SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
or
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
-------------------------------------
For the Fiscal Year Ended: Commission File No.:
December 31, 1999 0-25863
LEON TOURS LIMITED
(Exact name of Registrant as specified in its charter)
Commonwealth of the Bahamas
(Jurisdiction of incorporation or organization)
Saffrey Square
Bay Street and Bank Lane
Suite 1 04A
Box N-3927
Nassau, Bahamas
(Address of Principal Offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: NONE
Indicate the number of outstanding shares of each of the Issuer's classes of
capital or common stock as of the close of the period covered by the annual
report: 5,000
Indicate by check mark whether the Registrant: (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (ii) has been subject to such
filing requirements for the past 90 days.
Yes[x] No[ ]
Indicate by check mark which financial statement item the Registrant has elected
to follow:
Item l7[ ] Item l8[X]
<PAGE>
TABLE OF CONTENTS
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FINANCIAL STATEMENTS
PART I
Item 1. Description of Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Control of the Company
Item 5. Nature of Trading Market
Item 6. Exchange Controls and Other Limitations Affecting
Security Holders
Item 7. Taxation
Item 8. Selected Financial Data
Item 9A. Quantitative and Qualitative Disclosure of Market Risk
Item 9B. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 10. Directors and Officers of the Company
Item 11. Compensation of Directors and Officers
Item 12. Options to Purchase Securities from Company or Subsidiaries
Item 13. Interest of Management in Certain Transactions
PART II
Item 14. Description of Securities to be Registered
PART III
Item 15. Defaults Upon Senior Securities
Item 16. Changes in Securities and Changes in Security for Company's
Securities
PART IV
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Financial Statements and Exhibits
SIGNATURES
<PAGE>
PART 1.
As used in this Annual Report, the "Bahamas" refers to The Commonwealth of
the Bahamas. The term "Company" refers to Leon Tours Limited
This Annual Report on Form 20-FR contains forward-looking statements. These
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those anticipated in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, those discussed in the section entitled Risk Factors
under Item 1 - Description of Business.
Readers should not place undue reliance on forward-looking statements,
which reflect management's view only as of the date of this Annual Report. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect subsequent events or circumstances.
FINANCIAL STATEMENTS
<PAGE>
PART I
Item 1. Description of Business.
- --------------------------------
Background
Leon Tours Limited was incorporated on June 16, 1992 as a corporation
pursuant to the International Business Companies Act of the Bahamas. The Company
was incorporated in the Bahamas principally to engage in any lawful corporate
business including, but not limited to, particpating in mergers with and
acquisitions of other companies. The Company is not subject to any income tax in
the Bahamas. The Company's corporate administrative matters are conducted
through its registered agent located at 284 Bay Street, #5, Nassau, Bahamas. The
Company's principal office is located at Saffrey Square, Bay Street and Bank
Lane, Suite 104A, Box N-3 927, Nassau, Bahamas. Its telephone number is (242)
356-6940.
The Company is in the developmental stage and has been inactive since its
inception. The Company has no current operations nor any significant assets or
liabilities.
The primary activity of the Company during fsical year 1999 involved
seeking a company or companies that it could acquire or with which it could
merge. Management of the Company has not selected any company as an acquisition
target or merger partner. The Company intends to continue to pursue and identify
potential candidate companies for acquisition or as a merger partner. The
Company does not have any subsidiaries and management does not contemplate
establishing any subsidiaries of the Company.
Business Strategy
General
Management believes that certain companies (both in the United States and
abroad) may have a significant interest in obtaining a controlling interest in
an United States public company and thereby become publicly held without having
to offer their own securities directly to the public. The Company intends to
continue to seek and identify such business companies to offer these companies
the opportunity to obtain a controlling interest in the Company. The Company may
accomplish such business transactions by acquiring such business companies
pursuant to either a purchase, merger, joint venture, exchange of stock or
otherwise, and may include business entities such as a corporation, partnership,
or limited liability company. The Company has limited available capital,
therefore, it is unlikely that the Company will be able to acquire more than one
or two such businesses. There can be no assurance that the Company will be able
to successfully identify any such business opportunities and that such
acquisitions will be successfully completed.
As of the date of this Annual Report, management of the Company has not
identified any business opportunities that it plans to pursue nor has the
Company reached any agreement or definitive understanding concerning such an
acquisition. Management intends to continue to search for business opportunities
in any geographical area, industry or business within an industry, and may
engage in any line of business including, but not limited to, service, finance,
mining, manufacturing, real estate, oil and gas, distribution, transportation,
medical, communication, and high technology. Management may later determine,
however, to concentrate its search for business opportunities to a particular
industry, segment of an industry, or line of business, or to a defined
geographical area. To date, no such determination has been discussed or made.
