U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: July 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file no.: 0-27381
Aquaculture Resources Management, Inc.
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(Name of small business issuer in its charter)
Florida 65-0877740
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (561) 832-5698
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
None
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Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.0001 par value
(Title of class)
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Copies of Communications Sent to:
Donald F. Mintmire, Esq.
Mintmire & Associates
265 Sunrise Ave., Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
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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.
Yes X No
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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 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. $0.00.
Of the 6,000,000 shares of voting stock of the registrant issued and
outstanding as of July 31, 2000, 1,000,000 shares are held by non-affiliates.
Because of the absence of an established trading market for the voting stock,
the registrant is unable to calculate the aggregate market value of the voting
stock held by non-affiliates as of a specified date within the past 60 days.
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SUMMARY TABLE OF CONTENTS SUMMARY TABLE OF CONTENTS
PART I
Item 1. Description of Business.
Item 2. Description of Property.
Item 3. Legal Proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Item 7. Financial Statements.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Item 10. Executive Compensation.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
Item 12. Certain Relationships and Related Transactions.
Item 13. Exhibits, List and Reports on Form 8-K.
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PART I
Item 1. Description of Business
(a) Business Development
Aquaculture Resources Management, Inc. (the "Company") was organized on
April 18, 1997, under the laws of the State of Florida, having the stated
purpose of engaging in any lawful activities. The Company was formed with the
contemplated purpose to engage in aquaculture farming and marketing in the
United States and elsewhere. The business concept and plan was based upon
information obtained by the incorporator several years before while working in
China. The incorporator was unable to obtain the cooperation and assistance of
workers and investors to implement the proposed plan. After development of a
business plan and efforts to develop the business failed, all such efforts were
abandoned.
The Company never engaged in an active trade or business throughout the
period from 1997 until just recently. On August 1, 1999, all of the issued and
outstanding shares of the common stock of the Company were acquired from Donald
F. Mintmire, (5,000,000 shares of common stock) and Richard W.A. Davis (500,000
shares of common stock) its two (2) shareholders. At that time neither was an
officer or director of the Company. The shares were purchased from Mr. Mintmire
by Mr. Gregory D. Nichols, the principal of the Company. The shares were
purchased from Mr. Davis on that same date by a number of investors which did
not include Mr. Nichols. The original shareholders individually agreed to
exchange the 5,500,000 issued and outstanding shares held by such shareholders
to the new group of investors in exchange for a commitment by the new investors
to arrange to pay the costs of the continued operations of the corporation, and
bringing its books and records up to date. The Company additionally received
gross proceeds in the amount of $20,000 from the sale of a total of 500,000
shares of common stock, $.0001 par value per share (the "Common Stock"), in an
offering conducted pursuant to Section 3(b) and 4(2) of the Securities Act of
1933, as amended (the "Act"), and Rules 505 and 506 of Regulation D promulgated
thereunder. This offering was made in the State of Georgia and the State of
Florida. The Company undertook the offering of shares of Common Stock on August
1, 1999.
The Company then began to consider and investigate potential business
opportunities. The Company is considered a development stage company and, due to
its status as a "shell" corporation, its principal business purpose is to locate
and consummate a merger or acquisition with a private entity. Because of the
Company's current status of having limited assets and no recent operating
history, in the event the Company does successfully acquire or merge with an
operating business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will be a probable
change in control of the Company.
On August 1, 1999, the Company also determined it should become active
in seeking potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses.
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Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years, or in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
The Company's principal executive offices are located at 265 Sunrise
Avenue, Suite 204, Palm Beach, FL 33480 and its telephone number is (561)
832-5698.
(B) Business of Issuer
The Company has no recent operating history and no representation is
made, nor is any intended, that the Company will be able to carry on future
business activities successfully. There can be no assurance that the Company
will have the ability to acquire or merge with an operating business, business
opportunity or property that will be of material value to the Company.
Management plans to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or business
opportunities. The Company currently has no commitment or arrangement, written
or oral, to participate in any business opportunity and management cannot
predict the nature of any potential business opportunity it may ultimately
consider. Management will have broad discretion in its search for and
negotiations with any potential business or business opportunity.
