SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
[Fee Required]
For the fiscal year ended December 31, 1999 or
[ ] Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
[No Fee Required]
For the transition period from ________ to __________
ESSEX CAPITAL CORPORATION
-------------------------------------------
(Name of Small Business Issuer in its Charter)
Colorado 84-1113058
-------------------------------- ----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
5353 Manhattan Circle Suite 201 Boulder, CO 80303
----------------------------------------------------------------------
(Address of principal executive offices including Zip Code)
Issuer's telephone number: (303) 499-6000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
-------------------------
(Title of Class)
Check whether the Registrant (1) 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. Yes X No
As of December 31, 1999, 501,300 shares of the Registrant's no par value Common
Stock were outstanding. As of January 31, 2000, there was no market value of the
Registrant's no par value Common Stock, since such stock was not trading on any
exchange.
Check if there is no disclosure contained herein of delinquent filers in
response to Item 405 of Regulation S-B, and will not be contained, to the best
of the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
The Registrant's revenues for its most recent fiscal year were negligible. The
following documents are incorporated by reference into Part III, Items 9 through
12 hereof: None.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed throughout the Report and
will be further discussed from time to time in the Company's periodic reports
filed with the Commission. The forward-looking statements included in the Report
speak only as of the date hereof.
Introduction
Business Development.
Essex Capital Corporation (the "Company") was organized under the laws of
the State of Colorado on March 15, 1989, for the purpose of engaging in a merger
with, or acquisition of, one or a small number of private companies,
partnerships or sole proprietorships. The Company is seeking business
opportunities through a merger with, or acquisition of, one or more private
companies. The Company has had no material operations in the past three years.
The Company believes that there is a demand by non-public corporations for
public shell corporations. The Company believes that demand for shell
corporations has increased dramatically since the Securities and Exchange
Commission (the "Commission") imposed additional requirements upon "blank check"
companies pursuant to Reg. 419 of the Securities Act of 1933, as amended (the
"Act"). According to the Commission, Rule 419 was designed to strengthen
regulation of securities offerings by blank check companies, which Congress has
found to have been a common vehicle for fraud and manipulation in the penny
stock market. See Securities Act Releases No. 6891 (April 17, 1991), 48 SEC
Docket 1131 and No. 6932 (April 13, 1992) 51 Docket 0382, SEC Docket 0382. The
foregoing regulation has substantially decreased the number of "blank check"
offerings filed with the Commission, and as a result has stimulated an increased
demand for shell corporations. While the Company has made the foregoing
assumption, there is no assurance that the same is accurate or correct and,
accordingly, no assurance that the Company will merge with or acquire an
existing private entity.
General
The Company proposes to seek, investigate and, if warranted, acquire an
interest in one or more business opportunity ventures. As of the date hereof,
the Company has no business opportunities or ventures under contemplation for
acquisition or merger but proposes to investigate potential opportunities with
investors or entrepreneurs with a concept which has not yet been placed in
operation, or with firms which are developing companies. The Company may seek
out established businesses which may be experiencing financial or operation
difficulties and are in need of the services the Company could provide. The
<PAGE>
Company anticipates that it will seek to merge with or acquire an existing
business. After the merger or acquisition has taken place, the surviving entity
will be the Company, however, management from the acquired entity will in all
likelihood operate the Company. There is a remote possibility that the Company
may seek to acquire and operate an ongoing business, in which case the existing
management might be retained. Due to the absence of capital available for
investment by the Company, the types of business seeking to be acquired by the
Company will invariably be smaller and higher risk types of businesses. In all
likelihood, a business opportunity will involve the acquisition of or merger
with a corporation which does not need additional cash but which desires to
establish a public trading market for its Common Stock. Accordingly, the
Company's ability to acquire any business of substance will be extremely
limited.
The Company does not propose to restrict its search for investment
opportunities to any particular industry or geographical location and may,
therefore, engage in essentially any business, anywhere, to the extent of its
limited resources.