<PAGE>
Analysis of Potential Business Combinations
Management of the Company generally will consider substantial and detailed
information in connection with its decision of whether or not to acquire a
business. Such information may include financial analysis and review of the
proposed business and industry, market surveys and consultations with industry
experts. Management also anticipates that it will consider the following
factors: (i) total and net assets and shareholders' equity; (ii) current and
long-term liabilities; (iii) gross revenues and earnings for the prior three
fiscal years; (iv) potential for revenue and earnings growth; (v) existing and
potential competition; (vi) proprietary and state-of-the-art technology, patents
and trademarks; (vii) capabilities and experience of current management and
potential for recruitments; (viii) capital requirements; (ix) availability of
new capital, debt financing sources and relationships with existing lenders; (x)
cost and form of participation by the Company; (xi) special risks associated
with the business and its industry; and (xii) perceived desirability of the
business to investors in the capital markets.
Participation by the Company in a proposed transaction may also be based in
large part on the perceived quality of the private company's management and
personnel, properties or proprietary rights, products and/or services, marketing
concepts, level of technology or other factors which may be difficult to analyze
with complete objectivity.
Management of the Company will generally request that it be provided with
written materials from the principals of the business containing disclosures and
descriptions regarding the business' products and/or services, history,
management resumes, audited financial statements and financial projections,
proprietary products and services, present and proposed remuneration to
management, facilities and properties, analysis of risks and competitive
conditions, financial plan of operation and estimated capital requirements, and
other relevant information.
In applying the factors set forth above, no specific factor will be
controlling. Management will attempt to analyze all factors appropriate to the
specific business opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development, which may make comparative investigation and analysis of such
business opportunities difficult and complex for management. Historical
operations of a specific business may not necessarily be indicative of its
fixture potential because of the possible need to substantially shift marketing
strategies, expand significantly, change product emphasis, change or augment
management or make other changes. Moreover, although management does not intend
to do so, its decisions may be made without the benefit of detailed feasibility
studies, independent analysis, market surveys or professional studies. Thus,
management may be dependent upon the principals of a business to identify such
problems and to implement or be primarily responsible for implementing change.
Management may not, therefore, discover or adequately evaluate adverse facts
about any potential business opportunity.
Based upon such an analysis and review, management will determine the
suitable legal structure or method to be selected.
An acquisition or business combination may occur in one of several methods,
such as a statutory merger or consolidation, asset purchase, or "reverse merger"
in which the Company acquires all of the private company's outstanding common
stock in exchange for the issuance of unregistered shares of the Company's
common stock. Management of the Company does not anticipate that such
acquisitions by the Company will involve a cash purchase of the assets or the
outstanding voting stock of a viable business due to the lack of liquid assets
<PAGE>
or cash. In the event that the Company engages in an acquisition of a private
company's outstanding common stock by issuing additional shares of its common
stock, such a transaction would be made in reliance upon one or more exemptions
from the registration provisions of federal securities laws, including the
exemptions provided for non-public or limited offerings, and analogous
exemptions under applicable state securities laws. Shares of the Company's
common stock issued in such an exempt transaction would be considered
"restricted securities" under the Securities Act of 1933, as amended (the "1933
Act"), and Rule 144 thereunder, would be subject to certain restrictions, and
generally could not be resold for a period of one year. In some circumstances,
management anticipates that an agreement with the private company to register
such securities either at the time the transaction is consummated, under certain
conditions or at specified times thereafter, may be a viable negotiating
element. The issuance of substantial additional securities and their potential
sale into any trading market which may develop in the Company's securities may
have an adverse effect upon such market.
As of the date of this Annual Report, it is impossible to predict the
manner in which the Company may participate, if at all, in a business
opportunity.
Management intends to structure any such acquisitions so as to avoid
creating a taxable event under the United States tax laws and anticipates that
such an acquisition will be structured as a tax-free reorganization under
Sections 351 or 368(a) of the Internal Revenue Code of 1986, as amended ("the
Code"). Moreover, the value of any private company acquired may exceed the value
of the Company, therefore, under generally accepted accounting principles, such
an acquisition will be generally be treated as if the private company had
acquired the Company.
