SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1999
Commission file number 000-28713
ROYAL ACQUISITIONS, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0443120
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 E. Flamingo Rd., #111
Las Vegas, NV 89119
(Address of principal executive offices) (zip code)
Issuer's Telephone Number: (702) 866-5836
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
(Title if Class)
Indicate by check mark whether the registrant (a) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. [ ]
The number of shares of Common Stock, $0.001 par value, outstanding on
December 31, 1999, was 5,000,000 shares, held by approximately 1 stockholder.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Royal Acquisitions was incorporated on November 22, 1999 in the state of
Nevada, to engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. We have been in the
development stage since inception. Royal Acquisitions has not engaged in any
commercial operations. Royal Acquisitions does not have active business
operations, and at this time we are considered as a "Blank Check" company.
We registered our common stock on a Form 10-SB registration statement
filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act")
and Rule 12(g) thereof. We intend to file with the Securities and Exchange
Commission periodic and episodic reports under Rule 13(a) of the Exchange
Act, including quarterly reports on Form 10-QSB and annual reports on Form 10-
KSB. As a reporting company under the Exchange Act, we may register
additional securities on Form S-8 (provided that we are in compliance with
the reporting requirements of the Exchange Act) and on Form S-3 (provided
that we have during the prior 12 month period timely filed all reports
required under the Exchange Act), and our class of common stock registered
under the Exchange Act may be traded in the United States securities markets
provided that we are then in compliance with applicable laws, rules and
regulations, including compliance with our reporting requirements under the
Exchange Act.
We will attempt to locate and negotiate with a business entity for the
merger of that target business into the Company. In certain instances, a
target business may wish to become a subsidiary of the Company or may wish to
contribute assets to the Company rather than merge. No assurances can be
given that we will be successful in locating or negotiating with any target
business.
Management believes that there are perceived benefits to being a
reporting company with a class of publicly-traded securities. These are
commonly thought to include (1) the ability to use registered securities to
make acquisition of assets or businesses; (2) increased visibility in the
financial community; (3) the facilitation of borrowing from financial
institutions; (4) improved trading efficiency; (5) stockholder liquidity;
(6) greater ease in subsequently raising capital; (7) compensation of key
employees through options stock; (8) enhanced corporate image; and (9) a
presence in the United States capital market.
A business entity, if any, which may be interested in a business
combination with us may include (1) a company for which a primary purpose of
becoming public is the use of its securities for the acquisition of assets or
businesses; (2) a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities on terms
acceptable to it; (3) a company which wishes to become public with less
dilution of its common stock than would occur normally upon an underwriting;
(4) a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public; (5) a foreign
company which may wish to gain an initial entry into the United States
securities market; (6) a special situation company, such as a company seeking
a public market to satisfy redemption requirements under a qualified Employee
Stock Option Plan; or (7) a company seeking one or more of the other
perceived benefits of becoming a public company.
<PAGE>
Management is actively engaged in seeking a qualified company as a
candidate for a business combination. We are authorized to enter into a
definitive agreement with a wide variety of businesses without limitation as
to their industry or revenues. It is not possible at this time to predict
with which company, if any, we will enter into a definitive agreement or what
will be the industry, operating history, revenues, future prospects or other
characteristics of that company.
We 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. We may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
Our management, which in all likelihood will not be experienced in
matters relating to the business of a target business, will rely upon its own
efforts in accomplishing our business purposes. Outside consultants or
advisors may be utilized by us to assist in the search for qualified target
companies. If we do retain such an outside consultant or advisor, any cash
fee earned by such person will need to be assumed by the target business, as
we have limited cash assets with which to pay such obligation.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, our officer and director, who is not a professional
business analyst. In analyzing prospective business opportunities,
management may consider such matters as the available technical, financial
and managerial resources; working capital and other financial requirements;
history of operations, if any; prospects for the future; nature of present
and expected competition; the quality and experience of management services
which may be available and the depth of that management; the potential for
further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact our proposed
activities; the potential for growth or expansion; the potential for profit;
the perceived public recognition or acceptance of products, services, or
trades; name identification; and other relevant factors.
Management does not have the capacity to conduct as extensive an
investigation of a target business as might be undertaken by a venture
capital fund or similar institution. As a result, management may elect to
merge with a target business which has one or more undiscovered shortcomings
and may, if given the choice to select among target businesses, fail to enter
into an agreement with the most investment-worthy target business.
Following a business combination we may benefit from the services of
others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target business, management may
recommend one or more underwriters, financial advisors, accountants, public
relations firms or other consultants to provide such services.
A potential target business may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued
after any business combination. Additionally, a target business may be
presented to us only on the condition that the services of a consultant or
advisor be continued after a merger or acquisition. Such preexisting
agreements of target businesses for the continuation of the services of
attorneys, accountants, advisors or consultants could be a factor in the
selection of a target business.