It is anticipated that business opportunities will be available to the
Company and sought by the Company from various sources throughout the United
States, including its officers and directors, professional advisors such as
attorneys and accountants, securities broker/dealers, venture capitalists,
members of the financial community, other businesses and others who may present
solicited and unsolicited proposals. Management believes that business
opportunities and ventures will become available to it due to a number factors,
including, among others: (a) management's willingness to enter into unproven,
speculative ventures; (b) management's contacts and acquaintances; and (c) the
Company's flexibility with respect to the manner in which it may structure
potential financing, mergers and/or acquisitions. However, there is no assurance
that the Company will be able to structure, finance, merge with and/or acquire
any business opportunity or venture.
Operation of the Company
The Company intends to search throughout the United States for a
merger/acquisition candidate, however, because of its lack of capital, the
Company believes that the merger/acquisition candidate will be conducting
business within a limited geographical area. The Company intends to maintain its
corporate headquarters and principal place of business at 5353 Manhattan Circle
suite 201 Boulder, CO 80303. All corporate records will be maintained at said
office, and it is anticipated that all shareholders' meetings will take place in
Colorado. In the event that a merger or acquisition of the Company takes place,
no assurance can be given that the corporate records or headquarters will
continue to be maintained at Littleton, Colorado, or that shareholders' meetings
will be held in Colorado.
The Company's executive officers will seek acquisition/merger candidates
and/or orally contact individuals or broker/dealers and advise them of the
availability of the Company as a merger candidate. The Company's executive
officers will review material furnished by the proposed merger/acquisition
candidates and decide if a merger/acquisition is in the best interests of the
Company and its shareholders.
<PAGE>
The Company may employ outside consultants until a merger/acquisition
candidate has been targeted by the Company, however, management believes that it
is impossible to consider the criteria that will be used to hire such
consultants. While the Company may hire independent consultants, it has not
considered any criteria regarding their experience, the services to be provided,
or the term of service. The Company has not had any discussions with any
consultants and there are no agreements or understandings with any consultants.
Other than as disclosed herein, there are no other plans for accomplishing the
business purpose of the Company.
Selection of Opportunities
The analysis of new business opportunities will be undertaken by or under
the supervision of the Company's executive officers and directors. Inasmuch as
the Company will have limited funds available to it in its search for business
opportunities and ventures, the Company will not be able to expend significant
funds on a complete and exhaustive investigation of such business or
opportunity. The Company will however, investigate, to the extent believed
reasonable by its management, such potential business opportunities or ventures.
As part of the Company's investigation, representatives of the Company may
meet personally with management and key personnel of the firm sponsoring the
business opportunity, may visit and inspect plants and facilities, obtain
independent analysis or verification of certain information provided, check
references of management and key personnel, and conduct other reasonable
measures, to the extent of the Company's limited financial resources and
management and technical expertise.
Prior to making a decision to recommend to shareholders participation in a
business opportunity or venture, the Company will generally request that it be
provided with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections with related
assumptions upon which they are based; evidence of existing patents, trademarks
or service marks or rights thereto; current and proposed forms of compensation
to management; a description of transactions between the prospective entity and
its affiliates during relevant periods; a description of current and required
facilities; an analysis of risks and competitive conditions; and other
information deemed relevant.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and costs for accountants, attorneys and others. The Company's
executive officers anticipate funding the Company's operations, including
providing funds necessary to search for acquisition candidates, until an
acquisition candidate is found, without regard to the amount involved.
Accordingly, no alternative cash resources have been explored.
