<TABLE>
<CAPTION>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X[ ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT
For the Fiscal Year Ended December 31, 1999
Commission file No. 0-26947
WHISPERING OAKS INTERNATIONAL, INC.
(Name of Small Business Issuer as specified in its Charter)
<S> <C> <C>
Texas 16910 Dallas Parkway, Suite 100, Dallas, TX 75248 75-2742601
(State or Other Jurisdiction (Address of Principal Executive Office, (IRS Employer
of incorporation ) including Zip Code) Identification No.)
</TABLE>
(972) 248-1922
(Registrant's telephone number, including area code)
Securities Registered under Section 12(b) of the Exchange Act:
Title of each Class Name of Each Exchange on which Registered
------------------- -----------------------------------------
None None
Securities registered Under Section 12(g) of the exchange Act: Common Stock,
$0.001 Par Value
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of management's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K. [ X ]
State issuer's revenues for its most recent fiscal year: $46,728
State the aggregate market value of the voting stock held by non-affiliates
computed by reference at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within the past 60 days: $-0-
(stock is not quoted).
As of May 15, 2000 the issuer had 2,525,000 shares of common stock issued and
outstanding.
<PAGE>
PART I
Item 1. Description of Business.
------------------------
General
The Company was incorporated in December 1997. The Company is engaged primarily
in the acquisition and sale of thoroughbred racing stock of every age from
broodmares, weanlings and yearlings to racehorses and stallions.
Item 2. Description of Property.
------------------------
The Company has no properties.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any material pending litigation nor is it
aware of any threatened legal proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matters were submitted to securities holders during the year ended
December 31, 1999.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
The stock does not trade on any exchange or the OTC market. There is no
known public market for this security. As of May 15, 2000, there were 5 holders
on record of the Company's common stock, holding a total of 2,525,000 shares.
Dividend Policy
The Company has never paid any dividends on its common stock and does
not have any current plan to pay any dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and
Plan of Operation.
---------------------------------------------------------------
Discussion of Financial Condition
As of December 31, 1999, the Company has liquidated its livestock stable and has
no significant assets and owes related entities amounts in excess of available
cash. Accordingly, the Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity of
the corporate entity at this time. It is the intent of management and
significant shareholders to provide the sufficient working capital necessary to
support the viability of the Company for the foreseeable future.
2
<PAGE>
The Company's independent auditor, S.W. Hatfield, CPA, expressed, in his opinion
on the Company's audited financial statements, doubt about the Company's ability
to continue as a going concern. Reference is made to the Report of Independent
Certified Public Accountants included elsewhere in this report.
Item 7. Financial Statements.
---------------------
Page
Report of Independent Certified Public Accountants F-2
Balance Sheets as of December 31, 1999 and 1998 F-3
Statements of Operations F-4
For the years ended December 31, 1999 and 1998
Statements of Stockholders' Deficit
For the years ended December 31, 1999 and 1998 F-5
Statements of Cash Flows F-6
For the years ended December 31, 1999 and 1998
Notes to Financial Statement F-7
ITEM 8. Changes and Disagreements with Accountants on Accounting and Financial
Disclosures.
------------------------------------------------------------------------
None
3
<PAGE>
PART III
Item 9. Directors. Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.
------------------------------------------------------------------------
The following table sets forth the officers and directors of the Company.
Name Position Age
- ---- -------- ---
Kevin B. Halter Chairman, President, CEO & Director 64
Kevin B. Halter Jr. Vice President, Secretary, Treasurer & Director 39
Pam J. Halter Director 44
Set forth below is a description of the backgrounds of each of the officers and
directors of the Company.
Kevin B. Halter has served as Chairman, President, CEO and a director of the
Company since December 1997. Mr. Halter has served as Chairman of the Board and
Chief Executive Officer of Halter Capital Corporation, a privately held
investment and consulting company, since 1987. Mr. Halter has served as Chairman
of the Board and President of Millennia, Inc. and Chairman of the Board of
Digital Communications Technology Corporation since 1994. Mr. Halter is the
husband of Pam Halter and the father of Kevin B. Halter, Jr.
Kevin B. Halter, Jr. has served as Vice President, Secretary, Treasurer and a
director of the Company since December 1997. Mr. Halter also serves as Vice
President and Secretary of Halter Capital Corporation. He is the President of
Securities Transfer Corporation, a stock transfer company registered with the
Securities and Exchange Commission, a position that he has held since 1987. Mr.
