Form 10-KSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: June 30, 2000
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
MAS Acquisition XIX Corp.
(Name of small business issuer in its charter)
Indiana
(State or other jurisdiction of incorporation or
organization)
35-2082971
(I.R.S. Employer Identification No.)
2963 Gulf to Bay Blvd., Suite 265, Clearwater, Florida 33759
(Address of principal executive offices and zip code)
Issuer's telephone number
(812) 479-7266
Securities registered under Section 12(b) of the Exchange Act:
None.
Securities registered under Section 12(g) of the Exchange Act:
Common stock, $.001 par value per share
Check whether the issuer (1) 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.
[X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of 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]
State issuer's revenues for its most recent fiscal year.
There have been no revenues in the most recent fiscal year.
______________________________
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State the aggregate market value of the voting and non-voting common equity
held by non-affiliates:
Pinnacle Business Management Inc. acquired MAS Acquisition XIX Corp.
pursuant to a Shell Acquisition and Stock Purchase Agreement and Exchange
Agreement on March 3, 2000.
In the Shell Acquisition and Stock Purchase Agreement, MAS Capital Inc.,
the seller, agreed to deliver to MRC Legal Services Corporation, the
acquiring shareholder, an aggregate of 8,250,000 shares, consisting
approximately of the 96.8% of the issued and outstanding shares.
In the Exchange Agreement between Pinnacle Business Management Inc. and MRC
Legal Services Corporation, executed on March 3, 2000, Pinnacle agreed to
exchange 1,500,000 shares of its restricted common stock for 8,250,000
shares of the company, representing approximately 96.8% of the issued and
outstanding common shares of the company.
After the closing set forth in the Exchange Agreement, the shareholder
caused the company to complete the reverse stock split by paying an
aggregate of $1,000 for the remaining 269,900 shares held by minority
shareholders. As a result, all the shares held by minority shareholders
were cashed out and retired, and Pinnacle became the sole shareholder with
1,000 shares issued and outstanding.
There are no shares held by non-affiliates.
There were 1,000 shares of common stock outstanding shares, $.001 par
value, as of the end of the company's fiscal year, June 30, 2000.
______________________________
Transitional Small Business Disclosure Format: Yes ____; No X____
______________________________
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TABLE OF CONTENTS
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PART I
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. DESCRIPTION OF PROPERTY 5
ITEM 3. LEGAL PROCEEDINGS 5
ITEM 4. SUBMISSION OF MATTERS
TO THE VOTE OF SECURITY HOLDERS 5
PART II.
ITEM 5. MARKET FOR COMMON EQUITY 5
ITEM 6. MANAGEMETN DISCUSSIONS 6
ITEM 7. FINANCIAL STATEMENTS 8
PART III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS 8
ITEM 10. EXECUTIVE COMPENSATION 8
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT 8
ITEM 12. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS 8
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 8
</TABLE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
MAS Acquisition XIX Corp. was incorporated on January 6, 1997 in the State
of Indiana, to engage in any lawful corporate undertaking, including, but
not limited to, selected mergers and acquisitions. The company commenced
implementation of the company's business in the fiscal year ending June 30,
2000.
Since its inception, the company has not sought reorganization under the
bankruptcy laws nor has it been in receivership or similar proceedings. The
company is in a developmental stage since inception and has no operations.
The company is a "shell" company, whose purpose is to locate and consummate
a merger or acquisition with a private entity.
On March 3, 2000, the company entered into Shell Acquisition and Stock
Purchase Agreement with MAS Capital Inc., the seller and a shareholder of
the company with 8,250,000 of the issued and outstanding common stock and
MRC Legal Services Corporation, an acquiring shareholder.
In the agreement, the seller warranted that all outstanding shares of
minority shareholders be delivered to the acquiring shareholder upon the
transfer of aggregate $1,000 in immediately available funds for delivery to
the remaining shareholders of the company upon completion of the reverse
stock split. As a result, all the outstanding shares were retired. MRC
Legal Services Corporation then delivered to Pinnacle Business Management,
Inc., 100% of the company's outstanding shares. Pinnacle is the current
shareholder of the company.