The Company will have unrestricted flexibility in seeking, analyzing and
participating in business opportunities. In its efforts, the Company will
consider the following kinds of factors:
<PAGE>
(i) Potential for growth, indicated by new technology, anticipated market
expansion or new products;
(ii) Competitive position as compared to other firms engaged in similar
activities;
(iii) Strength of management;
(iv) Capital requirements and anticipated availability of required funds
from future operations, through the sale of additional securities, through joint
ventures or similar arrangements or from other sources; and
(v) Other relevant factors.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Potential investors must recognize that due to
the Company's limited capital available for investigation, the Company may not
discover or adequately evaluate adverse facts about the opportunity to be
acquired.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more. The
Company does not plan to raise any capital at the present time, by private
placements, public offerings, pursuant to Regulation S promulgated under the
Act, or by any means whatsoever. Further, there are no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of an acquisition or merger
candidate.
Form of Acquisition
The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity, and the relative negotiating
strength of the Company and such promoters. The exact form or structure of the
Company's participation in a business opportunity or venture will be dependent
upon the needs of the of the particular situation. The Company's participation
may be structured as an asset purchase agreement, a lease, a license, a joint
venture, a partnership, a merger, or acquisition of securities.
As set forth above, the Company may acquire its participation in a business
opportunity through the issuance of Common Stock or other securities in the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1954, as amended, may depend
upon the issuance to the shareholders of the acquired company of at least eighty
percent (80%) of the Common Stock of the combined entities immediately following
the reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, all prior shareholders may, in such circumstances, retain twenty
<PAGE>
percent (20%) or less of the total issued and outstanding Common Stock. If such
a transaction were available to the Company, it will be necessary to obtain
shareholder approval to effectuate a reverse stock split or to authorize
additional shares of Common Stock prior to completing such acquisition. This
could result in substantial additional dilution to the equity of those who were
shareholders of the Company prior to such reorganization. Further, extreme
caution should be exercised by any investor relying upon any tax benefits in
light of the proposed new tax laws. It is possible that no tax benefits will
exist at all. Prospective investors should consult their own legal, financial
and other business advisors.
The present management and the shareholders of the Company will in all
likelihood not have control of a majority of the voting shares of the Company
following a reorganization transaction. In fact, it is most probable that the
shareholders of the acquired entity will gain control of the Company. The terms
of sale of the shares presently held by management of the Company may not be
afforded to other shareholders of the Company. As part of any transaction, the
Company's then directors may resign and new directors may be appointed without
any vote by shareholders.
The Company may not borrow funds and use funds to make payments to Company
promoters, management or their affiliates or associates.
The Company has an unwritten policy that it will not acquire or merge with
a business or company in which the Company's management or their affiliates or
associates directly or indirectly have an ownership interest. Management is not
aware of any circumstances under which the foregoing policy will be changed and
management, through their own initiative, will not change said policy.
Rights of Dissenting Shareholders
Under the Colorado Corporation Code, a business combination typically
requires the approval of two-thirds of the outstanding shares of both
participating companies. The Company's Articles of Incorporation reduce the
voting requirement to a majority of the Company's outstanding Common Stock.
Shareholders who vote against any business combination in certain instances may
be entitled to dissent and to obtain payment for their shares pursuant to
Sections 7-4-123 and 7-4-124 of the Colorado Corporation Code. The requirement
of approval of the Company's shareholders in any business combination is limited
to those transactions identified as a merger or a consolidation. A business
combination identified as a share exchange under which the Company would be the
survivor does not require the approval of the Company's shareholders, nor does
it entitle shareholders to dissent and obtain payment for their shares.
Accordingly, unless the acquisition is a statutory merger, requiring shareholder
approval, the Company will not provide shareholders with a disclosure document
containing audited or unaudited financial statements, prior to such acquisition.
Prior to any business combination for which shareholder approval is
required, the Company intends to provide its shareholders complete disclosure
documentation concerning the business opportunity or target company and its
business. Such disclosure will in all likelihood be in the form of a proxy
statement which will be distributed to shareholders at least 20 days prior to
any shareholder's meeting.
<PAGE>
None of the Company's officers, directors, promoters, their affiliates or
associates have had any preliminary contact or discussions with and there are no
present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction contemplated in this
statement.