Halter has served as Vice President, Secretary and a director of Millennia, Inc.
and Digital Communications Technology Corporation since 1994. Kevin B. Halter,
Jr. is the son of Kevin B. Halter.
Pam J. Halter has served as a director of the Company since December 1997. Ms.
Halter has been involved in various facets of horse racing since age sixteen,
culminating with her successful record as a trainer. Ms. Halter is the wife of
Kevin B. Halter.
All directors hold office until the next annual meeting of the shareholders of
the Company, and until their successors have been elected and qualified.
Officers serve at the discretion of the Board of Directors.
Item 10. Executive Compensation.
- --------------------------------
The Company pays no compensation to its officers and directors currently and has
paid no compensation in amount or of any kind to its executive officers or
directors since inception. Executive management and oversight services are
provided to the Company by a controlling shareholder. The accompanying financial
statements reflect management's estimate of the estimated fair value of the
services contributed to the Company during each fiscal year based on the time
and effort required to administer the Company's operations and affairs.
4
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
The following table set forth the names and addresses of each of the
persons known by the Company to own beneficially 5% or more of the common stock
of the Company, as well as the common stock ownership of each of the officers
and directors of the Company as of May 15, 2000.
Name and Address Number of Shares Percentage of Ownership
- ---------------- ---------------- -----------------------
Kevin B. Halter 1,000,000 39.6%
16910 Dallas Parkway - #100
Dallas, TX 75248
Kevin B. Halter, Jr. 1,250,000 49.5%
16910 Dallas Parkway - #100
Dallas, TX 75248
Pam J. Halter 250,000 9.9%
16910 Dallas Parkway - #100
Dallas, TX 75248
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
In order to maintain liquidity, the Company has obtained non-interest bearing
advances from entities owned by the Company's management. These advances are
payable on demand. At December 31, 1999 the Company owed approximately $70,000.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Exhibits
None
Reports on Form 8-K
No Current Report on Form 8-K was filed during the year ended December 31, 1999.
5
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May 24, 2000
WHISPERING OAKS INTERNATIONAL, INC.
By: /S/ Kevin B. Halter
-------------------------------
Kevin B. Halter
President, CEO and Director
(Principal Executive Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
/s/ Kevin B. Halter May 24, 2000
- -------------------
Kevin B. Halter, President, CEO & Director
(Principal Executive Officer)
/s/Kevin B. Halter, Jr. May 24, 2000
- -----------------------
Kevin B. Halter
Vice President, Secretary, Treasurer and Director
(Principal Financial Officer)
6
<PAGE>
WHISPERING OAKS INTERNATIONAL, INC.
CONTENTS
Page
Report of Independent Certified Public Accountants F-2
Financial Statements
Balance Sheets as of December 31, 1999 and 1998 F-3
Statements of Operations and Comprehensive Income
for the years ended December 31, 1999 and 1998 F-4
Statement of Changes in Stockholders' Equity
for the years ended December 31, 1999 and 1998 F-5
Statements of Cash Flows
for the years ended December 31, 1999 and 1998 F-6
Notes to Financial Statements F-7
F-1
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Whispering Oaks International, Inc.
We have audited the accompanying balance sheets of Whispering Oaks
International, Inc. (a Texas corporation) as of December 31, 1999 and 1998 and
the related statements of operations and comprehensive income, changes in
stockholders' equity and cash flows for the years ended December 31, 1999 and
1998, respectively. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated 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 Whispering Oaks International,
Inc. as of December 31, 1999 and 1998 and the related statements of operations,
changes in stockholders' equity and cash flows for the years ended December 31,
1999 and 1998, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has no significant assets and is dependent
upon significant shareholders to provide sufficient working capital to maintain
the integrity of the corporate entity. These circumstances create substantial
doubt about the Company's ability to continue as a going concern and are
discussed in Note A. The financial statements do not contain any adjustments
that might result from the outcome of these uncertainties.
/s/ S. W. HATFIELD, CPA
------------------------
S. W. HATFIELD, CPA
Dallas, Texas
January 24, 2000
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-2
<PAGE>
<TABLE>
<CAPTION>
WHISPERING OAKS INTERNATIONAL, INC.