Sources of Business Opportunities
The Company intends to use various sources in its search for potential
business opportunities including its officer and director, consultants, special
advisors, securities broker-dealers, venture capitalists, member of the
financial community and others who may present management with unsolicited
proposals. Because of the Company's limited capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. The Company will most likely have to rely on outside
sources, not otherwise associated with the Company, that will accept their
compensation only after the Company has finalized a successful acquisition or
merger. The Company will rely upon the expertise and contacts of such persons,
will use notices in written publications and personal contacts to find merger
and acquisition candidates, the exact number of such contacts dependent upon the
skill and industriousness of the participants and the conditions of the
marketplace. None of the participants in the process will have any past business
relationship with management. To date the Company has not engaged nor entered
into any definitive agreements nor understandings regarding retention of any
consultant to assist the Company in its search for business opportunities, nor
is management presently in a position to actively seek or retain any prospective
consultants for these purposes.
The Company does not intend to restrict its search to any specific kind
of industry or business. The Company may investigate and ultimately acquire a
venture that is in its
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preliminary or development stage, is already in operation, or in various stages
of its corporate existence and development. Management cannot predict at this
time the status or nature of any venture in which the Company may participate. A
potential venture might need additional capital or merely desire to have its
shares publicly traded. The most likely scenario for a possible business
arrangement would involve the acquisition of, or merger with, an operating
business that does not need additional capital, but which merely desires to
establish a public trading market for its shares. Management believes that the
Company could provide a potential public vehicle for a private entity interested
in becoming a publicly held corporation without the time and expense typically
associated with an initial public offering.
Evaluation
Once the Company has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's knowledge
and experience, (limited solely to working history - See "PART III, Item 9.
Directors, Executive Officers, etc.") or with the assistance of outside advisors
and consultants evaluating the preliminary information available to them.
Management may elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities. However, because of
the Company's limited capital it may not have the necessary funds for a complete
and exhaustive investigation of any particular opportunity. Management will not
devote full time to finding a merger candidate, will continue to engage in
outside unrelated activities, and anticipates devoting no more than an average
of five (5) hours weekly to such undertaking.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development or
exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Company has not located or identified any specific business
opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available to
the Company may involve new and untested products, processes or market
strategies which may not ultimately prove successful.
Form of Potential Acquisition or Merger
Presently the Company cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen.
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The particular manner in which the Company participates in a specific business
opportunity will depend upon the nature of that opportunity, the respective
needs and desires of the Company and management of the opportunity, and the
relative negotiating strength of the parties involved. Actual participation in a
business venture may take the form of an asset purchase, lease, joint venture,
license, partnership, stock purchase, reorganization, merger or consolidation.
The Company may act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, the Company does not intend
to participate in opportunities through the purchase of minority stock
positions.
Because of the Company's current status and recent inactive status for
the prior four (4) years, and its concomitant lack of assets and relevant
operating history, it is likely that any potential merger or acquisition with
another operating business will require substantial dilution to the Company's
existing shareholders interests. There will probably be a change in control of
the Company, with the incoming owners of the targeted merger or acquisition
candidate taking over control of the Company. Management has not established any
guidelines as to the amount of control it will offer to prospective business
opportunity candidates, since this issue will depend to a large degree on the
economic strength and desirability of each candidate, and the corresponding
relative bargaining power of the parties. However, management will endeavor to
negotiate the best possible terms for the benefit of the Company's shareholders
as the case arises. Management may actively negotiate or otherwise consent to
the purchase of any portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition. In such an event, existing
shareholders may not be afforded an opportunity to approve or consent to any
particular stock buy-out transaction. However the terms of the sale of shares
held by present management of the Company will be extended equally to all other
current shareholders.
Management does not have any plans to borrow funds to compensate any
persons, consultants, or promoters in conjunction with its efforts to find and
acquire or merge with another business opportunity. Management does not have any
plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential parties
to the acquisition or merger. In either case, it is unlikely that the Company
would be able to borrow significant funds for such purposes from any
conventional lending sources. In all probability, a public sale of the Company's
securities would also be unfeasible, and management does not contemplate any
form of new public offering at this time. In the event that the Company does
need to raise capital, it would most likely have to rely on the private sale of
its securities. Such a private sale would be limited to persons exempt under the
Commissions's Regulation D or other rule, or provision for exemption, if any
applies. However, no private sales are contemplated by the Company's management
at this time. If a private sale of the Company's securities is deemed
appropriate in the future, management will endeavor to acquire funds on the best
terms available to the Company. However, there can be no assurance that the
Company will be able to obtain funding when and if needed, or that such funding,
if available, can be obtained on terms reasonable or acceptable to the Company.