Prior to any merger or consolidation, or other corporate transaction for
which management may voluntarily seek the approval of the Company's
shareholders, management intends to provide its shareholders with complete
disclosure and documentation regarding the business opportunity and business
proposed to be acquired. Such disclosure and documentation will be in the form
of a proxy statement in compliance with the rules and regulations of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and will be
distributed to the shareholders of the Company at least twenty (20) days prior
to any shareholder's meeting. The International Business Companies Act of the
Bahamas (the "IBCA") provides for approval by a majority of shareholders or
classes of shareholders entitled to vote at a meeting called for that purpose
after due notice, accompanied by a plan or merger, consolidation or reverse
merger, has been given. Moreover, such an acquisition or business combination
may require compliance with the laws of another country or state within the
United States if such acquisition or business combination involves a business
entity organized under the laws of a country or state different than the
Company's.
In the event that the Company acquires a business pursuant to a statutory
merger or consolidation or other corporate transaction, management believes that
neither it nor the current shareholders of the Company will have any control of
a majority of the voting shares of such business following the acquisition
transaction. In the event that the Company acquires a business pursuant to a
reverse merger, management believes that the shareholders of the Company will
subsequently own twenty percent (20%) or less of the Company's common stock
following the acquisition transaction.
Competition
The Company will be in direct competition with many entities in its efforts
to locate suitable business opportunities. The Company's major competitors
include business development companies, venture capital partnerships and
corporations, small business investment companies, venture capital affiliates of
industrial and financial companies, broker-dealers and investment bankers,
management and management consultant firms, and private individual investors.
Moreover, the Company will also be competing with numerous small public
companies for such opportunities. Most of these entities may posses greater
financial resources and will be able to assume greater risks than those which
the Company, with its limited capital, could consider. Many of these competing
entities may also posses significantly greater experience and contacts than the
management of the Company.
<PAGE>
Employees and Consultants
The Company currently does not have any employees other than its officers
and directors. The Company may engage the services of outside professionals
regarding the identification and acquisition of certain companies.
The Company may also engage the services of consultants or finders to
assist in locating or acquiring a business opportunity. However, the Company
does not currently have any agreement, understanding or arrangement of any kind
with any consultant, finder or other person engaged in arranging acquisitions
for companies such as the Company. The Company does not currently have any funds
with which to pay a finder or consultant and has no means of raising such funds.
It is possible that a consultant, finder or other person will present a business
opportunity to the Company for consideration and, in such event, management
anticipates that such business or its principals will pay any consulting or
finder's fee.
Certain Foreign Issuer Considerations
Enforceability of Civil Liabilities. The Company is a Bahamas corporation.
The Company has appointed Diane D. Dalmy, 8965 W. Cornell Place, Lakewood,
Colorado 80227 as its agent upon whom process may be served in any action
brought against it under the securities laws of the United States. Outside the
United States, it may be difficult for investors to enforce judgments against
the Company obtained in the United States in any such actions, including actions
predicated upon the civil liability provisions of the United States securities
laws. The Company has been advised by E.P. Toothe & Associates ("E.P. Toothe"),
its Bahamas counsel, that there is substantial doubt as to the enforceability
against the Company in original actions or in actions for enforcement of
judgments of United States courts of liabilities predicated solely on the civil
liability provisions of the United States securities laws. The Company's
officers and directors, however, reside within the United States and the assets
of these persons are primarily located within the United States. It may be
possible for an investor to enforce a judgment against the personal assets of
the Company's officers and directors if named as a party in such action.
The Company has been further advised by E.P. Toothe that no treaty exists
between the Bahamas and the United States providing for the reciprocal
enforcement of foreign judgments arising out of civil proceedings. A foreign
judgment that is contrary to public policy or that is founded on a cause of
action not recognized in the Commonwealth of the Bahamas will not be enforced,
the general principal being that only judgments that rest upon principles of
universal acceptance will be enforced. A action may be commenced in the Bahamas
for recovery in such a proceeding. Enforcement of a foreign judgment against the
Company in the Bahamas may also be limited or affected by applicable bankruptcy,
insolvency, liquidation, arrangement, moratorium or similar laws relating to or
affecting creditors' rights generally and will be subject to a statutory
limitation of time within which proceedings may be brought.
Under United States law, majority and controlling shareholders generally
have certain "fiduciary" responsibilities to the minority shareholders.
