FORM 10-K-SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT
PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-26249
SNOHOMISH EQUITY CORPORATION
(formerly SNOHOMISH EQUITY GROUP, INC)
Nevada 33-0507843
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
219 Broadway, Suite 261, Laguna Beach CA 92651
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-1765
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 2,010,000
Yes[x] No[] (Indicate by check mark whether the Registrant (1) 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 (2) has been subject to such
filing requirements for the past 90 days.)
[] (Indicate by check mark whether if disclosure of delinquent filers
('229.405) is not and will not to the best of Registrant's knowledge be
contained herein, in definitive proxy or information statements incorporated
herein by reference or any amendment hereto.)
As of 12/31/99
the aggregate number of shares held by non-affiliates was approximately
90,015 shares.
the number of shares outstanding of the Registrant's Common Stock was
2,010,000.
Exhibit Index is found on page 13
1
<PAGE>
PART I
INTRODUCTION
We filed a 1934 Securities and Exchange Registration of our common stock
which has recently become effective and clear of comments by the staff of the
Securities and Exchange Commission. This Annual Report on Form 10-K-SB begins
our normal, annual, quarterly and current reporting. We became a reporting
company voluntarily filed pursuant to Section 12(g) of the Securities Exchange
Act of 1934, in order to comply with the requirements of National Association of
Securities Dealers for submission for quotation on the Over the Counter Bulletin
Board, often called "OTCBB". Our common stock is not presently quoted on the
OTCBB or elsewhere and had never traded in brokerage transaction. The
requirements of the OTCBB are that the financial statements and information
about the Issuer be reported periodically to the Commission and be and become
information that the public can access easily. We do wish to report and provide
disclosure voluntarily, and will continue to file periodic reports even in the
event that our obligation to file such reports is excused or suspended under the
Exchange Act.
Our corporation may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
("Issuer") company, by which the private company's shareholders acquire control
of the public company. While no negotiations are in progress, and to potential
targets have been identified, our business plan is to find such a target or
targets, and attempt to acquire them for stock. While no such arrangements or
plans have been adopted or are presently under consideration, it would be
expected that a reverse acquisition of a target company or business would be
associated with some private placements and/or limited offerings of common stock
of this Issuer for cash. Such placements, or offerings, if and when made or
extended, would be made with disclosure and reliance on the businesses and
assets to be acquired, and not upon our present condition as disclosed in this
Report.
- --------------------------------------------------------------------------------
ITEM 1. DESCRIPTION OF BUSINESS.
- --------------------------------------------------------------------------------
(A) HISTORICAL INFORMATION. We were first organized under the laws of the State
of Texas on April 8, 1992, as Snohomish Equity Group, Inc. for the purpose of
seeking out one or more potential business ventures, without regard to
geographical considerations, which venture or ventures, in the judgment of
management, warrant interest and involvement of our Company. On or about April
27, 1992, we made our initial issuance of 2,000,000 shares of common stock to a
single founders' group of six related founders, for cash. We made no further
issuances until after our revival in 1999, and the total issued and outstanding
shares of common stock stood at 2,000,000 shares until shortly before the date
of this report. During 1992, the various Founders made private gifts of stock to
family members and friends, totaling 108,108 shares: 27,093 to ten affiliates
(six of whom remain affiliates); and 81,015 shares to a total of 94
non-affiliate shareholders. On or about April 29, 1992, we incorporated a
wholly-owned subsidiary, Snohomish Capital Corporation, and authorized a stock
dividend by which the ownership of that subsidiary would have been spun off to
shareholders, but that dividend/spin-off was abandoned and never consummated,
and the former subsidiary corporation expired without action, pursuant to the
laws of Texas. The shares of our common stock have never traded, over the
counter or otherwise. Our predecessor remained dormant and inactive from 1993 to
the present. About early 1997, the founder's control block of 1,891,892 shares,
was acquired by Intrepid International S.A., a Panama Corporation. As of that
time, there were 107,108 shares issued and outstanding to persons who were and
are (with some exceptions) non-affiliate shareholders. We were formally
reorganized and our Articles of Incorporation re-stated in the State of Nevada
2
<PAGE>
on December 8, 1998, as Snohomish Equity Corporation, for the purpose of seeking
out one or more potential business ventures, without regard to geographical
considerations, which venture or ventures, in the judgment of management,
warrant interest and involvement of the Company. On or about January 1, 1998 we
authorized the Issuance of an additional 10,000 shares to its present officers,
pursuant to sec4(2) of the Securities Act of 1933. As a result, the total shares
of common stock issued and outstanding is 2,010,000 shares, as of the date of
this Statement.
(B) BUSINESS. Our Company has recently revived following a period of dormancy
for the past six years and has no current business. Its business plan is to seek
one or more profitable business combinations or acquisitions to secure
profitability for shareholders. It has no day to day operations at the present
time. Its officers and directors devote only insubstantial time and attention to
the affairs of this issuer at the present time, for the reason that only such
attention is presently required. Management does, however, constantly review
potential business combination proposals, and has adopted a conservative and
patient policy of seeking opportunities of exceptional quality, in management's
view, and to accept that it may have to wait longer, as a result, before
consummating any transactions to create profitability for its shareholder.
While the Company does not intend to rule out its consideration to any
particular business or industry segment, Management has determined to focus its
interest in evaluating development stage companies in the electronic commerce,
communication and internet industry. Management regularly reviews proposals for
ventures in this area. It is possible that an outstanding opportunity may
develop in other industry segments, such as finance, brokerage, insurance,
transportation, communications, research and development, service, natural
resources, manufacturing or other high-technology areas.