3
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Business of Issuer:
--------------------
The company's business purpose is to locate and consummate a merger or
acquisition with a private entity. The primary attraction of the company as
a merger partner or acquisition vehicle is its status as a reporting public
company. The company offers no products or other services to the public.
The company is an active but insignificant participant in the business of
seeking mergers and joint venture with and acquisitions of small private
and public entities.
The company has not conducted market research, nor had results of a
similar market research available, that would indicate that market demand
exists for the transactions contemplated by the company. The company does
not have, and does not plan to establish, a marketing organization. Even in
the event a demand is identified for a merger or acquisition contemplated
by the company, there is no assurance the company will be successful in
completing any such business combination.
The company also lacks ability to diversify. The company's proposed
operations will in all likelihood result in the company engaging in a
business combination with a business opportunity. Consequently, the
company's activities may be limited to those engaged in by the business
opportunity which the company merges with or acquires. The company's
inability to diversify its activities into a number of areas may subject
the company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the company's
operations.
Business conditions for the company are highly competitive. A large number
of established and well-financed entities, including venture capital firms,
are active in mergers and acquisitions of companies which may be also
desirable targets for the company. These entities have a significantly
greater financial resources, technical expertise and managerial
capabilities than the company. Consequently, the company is at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination.
The company also competes with numerous other small public companies in
seeking merger or acquisition candidates. The company has no arrangement,
agreement or understanding with respect to engaging in a merger or joint
venture with or acquisition of a private or public entity. There can be no
assurance that the company will be successful in identifying and evaluating
suitable business opportunities and concluding a business combination.
There is no assurance the company will be able to negotiate a business
combination on terms favorable to the company.
The company has not established a specific length of operating history and
has not achieved a specific level of earnings, assets, or net worth
generally required by a target business opportunity. Accordingly, the
company may enter into a business combination with a business entity that
has insignificant operating history, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
At present time, the company holds no patents, trademarks, licenses,
franchises, concessions, royalty agreements or labor contracts.
4
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Government Regulation:
----------------------
The company filed Form 10SB12G for registration of securities of small
business issuers on October 28, 1999, and has timely filed reports relating
to subsequent changes in beneficial stock ownership and current status.
The company is subject to regulations under the Securities Exchange Act of
1934. Management believes that the company will not be subject to
regulations under the Investment Act of 1940, insofar as the company will
not be engaged in the business of investing or trading in securities. In
the event the company engages in business combinations which result in the
company holding passive investment interest in a number of entities, the
company could be subject to regulation under the Investment company Act of
1940. In such event, the company would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs.
The company has obtained no formal determination from the Securities and
Exchange Commission as to the status of the company under the Investment
company Act of 1940 and, consequently, any violation of such Act would
subject the company to material adverse consequences.
The company is not subject to environmental laws. The company may combine
with a business opportunity that may be subject to environmental laws.
However, at the present time the company has no intention to do so.
Research and development:
--------------------------
Until March 2000, research and development activities, management control,
and day to day operations were conducted by Aaron Tsai, President of the
company. He was responsible for market research, development activities,
negotiations with potential merger or acquisition candidates and day to day
operations. On March 3, 2000, Aaron Tsai resigned as President and Director
of the company and Michael Bruce Hall filled the vacancy.
The company has no written employment agreement with Michael Bruce Hall and
has no key man life insurance. The loss of the services of Michael Bruce
Hall would adversely affect the development of the company's business and
its likelihood of continuing operations.
To date, business expenses are nominal and are paid by Pinnacle Business
Management, Inc. The company has no employees.
ITEM 2. DESCRIPTION OF PROPERTY.
The company currently maintains a mailing address at 2963 Gulf to Bay
Boulevard, Suite 265, Clearwater, Florida 33759. The company pays no rent
for the use of this mailing address. Management does not believe that it
will need to maintain an office at any time in the foreseeable future in
order to carry out its plan of operations described above.