Shareholder action must be taken in good faith and actions by controlling
shareholders that are obviously unreasonable may be declared null and void. The
Bahamas law protecting the interests of minority shareholders may not be as
protective in all circumstances as the law protecting minority shareholders in
United States jurisdictions. While the Bahamas law does permit a shareholder of
a Bahamas company to sue its directors derivatively, i.e. in the name of and for
the benefit of the company and to sue the company and its directors for his
benefit and the benefit of others similarly situated, the circumstances in which
any such action may be brought and the procedures and defenses that may be
available regarding any such action may result in the rights of shareholders in
a Bahamas company being more limited than those rights of shareholders in an
United States company.
<PAGE>
Item 2. Description of Property.
- --------------------------------
The Company does not own nor lease any real estate or other properties. The
Company's offices are located at Saffrey Square, Bay Street and Bank Lane, Suite
104k Nassau, Bahamas. Management believes that the Company's offices are
adequate for its reasonable foreseeable needs. The Company does not intend to
acquire any properties. Moreover, management does not anticipate that the
Company will lease office space unless and until it has acquired a business
opportunity, in which event management anticipates that such offices of the
Company will be those offices of the acquired business.
Item 3. Legal Proceedings.
- --------------------------
Management is not aware of any legal proceedings contemplated by any
governmental authority involving the Company. No director, officer or affiliate
of the Company is (i) a party adverse to the Company in any legal proceedings,
or (ii) has an adverse interest to the Company in any legal proceeding.
Management is not aware of any other legal proceedings pending or that have been
threatened against the Company.
Item 4. Control of Registrant.
- ------------------------------
The Company is not directly or indirectly owned or controlled by any
foreign government or by another corporation. The following table sets forth as
of December 31, 1999 the beneficial ownership of the Company's common stock by
each person known by the Company to own beneficially more than five percent (5%)
of the Company outstanding as of such date and by the officers and directors of
the Company as a group. Each person listed below is the sole beneficial owner of
the shares and has sole investment and voting power of such shares. No person
listed below has any option, warrant or other right to acquire additional
securities of the Company.
Title of Class Identify of Person or Group Amount Owned Percentage
- -------------- --------------------------- ------------ ----------
Common Stock Luther Jeffries 2,000 40%
Common Stock Ruth Teichert 500 10%
Common Stock officers and directors 2,500 50%
(as a group)
Change in Control
There are no arrangements known to the Company the operation of which may
at a subsequent date result in a change in control of the Company. A change in
control of the Company, however, will in all probability occur when and if the
Company acquires a business opportunity. Although the extent of the control
cannot be predicted at this time, it is unlikely that the existing shareholders
of the Company will own more than twenty percent (20%) of the combined entity
following an acquisition. There are no plans at this time to issue common shares
or other securities of the Company to any officer or director of the Company.
Item 5. Nature of Trading Market.
- ---------------------------------
The Company's common stock is not currently being quoted or publicly traded
in the over-the-counter market or otherwise. Any such quotation in the immediate
future would only be possible on the OTC Electronic Bulletin Board maintained
for over-the-counter stocks not listed on the NASDAQ system. Quotation on the
NASDAQ system or listing on a national securities exchange would be possible
only after the Company has successfully acquired a business opportunity which
would enable the Company to qualify for such listing. Management has not yet
determined whether it will seek listing for the Company's stock in the OTC
markets prior to identifying business opportunities for possible acquisition. No
assurance exists that a public trading market will ever develop for the
Company's common stock, and no market is expected to arise unless the Company
successfully consummates an acquisition.
<PAGE>
Transfer Agent
The transfer agent and registrar for the common stock is Alpha Tech Stock
Transfer Co., 929 East Spiers Lane, Draper, Utah 84020, telephone 801.571.5118.
Item 6. Exchange Controls and Other Limitations Affecting Security Holders.
- ---------------------------------------------------------------------------
There are no exchange control restrictions on payment of dividends on the
Company's common stock or on the conduct of the Company's operations in the
Bahamas. Taxation and repatriation of profits regarding the Company's operations
are regulated by the Bahamas' laws and regulations. To date, these controls have
not had and are not expected to have a material impact on the Company. The laws
of the Bahamas and the Company's Memorandum and Articles of Association impose
no limitations on the rights of nonresident or foreign owners to hold or vote
the Company's securities.
Item 7. Taxation.
- -----------------
Under current laws of the Bahamas, the Company is not subject to tax on its
income. Moreover, no reciprocal tax treaty regarding withholding exists between
the United States and the Bahamas. Under current laws of the Bahamas, dividends,
interest or royalties paid by the Company to individuals are not subject to tax.