The Company does not anticipate using Regulation S promulgated under the
Securities Act of 1933 to raise any funds any time within the next year, subject
only to its potential applicability after consummation of a merger or
acquisition.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of the Company, may be paid to persons
instrumental in facilitating the transaction. The
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Company has not established any criteria or limits for the determination of a
finder's fee, although most likely an appropriate finder's fee will be
negotiated between the parties, including the potential business opportunity
candidate, based upon economic considerations and reasonable value as estimated
and mutually agreed upon at that time. A finder's fee would only be payable upon
completion of the proposed acquisition or merger in the normal case, and
management does not contemplate any other arrangement at this time. Current
management has not in the past used any particular consultants, advisors or
finders. Management has not actively undertaken a search for, nor retention of,
any finder's fee arrangement with any person. It is possible that a potential
merger or acquisition candidate would have its own finder's fee arrangement, or
other similar business brokerage or investment banking arrangement, whereupon
the terms may be governed by a pre-existing contract; in such case, the Company
may be limited in its ability to affect the terms of compensation, but most
likely the terms would be disclosed and subject to approval pursuant to
submission of the proposed transaction to a vote of the Company's shareholders.
Management cannot predict any other terms of a finder's fee arrangement at this
time. If such a fee arrangement was proposed, independent management and
directors would negotiate the best terms available to the Company so as not to
compromise the fiduciary duties of the representative in the proposed
transaction, and the Company would require that the proposed arrangement would
be submitted to the shareholders for prior ratification in an appropriate
manner.
Management does not contemplate that the Company would acquire or merge
with a business entity in which any officer or director of the Company has an
interest. Any such related party transaction, however remote, would be submitted
for approval by an independent quorum of the Board of Directors and the proposed
transaction would be submitted to the shareholders for prior ratification in an
appropriate manner. The Company's management has not had any contact,
discussions, or other understandings regarding any particular business
opportunity at this time, regardless of any potential conflict of interest
issues. Accordingly, the potential conflict of interest is merely a remote
theoretical possibility at this time.
Possible Blank Check Company Status
While the Company may be deemed a "shell" company at this time, it does
not constitute a "blank check" company under pertinent securities law standards.
Accordingly, the Company is not subject to securities regulations imposed upon
companies deemed to be "blank check companies." If the Company were to file a
registration statement under Securities Act of 1933 and, at such time, priced
its shares at less than $5.00 per share and continued to have no specific
business plan, it would then be classified as a blank check company.
If in the future the Company were to become a blank check company,
adverse consequences could attach to the Company. Such consequences can include,
but are not limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control to public
shareholders and the additional steps required to comply with various federal
and state laws enacted for the protection of investors, including so-called
"lock-up" agreements pending consummation of a merger or acquisition that would
take it out of blank check company status.
Many states (excluding Florida where the Company is incorporated) have
statutes, rules and regulations limiting the sale of securities of "blank check"
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companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the companies securities
or to undertake any offering of the Company's securities, either debt or equity,
until such time as the Company has successfully implemented its business plan
described herein. In the event the Company undertakes the filing of a
registration statement under circumstances that classifies it as a blank check
company the provisions of Rule 419 and other applicable provisions will be
complied with.
Rights of Shareholders
The Company amended its Articles of Incorporation on September 8, 1999,
to expressly provide that the Board of Directors is authorized to enter into on
behalf of the corporation and to bind the corporation without shareholder
approval, any and all acts approving the terms and conditions of a merger and/or
a share exchange, and shareholders affected thereby, shall not be entitled to
dissenters rights with respect thereto under any applicable statutory dissenters
rights provision. This provision expressly eliminates shareholder participation
in the merger and/or share exchange contemplated by the Company and expressly
eliminates any shareholders dissenters rights. The Company does not intend to
provide its shareholders with complete disclosure documentation including
audited finance statements concerning a target company and its business prior to
any mergers or acquisitions.