ITEM 3. LEGAL PROCEEDINGS.
The company is not a party to any legal proceedings.
5
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On March 3, 2000, the sole director of the company approved a 1 for 8,250
reverse stock split for all outstanding shares as of that date, in
accordance with Section 23-1-38-2(4) of the Indiana Corporation Code. As a
result, the issued and outstanding shares of common stock of the company
were reduced so that 8,250 shares issued and outstanding prior to the
record date of the reverse stock split equaled one share effective on the
record date of the reverse stock split. All fractional shares which
remained in the reverse stock split were paid $.001927 per share (an
aggregate of $1,000 for all of the remaining shareholders of MAS
Acquisition XIX Corp.) Subsequent to the reverse stock split, the company
now has one remaining shareholder with 1,000 shares outstanding.
Immediately subsequent to reverse stock split, the shareholder and sole
director, Aaron Tsai, resigned and appointed Michael Bruce Hall as a
director and as President, Secretary and Treasurer of the Corporation.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no public trading market for the company's common stock. The
company plans to apply, but at this point has not applied, to have its
common stock traded on the over-the-counter market and listed on the OTC
Bulletin Board. There is no assurance that a trading market will ever
develop or, if such a market does develop, that it will continue.
As of July 31, 1999, the number of holders of the company's common stock
was 150. Subsequent to the reverse stock split on March 3, 2000, the
company has one shareholder, Pinnacle Business Management, Inc., with 1000
shares outstanding.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Plan of Operation:
-------------------
The company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The company has no particular acquisition in mind and has not
entered into any negotiations regarding such acquisition.
With the exception of the March 2000 acquisition, none of the company's
officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions on behalf of the company with any
representative of any other company regarding the possibility of an
acquisition or merger between the company and such other company during the
past two years.
The company has no full time or part time employees. Michael Bruce Hall,
director and President of the company, has agreed to allocate a portion of
his time to the activities of the company, without compensation. The
company anticipates that the business plan of the company can be
implemented through the efforts of Michael Bruce Hall, who plans to devote
up to 10 hours per month to the business affairs of the company.
6
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The company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation.
The company will not restrict its research to any specific business,
industry, or geographical location and the company may participate in a
business venture or virtually any kind of nature. Management anticipates
that it may be able to participate in only one potential business venture
because the company has nominal assets and limited financial resources.
The company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public
marketplace in order to raise additional capital in order to expand into
new products or markets, to develop a new product or service, or for other
corporate purposes. The company may acquire assets and establish
wholly-owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.
The company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. The management
believes that due to general economic conditions, rapid technological
advances and shortages of available capital, there are numerous firms
seeking the benefits of a publicly registered corporation. Such benefits
may include facilitating additional equity financing, providing liquidity
for incentive stock options to key employees, providing liquidity (subject
to restrictions of applicable statutes)for all shareholders and other
factors.
Due to these factors, the company may encounter available business
opportunities in many different industries and at various stages of
development. Analysis of such business opportunities and comparative
investigation are expected to be extremely difficult and complex.
The company has, and will continue to have, no capital with which to
acquire a business opportunity. However, management believes the company
will be able to offer the owners of acquisition candidates the opportunity
to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to conduct an initial
public offering.
The owners of the business opportunities will, however, incur significant
legal and accounting costs in connection with acquisition of a publicly
registered company, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The Securities
Exchange Act of 1934 (the "34 Act"), specifically requires that any merger
or acquisition candidate comply with all applicable reporting requirements,
which include providing audited financial statements to be included with
filings required under the 34 Act. As a result, management may not enter
into negotiations with a business opportunity that may be unable to provide
audited financial statements for the past two fiscal years.
The analysis of new business opportunities will be undertaken by Michael
Bruce Hall, President of the company. He will be the key person in the
search, review and negotiation with potential acquisition or merger
candidates.