Because of the Company's limited resources, and practical considerations,
the Company will not be able to participate in more than a single business
venture. Accordingly, it is anticipated that the Company will not be able to
diversity, but will may be limited to one merger or acquisition. This lack of
diversification will not permit the Company to offset potential losses from one
business opportunity against profits from another. To a large extent, a decision
to participate in a specific business opportunity may be made upon management's
analysis of the quality of the other firm's management an personnel, the
anticipated acceptability of new products or marketing concepts, the merit of
technological changes and numerous other factors which are difficult, if not
impossible, to anticipate.
This Company is required to rely on Management's skill, experience and
judgement, both in regard to extreme selectivity, and in any final decision to
pursue any particular business venture, as well as the form of any business
combination, should agreement be reached at some point to acquire or combine.
Management is in turn reliant upon the experience of its principal shareholder.
For further information about the plans of this company, and about its principal
shareholder, please see Item 2 of this Part, Managements Discussion and Analysis
or Plan of Operation, and also Item 7 of this Part, Certain Relationships and
Related Transactions.
(1) PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS.
[None.]
(2) DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES.
[None.]
(3) STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE.
[None.]
(4) COMPETITIVE BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S
COMPETITIVE POSITION IN THE INDUSTRY. Other better capitalized firms are engaged
in the search for acquisitions or business combinations which firms may be able
to offer more and may be more attractive to acquisition candidates. While this
issuer has little to recommend it competitively, as against other so-called
"Blank Check Companies", its prospects rest in the skill and knowledge of
management, and of management consultants, including the principal shareholder,
3
<PAGE>
and such acquaintances and credibility they may command among business brokers
and promoters looking for dormant public companies. This Issuer is not desperate
or overly eager to find a business partner, and its management has resolved to
allow such time as may be required to find an opportunity of superior value and
potential. Notwithstanding the confidence of management in its knowledge, skill
and that of its consultants and principal shareholder, there can be no assurance
that this issuer will prove competitively attractive to the kinds of
transactions it seeks. Please see Management's Discussion and Analysis, Item 2
of this part, for an expanded discussion of these and related subjects of
disclosure.
(5) SOURCES OF AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF
PRINCIPAL SUPPLIERS. Not Applicable
(6) DEPENDANCE ON ONE OR A FEW MAJOR CUSTOMERS. Not Applicable
(7) PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS OR LABOR CONTRACTS.
[None.]
(8) GOVERNMENT FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR
SERVICES AND STATUS. Not applicable
(9) EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE
BUSINESS. Not applicable.
(10) ESTIMATE OF AMOUNT SPENT ON RESEARCH AND DEVELOPMENT IN EACH OF LAST
TWO YEARS.
[None.]
(11) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS. None at
this time.
(12) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES.
[None.]
(13) YEAR 2000 COMPLIANCE ISSUES. None. The issuer has no computers or
digital equipment of its own, no suppliers or customers. Accordingly, the issuer
has determined that it is faced with no year 2000 compliance issues other than
those shared by the public in general.
(C) FINANCING PLANS. For more information, please see Item 6 of Part II,
Management's Discussion and Analysis.
(D) GOVERNMENT REGULATION. There are no issues of government regulation unique
to this Registrant or its business.
(E) COMPETITION. Other better capitalized firms are engaged in the search for
acquisitions or business combinations which firms may be able to offer more and
may be more attractive to acquisition candidates. While this issuer has little
to recommend it competitively, as against other so-called "Blank Check
Companies", its prospects rest in the skill and knowledge of management, and of
management consultants, including the principal shareholder, and such
acquaintances and credibility they may command among business brokers and
promoters looking for dormant public companies. This Issuer is not desperate or
overly eager to find a business partner, and its management has resolved to
allow such time as may be required to find an opportunity of superior value and
potential. Notwithstanding the confidence of management in its knowledge, skill
and that of its consultants and principal shareholder, there can be no assurance
that this issuer will prove competitively attractive to the kinds of
transactions it seeks. Please see Management's Discussion and Analysis, Item 6
of part II, for an expanded discussion of these and related subjects of
disclosure.
(F) PLANNED ACQUISITIONS. There are no planned acquisitions at this time.
(G) EMPLOYEES. None. We have two officers not classified as employees.
4
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.
We have no property and enjoy the non-exclusive use of offices and
telephone of its officers and attorneys.
ITEM 3. LEGAL PROCEEDINGS.
There are no legal proceedings pending against our Company, as of the
preparation of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
[None.]
The Remainder of this Page is Intentionally left Blank
5
<PAGE>
- --------------------------------------------------------------------------------
PART II
- --------------------------------------------------------------------------------
ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.
(A) MARKET INFORMATION. The Company, has one class of securities, Common Voting
Equity Shares ("Common Stock"). The Company's Securities have never been quoted
in the over-the-counter market, or elsewhere.
(B) HOLDERS. Management calculates that the approximate number of holders of
the Company's Common Stock, as of December 31, 1999, was 107.
(C) DIVIDENDS. No cash dividends have been paid by the Company on its Common
Stock and no such payment is anticipated in the foreseeable future.
(D) SALES OF UNREGISTERED COMMON STOCK 1999.
[None.]
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We have had no activity in
1999 except for our Registration of our common stock, pursuant to section 12(g)
of the Securities Exchange Act of 1934.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS. We
have no need of additional funds during the next twelve months, from sources
outside of our affiliates, to maintain our corporate franchise in the State of
our incorporation, and to file periodic reports as required of Registrants under
the 1934 Act.