Competition
Because the Company has not identified any potential acquisition or
merger candidate, it is unable to evaluate the type and extent of its likely
competition. The Company is aware that there are several other public companies
with only nominal assets that are also searching for operating businesses and
other business opportunities as potential acquisition or merger candidates. The
Company will be in direct competition with these other public companies in its
search for business opportunities and, due to the Company's limited funds, it
may be difficult to successfully compete with these other companies.
Employees
As of the date hereof, the Company does not have any employees and has
no plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges with
an operating business. The Company may find it necessary to periodically hire
part-time clerical help on an as-needed basis.
Industry Segments
No information is presented regarding industry segments. The Company is
presently a development stage company seeking a potential acquisition of or
merger with a yet to be identified business opportunity. Reference is made to
the statements of income included herein in response to part F/S of this Form
10-KSB for a report of the Company's operating history for the past two fiscal
years.
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Item 2. Description of Property
The Company is currently using at no cost to the Company, as its
principal place of business offices of its legal counsel (provided at no cost),
located in Palm Beach, Florida. Although the Company has no written agreement
and pays no rent for the use of this facility, it is contemplated that at such
future time as an acquisition or merger transaction may be completed, the
Company will secure commercial office space from which it will conduct its
business. Until such an acquisition or merger, the Company lacks any basis for
determining the kinds of office space or other facilities necessary for its
future business. The Company has no current plans to secure such commercial
office space. It is also possible that a merger or acquisition candidate would
have adequate existing facilities upon completion of such a transaction, and the
Company's principal offices may be transferred to such existing facilities.
Item 3. Legal Proceedings
The Company is currently not a party to any pending legal proceedings
and no such action by, or to the best of its knowledge, against the Company has
been threatened. The Company was inactive from late 1995 through the date of
this Form 10-KSB.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the fiscal year
ended July 31, 2000, covered by this report to a vote of the Company's
shareholders, through the solicitation of proxies or otherwise.
PART II
Item 5. Market For Common Equity and Other Shareholder Matters.
No shares of the Company's common stock have previously been registered
with the Securities and Exchange Commission (the "Commission") or any state
securities agency or authority. The Company intends to make application to the
NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
Company's application to the NASD will consist of current corporate information,
financial statements and other documents as required by Rule 15c211 of the
Securities Exchange Act of 1934, as amended. Inclusion on the OTC Bulletin Board
permits price quotation for the Company's shares to be published by such
service.
The Company is not aware of any existing trading market for its common
stock. The Company's common stock has never traded in a public market. There are
no plans, proposals, arrangements or understandings with any person(s) with
regard to the development of a trading market in any of the Company's
securities.
If and when the Company's common stock is traded in the
over-the-counter market, most likely the shares will be subject to the
provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the Exchange Act"), commonly referred to as the "penny stock"
rule. Section 15(g) sets forth certain requirements for transactions in penny
stocks and
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Rule 15g9(d)(1) incorporates the definition of penny stock as that used in Rule
3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity security is considered to be a
penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission; authorized
for quotation on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at least $5.00 per
share) or the issuer's net tangible assets; or exempted from the definition by
the Commission. If the Company's shares are deemed to be a penny stock, trading
in the shares will be subject to additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally persons with assets in excess of $1,000,000
or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in the Company's common stock and may affect the
ability of shareholders to sell their shares.
As of July 31, 2000, there were 26 holders of record of the Company's
common stock.
As of the date hereof, the Company has issued and outstanding 6,000,000
shares of common stock. Of this total, 500,000 shares may be sold or otherwise
transferred without restriction pursuant to the terms of Rule 144 ("Rule 144")
of the Securities Act of 1933, as amended (the "Act") since such shares were
originally issued in transactions more than two (2) years ago. 5,000,000 such
shares remain restricted under Rule 144 since such shares are held by an
affiliate. An additional 500,000 shares were may be sold by complying with the
provisions of Rule ("Rule 144") of the Securities Act of 1933, as amended (the
"Act") since such shares were originally issued in transactions more than one
(1) year ago.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will pay
cash dividends or make distributions in the foreseeable future. The Company
currently intends to retain and reinvest future earnings, if any, to finance its
operations.