Not an "Investment Adviser"
The Company is not an "investment adviser" under the Federal Investment
Advisers Act of 1940, which classification would involve a number of negative
considerations. Accordingly, the Company will not furnish or distribute advice,
counsel, publications, writings, analysis or reports to anyone relating to the
purchase or sale of any securities within the language, meaning and intent of
Section 2(a)(11) of the Investment Advisers Act of 1940, 15 U.S.C. 80b2(a)(11).
Not an "Investment Company"
The Company may become involved in a business opportunity through
purchasing or exchanging the securities of such business. The Company does not
intend however, to engage primarily in such activities and is not registered as
an "investment company" under the Federal Investment Company Act of 1940. The
Company believes such registration is not required.
The Company must conduct its activities so as to avoid becoming
inadvertently classified as a transient "investment company" under the Federal
Investment Company Act of 1940, which classification would affect the Company
adversely in a number of respects. Section 3(a) of the Investment Company Act
provides the definition of an "investment company" which excludes an entity
which does not engage primarily in the business of investing, reinvesting or
trading in securities, or which does not engage in the business of investing,
owning, holding or trading "investment securities" (defined as "all securities
other than United States government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty percent (40%) of the value of
its total assets (excluding government securities, cash or cash items). The
Company intends to implement its business plan in a manner which will result in
the availability of this exemption from the definition of "investment company."
The Company proposes to engage solely in seeking an interest in one or more
business opportunities or ventures.
Effective January 14, 1981, the Commission adopted Rule 3a-2 which deems
that an issuer is not engaged in the business of investing, reinvesting, owning,
holding or trading in securities for purposes of Section 3(a)(1), cited above,
if, during a period of time not exceeding one year, the issuer has a bona fide
intent to be engaged primarily, or as soon as reasonably possible (in any event
by the termination of a one year period of time), in a business other than that
of investing, reinvesting, owning, holding or trading in securities and such
intent is evidenced by the Company's business activities and appropriate
resolution of the Company's Board of Directors duly adopted and duly recorded in
the minute book of the Company. The Rule 3a-2 "safe harbor" may not be relied on
more than one single time.
<PAGE>
The Company's Office
The Company's office is located at 5353 Manhattan Circle Suite 201 Boulder,
CO 80303, and the telephone number is (303) 499-6000. It is anticipated that the
Company's office will remain at the above location until an acquisition has been
concluded. There are no written documents memorializing the foregoing. The
Company is not responsible for reimbursement for out-of-pocket office expenses,
such as telephone, postage or supplies.
There are no agreements or understandings with respect to the office
facility subsequent to the completion of an acquisition. Upon a merger or
acquisition, the Company intends to relocate its office to that of the
acquisition candidate.
Competition
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's lack of financial resources and limited management
availability, the Company will continue to be at a significant competitive
disadvantage compared to its competitors. The Company will also be competing
with a large number of small, widely-held companies located throughout the
United States, as well as other publicly-held companies.
Employees
The Company has no salaried employees and none of its officers, directors
or principal stockholders will receive any compensation for any assistance they
may provide the Company. Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need to engage
any full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to acquire or participate in a
specific business opportunity.
Reports to Security Holders
The Company's Form 10-SB became effective September 1999 subjecting the
Company to reporting obligations under the Exchange Act. These obligations
include an annual report under cover of Form 10-KSB, with audited financial
statements, unaudited quarterly reports and the requisite proxy statements with
regard to annual shareholder meetings. The public may read and copy any
materials the Company files with the Commission at the Commission's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information of the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0030. The Commission maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the
Commission.
ITEM 2. DESCRIPTION OF PROPERTY
The Company is provided rent free office space by an officer and director
of the Company at 5353 Manhattan Circle Suite 201 Boulder, CO 80303. The Company
is not responsible for reimbursement for out-of-pocket office expenses, such as
telephone, postage or supplies.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation and, to its knowledge, no
action, suit or proceedings have been threatened against the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is not traded on any market system.