(2) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT.
[ None.]
(3) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT.
[None.]
(4) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES.
[None.]
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We have had no activity in 1999 except for our Registration of our common stock,
pursuant to section 12(g) of the Securities Exchange Act of 1934. We had general
and administrative expenses in 1999, which were legal and accounting costs, in
connection with our 1934 Registration.
ITEM 7. FINANCIAL STATEMENTS.
Please see the Exhibit Index found on page 12 of this Report. The financial
statements listed therein, attached hereto and filed herewith are incorporated
herein by this reference as though fully set forth herein.
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
[None.]
6
<PAGE>
The Remainder of this Page is Intentionally left Blank
7
<PAGE>
- --------------------------------------------------------------------------------
PART III
- --------------------------------------------------------------------------------
ITEM 9.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following persons are the Directors of Registrant, having taken office
December 9, 1998, to serve until their successors might be elected or appointed.
The time of the next meeting of shareholders has not been determined and is not
likely to take place before a targeted acquisition or combination is determined.
Please see Item 7, Certain Relationships and Related Transactions for
information about the other affiliates of this issuer.
Pete Chandler, President/Director was born and raised in Northern Utah,
where he received a Bachelor of Science Degree from Weber State University, in
finance and business administrations. He also attended DeVry Institute of
Technology in Phoenix Arizona, where he studied computer information and
accounting systems. He serves as Director of Research & Finance, for Corporate
Relations & Management, Inc., from August 1999 and presently. From February 1997
until August 1999, he served as financial markets liaison to Jordan Richards
Associates. From October 1994 until October 1996, he was an investment
consultant to Everen Securities. From January 1, 1994 to October 1994, he was an
agent for New York Life Insurance Company. From August 1993 to December 1993, he
was a sales and leasing representative for Freeway Oldsmobile, Cadillac, Mazda.
Mr. Chandler is a Board Member of the Foster Care Citizens Board, appointed in
1995, and involved in its community service activities.
Susan Sanchez, Secretary/Treasurer/Director, has been a self-employed
provider of paralegal, secretarial and administrative services for the last five
years, for various public and private corporate clients. During this time she
had become familiar with corporate and securities filings, NASD compliance, and
maintenance of corporate records and minutes.
While there are no arrangements for the resignation of these directors, it
is manifestly clear that they are nominees of Intrepid International, Ltd.
(AIntrepid US@), the United States agency of Intrepid International, S. A., of
Panama. It is to be expected that present management would continue in office
until a business combination is effected and would retire in favor of new
management at that time.
ITEM 10. EXECUTIVE COMPENSATION.
Each of the two Officer/Directors have been issued 5,000 new investment
shares of stock, for present service and incentive purposes. No other
compensation, or plan of compensation, has been made, authorized or contemplated
at the present time and for the present period of corporate inactivity and
ill-liquidity.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the best of
Registrant's knowledge and belief the following disclosure presents the total
security ownership of all persons, entities and groups, known to or discoverable
by Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. Each of the following "Other Affiliates"
are affiliates of the Issuer, by reason of their respective affiliation with the
Principal Shareholder. Mr. Sifford and Mr. James are officer-affiliates of
Intrepid, and Mr. Stocker is United States Counsel for Intrepid.
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Beneficial Owners (more than 5%) COMMON STOCK SHAREHOLDER # SHARES %
- ----------------------------------------------------------------------------
Intrepid International, S.A.
P. O. Box 8807 1,891,892 94.12
Panama City 5
Republic of Panama
- ----------------------------------------------------------------------------
subtotal principal shareholder 1,891,892 94.12
- ----------------------------------------------------------------------------
J. Dan Sifford 531 0.03
3131 South West Freeway, #42
Houston, TX 77098
- ----------------------------------------------------------------------------
Kirt W. James 3,000 0.15
33481 Spinnaker
Dana Point CA 92629
- ----------------------------------------------------------------------------
Kirt W. James custodian 4500 0.22
for Jillian R. James
3842 Quail Hollow Drive
Salt Lake City, UT 84109
- ----------------------------------------------------------------------------
William Stocker Trustee 1500 0.07
The Johannes Michael Beelner Living Trust
31878 Del Obispo 118-606
San Juan Capistrano CA 92675 34996
- ----------------------------------------------------------------------------
William Stocker Trustee 2562 0.13
The Osha Makai Smith Living Trust
31878 Del Obispo 118-606
San Juan Capistrano CA 92675 34996
- ----------------------------------------------------------------------------
William Stocker/Boni Light TTEE 4500 0.22
The Fallowfield Family Trust
31878 Del Obispo 118-606
San Juan Capistrano CA 92675 34996
- ----------------------------------------------------------------------------
Boni Light/William Stocker TTEE 1500 0.07
The Tommy Hawk Endowment Trust
31878 Del Obispo 118-606
San Juan Capistrano CA 92675 34996
- ----------------------------------------------------------------------------
subtotal other affiliates 18,093 0.90
TOTAL Other Affiliate Ownership 1,909,985 95.02
============================================================================
</TABLE>
The Remainder of this Page is Intentionally left Blank
9
<PAGE>
(B) SECURITY OWNERSHIP OF MANAGEMENT. To the best of Registrant's knowledge
and belief the following disclosure presents the total beneficial security
ownership of all Directors and Nominees, naming them, and by all Officers and
Directors as a group, without naming them, of Registrant, known to or
discoverable by Registrant.