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Public Quotation of Stock
The Company has not as of this date, but intends to request in the
immediate future a broker-dealer who has not been identified at this time, to
act as a market maker for the Company's securities. Thus far the Company has not
requested a market maker to submit the Company's Form 10-SB to the National
Association of Securities Dealers and to serve as a market maker for the
Company's Common Stock. The Company anticipates that other market makers may be
requested to participate at a later date. The Company will not use consultants
to obtain market makers. There have been no preliminary discussions between the
Company, or anyone acting on its behalf, and any market maker regarding the
future trading market for the Company. It is anticipated that the market maker
will be contacted prior to an acquisition or merger and only by management of
the Company.
Item 6. Management's Discussion and Analysis or Plan of Operation
The Company is considered a development stage company with limited
assets or capital, and with no operations or income since approximately 1997.
The costs and expenses associated with the preparation and filing of its initial
registration statement and subsequent Securities and Exchange Commission filings
as well as other operations of the Company have been paid for by a shareholder,
specifically Gregory D. Nichols. Mr. Nichols has agreed to pay future costs
associated with filing future reports under Exchange Act of 1934 if the Company
is unable to do so. It is anticipated that the Company will require only nominal
capital to maintain the corporate viability of the Company and any additional
needed funds will most likely be provided by the Company's existing shareholders
or its sole officer and director in the immediate future. Current shareholders
have not agreed upon the terms and conditions of future financing and such
undertaking will be subject to future negotiations, except for the express
commitment of Mr. Nichols to fund required 34 Act filings. Repayment of any such
funding will also be subject to such negotiations. However, unless the Company
is able to facilitate an acquisition of or merger with an operating business or
is able to obtain significant outside financing, there is substantial doubt
about its ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure
a successful acquisition or merger partner so that it will be able to continue
as a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of the Company is to
fund required future filings under the 34 Act, and existing shareholders have
expressed an interest in additional funding if necessary to continue the Company
as a going concern.
Plan of Operation
During the next twelve months, the Company will actively seek out
and investigate possible business opportunities with the intent to acquire or
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merge with one or more business ventures. In its search for business
opportunities, management will follow the procedures outlined in Item 1 above.
Because the Company has limited funds, it may be necessary for the sole officer
and director to either advance funds to the Company or to accrue expenses until
such time as a successful business consolidation can be made. The Company will
not be a condition that the target company must repay funds advanced by its
officers and directors. Management intends to hold expenses to a minimum and to
obtain services on a contingency basis when possible. Further, the Company's
directors will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business opportunity
provide their remuneration. However, if the Company engages outside advisors or
consultants in its search for business opportunities, it may be necessary for
the Company to attempt to raise additional funds. As of the date hereof, the
Company has not made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital. In the event the Company does
need to raise capital most likely the only method available to the Company would
be the private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
Item 7. Financial Statements
The Company's financial statements for the years ended July 31, 2000
have been examined to the extent indicated in their reports by Dorra, Shaw, &
Dugan, independent certified accountants, and have been prepared in accordance
with generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein,
on Page F-1 hereof in response to Part F/S of this Form 10-KSB.
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AQUACULTURE RESOURCES MANAGEMENT, INC.
TABLE OF CONTENTS
Independent Auditors' Report F-1
Balance Sheet F-2
Statement of Operations and Deficit Accumulated
During the Developmental Stage F-3
Statement of Changes in Stockholders' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
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Dorra Shaw & Dugan
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Aquaculture Resources Management, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of Aquaculture Resources
Management, Inc. (a Florida corporation and a development stage company) as of
July 31, 2000, and the related statements of operations, deficit accumulated
during the development stage, cash flows and changes in stockholders' equity for
the year ended July 31, 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Aquaculture Resources
Management, Inc. as of July 31, 2000 and the results of its operations and its
cash flows and changes in stockholders' equity for the year ended July 31, 2000
in conformity with generally accepted accounting principles.