Persons who are residents of the Bahamas may not be considered residents for any
exchange control purposes. Generally, shareholders in a company incorporated
pursuant to the IBCA are exempt from exchange controls and are not (for twenty
years from the date of incorporation) subject to any tax on income, gift, estate
or corporate tax. If the Company were to pay a dividend, the Company would not
be liable to withhold any tax, but shareholders would receive gross dividends,
if any, irrespective of their residential or national status.
Dividends, if any, paid to any United States resident or citizen
shareholder would be treated as dividend income for United States federal income
tax purposes. Such dividends would not be eligible for the 70%
dividends-received deduction allowed to United States corporations on dividends
from a domestic corporation under Section 243 of the United States Internal
Revenue Code of 1986 (the "Internal Revenue Code"). Various Internal Revenue
Code provisions impose special taxes in certain circumstances on non-United
States corporations and their shareholders. Shareholders of the Company are
urged to consult their tax advisors with regard to such possibilities and their
own tax situation.
In addition to United States federal income taxation, shareholders may be
subject to state and local taxes upon their receipt of dividends.
Dividend Policy
The Company has never paid any dividends on its common stock and does not
anticipate paying any dividends in the future. The Board of Directors has not
adopted a policy with respect to the payment of dividends. Management
anticipates that any future earnings will be retained as working capital and
used for business purposes. Accordingly, it is unlikely that the Board of
Directors will declare or pay any such dividends in the foreseeable future.
Item 8. Selected Financial Data.
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The selected financial data set forth below is as of December 31, 1999, and
is derived from the audited Financial Statements and notes thereto, which are
prepared in accordance with generally accepted accounting principles in the
United States of America in United States dollars, and which are incorporated
herein. The selected financial data is qualified in its entirety by reference
to, and should be read in conjunction with, the Financial Statements and related
notes and Item - "Management's Discussion and Analysis of Financial Condition
and Results of Operations".
<PAGE>
Balance Sheet Data As of 12/31/99
------------------ --------------
(audited)
Current assets $ 5,000
Total assets $ 5,000
Current liabilities $ 0
Total liabilities $ 0
Stockholders' Equity $ 5,000
Income Statement Data
---------------------
Revenues 0
Expenses $ 0
Net Income (Loss) $ 0
Item 9A. Quantitative and Qualitative Disclosures about Market Risk.
- --------------------------------------------------------------------
The Financial Statements of the Company are prepared in United States
dollars. The Bahamian Dollar is the national currency of the Commonwealth of the
Bahamas. The Bahamian Dollar is comprised of 100 cents. It was decimalized in
1966 from a Sterling Pound to a Bahamian Dollar at a rate of one Sterling Pound
equal to 2.86 Bahamian Dollars. The Bahamian Dollar is equivalent to and
interchangeable with the United States dollar at freely floating rates. There
are currently no restrictions on the flow of such currencies between the Bahamas
and the United States.
In general, fluctuations in the value of foreign currencies may cause
United States dollar translated amounts to change in comparison with previous
periods and, accordingly, the Company cannot quantify in any meaningful way, the
effect of such fluctuations upon future income. This is due to the constantly
changing exposures to these currencies, and the fact that all foreign currencies
do not react in the same manner against the United States dollar.
The Company may be subject to a variety of risks associated with changes
between the relative value of the United States dollar and the Bahamian dollar.
Management believes, however, that these risks are minimized due to its focus
primarily on acquisition of business companies organized under the laws of a
respective state within the United States. As of the date of this Annual Report,
the exchange rate of the Bahamian dollar to the United States dollar is
approximately 1.225 to 1, respectively.
Item 9B. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
- --------------------------------------------------------------------------------
The Company is in the developmental state, has conducted no operations nor
generated any revenues. From its inception to the date of this Annual Report,
the Company's operations have been limited to the development, analysis and
potential successfulness of its business strategy. As of the date of this Annual
Report, the Company has no working capital.
<PAGE>
Capital Resources
The Company may not have sufficient funds to cover all of its estimated
operational, general and administrative expenses for fiscal year 2000. It is
anticipated that the Company may not have sufficient funds to cover the
estimated expenses associated with its operational activities of acquisition of
a business opportunity. Under these circumstances, management intends to obtain
loans from its current directors, officers and shareholders to cover such
deficits and/or raise capital through private placement offerings of its
securities. These potential sources of funds, however, have not made definitive
commitments to make such loans to the Company.
Item 10. Directors and Officers of Registrant.