<TABLE>
<CAPTION>
<S> <C> <C>
Ownership of Management Common Stock Actual
Shareholder Ownership %
- ---------------------------------------------------------
Pete Chandler President
430 4th Street 5,000 0.25
Ogden UT 84404
- ---------------------------------------------------------
Susan Sanchez Secretary/Treasurer
34155 Camino El Molino 5,000 0.25
Capistrano Beach CA 92624
- ---------------------------------------------------------
All Officers and Directors as a Group 10,000 0.50
- ---------------------------------------------------------
Grand Total Shares 2,010,000 100.00
Issued and Outstanding
=========================================================
</TABLE>
(C) CHANGES IN CONTROL. There are no arrangements known to Registrant,
including any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Issuer. The Issuer is
searching for a profitable business opportunity. The Issuer is searching for a
profitable business opportunity. The acquisition of such an opportunity could
and likely would result in some change in control of the Issuer at such time.
This would likely take the form of a reverse acquisition. That means that this
issuer would likely acquire businesses and assets for stock in an amount that
would effectively transfer control of this issuer to the acquisition target
company or ownership group. It is called a reverse-acquisition because it would
be an acquisition by this issuer in form, but would be an acquisition of this
issuer in substance.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(A) THE PRINCIPAL SHAREHOLDER. Intrepid International, S. A. ("Intrepid")
is the principal shareholder of this issuer. It was incorporated in the Republic
of Panama in 1984 to offer financial services to natural resource companies,
primarily those engaged in the production of oil and gas. Following the world
wide collapse of oil prices in the mid-eighties, the Company broadened the focus
of its universe of support services to include a wider range of companies, with
an emphasis on public companies and private companies, companies engaged in the
transition from privately held to publicly held, and development stage
companies, whether public or private, requiring professional business and
corporate guidance. In August of 1997 the Company sought a United States
Representative and entered into a relationship with a group of corporate and
business specialists who, after contracting with the Panama Company,
incorporated as Intrepid International, Ltd. ("Intrepid US") to provide the
required representation and agency for the Company in North America and Europe.
Intrepid US is incorporated in the State of Nevada. Intrepid is not an
investment banker, nor a broker or dealer in securities. Intrepid is a provider
of technical support services to client companies, generally, and an occasional
investor for its own account. About early 1997, the founder's control block of
1,891,892 shares, was acquired by Intrepid International S.A., a Panama
Corporation.
Intrepid has two distinct relationships with this Issuer. The Panama
Company is the principal and controlling shareholder. The Nevada subsidiary is
the principal financial service provider under contract with the Issuer. The
following persons and their relationships to Intrepid are disclosed as follows:
10
<PAGE>
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the worlds largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, one of the most prestigious law firms in Panama
with offices around the world. In addition to his law practice he has served as
Panamanian Consul to Liverpool, England and for the past five years as
Ambassador to Great Britain. The firm of Franco and Franco is regarded with the
highest degree of integrity and professionalism in the business and political
community in Panama with its partners and several of its associates holding or
having held public office. The firm practices maritime, aviation and commercial
law and currently is the legal firm for: IBERIA (the Spanish national airline),
KLM (the Dutch national airline), VIASA (the Venezuelan national airline),
Aeroflot (the Russian national airline) and various smaller Latin American
national airlines as well as being the registered agents for thousands of ocean
going ships around the world flying the Panamanian flag. Mr. Franco brings to
the Company a wealth of international legal, commercial and diplomatic
experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, is, and has
for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found below.
The officers, directors and controlling persons of Intrepid International,
Ltd. (Nevada) ("Intrepid U.S.") are two individuals; Kirt W. James, and J. Dan
Sifford, Jr.
Kirt W. James, the President of Intrepid U.S., has a lifelong background in
marketing and sales. From 1972 to 1987, Mr. James was responsible for sales and
business administrative matters for Glade N. James Sales Co., Inc. and from 1987
to 1990 Mr. James built retail markets for American International Medical Supply
Co., a publicly traded company. In 1990 he formed and became President of HJS
Financial Services, Inc., and was responsible for the day to day business
operations of the firm as well as consultation with Clients concerning their
business and Product Development. During the past five years Mr. James has been
involved in the valuation, sale and acquisition of numerous private businesses
and planning for the entry of private corporations into the public market place.
J. Dan Sifford, Jr., Secretary-Treasurer of Intrepid U.S., grew up in Coral
Gables, Florida, where he attended Coral Gables High School and the University
of Miami. After leaving the University of Miami, Mr. Sifford formed a wholesale
consumer goods distribution company which operated throughout the southeastern
United States and all of Latin America. In 1965, as an extension of the
operations of the original company, he founded Indiasa Corporation (Indiasa), a
Panamanian company which was involved in supply and financing arrangements with
11
<PAGE>
many of the Latin American Governments, in particular, their air forces and
their national airlines. As customer requirements dictated, separate
subsidiaries were established to handle specific activities, among them: Indiasa
Securities Corporation, to structure the financing necessary to facilitate the
transactions; Indiasa Aviation Corporation, to serve as an all cargo airline
operating large cargo aircraft throughout Latin America; and Overseas Aviation
Corporation, to buy, sell, lease and broker aircraft, and to provide services to
Indiasa Aviation Corporation and to other airlines. Indiasa, which is the parent
company of all the Panamanian companies formed by Mr. Sifford, operates, through
its partially owned subsidiary, Robmar International, S. A., plants in Argentina
and Brazil which produce high temperature, high pressure lubricants and
sealants. For twelve years ending in 1982, it operated, through its partially
owned subsidiaries Indiasa Aviation Corporation and Overseas Aviation
Corporation, an all cargo airline based at Miami International Airport and
serving points throughout Central and South America and Africa. In addition to
his general aviation experience, Mr. Sifford, an Airline Transport rated pilot,
has twenty two years experience in the airline business, and is currently the
President of Airline of the Virgin Islands, Ltd. a commuter passenger airline
operating in the Caribbean.