Audited balance sheets for prior periods and the statements of operations, cash
flows and changes in stockholders' equity for the year ended July 31, 1999 as
required by item 310 of regulation S-B are not provided because the company was
dormant.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has incurred net losses since its inception. The Company's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. Management's plan regarding those matters also are
described in Note D. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Dorra Shaw & Dugan
Certified Public Accountants
October 27, 2000
270 South County Road, Palm Beach, FL
33480 Telephone (561) 822-9955 Fax (561) 822-9955
Website: dsd-cpa.com
<PAGE>
<TABLE>
<CAPTION>
AQUACULTURE RESOURCE MANAGEMENT,
INC.
(A Development Stage Company)
BALANCE SHEET
July 31, 2000
--------------------------------------------------------------------- ----------
<S> <C>
ASSETS
Current Assets:
Cash $ 9,350
--------------------------------------------------------------------- ----------
TOTAL CURRENT ASSETS 9,350
--------------------------------------------------------------------- ----------
$ 9,350
--------------------------------------------------------------------- ----------
LIABILITIES
Current Liabilities:
Accrued expenses $ 6,000
--------------------------------------------------------------------- ----------
TOTAL CURRENT LIABILITIES 6,000
--------------------------------------------------------------------- ----------
6,000
--------------------------------------------------------------------- ----------
STOCKHOLDERS' EQUITY
Common stock - $.0001 par value - 50,000,000 shares authorized
6,000,000 shares issued and outstanding 600
Preferred stock - no par value - 10,000,000 shares authorized
No shares issued and outstanding -
Additional paid-in-capital 21,900
Deficit accumulated during the developmental stage (19,150)
--------------------------------------------------------------------- ----------
TOTAL STOCKHOLDERS' EQUITY 3,350
--------------------------------------------------------------------- ----------
$ 9,350
--------------------------------------------------------------------- ----------
</TABLE>
See Accompanying Notes To Financial Statements
F-2
<PAGE>
<TABLE>
<CAPTION>
AQUACULTURE RESOURCES MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
For the year ended July 31, 2000
-------------------------------------------------------- ----------------
<S> <C>
Revenues $ -
-------------------------------------------------------- ----------------
Operating expenses:
Professional fees 10,500
Consulting fees 6,000
Taxes and licenses 150
-------------------------------------------------------- ----------------
Total operating expenses 16,650
-------------------------------------------------------- ----------------
Loss before income taxes (16,650)
Income taxes -
-------------------------------------------------------- ----------------
Net loss (16,650)
Deficit accumulated during the
development stage - August 1, 1999 (2,500)
-------------------------------------------------------- ----------------
Deficit accumulated during the
development stage - July 31, 2000 $ (19,150)
-------------------------------------------------------- ----------------
Net loss per share $ (0.002)
-------------------------------------------------------- ----------------
Weighted average shares of
common stock 6,000,000
-------------------------------------------------------- ----------------
</TABLE>
See Accompanying Notes To Financial Statements
F-3
<PAGE>
<TABLE>
<CAPTION>
AQUACULTURE RESOURCES MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional
Number of Preferred Common Paid - In Deficit
Shares Stock Stock Capital Accumulated Total
--------- --------- ------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance:
April 18, 1997 - Services 5,500,000 $ - $ 550 $ 1,950 $ - $ 2,500
(Date of Inception)
Issuance of Common Stock:
August 1, 1999 500,000 - 50 19,950 - 20,000
Deficit accumulated during
the development stage - - - - (19,150) (19,150)
------------------------------- --------- --------- ------ ----------- ----------- ---------
Balance - July 31, 2000 6,000,000 $ - $ 600 $ 21,900 $ (19,150) $ 3,350
------------------------------- --------- --------- ------ ----------- ----------- ---------
</TABLE>
See Accompanying Notes To Financial Statement
F-4
<PAGE>
<TABLE>
<CAPTION>
AQUACULTURE RESOURCES MANAGEMENT, INC.
(A Development Stage Company)
Statement of Cash Flows
For the year ended July 31, 2000
---------------------------------------------------------- ------------
<S> <C>
Operating Activities:
Net loss $ (16,650)
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase in:
Accrued expenses 6,000
---------------------------------------------------------- -------------
Net cash used by operating activities (10,650)
---------------------------------------------------------- -------------
Net decrease in cash (10,650)
---------------------------------------------------------- -------------
Cash - August 1, 1999 20,000
---------------------------------------------------------- -------------
Cash - July 31, 2000 $ 9,350
---------------------------------------------------------- -------------
</TABLE>
See Accompanying Notes To Financial Statements
F-5
<PAGE>
Aquaculture Resources Management, Inc.