- ----------------------------------------------
The directors and officers of the Company are as follows:
Name Age Position with the Company
---- --- -------------------------
Luther Jeffries 65 President and Director
Ruth Teichert 52 Secretary
LUTHER JEFFRIES is the founder of the Company. Mr. Jeffries has been the
President and a director of the Company since its inception. Mr. Jeffries
studied at Ohio State university, the Army Engineers School at Fort Belvoir,
Virginia, and the University of Alaska, receiving degrees in engineering and
finance. Over the past thirty years, Mr. Jeffries served as chief executive
officer of many companies, most notably the General Nuclear Corp, Houston,
Texas; Cumberland Research Corp., Port Norris, New Jersey; and Eastern Testing
Laboratories, Pennsauken, New Jersey. Mr. Jeffries also served as a consultant
to many governmental entities and companies, including the U.S. Department of
Commerce, the U.S. Atomic Energy Commission, the Commonwealth of the Bahamas,
the British American Tobacco Company, and to three successive governors of the
State of New Jersey. Mr. Jeffries developed and patented a device for
determining the exact location of kilcuries and gamma sources. He is a member of
several Societies, including the Society of Naval Architects & Marine Engineers,
the American Society for Metals, the American Society for Quality Control and
the American Society for Technology. Mr. Jeffries has authored several papers,
including Interaction of Politics and the Seafood Industry for the American
Society of Quality Control, and A Reconciliation of the Results of Radiographic
and Ultrasonic Inspection of High Yield Steels for the U.S. Bureau of Ships.
RUTH TEICHERT has been the Secretary of the Company since inception. Ms.
Teichert was born in New York on April 18, 1947. Ms. Teichert currently lives in
Nassau, and acts as secretary for other corporations organized under the laws of
the Commonwealth of the Bahamas.
The directors of the Company are elected annually and serve until their
successors take office or until their death, resignation or removal. The
officers of the Company serve at the pleasure of the Board of Directors of the
Company.
Item 11. Compensation of Directors and Officers.
- ------------------------------------------------
The Company does not have any agreement or understanding, express or
implied, with any officer or director concerning employment or cash compensation
for services. No compensation has been paid or accrued to any officers or
director to date, and none is expected to be paid or accrued during fiscal year
2000, except for the reimbursement for out-of-pocket expenses. No salary or
similar remuneration is anticipated to be paid to such persons by the Company.
No officer or director will receive any finder's fee to be paid by the Company
for finding or arranging any business transaction in which the Company
participates.
<PAGE>
The Company does not have any pension plan, profit sharing plan or stock
option plan, although such plans may be adopted in the future at the discretion
of the Board of Directors. No other incentive plans are in existence or are
contemplated.
Item 12. Options to Purchase Securities from Registrant.
- --------------------------------------------------------
There are no options issued to any officer, director or shareholder of the
Company or to any other person, directly or indirectly, to purchase any
securities from the Company.
Item 13. Interest of Management in Certain Transactions.
- --------------------------------------------------------
The Company currently does not have any understandings, agreements or
arrangements with its officers or directors in which such persons have agreed to
contribute capital to the Company or the Company has agreed to loan such persons
capital. The Company does not intend to issue any additional securities to such
persons prior to consummation of any acquisition.
Item 14. Description of Securities Registered.
- ----------------------------------------------
The authorized capital stock of the Company consists of 50,000,000 shares
of common stock, no par value per share. There are no classes of preferred stock
authorized at this time.
Common Stock
As of Decemebr 31, 1999, there were 5,000 shares of common stock
outstanding held of record by fifteen (15) shareholders. The shares of common
stock were issued to the existing shareholders in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act of 1933, as
amended. The shareholders represented to the Company that they acquired the
shares for their own respective account and not with a view to distribution and
that the Company made available to them all material information concerning the
Company. The certificates bear a restrictive legend. No underwriter was involved
in the transaction, and no commissions or other remuneration was involved in the
offer and sale of the securities.
The holders of common stock are entitled to one vote for each share held.
The Company's Memorandum and Articles of Association provide that the
affirmative vote of at least twenty-five percent (25%) of the votes cast at a
shareholder meeting is sufficient to effect any corporate action upon which
shareholders may or must vote. Common shares do not carry any cumulative voting
rights, thus holders of more than twenty-five percent (25%) of the common stock
have the power to elect all directors and to control the Company. Moreover,
directors may also have the power to elect the directors and in effect control
the Company. Holders of common stock are not entitled to pre-emptive rights.
The Company's Memorandum and Articles of Association provide for a minimum
of one director and any other number of directors as established by the board of
directors. Directors are elected for one-year terms by either the vote of the
shareholders as their annual meeting or the vote of the existing board of
directors.
Item 15. Defaults Upon Senior Securities.
