,
Years Ended 1994 Through
December 31, December 31,
1998 1997 1998
REVENUES $ - $ - $ -
EXPENSES
General and administrative 16,709 16,230 32,939
Interest expense 583 56 639
Total Expenses 17,292 16,286 (33,578)
NET LOSS $ (17,292) $ (16,286) $ (33,578)
BASIC LOSS PER SHARE $ (0.01) $ (0.10)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,492,550 160,678
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1993 5,530 $ 6 $ 1,826,086 $ (1,826,092)
Net loss for the year ended
December 31, 1994 - - - -
Balance, December 31, 1994 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1996 - - - -
Balance, December 31, 1996 5,530 6 1,826,086 (1,826,092)
November 7, 1997, issuance of
common stock at $0.01 per share
for cash 466,667 467 4,533 -
November 12, 1997, issuance of
common stock at $0.01 per share
for cash 499,999 499 7,451 -
Fractional shares issued in reverse
stock split 18,984 19 (19) -
Contributed capital - - 936 -
Net loss for the year ended
December 31, 1997 - - - (16,286)
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
Contributed capital - - 1,753 -
October 31, 1998, issuance of
common stock at $0.003 per
share for services 1,500,000 1,500 3,500 -
October 31, 1998, issuance of
common stock at $0.003 per
share for cash 1,500,000 1,500 3,500 -
Net loss for the year ended
December 31, 1998 - - - (17,292)
Balance, December 31,1998 3,991,180 $ 3,991 $ 1,847,740 $ (1,859,670)
QUAZON, CORP.
(A Development Stage Company)
Statements of Cash Flows
From the
Beginning of
Development
Stage on
For the January 1,
Years Ended 1994 Through
December 31, December 31,
1998 1997 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (17,292) $ (16,286) $ (33,578)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Stock issued for services 5,000 - 5,000
Changes in operating asset and liability accounts:
Increase (decrease) in accounts payable (2,632) 3,455 823
Net Cash (Used) by Operating Activities (14,924) (12,831) (27,755)
CASH FLOWS FROM INVESTING ACTIVITIES: - - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributed capital 1,753 56 1,809
Proceeds from notes payable - related party 5,000 5,000 10,000
Issuance of common stock for cash 5,000 13,830 18,830
Net Cash Provided by Financing Activities 11,753 18,886 30,639
NET INCREASE (DECREASE) IN CASH (3,171) 6,055 2,884
CASH AT BEGINNING OF PERIOD 6,055 - -
CASH AT END OF PERIOD $ 2,884 $ 6,055 $ 2,884
Cash Payments For:
Income taxes $ - $ - $ -
Interest $ - $ - $ -
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Quazon, Corp. (the Company) was originally incorporated on
June 26, 1981, as a Utah Corporation under the name of The
Fence Post, Inc.
On March 24, 1986, the Company changed its name to Dynamic
Video, Inc. On September 6, 1988, the name was changed to
Loki Holding Corporation.
On September 11, 1990, the name was changed to Interactive
Development Applications, Inc. and completed a reverse
acquisition of several Belgium corporations, which was
revoked in 1997.
On November 7, 1997, the name was changed to Quazon, Corp.,
a Utah corporation. On November 19, 1997, Quazon, Corp. of
Utah merged with Quazon, Corp., a Nevada corporation,
leaving the Nevada corporation as the surviving company.
Currently the Company is seeking new business opportunities
believed to hold a potential profit or to merge with an
existing company.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a
December 31 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock
are based on the weighted average number of shares issued
and outstanding at the date of the financial statements.
d. Use of 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 statement and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Provision for Taxes
At December 31, 1998, the Company had net operating loss
carryforwards of approximately $33,000 that may be offset
against future taxable income through 2013. No tax benefit
has been reported in the financial statements, because the
potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the
same amount.
NOTE 2 - RELATED PARTY TRANSACTIONS
In 1998, an officer of the Company contributed $1,753 to
the Company in expenses incurred on the Company's behalf.
The officer contributed $936 in 1997.
On October 21, 1997, 23,000,000 shares of common stock was
issued to officers and directors of the Company for
services. On November 12, 1997, the previously mentioned
shares were returned and canceled and the transaction was
reversed retroactively.
On November 11, 1997, the Company issued 466,667 shares of
its restricted common stock to officers of the Company for
cash of $5,000.
On November 12, 1997, the Company issued 499,999 shares of
its restricted common stock for $8,000 cash.