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies:
Organization
Aquaculture Resources Management, Inc. (a development stage company) is a
Florida Corporation organized to engage in aquaculture farming and marketing in
the United States and elsewhere. The Company failed in its attempt to implement
its initial business plan and during June 1997 abandoned its efforts. The
Company had no operations for the period prior to June 1997. The Company was
inactive and there were no transactions from June 1997 to the date of
reinstatement by the State of Florida on November 30, 1998 that affect the
balances reflected in the financial statements as of August 1, 1999. In
addition, audited balance sheets for prior periods and the statements of
operations, cash flows and stockholders' equity for the year ended July 31, 1999
as required by item 310 of regulation S-B are not provided because the company
was dormant.
The Company has a new business plan, which was adopted on or about August 1,
1999, which is to engage in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
assets of the Company will be used for its expenses of operation to implement
this plan.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a July 31 year-end.
Start - Up Costs
Start - up and organization costs are being expensed as incurred.
Loss Per Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Note B - Stockholders' Equity:
On April 18, 1997, the Company issued 6,000,000 shares of common stock, in lieu
of cash, for the fair market value of services rendered by its initial
stockholders. On or about August 1, 1999, third parties purchased the shares
from the initial stockholders.
F-6
<PAGE>
Aquaculture Resources Management, Inc.
Notes to Financial Statements
Note B - Stockholders' Equity (con't):
Subsequently the same third parties purchased at $0.04 per share, 500,000 shares
of the common stock of the Company in a private placement pursuant to Regulation
D of the SEC. The $10,500 in professional fees includes the costs and expenses
of legal and accounting service associated with the preparation and filing of
the registration statement.
At July 31, 2000, the Company had authorized 50,000,000 shares of $.0001 par
value common stock and had 6,000,000 shares of common stock issued and
outstanding. In addition, the Company authorized 10,000,000 shares of preferred
stock with the specific terms; conditions, limitations and preferences to be
determined by the Board of Directors. None of the preferred stock was issued and
outstanding as of July 31, 2000.
Note C - Income Taxes:
The Company has a net operating loss carry forward of $16,650 that may be offset
against future taxable income. If not used, the carry forward will expire in
2020.
The amount recorded as deferred tax assets, cumulative as of July 31, 2000 is
$2,500, which represents the amounts of tax benefits of loss carry-forwards. The
Company has established a valuation allowance for this deferred tax asset of
$2,500, as the Company has no history of profitable operations.
Note D - Going Concern:
The Company's financial statements are prepared using generally accepted
accounting principles applied to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its inception through July 31,
2000. It has not established revenues sufficient to cover operating costs and to
allow it to continue as a going concern. Management plans currently provide for
experts to secure a successful acquisition or merger partner so that it will be
able to continue as a going concern. In the event such efforts are unsuccessful,
contingent plans have been arranged to provide that the current Director of the
Company is to fund required future filings under the 34 Act, and existing
shareholders have expressed an interest in additional funding if necessary to
continue the Company as a going concern.
F-7
<PAGE>
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
Because the Company has been generally inactive since its inception, it
had no independent accountant until the retention in August , 1998, of Dorra,
Shaw & Dugan, CPA's 270 South County Road, Palm Beach, Florida 33480. There has
been no change in the Company's independent accountant during the period
commencing with the Company's retention of Dorra, Shaw & Dugan, CPA's , through
the date hereof.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance
with Section 16(a) of the Exchange Act.
The director and executive officer of the Company and his respective age is as
follows:
Name Age Position
----------------- --- --------------------------
Gregory D. Nichols 34 Director, President, Secretary and Treasurer
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. As of the date hereof, no director has accrued any expenses or
compensation. Officers are appointed annually by the Board of Directors and each
executive officer serves at the discretion of the Board of Directors. The
Company does not have any standing committees at this time.