(B) OTHER RELATIONSHIPS. Certain Trusts have been listed as affiliates in
Item 4 of this part, for the reason that the trustees are affiliates of the
Issuer. In addition to those mentioned in paragraph (a) preceding, William
Stocker, Special Securities Counsel to this Issuer, is also Counsel to the
Principal Shareholder, and elects to be treated as, and is deemed to be, an
affiliate of the Issuer.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) FINANCIAL STATEMENTS. Please see Exhibit Index following.
(B) FORM 8-K REPORTS.
[None.]
(C) EXHIBITS. Please see Exhibit Index following.
12
<PAGE>
- --------------------------------------------------------------------------------
Exhibit Index
FINANCIAL STATEMENTS AND DOCUMENTS
FURNISHED AS A PART OF THIS REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
Each Exhibit is filed under an Exhibit Cover-page, and indexed by the
Exhibit Number, Description, and sequential page number of this Report.
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Exhibit Table Category / Description of Exhibit Number
[3] ARTICLES OF INCORPORATION AND BY-LAWS
- -------------------------------------------------------------------------------------------------------------------------
3.1 ARTICLES OF INCORPORATION 14
3.2 BY-LAWS 17
- -------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------------------------------------------------
F-1 Audited Financial Statements for the years ended December 31, 1999, 1998 26
=========================================================================================================================
</TABLE>
13
<PAGE>
SUPPLEMENTARY INFORMATION TO BE FURNISHED WITH
REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY
REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report or proxy material has been sent to security holders.
14
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the individual capacities and on the
date indicated.
SNOHOMISH EQUITY CORPORATION
(formerly SNOHOMISH EQUITY GROUP, INC)
Dated:
_________/s/_________ _________/s/__________
Pete Chandler Susan Sanchez
President/Director Secretary-Treasurer/Director
15
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
16
<PAGE>
- --------------------------------------------------------------------------------
ARTICLES OF INCORPORATION
OF
SNOHOMISH EQUITY CORPORATION.
- --------------------------------------------------------------------------------
ARTICLE I. The name of the Corporation is SNOHOMISH EQUITY CORPORATION.
ARTICLE II. Its principal office in the State of Nevada is 774 Mays Blvd. #10,
Incline Village NV 89452. The initial resident agent for services of process at
that address is N&R Ltd. Group, Inc
ARTICLE III. The purposes for which the corporation is organized are to engage
in any activity or business not in conflict with the laws of the State of Nevada
or of the United States of America. The period of existence of the corporation
shall be perpetual.
ARTICLE IV. The corporation shall have authority to issue an aggregate of
50,000,000 shares of common voting equity stock of par value one mil ($0.001)
per share, and no other class or classes of stock, for a total capitalization of
$50,000. The corporation's capital stock may be sold from time to time for such
consideration as may be fixed by the Board of Directors, provided that no
consideration so fixed shall be less than par value.
ARTICLE V. No shareholder shall be entitled to any preemptive or preferential
rights to subscribe to any unissued stock or any other securities which the
corporation may now or hereafter be authorized to issue, nor shall any
shareholder possess cumulative voting rights at any shareholders meeting, for
the purpose of electing Directors, or otherwise.
ARTICLE VI. The name and address of the Incorporator of the corporation is
William Stocker, Attorney at Law, 34700 Pacific Coast Highway, Suite 303,
Capistrano Beach CA 92624, phone (949) 248-9561, fax (949) 248-1688. The
affairs of the corporation shall be governed by a Board of Directorsof not less
than one (1) nor more than (7) persons. The Incorporator shall act as Sole
Initial Director.
ARTICLE VII. The Capital Stock, after the amount of the subscription price or
par value, shall not be subject to assessment to pay the debts of the
corporation, and no stock issued, as paid up, shall ever be assessable or
assessed.
ARTICLE VIII. The initial By-laws of the corporation shall be adopted by its
Board of Directors. The power to alter, amend or repeal the By-laws, or adopt
new By-laws, shall be vested in the Board of Directors, except as otherwise may
be specifically provided in the By-laws.
17
<PAGE>
I THE UNDERSIGNED, being the Incorporator hereinbefore named for the purpose of
forming a corporation pursuant the General Corporation Law of the State of
Nevada, do make and file these Articles of Incorporation, hereby declaring and
certifying that the facts herein stated are true, and accordingly have set my
hand hereunto this Day, December 8, 1998.
________/s/________
William Stocker
attorney at law
Incorporator
18
<PAGE>
- --------------------------------------------------------------------------------
Exhibit 3.2
BY-LAWS
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
BY-LAWS
OF
SNOHOMISH EQUITY CORPORATION.
A NEVADA CORPORATION
- --------------------------------------------------------------------------------
ARTICLE I
CORPORATE OFFICES
The principal office of the corporation in the State of Nevada shall be located
at 774 Mays Blvd. Suite 10, Incline Village NV 89451. The corporation may have
such other offices, either within or without the State of incorporation as the
board of directors may designate or as the business of the corporation may from
time to time require.
ARTICLE II
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETINGS
The directors may designate any place, either within or without the State unless
otherwise prescribed by statute, as the place of meeting for any annual meeting
or for any special meeting called by the directors. A waiver of notice signed by
all stockholders entitled to vote at a meeting may designate any place, either
within or without the State unless otherwise prescribed by statute, as the place
for holding such meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
corporation.