- -----------------------------------------
Not applicable.
<PAGE>
Item 16. Changes in Securities. Changes in Security for Registered Securities
and Use of Proceeds.
- -----------------------------------------------------------------------------
The Company sold its shares of common stock, par value $1.00, to fifteen
(15) individuals in June 1992. On March 10, 1999, the Board of Directors and
shareholders authorized an amendment to the Company's Articles of Association
increasing the authorized capital structure to 50,000,000 shares of common
stock, no par value.
Item 17. Financial Statements.
- ------------------------------
Not applicable.
Item 18. Financial Statements.
- ------------------------------
Reference is made to Item 19(a) for a list of all financial statements
filed as part of this Annual Report on Form 20-F.
Item 19. Financial Statements and Exhibits.
- -------------------------------------------
(a) The following Financial Statements are filed as part of this
Registration Statement:
1. Independent Auditors' Report dated March 28, 2000;
2. Balance Sheet for fiscal Year ending December 31, 1999;
3. Statement of Operations for Years Ended December 31, 1999, 1998 and
for the Period from June 16, 1992 (date of organization) through
December 31, 1999;
4. Statement of Shareholders' Equity from June 16, 1992 (date of
organization) through December 31, 1999;
5. Statements of Cash Flows for Years Ended December 31, 1999, 1998 and
Cumulative for the Period from June 16, 1992 (date of organization)
through December 31, 1999;
6. Notes to Financial Statements December 31, 1999.
(b) The following Exhibits are filed as part of this Annual Report:
None.
<PAGE>
LEON TOURS, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
F-1
<PAGE>
C O N T E N T S
Independent Auditors' Report................................................ F-3
Balance Sheet............................................................... F-4
Statements of Operations.................................................... F-5
Statements of Stockholders' Equity.......................................... F-6
Statements of Cash Flows.................................................... F-8
Notes to the Financial Statements........................................... F-9
F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Leon Tours, Ltd.
(A Development Stage Company)
Nassau, Bahamas
We have audited the accompanying balance sheet of Leon Tours, Ltd. (a
development stage company) as of December 31, 1999 and the related statements of
operations, stockholders' equity and cash flows for the years ended December 31,
1999 and 1998 and from inception on June 16, 1992 through December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 Leon Tours, Ltd. (a development
stage company) as of December 31, 1999 and the results of its operations and
cash flows for the years ended December 31, 1999 and 1998, and from inception on
June 16, 1992 through December 31, 1999 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has not established revenues sufficient to cover its
operating costs which raises substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
- ---------------------------
Jones, Jensen & Company
Salt Lake City, Utah
March 28, 2000
F-3
<PAGE>
LEON TOURS, LTD.
(A Development Stage Company)
Balance Sheet
ASSETS
------
December 31,
1999
----
CURRENT ASSETS
Cash $ 5,000
-------
Total Current Assets 5,000
-------
TOTAL ASSETS $ 5,000
=======
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
CURRENT LIABILITIES
Accounts payable $ --
-------
Total Current Liabilities --
-------
STOCKHOLDERS' EQUITY
Common stock; no par value; authorized 50,000,000
shares; 5,000 issued and outstanding 5,000
Additional paid-in capital 6,000
Deficit accumulated during the development stage (6,000)
-------
Total Stockholders' Equity 5,000
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,000
=======
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
LEON TOURS, LTD.
(A Development Stage Company)
Statements of Operations
From
For the Inception on
Years Ended June 16,
December 31, 1992 Through
--------------------- December 31,
1999 1998 1999
-------- ------- -------
REVENUES $ -- $ -- $ --
-------- ------- -------
EXPENSES
Professional fees -- 5,000 6,000
-------- ------- -------
Total Expenses -- 5,000 6,000
-------- ------- -------
NET LOSS $ -- $(5,000) $(6,000)
======== ======= =======
BASIC NET LOSS PER SHARE $ 0.00 $ (1.00)
======= =======
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 5,000 5,000
======= =======
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
LEON TOURS, LTD.