<PAGE>
In implementing a structure for a particular business acquisition, we
may become a party to a merger, consolidation, reorganization, joint venture,
or licensing agreement with another corporation or entity. We may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is likely that our present management and stockholder will no
longer be in our control. In addition, it is likely that the our officer and
director will, as part of the terms of the acquisition transaction, resign
and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, we may agree to register all or a part
of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can
be no assurance, it will be undertaken by the surviving entity after we have
entered into an agreement for a business combination or have consummated a
business combination and we are no longer considered a blank check company.
The issuance of additional securities and their potential sale into any
trading market which may develop in our securities may depress the market
value of our securities in the future if such a market develops, of which
there is no assurance.
While the terms of a business transaction to which we may be a party
cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a tax-free reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended.
With respect to any merger or acquisition negotiations with a target
business, management expects to focus on the percentage of the Company which
target business stockholder would acquire in exchange for their shareholdings
in the target business. Depending upon, among other things, the target
business's assets and liabilities, our stockholder will in all likelihood
hold a substantially lesser percentage ownership interest in the Company
following any merger or acquisition. Any merger or acquisition effected by
us can be expected to have a significant dilutive effect on the percentage of
shares held by our stockholder at such time.
No assurances can be given that we will be able to enter into a business
combination, as to the terms of a business combination, or as to the nature
of the target business.
As of the date hereof, management has not made any final decision
concerning or entered into any written agreements for a business combination.
When any such agreement is reached or other material fact occurs, we will
file notice of such agreement or fact with the Securities and Exchange
Commission on Form 8-K. Persons reading this Form 10-KSB are advised to
determine if we have subsequently filed a Form 8-K.
We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Management
believes (but has not conducted any research to confirm) that there are
numerous firms seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key employees,
increasing the opportunity to use securities for acquisitions, and providing
liquidity for stockholder and other factors. Business opportunities may be
available in many different industries and at various stages of development,
all of which will make the task of comparative investigation and analysis of
such business opportunities extremely difficult and complex.
<PAGE>
Computer Systems Redesigned For Year 2000. Many existing computer
programs use only two digits to identify a year in such program's date field.
These programs were designed and developed without consideration of the
impact of the change in the century for which four digits will be required to
accurately report the date. If not corrected, many computer applications
could fail or create erroneous results following the year 2000 ("Year 2000
Problem"). Many of the computer programs containing such date language
problems have not been corrected by the companies or governments operating
such programs. It is impossible to predict what computer programs will be
effected, the impact any such computer disruption will have on other
industries or commerce or the severity or duration of a computer disruption.
We do not have operations and do not maintain computer systems. Before
we enter into any business combination, we may inquire as to the status of
any target business's Year 2000 Problem, the steps such target business has
taken or intends to take to correct any such problem and the probable impact
on such target business of any computer disruption. However, there can be no
assurance that we will not merge with a target business that has an
uncorrected Year 2000 Problem or that any planned Year 2000 Problem
corrections will be sufficient. The extent of the Year 2000 Problem of a
target business may be impossible to ascertain and any impact on us will
likely be impossible to predict.
ITEM 2. DESCRIPTION OF PROPERTY
We have no properties and at this time have no agreements to acquire any
properties. We currently use the offices of management at no cost to us.
Management has agreed to continue this arrangement until we complete an
acquisition or merger.
ITEM 3. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against us
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is currently no public market for our securities. We do not intend
to trade our securities in the secondary market until completion of a
business combination or acquisition. It is anticipated that following such
occurrence we will cause our common stock to be listed or admitted to
quotation on the NASD OTC Bulletin Board or, if we then meet the financial
and other requirements thereof, on the Nasdaq SmallCap Market, National
Market System or regional or national exchange.
<PAGE>
The proposed business activities described herein classify us as a
"blank check" company. The Securities and Exchange Commission and many
states have enacted statutes, rules and regulations limiting the sale of
securities of blank check companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to
develop in our securities until such time as we have successfully implemented
our business plan described herein. Accordingly, our stockholder has agreed
that he will not sell or otherwise transfer his shares of our common stock
except in connection with or following completion of a merger or acquisition
and we have no longer classified as a blank check company. The stockholder
has deposited such stockholder's respective stock certificate with our
management, who will not release the respective certificate except in
connection with or following the completion of a merger or acquisition.
There is currently one stockholder of our outstanding common stock.
During the past three years, we have issued securities which were not
registered as follows:
<TABLE>
NUMBER OF
DATE NAME SHARES CONSIDERATION
<S> <C> <C> <C>
November 22, 1999 Anthony N. DeMint 5,000,000 $5,000
</TABLE>
________
(1) Mr. DeMint is our sole director, controlling stockholder and president.