SECTION 2. ANNUAL MEETINGS
The time and date for the annual meeting of the shareholders shall be set by the
Board of Directors of the Corporation, at which time the shareholders shall
elect a Board of Directors and transact any other proper business. Unless the
Board of Directors shall determin otherwise, the annual meeting of the
shareholders shall be held on the second Monday of March in each year, if not a
holiday, at Ten o'clock A.M., at which time the shareholders shall elect a Board
of Directors and transact any other proper business. If this date falls on a
holiday, then the meeting shall be held on the following business day at the
same hour.
SECTION 3. SPECIAL MEETINGS
Special meetings of the shareholders may be called by the President, the Board
of Directors, by the holders of at least ten percent of all the shares entitled
to vote at the proposed special meeting, or such other person or persons as may
be authorized in the Articles of Incorporation.
SECTION 4. NOTICES OF MEETINGS
Written or printed notice stating the place, day and hour of the meeting and, in
the case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (l0) days nor more than sixty (60)
days before the date of the meeting, either personally or by mail, by the
direction of the president, or secretary, or the officer or persons calling the
20
<PAGE>
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, addressed to the stockholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Closing of Transfer Books or Fixing Record Date.
(a) For the purpose of determining stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case twenty (20) days. If the stock transfer books be
closed for the purpose of determining stockholders entitled to notice or to vote
at a meeting of stockholders, such books shall be closed for at least twenty
(20) days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the directors may prescribe a
day not more than sixty (60) days before the holding of any such meeting as the
day as of which stockholders entitiled to notice of the and to vote at such
meeting must be determined. Only stockholders of record on that day are entitled
to notice or to vote at such meeting
(c) The directors may adopt a resolution prescribing a date upon which the
stockholders of record are entitled to give written consent to actions in lieu
of meeting. The date prescibed by the directors may not precede nor be more than
ten (10) days after the date the resolution is adopted by directors.
SECTION 5. VOTING LIST.
The officer or agent having charge of the stock transfer books for the shares of
the corporation shall make, at least ten (l0) days before each meeting of
stockholders, a complete list of stockholders entitled to vote at such meeting,
or any adjournment thereof, arranged in alphabetical order, with the address of
and number of shares held by each, which list, for a period of ten (l0) days
prior to such meeting, shall be kept on file at the principal office of the
corporation and shall be subject to inspection by any stockholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
stockholder during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the stockholders entitled to
examine such list or transfer books or to vote at the meeting of stockholders.
SECTION 6. QUORUM.
At any meeting of stockholders, a majority of fifty percent plus one vote, of
the outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders. If
less than said number of the outstanding shares are represented at a meeting, a
majority of the outstanding shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting originally notified. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
21
<PAGE>
SECTION 7. PROXIES.
At all meetings of the stockholders, a stockholder may vote by proxy executed in
writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary of the corporation before or at the time
of the meeting. Such proxies may be deposited by electronic transmission.
SECTION 8. VOTING.
Each stockholder entitled to vote in accordance with the terms and provisions of
the certificate of incorporation and these by-laws shall be entitled to one
vote, in person or by proxy, for each share of stock entitled to vote held by
such shareholder. Upon the demand of any stockholder, the vote for directors and
upon any question before the meeting shall be by ballot. All elections for
directors shall be decided by plurality vote; all other questions shall be
decided by majority vote except as otherwise provided by the Certificate of
Incorporation or the laws of Nevada.
SECTION 9. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders, shall be as follows:
a.Roll Call.
b.Proof of notice of meeting or waiver of notice.
c.Reading of minutes of preceding meeting.
d.Reports of Officers.
e.Reports of Committees.
f.Election of Directors.
g.Unfinished Business.
h.New Business.
SECTION 10. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be taken, or any other
action which may be taken, at a meeting of the stockholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof. Unless otherwise provided by law, any action required to
be taken, or any other action which may be taken, at a meeting of the
stockholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a Majority of all of the
stockholders entitled to vote with respect to the subject matter thereof at any
regular meeting called on notice, and if written notice to all shareholders is
promptly given of all action so taken.
SECTION 11. BOOKS AND RECORDS.
The Books, Accounts, and Records of the corporation, except as may be otherwise
required by the laws of the State of Nevada, may be kept outside of the State of
Nevada, at such place or places as the Board of Directors may from time to time
appoint. The Board of Directors shall determine whether and to what extent the
accounts and the books of the corporation, or any of them, other than the stock
ledgers, shall be open to the inspection of the stockholders, and no stockholder
shall have any right to inspect any account or book or document of this
Corporation, except as conferred by law or by resolution of the stockholders or
directors. In the event such right of inspection is granted to the
Stockholder(s) all fees associated with such inspection shall be the sole
22
<PAGE>
expense of the Stockholder(s) demanding the inspection. No book, account, or
record of the Corporation may be inspected without the legal counsel and the
accountants of the Corporation being present. The fees charged by legal counsel
and accountants to attend such inspections shall be paid for by the Stockholder
demanding the inspection.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its board of
directors. The directors shall in all cases act as a board, and they may adopt
such rules and regulations for the conduct of their meetings and the management
of the corporation, as they may deem proper, not inconsistent with these by-laws
and the laws of this State.
SECTION 2. NUMBER, TENURE, AND QUALIFICATIONS.
The number of directors of the corporation shall be a minimum of one (l) and a
maximum of nine (7), or such other number as may be provided in the Articles of
Incorporation, or amendment thereof. Each director shall hold office until the
next annual meeting of stockholders and until his successor shall have been
elected and qualified.