On October 30, 1998, the Company issued 1,500,000 post-
split shares of restricted common stock to officers of the
Company for services valued at $5,000 and 1,500,000 to
Company officers for $5,000 cash.
The Company has notes payable to an officer totaling
$10,000 at December 31, 1998. The notes are unsecured and
due upon demand. Interest is imputed on the note at 10%
per annum, which is contributed by the officer to the
capital of the Company.
NOTE 3 - 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. It is the intent of the Company to seek a merger
with an existing, operating company. In the interim,
shareholders of the Company have committed to meeting its
minimal operating expenses.
QUAZON, CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
C O N T E N T S
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Operations . . . . . . . . . . . . . . . . . . . . . 4
Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . 5
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . 6
Notes to the Financial Statements. . . . . . . . . . . . . . . . . 8
QUAZON, CORP.
(A Development Stage Company)
Balance Sheets
ASSETS
June 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
Cash $ 1,001 $ 2,884
Total Current Assets 1,001 2,884
TOTAL ASSETS $ 1,001 $ 2,884
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,677 $ 823
Notes payable - related party (Note 2) 15,000 10,000
Total Current Liabilities 17,677 10,823
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized: 100,000,000
common shares at $0.001 par value:
3,991,180 shares issued and outstanding 3,991 3,991
Capital in excess of par value 1,847,740 1,847,740
Accumulated deficit prior to January 1, 1994 (1,826,092) (1,826,092)
Deficit accumulated during the development stage (42,315) (33,578)
Total Stockholders' Equity (Deficit) (16,676) (7,939)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 1,001 $ 2,884
QUAZON, CORP.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From the
Beginning of
Development
Stage on
For the For the January 1,
Three Months Ended Six Months Ended 1994 Through
June 30, June 30, June 30,
1999 1998 1999 1998 1999
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and administrative - 1,500 7,987 4,100 40,926
Interest expense 375 146 750 291 1,389
Total Expenses 375 1,646 8,737 4,391 (42,315)
NET LOSS $ (375) $ (1,646) $ (8,737) $ (4,391) $(42,315)
BASIC LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,991,180 1,492,550 3,991,180 1,492,550
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1993 5,530 $ 6 $ 1,826,086 $ (1,826,092)
Net loss for the year ended
December 31, 1994 - - - -
Balance, December 31, 1994 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 5,530 6 1,826,086 (1,826,092)
Net loss for the year ended - - - -
December 31, 1996
Balance, December 31, 1996 5,530 6 1,826,086 (1,826,092)
November 7, 1997, issuance of
common stock at $0.01 per share
for cash 466,667 467 4,533 -
November 12, 1997, issuance of
common stock at $0.01 per share
for cash 499,999 499 7,451 -
Fractional shares issued in
reverse stock split 18,984 19 (19) -
Contributed capital - - 936 -
Net loss for the year ended
December 31, 1997 - - - (16,286)
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
QUAZON, CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1997 991,180 $ 991 $ 1,838,987 $ (1,842,378)
Contributed capital - - 1,753 -
October 31, 1998, issuance of
common stock at $0.003 per
share for services 1,500,000 1,500 3,500 -
October 31, 1998, issuance of
common stock at $0.003 per
share for cash 1,500,000 1,500 3,500 -
Net loss for the year ended
December 31, 1998 - - - (17,292)
Balance, December 31,1998 3,991,180 3,991 1,847,740 (1,859,670)
Net loss for the six months
ended June 30, 1999 (unaudited) - - - (8,737)
Balance, June 30, 1999
(unaudited) 3,991,180 $ 3,991 $ 1,847,740 $ (1,868,407)
QUAZON, CORP.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From the
Beginning of
Development
Stage on
For the For the January 1,
Three Months Ended Six Months Ended 1994 Through
June 30, June 30, June 30,
1999 1998 1999 1998 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (375) $(1,646) $(8,737) $(4,391) $(42,315)
Adjustments to reconcile net
loss to net cash provided
(used) by operating activities:
Stock issued for services - - - - 5,000
Changes in operating asset
and liability accounts:
Increase (decrease) in accounts
payable 206 - 1,854 - 2,677
Net Cash (Used) by Operating
Activities (169) (1,646) (6,883) (4,391) (34,638)
CASH FLOWS FROM INVESTING
ACTIVITIES: - - - - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributed capital - - - 1,170 2,689
Proceeds from notes payable -
related party - 1,000 5,000 - 15,000
Issuance of common stock for cash - - - - 17,950
Net Cash Provided by Financing
Activities - 1,000 5,000 1,170 35,639
NET INCREASE (DECREASE) IN CASH (169) (646) (1,883) (3,221) 1,001
CASH AT BEGINNING OF PERIOD 1,170 3,480 2,884 6,055 -
CASH AT END OF PERIOD $ 1,001 $ 2,834 $ 1,001 $ 2,834 $ 1,001
Cash Payments For:
Income taxes $ - $ - $ - $ - $ -
Interest $ - $ - $ - $ - $ -
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Quazon, Corp. (the Company) was originally incorporated on June
26, 1981, as a Utah Corporation under the name of The Fence
Post, Inc.