As of December 31, 1999, the Company had approximately eight record and
beneficial stockholders and a total of 501,300 shares of the Company's Common
Stock were outstanding.
Dividend Policy
The Company has not paid any dividends since its inception. The Company
currently intends to retain any earnings for use in its business, and therefore
does not anticipate paying dividends in the foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operation
Year Ended December 31, 1999 vs. Year Ended December 31, 1998.
In 1999, the Company's efforts were centered around filing of a
Registration Statement on Form 10-SB On September 1999 the Company's
Registration Statement became effective. Operating expenses increased by $3,951
to $4,601 for 1999 compared to $650 for 1998. This increase in operating
expenses resulted from professional fees incurred in connection with updating
the Company's books and records and costs of filing a Registration Statement on
Form 10-SB. The Company's net loss increased to $4,601 for 1999 compared to $650
for 1998.
Liquidity and Capital Resources
Expenses incurred as a result of the above mentioned filing of Registration
Statement shall be carried on the books as a related party account payable.
The Company currently does not have funds to pay expenses and it is
anticipated that future expenses will increase the above mentioned related party
account payable.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
ESSEX CAPITAL CORPORATION
-------------------------
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
December 31, 1999 and 1998
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheet F-3
Statements of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors
Essex Capital Corporation
(A Development Stage Company)
Boulder, Colorado
We have audited the accompanying balance sheet of Essex Capital Corporation (A
Development Stage Company) as of December 31, 1999, and the related statements
of operations, stockholders' (deficit) and cash flows for the two years ended
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 Essex Capital Corporation (A
Development Stage Company) as of December 31, 1999, and the results of its
operations, changes in its stockholders' (deficit) and its cash flows for the
two years ended December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying balance sheet has been prepared assuming that the Company will
continue as a going concern. As described in Note 2 to the financial statements,
the Company has had operating losses since inception, has a capital deficiency
and has no recurring source of revenue which raise substantial doubts about its
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, CO 80211
March 20, 2000
F-2
<PAGE>
ESSEX CAPITAL CORPORATION
-------------------------
(A Development Stage Company)
BALANCE SHEET
December 31, 1999
ASSETS
------
Current Assets:
Accounts receivable, related party $ 205
-------
TOTAL ASSETS $ 205
=======
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
---------------------------------------
Current Liabilities:
Accounts payable, related party $ 4,601
-------
4,601
TOTAL LIABILITIES 4,601
-------
Commitments and Contingencies (Note 2) --
Stockholders' (deficit):
Preferred stock, no par value
10,000,000 shares authorized --
Common Stock no par value
800,000,000 shares authorized
501,300 shares issued and
outstanding 1,600
Accumulated (deficit) during
development stage (5,996)
-------
TOTAL STOCKHOLDERS' (DEFICIT) (4,396)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 205
=======
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
ESSEX CAPITAL CORPORATION
-------------------------
STATEMENTS OF OPERATIONS
From
March 15, 1989
(Inception)
Years Ended To
December 31, December 31,
1999 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
Revenue $ -- $ -- $ --
--------- --------- ---------
Expenses:
Audit fees 1,000 650 2,300
Legal fees 2,851 -- 2,851
Other 750 -- 845
--------- --------- ---------
4,601 650 5,996
--------- --------- ---------
Net (Loss) $ (4,601) $ (650) $ (5,996)
========= ========= =========
(Loss) Per Share $ (.01) $ nil $ (.01)
========= ========= =========
Weighted Average Shares
Outstanding 501,300 500,000 501,300
========= ========= =========
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
ESSEX CAPITAL CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
From Inception (March 15, 1989) through December 31, 1999
Preferred Stock Common Stock Additional Accumulated
No./Shares Amount No./Shares Amount Paid-in Capital Deficit Total
---------- ------ ---------- ------- --------------- ------- -----
Balance at March 15, 1989 -- $ -- -- $ -- $ -- $ -- $ --
Issuance of stock for cash -- -- 500,000 300 -- -- 300