SECTION 3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice than this
by-law immediately after, and at the same place as, the annual meeting of
stockholders. The directors may provide, by resolution, the time and place for
holding of additional regular meetings without other notice than such
resolution.
SECTION 4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of the
president or any two directors.The person or persons authorized to call special
meetings of the directors may fix the place for holding any special meeting of
the directors called by them.
SECTION 5. NOTICE.
Notice of any special meeting shall be given at least one day previously thereto
by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
SECTION 6. QUORUM.
At any meeting of the directors fifty (50) percent shall constitute a quorum for
the transaction of business, but if less than said number is present at a
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice.
SECTION 7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the directors.
23
<PAGE>
SECTION 8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of the majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
SECTION 9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the stockholders
or by action of the board. Directors may be removed without cause only by vote
of the stockholders.
SECTION 10. RESIGNATION.
A director may resign at any time by giving written notice to the board, the
president or the secretary of the corporation. Unless otherwise specified in the
notice, the resignation shall take effect upon receipt thereof by the board or
such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
SECTION 11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services, but by
resolution of the board a fixed sum and expenses for actual attendance at each
regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 12. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an executive
committee and other committees, each consisting of one (l) or more directors.
Each such committee shall serve at the pleasure of the board.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER.
The officers of the corporation shall be the president, a secretary and a
treasurer, each of whom shall be elected by the directors. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the directors.
SECTION 2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be elected
annually at the first meeting of the directors held after each annual meeting of
the stockholders. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided. In the
event that no election of officers be held by the directors at that time, the
existing officers shall be deemed to have been confirmed in office by the
directors.
24
<PAGE>
SECTION 3. REMOVAL.
Any officer or agent elected or appointed by the directors may be removed by the
directors whenever in their judgement the best interest of the corporation would
be served thereby, but such removal shall be without prejudice to contract
rights, if any, of the person so removed.
SECTION 4. VACANCIES.
A vacancy in any office because of death, resignation, removal, disqualification
or otherwise, may be filled by the directors for the unexpired portion of the
term.
SECTION 5. PRESIDENT.
The president shall be the principal executive officer of the corporation and,
subject to the control of the directors, shall in general supervise and control
all of the business and affairs of the corporation. He shall, when present,
preside at all meetings of the stockholders and of the directors. He may sign,
with the secretary or any other proper officer of the corporation thereunto
authorized by the directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the directors
have authorized to be executed, except in cases where the directors or by these
by-laws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the directors from time to time.
SECTION 6. CHAIRMAN OF THE BOARD.
In the absence of the president or in the event of his death, inability or
refusal to act, the chairman of the board of directors shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The chairman of the board of
directors shall perform such other duties as from time to time may be assigned
to him by the directors.
SECTION 7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the directors'
meetings in one or more books provided for that purpose, see that all notices
are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
the duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the president or by the directors.
SECTION 8. TREASURER.
If required by the directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by-laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
25
<PAGE>
SECTION 9. SALARIES.
The salaries of the officers shall be fixed from time to time by the directors
and no officer shall be prevented from receiving such salary by reason of fact
that he is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents to enter
into any contract or execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
SECTION 2. LOANS.
No loans shall be contracted on behalf of the corporation and no evidences of
indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the directors.
SECTION 4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited from time
to time to the credit of the corporation in such banks, trust companies or other
depositories as the directors may select.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall begin on the lst day of January in each
year, or on such other day as the Board of Directors shall fix.
ARTICLE VII
DIVIDENDS
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
26
<PAGE>
ARTICLE VIII
SEAL
The directors may provide a corporate seal which shall have inscribed thereon
the name of the corporation, the state of incorporation, year of incorporation
and the words, "Corporate Seal".
ARTICLE IX
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to
any stockholder or director of the corporation under the provisions of these
by-laws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE X
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be adopted
in the same manner as their adoption, by the Board of Directors if so adopted;
by a vote of the stockholders representing a majority of all the shares issued
and outstanding, if so adopted or adopted by the Board of Directors; or, in any
case, at any annual stockholders' meeting or at any special stockholders'
meeting when the proposed amendment has been set out in the notice of such
meeting.
CERTIFICATION
THE SECRETARY of the Corporation hereby certifies that the foregoing is a true
and correct copy of the By-Laws of the Corporation named in the title thereto
and that such By-Laws were duly adopted by the Board of Directors of said
Corporation on the date set forth below.
EXECUTED, this day of March 1, 1999.