7
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In analyzing prospective business opportunities, management will consider
such matters as the available technical, financial and managerial
resources; working capital; history of operations; prospects for the
future; industry competition; the potential for research and development;
specific risk factors; the potential for growth or expansion; the potential
for profit; the perceived public recognition of acceptance of products,
services, or trades; name identification, and other relevant factors.
The company intends to utilize written reports and investigation to
evaluate the above factors. The company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Acquisition of Opportunities:
------------------------------
In implementing a structure for a particular business acquisition, the
company may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity.
It may also acquire stock or assets of an existing business. Upon the
consummation of a transaction, the present management and shareholders of
the company may no longer be in control of the company. As part of the
terms of the acquisition transaction, the company's Directors may resign
and be replaced by new directors without a vote of the company's
shareholders or may sell their stock in the company. Any terms and
conditions of sale of the shares presently held by officers and/or
directors of the company will also be afforded to all other shareholders of
the company. Any and all such sales will only be made in compliance with
the securities laws of the United States and any applicable state.
ITEM 7. FINANCIAL STATEMENTS.
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000 AND 1999
<PAGE>
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
TABLE OF CONTENTS
JUNE 30, 2000 AND 1999
<TABLE>
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PAGE
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Auditor's Report 1
Financial Statements:
Balance Sheets 2
Statements of Operations 3
Statements of Changes in Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-8
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Shareholders and Board of Directors
MAS ACQUISITION XIX CORP.
(A Development Stage Corporation)
We have audited the accompanying balance sheet of MAS Acquisition XIX Corp. (a
development stage Company) as of June 30, 2000, and the related statement of
operations, changes in stockholders' equity, and cash flow for the year ended
June 30, 2000. 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 MAS Acquisition XIX Corp. (a
development stage Company) as of June 30, 2000, and the results of its
operations, and its cash flows for the year ended June 30, 2000 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 4 the Company
has been in the development stage since inception. Realization of the Company's
assets is dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements of MAS Acquisitions XIX Corp. (a development stage
Company) as of June 30, 1999 were audited by other auditors, whose report dated
August 25, 1999, expressed an unqualified opinion on those statements
Bagell, Josephs & Company, L.L.C.
September 25, 2000
<PAGE>
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MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
JUNE 30, 2000 AND 1999
2000 1999
---- ----
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ASSETS
Organization costs, net of accumulated amortization $ 21 $ 45
==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' Equity
Preferred stock, $.001 par value, 20,000,000 shares authorized,
none issued or outstanding - -
-------------------------------
Common stock, $.001 par value, 8,000,000 shares authorized,
1,000 shares issued and outstanding 111 111
Accumulated deficit (90) (66)
---- ----
Total stockholders' equity 21 45
---- ----
$ 21 $ 45
==== ====
</TABLE>
See accompanying notes to the financial statements
F-2
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<TABLE>
<CAPTION>
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
YEARS ENDED JUNE 30, 2000 AND 1999
INCEPTION TO YEAR-ENDED YEAR-ENDED
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 1999
-------------- --------------- ---------------
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Revenue $ - $ - $ -
Expenses
Amortization 90 24 30
-------------- --------------- ---------------
Total expenses 90 24 30
-------------- --------------- ---------------
Net loss (90) (24) (30)
Accumulated deficit, beginning of year - (66) (36)
-------------- --------------- ---------------
Accumulated deficit, end of year $ (90) $ (90) $ (66)
============== =============== ===============
Weighted average number of common
shares outstanding 8,511,200 8,519,900 8,511,138
============== =============== ===============
Basic loss per share $ - $ - $ -
============== =============== ===============
</TABLE>
See accompanying notes to the financial statements.