Shares issued to Mr. DeMint were in return for services provided to us
by Mr. DeMint, in lieu of cash. With respect to the stock issued to Mr.
DeMint, we relied upon Section 4(2) of the Securities Act of 1933, as
amended and Rule 506 promulgated thereunder.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We were formed to engage in a merger with or acquisition of an
unidentified foreign or domestic company which desires to become a reporting
("public") company whose securities are qualified for trading in the United
States secondary market. We meet the definition of a "blank check" company
contained in Section (7)(b)(3) of the Securities Act of 1933, as amended. We
have been in the developmental stage since inception and have no operations
to date. Other than issuing shares to our original stockholder, we have not
commenced any operational activities.
We will not acquire or merge with any entity which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. We are subject to all the reporting
requirements included in the Exchange Act. Included in these requirements is
our duty to file audited financial statements as part of our Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as our audited financial statements included
in our annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure our compliance with the requirements of the
Exchange Act, or if the audited financial statements provided do not conform
to the representations made by the target business, the closing documents may
provide that the proposed transaction will be voidable at the discretion of
our present management.
<PAGE>
We will not restrict our search for any specific kind of businesses, but
may acquire a business which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business
life. It is impossible to predict at this time the status of any business in
which we may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may
seek other perceived advantages which we may offer.
A business combination with a target business will normally involve the
transfer to the target business of the majority of our common stock, and the
substitution by the target business of its own management and board of
directors.
We have, and will continue to have, no capital with which to provide the
owners of business opportunities with any cash or other assets. However,
management believes we will be able to offer 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. Our officer and director has not conducted market
research and is not aware of statistical data to support the perceived
benefits of a merger or acquisition transaction for the owners of a business
opportunity.
Our stockholder has agreed that they will advance any additional funds
which we need for operating capital and for costs in connection with
searching for or completing an acquisition or merger. Such advances will be
made without expectation of repayment unless the owners of the business which
we acquire or merge with agree to repay all or a portion of such advances.
There is no minimum or maximum amount such stockholder will advance to us.
We will not borrow any funds for the purpose of repaying advances made by
such stockholder, and we will not borrow any funds to make any payments to
our promoters, management or their affiliates or associates.
The Board of Directors has passed a resolution which contains a policy
that we will not seek an acquisition or merger with any entity in which our
officer, director, stockholder or his affiliates or associates serve as
officer or director or hold more than a 10% ownership interest.
ITEM 7. FINANCIAL STATEMENTS
See Index to Financial Statements and Financial Statement Schedules
appearing on page F-1 through F-7 of this Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in or disagreements with accountants on accounting
and financial disclosure for the period covered by this report.
<PAGE>
PART III
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Our Director and Officer are as follows:
<TABLE>
Name Age Positions and Offices Held
<S> <C> <C>
Anthony N. DeMint 26 President, Secretary, Director
</TABLE>
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officer and
director is not acting on behalf of nor will act at the direction of any
other person.
Set forth below is the name of our director and officer, all positions
and offices with us held, the period during which he has served as such, and
the business experience during at least the last five years:
Anthony N. DeMint acts as President, Secretary, Treasurer and Director
for the Company. Mr. DeMint has served as an officer and Director of the
Company since inception. Mr. DeMint is also sole officer and Director of
Intercontinental Capital Fund, Inc., Navitec Group, Inc., and TourPro Golf,
Inc., which are also blank check companies. Since 1994, Mr. DeMint has been
a Director of Securities Law Institute a securities consulting firm located
in Las Vegas, NV and has served on the board of directors and as an officer
for several private and public companies. Mr. DeMint currently serves as Vice
President and as a Director of Secured Online Systems, Inc., a publicly held
consulting firm. From 1997-1998, Mr. DeMint was Vice President of operations
and a Director for Worldwide Golf Resources, Inc. From 1995-1997, Mr. DeMint
was Chief Operating Officer, Treasurer and a Director of a publicly held
import and wholesale company, Cutty-Fleet Trading Co., where he managed
day-to-day operations. Mr. DeMint attended Business and Economics school at
the University of Nevada Las Vegas.
CURRENT BLANK CHECK COMPANIES
The SEC reporting blank check companies that Anthony DeMint serves as
President and Director are listed in the following table:
<TABLE>
Date
Incorporation Name Form Type File # of Filing(3) Status(l)
<S> <C> <C> <C> <C>
Intercontinental
Capital Fund, Inc.(2a) 10SB12G 000-27931 04 Nov 99 No
Tele Special.Com (2b) 10SB12G 000-28207 19 Nov 99 Yes
TourPro Golf, Inc. (2c) 10SB12G 000-28569 20 Dec 99 No
Navitec Group, Inc. (2d) 10SB12G 000-28225 30 Dec 99 No
</TABLE>
<PAGE>
(1) Under Merger Status "Merger" represents either a merger or an
acquisition has occurred or the company ceased to be a blank check
company by operating specific business a "No" represents that the
company is currently seeking merger or acquisition candidate. More
detailed information for each merger is disclosed in following
paragraphs.