_______/s/_______
Susan Sanchez
27
<PAGE>
- --------------------------------------------------------------------------------
Exhibit F-1
Audited Financial Statements
for years ending December 31, 1999, 1998
- --------------------------------------------------------------------------------
28
<PAGE>
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999 and 1998
29
<PAGE>
C O N T E N T S
Independent Auditors Report 31
Balance Sheets 32
Statements of Operations 33
Statements of Stockholders Equity 34
Statements of Cash Flows 35
Notes to the Financial Statements 36-37
30
<PAGE>
INDEPENDENT AUDITOR S REPORT
To the Board of Directors and Stockholders of
Snohomish Equity Corporation
We have audited the accompanying balance sheets of Snohomish Equity Corporation
(a Development Stage Company) as of December 31, 1999 and 1998 and the related
statements of operations, stockholders equity and cash flows for the years then
ended and from inception on April 8, 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 audits 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 Snohomish Equity Corporation (a
Development Stage Company) as of December 31, 1999 and 1998 and the results of
its operations and cash flows for the three months ended and the years then
ended and from inception on April 8, 1992 through December 31, 1999 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 2 to the
financial statements, the Company has minimal assets and no operations and is
dependent upon financing to continue operations. These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in the Note 2.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
__________/s/_________
Salt Lake City, Utah
March 27, 2000
31
<PAGE>
<TABLE>
<CAPTION>
Snohomish Equity Corporation
(a development Stage Company)
Balance Sheets
<S> <C> <C>
December 31,
1999 1998
- ---------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 0 $ 0
Total Current Assets 0 0
Total Assets $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable 16,681 0
Total Current Liabilities 16,681 0
Stockholders' Equity
Common Stock, authorized
50,000,000 shares of $.001 par value
2,010,000, 2,010,000 and 2,000,000
shares issued and outstanding, respectively 2,010 2,010
Additional Paid in Capital 6,990 6,990
Deficit Accumulated During the
Development Stage (25,681) (9,000)
=====================================================================
Total Stockholders' Equity 0 0
=====================================================================
Total Liabilities and Stockholders' Equity $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
32
<PAGE>
Snohomish Equity Corporation
(a development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Deficit
Accumulated
For the years During the
ended December 31, Development
1999 1998 Stage
- -------------------------------------------------------------------------------------
Revenues: $ 0 $ 0 $ 0
Expenses:
General & Administrative (16,681) 0 (25,681)
Total Expenses (16,681) 0 (25,681)
Net (Loss) ($16,681) $ 0 ($25,681)
Net Loss Per share ($0.008) $ 0 ($0.013)
Weighted Average shares outstanding 2,010,000 2,010,000 2,045,593
</TABLE>
The accompanying notes are an integral part of these financial statements
33
<PAGE>
Snohomish Equity Corporation
(a development Stage Company)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Deficit
Additional Accumulated
Paid-in During the
Common Stock Capital Development
Shares Amount (Discount on Stock) Stage
- -----------------------------------------------------------------------------------------------
Balance at beginning of development
stage - April 8, 1992 2,000,000 $ 2,000 $ 6,000 $ 0
Net Loss December 31, 1992 0 0 0 (8,000)
Balance December 31, 1992 2,000,000 2,000 6,000 (8,000)
Net Loss December 31, 1993 0 0 0 0
Balance December 31, 1993 2,000,000 2,000 6,000 (8,000)
Net Loss December 31, 1994 0 0 0 0
Balance December 31, 1994 2,000,000 2,000 6,000 (8,000)
Net Loss December 31, 1995 0 0 0 0
Balance December 31, 1995 2,000,000 2,000 6,000 (8,000)
Net Loss December 31, 1996 0 0 0 0
Balance December 31, 1996 2,000,000 2,000 6,000 (8,000)
Net Loss December 31, 1997 0 0 0 0
Balance December 31, 1997 2,000,000 2,000 6,000 (8,000)
Common Stock issued for services 10,000 10 990 0
Net Loss December 31, 1998 0 0 0 (1,000)
Balance December 31, 1998 2,010,000 2,010 6,990 (9,000)
Net Loss December 31, 1999 0 0 0 (16,681)
Balance December 31, 1999 2,010,000 $ 2,010 $ 6,990 ($25,681)
</TABLE>
The accompanying notes are an integral part of these financial statements
34
<PAGE>
Snohomish Equity Corporation
(a development Stage Company)
Statement of Cash Flows
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From Inception
on
For the Years 8-Apr-1992
ended through
December 31, March 31,
1997 1996 1999
- --------------------------------------------------------------------------------
Cash Flows from Operating
Activities
Net Loss ($16,681) ($1,000) ($25,681)
Adjustments to reconcile
netl loss to net cash
provided by operations
Accounts Payable 16,681 0 16,681
Shares issued for services 0 1,000 1,000
Net Cash Flows used in
Operating Activities 0 0 (8,000)
Cash Flows from Investment
Activities: 0 0 0
Cash Flows from financing
Activities
Stock issued for cash 0 0 8,000
Net increase (decrease) in cash 0 0 0
Cash, beginning of year 0 0 0
Cash, end of year $ 0 $ 0 $ 0
Supplemental Cash Flow Information
Cash Paid for:
Interest $ 0 $ 0 $ 0
Taxes $ 0 $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
35
<PAGE>
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Snohomish Equity Corporation is a Texas corporation organized on April
8, 1992 under the name of Snohomish Equity Group, Inc., for the purpose of
seeking out one or more potential business ventures. The Company was formally
reorganized in the State of Nevada on December 8, 1998.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards totaling approximately $25,681 that will be offset against
future taxable income. Since the Company is in the development stage, no
provision for income taxes has been made.
Deferred tax assets and the valuation account is as follows at
December 31, 1999 and 1998.
December 31,
1999 1998
- --------------------------------------------------------------------------
Deferred tax asset:
NOL carrry forward $ 3,852 $ 3,060
Valuation allowance (3,852) (3,060)
- --------------------------------------------------------------------------
Total $ -0- $ -0-
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company is dependent upon
raising capital to continue operations. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. It is
management s plan to raise additional funds to begin its intended operations, or
find an operating company to merge with.
The accompanying notes are an integral part of these financial statements
36
<PAGE>
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and developing its business operations in
order to generate significant revenues.
NOTE 4 - Stockholders Equity
In April 1992, 2,000,000 shares of common stock were issued in
exchange for cash of $8,000.
In January 1998, 10,000 shares of common stock were issued to officers
in exchange for services valued at $1,000.