Net loss- year ended
December 31, 1989 -- -- -- -- -- (45) (45)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1989 -- -- 500,000 300 -- (45) 255
Net loss- year ended
December 31, 1990 -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1990 -- -- 500,000 300 -- (45) 255
Net loss- year ended
December 31, 1991 -- -- -- -- -- (25) (25)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1991 -- -- 500,000 300 -- (70) 230
Net loss- year ended
December 31, 1992 -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1992 -- -- 500,000 300 -- (70) 230
Net loss- year ended
December 31, 1993 -- -- -- -- -- (25) (25)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1993 -- -- 500,000 300 -- (95) 205
Net loss- year ended
December 31, 1994 -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1994 -- -- 500,000 300 -- (95) 205
Net loss- year ended
December 31, 1995 -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1995 -- -- 500,000 300 -- (95) 205
Net loss- year ended
December 31, 1996 -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1996 -- -- 500,000 300 -- (95) 205
Net loss- year ended
December 31, 1997 -- -- -- -- -- (650) (650)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1997 -- -- 500,000 300 -- (745) (445)
Issuance of stock for
related party payables -- -- 1,300 1,300 -- -- 1,300
Net loss- year ended
December 31, 1998 -- -- -- -- -- (650) (650)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1998 -- -- 501,300 1,600 -- (1,395) 205
Net loss- year ended
December 31, 1999 -- -- -- -- -- (4,601) (4,601)
------- ------- ------- ------- ------- ------- -------
Balance at December 31, 1999 -- $ -- 501,300 $ 1,600 $ -- $(5,996) $(4,396)
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
ESSEX CAPITAL CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
March 15,
1989
(Inception)
Years Ended to
December 31, December 31,
1999 1998 1999
------------ ------- -------
Cash Flows Operating Activities:
Net loss $ (4,601) $ (650) $(5,996)
Increase (decrease) in
accounts payable 4,601 (650) 4,601
(Increase)in accounts
receivable -- -- (205)
------------ ------- -------
Net Cash (Used in) Operating
Activities -- (1,300) (1,600)
------------ ------- -------
Cash Flows from Investing Activities -- -- --
------------ ------- -------
Cash Flows from Financing Activities
Proceeds from issuance of stock -- 1,300 1,600
------------ ------- -------
Net Cash Provided by Financing
Activities -- 1,300 1,600
------------ ------- -------
(Decrease) in Cash -- -- --
Cash, Beginning of Year -- -- --
------------ ------- -------
Cash, End of Year $ -- $ -- $ --
============ ======= =======
Interest Paid $ -- $ -- $ --
============ ======= =======
Income Taxes Paid $ -- $ -- $ --
============ ======= =======
The accompanying notes are an integral part of the financial statements.
F-6
</TABLE>
<PAGE>
ESSEX CAPITAL CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
(1) Summary of Accounting Policies
------------------------------
This summary of significant accounting policies of Essex Capital
Corporation (A Development Stage Company)(Company) is presented to assist
in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management who is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
(a) Organization and Principles of Consolidation
--------------------------------------------
The Company was incorporated under the laws of Colorado on March 15, 1989
as a limited liability company. The Company is an inactive entity other
than it is looking for a business combination candidate.
The Company has selected the last day of December as its year end.
(b) Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
(2) Basis of Presentation - Going Concern
-------------------------------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has had operating
losses since inception, has a capital deficiency and has no recurring
source of revenue. These matters raise substantial doubt about the
Company's ability to continue as a going concern. Management is attempting
to raise additional capital, and is looking for a business combination
candidate.
F-7
<PAGE>
ESSEX CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
(2) Basis of Presentation - Going Concern, Continued
------------------------------------------------
In view of these matters, continuing as a going concern is dependent upon
the Company's ability to meet its financing requirements, raise additional
capital, and the success of its future operations or completion of a
successful business combination. Management believes that actions planned
and presently being taken to revise the Company's operating and financial
requirements provide the opportunity for the Company to continue as a going
concern.