BALANCE SHEETS
December 31, 1999 and 1998
ASSETS
1999 1998
-------- --------
<S> <C> <C>
Current assets
Cash on hand and in bank $ 18,036 $ 15,266
-------- --------
Livestock -- 32,000
Accumulated depreciation -- (10,225)
-------- --------
Net livestock -- 21,775
-------- --------
TOTAL ASSETS $ 18,036 $ 37,041
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade $ -- $ 12,231
Advances from affiliates 58,925 70,705
-------- --------
Total liabilities 58,925 82,936
-------- --------
Commitments and contingencies
Stockholders' equity
Common stock - $0.001 par value
125,000,000 shares authorized
2,525,000 issued and outstanding, respectively 2,525 2,525
Additional paid-in capital 27,475 27,475
Contributed capital 20,000 15,000
Accumulated deficit (90,889) (90,895)
-------- --------
Total stockholders' equity (40,889) (45,895)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,036 $ 37,041
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
WHISPERING OAKS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Years ended December 31, 1999 and 1998
1999 1998
----------- -----------
Revenues
Sales of livestock $ 46,728 $ 238,347
Cost of Sales
Net capitalized cost of livestock 11,108 127,907
----------- -----------
Gross Profit 35,620 110,440
----------- -----------
Operating expenses
Livestock expenses 15,623 104,806
Executive compensation contributed
by a controlling shareholder 5,000 15,000
General and administrative expenses 4,297 9,711
Depreciation 10,667 71,818
----------- -----------
Total operating expenses 35,614 201,335
----------- -----------
Income (Loss) from operations 6 (90,895)
Other income (expense) -- --
----------- -----------
Income (Loss) before income taxes 6 (90,895)
Provision for income taxes -- --
----------- -----------
Net Income (Loss) 6 (90,895)
Other comprehensive income -- --
----------- -----------
Comprehensive Income (Loss) $ 6 $ (90,895)
=========== ===========
Income (Loss) per weighted-average share
of common stock outstanding, computed
on net loss - basic and fully diluted nil $ (0.04)
=== ===========
Weighted-average number of
common shares outstanding 2,525,000 2,525,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
WHISPERING OAKS INTERNATIONAL, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Year ended December 31, 1999 and 1998
Additional
Common Stock paid-in Contributed Accumulated
# shares amount capital capital deficit Total
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balances at
January 1, 1998 -- $ -- $ -- $ -- -- $ --
Shares issued to founders 505,000 505 29,495 -- -- 30,000
Effect of 5 for 1
forward split on
October 15, 1999 2,025,000 2,020 (2,020) -- -- --
Capital contributed by a
controlling shareholder
in the form of executive
compensation -- -- -- 15,000 -- 15,000
Net loss for the year -- -- -- -- (90,895) (90,895)
--------- --------- --------- --------- --------- ---------
Balances at
December 31, 1998 2,525,000 2,525 27,475 15,000 (90,895) (45,895)
Capital contributed by a
controlling shareholder
in the form of executive
compensation -- -- -- 5,000 -- 5,000
Net income for the year -- -- -- -- 6 6
--------- --------- --------- --------- --------- ---------
Balances at
December 31, 1999 505,000 $ 505 $ 29,495 $ 20,000 $ (90,889) $ (40,889)
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
WHISPERING OAKS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1999 and 1998
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) for the year $ 6 $ (90,895)
Adjustments to reconcile net loss to net
cash provided by operating activities
Gain on sale of livestock (35,620) (110,440)
Depreciation 10,667 71,818
Executive compensation contributed
by a controlling shareholder 5,000 15,000
Increase (Decrease) in accounts payable (12,231) 12,231
--------- ---------
Net cash used in operating activities (32,178) (102,286)
--------- ---------
Cash flows from investing activities
Proceeds from sales of livestock 46,728 238,347
Purchases of livestock -- (221,500)
--------- ---------
Net cash provided by investing activities 46,728 16,847
--------- ---------
Cash flows from financing activities
Advances from affiliates -- 70,305
Repayment of advances from affiliates (11,780) --
Proceeds from sale of common stock -- 30,000
--------- ---------
Net cash provided by financing activities (11,780) 100,705
--------- ---------
INCREASE IN CASH 2,770 15,266
Cash at beginning of year 15,266 --
--------- ---------
Cash at end of year $ 18,036 $ 15,266
========= =========
Supplemental disclosure of interest and income taxes paid
Interest paid for the period $ -- $ --
========= =========
Income taxes paid for the period $ -- $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
WHISPERING OAKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note A - Organization and Description of Business
Whispering Oaks International, Inc. (Company) was incorporated on December 8,
1997 under the laws of the State of Texas. The Company was formed to engage in
the acquisition and sale of thoroughbred race horses of every age, from
broodmares and weanlings to mature racehorses and stallions. The Company
intends, initially, to focus in the area of purchasing and selling weanlings and
yearlings at various auctions in an activity commonly referred to as
"pinhooking".