(A Development Stage Company)
Statements of Stockholders' Equity From
Inception on June 16, 1992 through December 31, 1999
Deficit
Accumulated
Common Stock Additional During the
------------------------- Paid-In Development
Shares Amount Capital Stage
------ ------ ------- -----
<S> <C> <C> <C> <C>
Balance at inception on
June 16, 1992 -- $ -- $ -- $ --
Common stock issued for
$1.00 per share 5,000 5,000 -- --
Contributed capital -- -- 1,000 --
Net loss for the period ended
December 31, 1992 -- -- -- (1,000)
------- ------- ------- -------
Balance, December 31, 1992 5,000 5,000 1,000 (1,000)
Net income for the year ended
December 31, 1993 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1993 5,000 5,000 1,000 (1,000)
Net income for the year ended
December 31, 1994 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1994 5,000 5,000 1,000 (1,000)
Net income for the year ended
December 31, 1995 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1995 5,000 5,000 1,000 (1,000)
Net income for the year ended
December 31, 1996 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1996 5,000 5,000 1,000 (1,000)
Net income for the year ended
December 31, 1997 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1997 5,000 $ 5,000 $ 1,000 $(1,000)
------- ------- ------- -------
The accompanying notes are an integral part of these financial statements.
F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEON TOURS, LTD.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
From Inception on June 16, 1992 through December 31, 1999
Deficit
Accumulated
Common Stock Additional During the
------------------------- Paid-In Development
Shares Amount Capital Stage
------ ------ ------- -----
<S> <C> <C> <C> <C>
Balance, December 31, 1997 5,000 $ 5,000 $ 1,000 $(1,000)
Net loss for the year ended
December, 31, 1998 -- -- -- (5,000)
------- ------- ------- -------
Balance, December 31, 1998 5,000 5,000 1,000 (6,000)
Contributed capital -- -- 5,000 --
Net income for the year ended
December 31, 1999 -- -- -- --
------- ------- ------- -------
Balance, December 31, 1999 5,000 $ 5,000 $ 6,000 $(6,000)
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
F-7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEON TOURS, LTD.
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
For the June 16,
Years Ended 1992 Through
December 31, December 31,
1999 1998 1999
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ -- $ (5,000) $ (6,000)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Increase (decrease) in account payable (5,000) 5,000 --
-------- -------- --------
Net Cash (Used) by Operating Activities (5,000) -- (6,000)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash -- -- 5,000
Contributed capital 5,000 -- 6,000
-------- -------- --------
Net Cash Provided by Financing Activities 5,000 -- 11,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS -- -- 5,000
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 5,000 5,000 --
-------- -------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 5,000 $ 5,000 $ 5,000
======== ======== ========
Cash Paid For:
Interest $ -- $ -- $ --
Taxes $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
F-8
</TABLE>
<PAGE>
LEON TOURS, LTD.
(A Development Stage Company)
Notes to the Financial statements
December 31, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Leon Tours, Ltd. (the Company) was incorporated in the Commonwealth of the
Bahamas on June 16, 1992.
The Company is in the development stage, and has been inactive since its
inception. The Company has no current operations nor any significant assets
or liabilities. Accordingly, the Company is dependent upon management
and/or significant shareholders to provide sufficient working capital to
preserve the integrity of the corporate entity during this phase. It is the
intent of management and significant shareholders to provide sufficient
working capital necessary to preserve the integrity of the corporate
entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has adopted a December 31 year end.
b. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period of the
financial statements.
For the Year Ended
December 31, 1999
Income (Loss) Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
$ - 5,000 $ 0.00
================== ================== ==================
For the Year Ended
December 31, 1998
Income (Loss) Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
$ (5,000) 5,000 $ (1.00)
================== ================== ==================
c. Provision for Taxes
The Commonwealth of the Bahamas has no income tax. Accordingly, no income
tax provision has been included in the accompanying 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 at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ form
those estimates.
F-9
<PAGE>
LEON TOURS, LTD.
(A Development Stage Company)
Notes to the Financial statements
December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Revenue Recognition
As of December 31, 1999, the Company has not established an ongoing source
of revenues. Revenue recognition policies will be determined when principal
operations commence.
f. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
g. Additional Accounting Policies
Additional accounting policies will be established once principal
operations commence.
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. The Company has not established revenues sufficient to cover
its operating costs and allow it to continue as a going concern. Management
intends to seek a merger with an existing, operating company. In the
interim, management is committed to meeting the Company's minimal operating
expenses.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 1998, the Company incurred $5,000 in
professional expenses payable to the Company's attorney. During the year
ended December 31, 1999, this debt was forgiven and was treated as a
capital contribution by a shareholder.
NOTE 5 - COMMON STOCK
During 1992, the Company issued 5,000 shares of $1.00 par value common
stock at $1.00 per share.
On March 10, 1999, the Company increased the number of shares authorized
from 5,000 to 50,000,000 and changed the par value from $1.00 to no par.
F-10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 5,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 5,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0.00
<EPS-DILUTED> 0
</TABLE>