F-3
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<TABLE>
<CAPTION>
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JANUARY 6, 1997 (INCEPTION)
THROUGH JUNE 30, 2000
ACCUMULATED
DEFICIT DURING
COMMON STOCK AMOUNT DEVELOPMENT
SHARES STAGE TOTAL
------------ ------------ --------------- -------
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Shares issued at inception
for organization costs $ 8,500,000 $ 90 $ - $ 90
Shares issued for services at $.001
par value in January 1997 500 1 - 1
Shares gifted at $.001 par value
in March 1997 7,750 8 - 8
Net loss for the year - - (18) (18)
------------ ------------ --------------- -------
Balance at June 30, 1998 8,508,250 99 (18) 81
Net loss for the year - - (18) (18)
------------ ------------ --------------- -------
Balance at June 30, 1999 8,508,250 99 (36) 63
Shares issued for services at $.001
par value in September 1998 750 1 - 1
Shares gifted at $.001 par value
in September 1998 10,800 11 - 11
Net loss for the year - - (30) (30)
------------ ------------ --------------- -------
Balance at June 30, 1999 8,519,800 111 (66) 45
Shares issued for services at
$.001 par value in October 1999 100 - - -
Reverse stock split in March 2000 (8,518,900) - - -
Net loss for the year - - (24) (24)
------------ ------------ --------------- -------
Balance at June 30, 2000 $ 1,000 $ 111 $ (90) $ 21
============ ============= =============== =======
</TABLE>
See accompanying notes to financial statements.
F-4
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MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2000 AND 1999
INCEPTION TO YEAR-ENDED YEAR-ENDED
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 1999
--------------- --------------- ---------------
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (90) $ (24) $ (30)
--------------- --------------- ---------------
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 90 24 30
--------------- --------------- ---------------
Total adjustments 90 24 30
--------------- --------------- ---------------
Net cash provided by operating activities - - -
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FROM FINANCING ACTIVITIES - - -
--------------- --------------- ---------------
Net increase in cash and cash equivalents - - -
Cash and cash equivalents
Beginning of the year - - -
--------------- --------------- ---------------
End of the year $ - $ - $ -
=============== =============== ===============
</TABLE>
See accompanying notes to financial statements
F-5
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MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------
Organization
------------
The Company was incorporated on January 6, 1997, in the State of Indiana. The
Company is in the development stage and its intent is to locate suitable
business ventures to acquire. The Company has had no significant business
activity to date and has chosen June 30, as a year end.
On March 3, 2000, the Company exchanged 8,250,000 shares of its stock for
1,500,000 shares of Pinnacle Business Management, Inc., a Nevada corporation.
The result is that the company was acquired by Pinnacle Business Management,
Inc. After this exchange a reverse stock split occurred leaving Pinnacle
Business Management, Inc. as the sole shareholder of the Company.
Cash and Cash Equivalents
----------------------------
For the purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturing of three months or less
to be cash equivalents.
Intangible Assets
------------------
The cost of intangible assets is amortized using the straight-line method over
the estimated useful economic life (five years for organization costs). They
are stated at cost less accumulated amortization. The Company reviews for the
impairment of long-lived assets and certain identifiable intangibles whenever
events or changes in circumstances indicate that the carrying value of the asset
may not be recoverable. An impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its eventual
disposition is less than its carrying amount. No such impairment losses have
been identified in the periods presented.
Net Loss per Share
---------------------
Basic loss per share is computed by dividing the net loss for the period by the
weighted average number of common shares outstanding for the period.
Use of Estimates
------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. These estimates and
assumptions affect the reported amount of assets and liabilities, the disclosure
of contingent assets and liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that were used.
F-6
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------
MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(CONT.)
----------------------------------------------------
Income taxes
-------------
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial reporting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classifications of the assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an
asset or liability are classified as current or non-current depending on the
periods in which the temporary differences are expected to reverse.
NOTE 2 - STOCKHOLDERS' EQUITY
---------------------------------
At inception the Company issued 8,500,000 shares of its $.001 par value common
stock to an officer as reimbursement of organization costs paid by the officer.
Fair value used for this transaction of $90 is based upon the actual cost of
incorporation.
During January, 1997 the Company issued 500 shares of its $.001 par value common
stock to directors as compensation valued at $1.