On March 24, 1986, the Company changed its name to Dynamic
Video, Inc. On September 6, 1988, the name was changed to Loki
Holding Corporation.
On September 11, 1990, the name was changed to Interactive
Development Applications, Inc. and completed a reverse
acquisition of several Belgium corporations, which was revoked
in 1997.
On November 7, 1997, the name was changed to Quazon, Corp., a
Utah corporation. On November 19, 1997, Quazon, Corp. of Utah
merged with Quazon, Corp., a Nevada corporation, leaving the
Nevada corporation as the surviving company.
Currently the Company is seeking new business opportunities
believed to hold a potential profit or to merge with an
existing company.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a
December 31 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are
based on the weighted average number of shares issued and
outstanding at the date of the financial statements.
d. Use of 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 statement and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Provision for Taxes
At June 30, 1998, the Company had net operating loss
carryforwards of approximately $42,000 that may be offset
against future taxable income through 2013. No tax benefit has
been reported in the financial statements, because the potential
tax benefits of the net operating loss carryforwards are offset
by a valuation allowance of the same amount.
g. Unaudited Financial Statements
The accompanying unaudited financial statements include all of
the adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of a
normal, recurring nature.
NOTE 2 - RELATED PARTY TRANSACTIONS
In 1998, an officer of the Company contributed $1,753 to the
Company in expenses incurred on the Company's behalf. The
officer contributed $936 in 1997.
On October 21, 1997, 23,000,000 shares of common stock was
issued to officers and directors of the Company for services.
On November 12, 1997, the previously mentioned shares were
returned and canceled and the transaction was reversed
retroactively.
On November 11, 1997, the Company issued 466,667 shares of its
restricted common stock to officers of the Company for cash of
$5,000.
On November 12, 1997, the Company issued 499,999 shares of its
restricted common stock for $8,000 cash.
On October 30, 1998, the Company issued 1,500,000 post-split
shares of restricted common stock to officers of the Company for
services valued at $5,000 and 1,500,000 to Company officers for
$5,000 cash.
The Company has notes payable to an officer totaling $10,000 at
December 31, 1998. The notes are unsecured and due upon demand.
Interest is imputed on the note at 10% per annum, which is
contributed by the officer to the capital of the Company.
NOTE 3 - 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. It is the intent of the Company to seek a merger with
an existing, operating company. In the interim, shareholders of
the Company have committed to meeting its minimal operating
expenses.
QUAZON, CORP.
(A Development Stage Company)
Notes to the Financial Statements
NOTE 4 - REVERSE STOCK SPLIT
On October 24, 1997, the board of directors of the Company
approved a 1-for-250 reverse stock split and on October 30,
1998, the board of directors of the Company approved a 1-for-15
reverse stock split while retaining the authorized shares at
100,000,000 and retaining the par value at $0.001. This change
has been applied to the financial statements on a retroactive
basis back to inception of the development stage. The Company
provided that no shareholder would be reduced below 100 shares,
accordingly, 18,984 post-split fractional shares were issued.
<PAGE>
PART III
ITEM 1. Index to Exhibits*
The following exhibits are filed with this Registration
Statement:
Exhibit No. Exhibit Name
2.1* Articles of Merger
3.1* Articles of Incorporation and Amendments thereto
3.2* By-Laws of Registrant
4.* See Exhibit No. 3.1, Articles of Incorporation,
Article IV
27.* Financial Data Schedule
________________
* Previously filed
2. Description of Exhibits
See Item I above.
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 organized.
QUAZON CORP.
(Registrant)
Date: September 10, 1999 By: /S/ Steven D. Moulton
Steven D. Moulton
President, Chief
Executive Officer and
Director