No director, or officer, or promoter of the Company has, within the
past five years, filed any bankruptcy petition, been convicted in or been the
subject of any pending criminal proceedings, or is any such person the subject
or any order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the person listed above during the past five
years is as follows:
Mr. Gregory D. Nichols, 34 years old, has been a Director of the
Company since August 1, 1999. Mr. Nichols has been employed since August 1998 to
present with Engineered Life Safety Systems as well as a part-time freelance
consultant and technical support person for Level 2 Gallery and KB Electric
since July 1996, in the Atlanta, Georgia metropolitan area. Mr. Nichols has
completed some undergraduate courses in computer information systems at Georgia
State University and other various computer courses at Intellinet Education
Center in Georgia. The Company believes Mr. Nichols; unique creative skills, his
special appreciation of computers and extensive networking ability will expose
it to many business opportunities.
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (hereinafter referred to as the
"Commission") initial statements of beneficial ownership, reports of changes in
ownership and annual reports concerning their ownership, of Common Stock and
other equity securities of the Company on Forms 3, 4, and 5, respectively.
Executive officers, directors and greater than 10% shareholders are required by
Commission regulations to furnish the Company with copies of all Section 16(a)
reports they file. To the Company's knowledge, Mr. Nichols comprising all of the
Company's executive officers, directors and greater than 10% beneficial owners
of its common Stock, have complied with Section 16(a) filing requirements
applicable to them during the Company's most recent fiscal year.
Item 10. Executive Compensation
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors. The
Company has not paid any salaries or other compensation to its officers,
directors or employees for the years ended 1997, 1998, 1999 nor at any time
during 2000. Further, the Company has not entered into an employment agreement
with any of its officers, directors or any other persons and no such agreements
are anticipated in the immediate future. It is intended that the Company's
director will defer any compensation until such time as an acquisition or merger
can be accomplished and will strive to have the business opportunity provide
their remuneration. As of the date hereof, no person has accrued any
compensation from the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best knowledge of
the Company as of July 31, 2000, with respect to each person known by the
Company to own beneficially more than 5% of the Company's outstanding common
stock, each director of the Company and all directors and officers of the
Company as a group.
Name of Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
------------------- ------------------- ----------------
Gregory D. Nichols 5,000,000 83.6%
2731-7 Briarcliff Road NE
Atlanta, GA 30309
All Executive Officers and
Directors as a Group (one person) 5,000,000 83.6%
<PAGE>
Item 12. Certain Relationships and Related Transactions
On August 1, 1999, Mr. Gregory D. Nichols acquired from the principal
controlling shareholder, Donald F. Mintmire, a total of 5,000,000 shares of
Common Stock of the Company in exchange for a commitment to arrange to pay the
costs of the continued operations of the corporation and bringing its books and
records up to date.
In addition Mr. Nichols has paid for the cost and expenses associated
with the filing of this Form 10-KSB and other operations of the Company.
At the current time, the Company has no provision to issue any
additional securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although the Company has a very large amount of
authorized but unissued Common Stock and Preferred Stock which may be issued
without further shareholder approval or notice, the Company intends to reserve
such stock for the Rule 506 offerings for acquisitions.
During the Company's 2000 fiscal year, there has not been any other
transactions between the Company and any officer, director, nominee for election
as director, or any shareholder owning greater than five percent (5%) of the
Company's outstanding shares, nor any member of the above referenced
individuals' immediate family.
Gregory D. Nichols may be deemed to be a "promoter" of the Company as
that term is defined under the Rules and Regulations promulgated under the Act.
Item 13. Exhibits and Reports on Form 8-K.
(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as
described in the following index of exhibits, are incorporated herein by
reference, as follows:
Exhibit No. Description
----------- ------------------------------
3(i).1 Articles of Incorporation filed April 18, 1997(1)
3(i).2 Articles of Amendment filed August 8, 1999(1)
3(ii).1 By-laws(1)
27 * Financial Data Schedule
(1) Filed under the same exhibit number to the Registrants Form 10-SB.
* (Filed herewith)
<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,
there unto duly authorized.
Aquaculture Resources Management, Inc.
(Registrant)
Date: October 30, 2000 BY: /s/ Gregory D. Nichols
-----------------------------------
Gregory D. Nichols, President
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.
Date Signature Title
October 30, 2000 BY: /s/ Gregory D. Nichols
----------------------------- President, Secretary,
Gregory D. Nichols Treasurer, Director,