(3) Income Taxes
------------
As of December 31, 1999, the Company had net operating losses available for
carry-over to future years of approximately $6,000, expiring in various
years through 2019. As of December 31, 1999 the Company has total deferred
tax assets of approximately $1,200 due to operating loss carry-forwards.
However, because of the uncertainty of potential realization of these tax
assets, the Company has provided a valuation allowance for the entire
$1,200. Thus, no tax assets have been recorded in the financial statements
as of December 31, 1999.
(4) Stock Split
-----------
Effective January 6, 1995 the Company effected a two for one stock split.
All references to stock outstanding have been retroactively adjusted as if
the split had taken place on the earliest date shown.
(5) Issuance of Stock
-----------------
Effective December 31, 1998, the Company issued 1,300 shares of common
stock in exchange for $1,300 of related party payables.
(6) Related Party Transactions
--------------------------
At December 31, 1999, the Company owed $4,601 to a related party for
expenses paid on behalf of the Company.
F-8
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The name, age and position held in the Company by its sole executive
officer and director is as follows:
Officer/Director
Name Age Position Since
---------------- --- -------- -----
Linda Stamelos 48 Chief Executive Officer, Chief 1999
Financial Officer, Secretary and
Director
Directors serve in such capacity until the next annual meeting of the
Company's shareholders and until their successors have been elected and
qualified. The Company's officers serve at the discretion of the Company's Board
of Directors, until their death, or until they resign or have been removed from
office.
There are no agreements or understandings for any director or officer to
resign at the request of another person and none of the directors or officers is
acting on behalf of or will act at the direction of any other person. No other
person's activities are material to the operation of the Company.
ITEM 10. EXECUTIVE COMPENSATION
None of the Company's executive officers or directors received compensation
in excess of $100,000 for the years ended December 31, 1999 or 1998 and none
currently receive any compensation.
Option Grants in Last Year and Stock Option Grant
The following table provides information on option grants during the year
ended December 31, 1999, to the named executive officers:
Individual Grants
% of Total
Options
Granted
Options to Employees
Name Granted in Year Exercise Price Expiration Date
---- ------- ------- -------------- ---------------
Linda Stamelos -0- 0% -- --
Aggregate Option Exercise of Last Fiscal year and Fiscal Year-End Option Values
There were no executive officers' unexercised options at December 31, 1999.
No shares of Common Stock were acquired upon exercise of options during the
fiscal year ended December 31, 1999.
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the Common Stock ownership, as of the date
of this Report, of (i) each person known by the Company to be the beneficial
owner of 5% or more of the Company's Common Stock, (ii) each director
individually, and (iii) all directors and officers of the Company. Each person
has sole voting and investment power with respect to the shares of Common Stock
shown, and all ownership is of record and beneficial. The address of all persons
is in care of the Company at 5353 Manhattan Circle Suite 201 Boulder, CO 80303.
Amount of Percent of
Name Ownership Class
--------- ----------
Allen R. Goldstone 150,650 30.0%
Michael Goldstone 30,000 6.0%
Alexis Goldstone 27,500 5.5%
Sanford L. Schwartz 150,650 30.0%
Samantha Schwartz 57,500 11.5%
Dave Lilja 40,000 8.0%
Mike Friess 30,000 6.0%
All officers and
directors as a
group (1 person)(1) -0- 0%
ITEM 12. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits: none
b. Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this Report.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized, in Boulder, Colorado, on May 31, 2000.
ESSEX CAPITAL CORPORATION
By /s/ Linda Stamelos
---------------------------------------
Linda Stamelos
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on the dates
indicated.
Signature Title Date
/s/ Linda Stamelos Chief Executive Officer, Chief May 31, 2000
------------------ Financial Officer (Principal
Accounting Officer), Secretary
and Director