During March, 1997 the Company issued 7,750 shares of its common stock to
foreign citizens as a gift with an aggregate fair value of $8.
During September, 1998 the Company issued 750 shares of its $.001 par value
common stock to directors as compensation valued at $1.
During September, 1998 the Company issued 10,800 shares of its common stock to
foreign citizens as a gift with an aggregate fair value of $11.
During October, 1999 the Company issued 100 shares of its common stock to one
individual with an aggregate fair value of $0.
On March 3, 2000 the Company entered into an exchange agreement and was acquired
by Pinnacle Business Management, Inc., a reporting entity on the OTC Exchange.
(PCBM). Subsequent to entering into the exchange agreement, the Company
declared a reverse stock split, effectively reducing the outstanding shares to
1,000.
F-7
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MAS ACQUISITION XIX CORP.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 3 - LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------
As of June 30, 2000 the Company had no cash or capital reserves.
NOTE 4 - INCOME TAXES
-------------------------
There is no provision for income taxes at June 30, 2000. The Company has a
small net operating loss which expires thru 2013.
F-8
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
There are no shareholders other than Pinnacle Business Management, Inc. The
outstanding stock owned by Pinnacle does not trade on the open market and
the shareholder may sell the stock to another business opportunity
candidate.
ITEM 10. EXECUTIVE COMPENSATION.
The company does not provide any plan or non-plan compensation awarded to,
earned by, or paid to the executive officers and directors of the company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Pinnacle Business Management, Inc. owns 100% of the company's outstanding
stock. A total of 51.2% of Pinnacle's outstanding stock is held by Michael
Bruce Hall Family Partnership and Katherine Burney Family Limited
Partnership. Mr. Hall is a beneficial owner of 38,941,585 shares, or 25.6%
of Pinnacle's outstanding shares, held by the Michael Bruce Hall Family
Partnership. Mr. Turino is the beneficial owner of 38,941,585 shares, or
25.6% of Pinnacle's outstanding shares, held by Katherine Burmey Family
Limited Partnership. Messrs. Hall and Turino are the directors and
executive officers of Pinnacle. They are also the directors and executive
officers of the company.
8
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the past two years, the company was not a party to any transaction
and is not a party to any proposed transaction in which any director,
executive officer, nominee for election as a director, any security holder,
or any member of the immediate family had or is to have a direct or
indirect material interest.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
No report on Form 8-K were filed during the last quarter of the period
covered by this report.
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBITS
<S> <C>
(2)(a) Shell Acquisition and Stock Purchase Agreement with MAS
Capital Inc. and MRC Legal Services Corporation entered into
on March 3, 2000.
(2)(b) Exchange Agreement between Pinnacle Business Management Inc.
and MRC Legal Services Corporation entered into on March 3,
2000, incorporated by reference in Form 8-K, filed on March 6,
2000.
(3)(i) Articles of Incorporation, incorporated by reference in Form 10SB,
filed on October 28, 1999.
(3)(i)(a) Articles of Amendment of the Articles of Incorporation, adopted by the
Company on March 3, 2000 and filed with the Secretary of State of the
State of Indiana on March 24, 2000.
(3)(ii) Bylaws, incorporated by reference in Form 10SB, filed on October 28,
1999.
(16) Letter regarding change in accountant dated September 21, 2000
certifying Bagell, Joseph, Levine, Firestone & Company, L.L.C., as
accountants for the company.
(17)(a) Resolutions adopted by the Board of Directors dated March 3,
2000 authorizing the reverse stock split.
(17)(b) Resolutions adopted by the Board of Directors dated March 3,
2000 appointing Michael Bruce Hall as a director and officer
of the company.
</TABLE>
9
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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.
MAS Acquisition XIX, Inc.
By /S/ Michael Bruce Hall
--------------------------------------------------------------
Michael Bruce Hall, President and Director
By /S/ Jeffrey G. Turino
--------------------------------------------------------------
Jeffrey G. Turino, Chief Executive Officer and Director
Date September 28, 2000
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10
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