Pinhooking is essentially the purchase of thoroughbred weanlings and yearlings
at auction and reselling them at a different, but similar, auction in the near
future. The Company projects an average historical holding period of five to six
months between purchase and resale.
The Company began operations in January 1998 with its initial capitalization and
its initial livestock purchase.
On October 15, 1999, the Company's Board of Directors amended the Company's
Articles of Incorporation to modify the Company's capital structure to allow for
the issuance of up to 125,000,000 total equity shares consisting solely of
common stock with a par value of $0.001 per share and effected a five (5) for
one (1) forward stock split. The effects of these transactions are reflected in
the accompanying financial statements as of the first day of the first period
presented.
The Company has elected a year-end of December 31 and uses the accrual method of
accounting.
As of December 31, 1999, the Company has liquidated its livestock stable and has
no significant assets and owes related entities amounts in excess of available
cash. Accordingly, the Company is dependent upon management and/or significant
shareholders to provide sufficient working capital to preserve the integrity of
the corporate entity at this time. It is the intent of management and
significant shareholders to provide the sufficient working capital necessary to
support and preserve the integrity of the corporate entity for the foreseeable
future.
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
For Statement of Cash Flows purposes, the Company considers all cash on
hand and in banks, including accounts in book overdraft positions,
certificates of deposit and other highly-liquid investments with maturities
of three months or less, when purchased, to be cash and cash equivalents.
Cash overdraft positions may occur from time to time due to the timing of
making bank deposits and releasing checks, in accordance with the Company's
cash management policies.
F-7
<PAGE>
WHISPERING OAKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Note B - Summary of Significant Accounting Policies - Continued
2. Livestock
---------
Livestock is recorded at cost and are depreciated on a straight-line basis,
over their estimated useful lives (generally 3 years). Foals delivered
after the broodmare is purchased are capitalized by the Company at a "zero
cost" basis. At December 31, 1998, the Company had one broodmare and one
foal delivered by a broodmare after acquisition by the Company in its
stable. As of December 31, 1999, the Company had liquidated its entire
stable of livestock.
3 Organization costs
------------------
The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all organization
and initial costs incurred with the incorporation and initial
capitalization of the Company were charged to operations as incurred.
4. Income Taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At December 31, 1999 and 1998, respectively, the deferred tax asset
and deferred tax liability accounts, as recorded when material to the
financial statements, are entirely the result of temporary differences.
Temporary differences represent differences in the recognition of assets
and liabilities for tax and financial reporting purposes, primarily
accumulated depreciation and amortization, allowance for doubtful accounts
and vacation accruals.
At December 31, 1999, the Company has a net operating loss carryforward for
income purposes of approximately $70,000, after a Fiscal 1999 utilization
of approximately $5,000. If this carryforward is not fully utilized, it
will expire in 2018. As of December 31, 1999 and 1998, the deferred tax
asset related to the Company's net operating loss carryforward is fully
reserved.
5. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of December 31, 1999 and 1998, the Company
had no warrants and/or options outstanding.
Note C - Common Stock Transactions
On October 15, 1999, the Company's Board of Directors amended the Company's
Articles of Incorporation to modify the Company's capital structure to allow for
the issuance of up to 125,000,000 total equity shares consisting solely of
common stock with a par value of $0.001 per share and effected a five (5) for
one (1) forward stock split. The effects of these transactions are reflected in
the accompanying financial statements as of the first day of the first period
presented.
F-8
<PAGE>
WHISPERING OAKS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Note C - Common Stock Transactions - Continued
In January 1998, as revised in March 1998, the Company prepared a Private
Placement Memorandum, utilizing an exemption from registration under Regulation
D, Rule 504 of the US Securities and Exchange Commission, intending to sell up
to 200,000 shares of Common Stock at a price of $5.00 per share. The Company
sold no shares pursuant to this Memorandum and subsequently canceled the
proposed offering.
Note D - Contributed Capital
Executive management and oversight services are provided to the Company by a
controlling shareholder. The accompanying financial statements reflect
management's estimate of the estimated fair value of the services contributed to
the Company during each fiscal year based on the time and effort required to
administer the Company's operations and affairs.
F-9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001092562
<NAME> Whispering Oaks International, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 18036
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18036
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<TOTAL-ASSETS> 18036
<CURRENT-LIABILITIES> 58925
<BONDS> 0
0
0
<COMMON> 2525
<OTHER-SE> (43414)
<TOTAL-LIABILITY-AND-EQUITY> 25345
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<CGS> 11108
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