(2) (2a) The SEC has no additional comments as of the date of this filing
and has granted effectiveness on November 15, 1999. (2b) The SEC has no
additional comments as of the date of this filing and has granted
effectiveness on December 3, 1999. (2c) The SEC has no additional
comments as of the date of this filing and has granted effectiveness on
December 27, 1999. (2d) The SEC has no additional comments as of the
date of this filing and has granted effectiveness on December 10, 1999.
(3) On the 60th day of the filing, each company becomes subject to the
reporting requirements under the Securities Exchange Act of 1934, unless
accelerated by the SEC, at the request of the company.
CONFLICTS OF INTEREST
Our officer and director expects to organize other companies of a
similar nature and with a similar purpose as us. Consequently, there are
potential inherent conflicts of interest in acting as our officer and
director. Insofar as the officer and director is engaged in other business
activities, management anticipates that he will devote only a minor amount of
time to our affairs. We do not have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such
opportunities may relate to our proposed business operations.
A conflict may arise in the event that another blank check company with
which management is affiliated is formed and actively seeks a target company.
It is anticipated that target companies will be located for us and other
blank check companies in chronological order of the date of formation of such
blank check companies or, in the case of blank check companies formed on the
same date, alphabetically. However, any blank check companies with which
management is, or may be, affiliated may differ from us in certain items such
as place of incorporation, number of shares and stockholder, working capital,
types of authorized securities, or other items. It may be that a target
company may be more suitable for or may prefer a certain blank check company
formed after us. In such case, a business combination might be negotiated on
behalf of the more suitable or preferred blank check company regardless of
date of formation.
The terms of business combination may include such terms as Mr. DeMint
remaining a director or officer of the Company and/or the continuing
securities work of the Company being handled by the consulting firm of which
Mr. DeMint is a director. The terms of a business combination may provide for
a payment by cash or otherwise to Mr. DeMint for the purchase or retirement
of all or part of his common stock of the Company by a target company or for
services rendered incident to or following a business combination. Mr. DeMint
would directly benefit from such employment or payment. Such benefits may
influence Mr. DeMint's choice of a target company.
We may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to us where that
reference results in a business combination. No finder's fee of any kind will
be paid by us to management or our promoters or to their associates or
affiliates. No loans of any type have, or will be, made by us to management
or our promoters of or to any of their associates or affiliates.
<PAGE>
We will not enter into a business combination, or acquire any assets of
any kind for our securities, in which our management or any affiliates or
associates have a greater than 10% interest, direct or indirect.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest
in favor of us could result in liability of management to us. However, any
attempt by stockholder to enforce a liability of management to us would most
likely be prohibitively expensive and time consuming.
ITEM 10. EXECUTIVE COMPENSATION
Our officer and director does not receive any compensation for his
services rendered, has not received such compensation in the past, and is not
accruing any compensation pursuant to any agreement with us However, our
officer and director anticipates receiving benefits as a beneficial
stockholder and, possibly, in other ways.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by us for the benefit of
our employees.
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1999, each person
known by us to be the beneficial owner of five percent or more of our Common
Stock and our director and officer. Except as noted, the holder thereof has
sole voting and investment power with respect to the shares shown.
<TABLE>
Name and Address Amount of Beneficial Percent of
Of Beneficial Owner Ownership Outstanding Stock
<S> <C> <C>
Anthony N. DeMint 5,000,000 100%
1850 E. Flamingo Rd., #111
Las Vegas, NV 89119
All Executive Officers and
Directors as a Group
(1 Person) 5,000,000 100%
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 22, 1999, the Company issued a total of 5,000,000 shares of
Common Stock to the following persons for a total of $5,000 in services:
<TABLE>
NUMBER OF TOTAL
NAME SHARES CONSIDERATION
<S> <C> <C>
Anthony N. DeMint 5,000,000 $5,000
</TABLE>
The Board of Directors has passed a resolution which contains a policy
that we will not seek an acquisition or merger with any entity in which our
officer, director or holder or their affiliates or associates serve as
officer or director or hold more than a 10% ownership interest. Management is
not aware of any circumstances under which this policy may be changed.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1* Certificate of Incorporation filed as an exhibit to the Company's
registration statement on Form 10-SB filed on December 30, 1999,
and incorporated herein by reference.
3.2* By-Laws filed as an exhibit to the Company's registration statement
on Form 10-SB filed on December 30, 1999, and incorporated herein
by reference.
23 Consent of Accountants
27 Financial Data Schedule
_____
* Previously filed
(b) There were no reports on Form 8-K filed by the Company during the
quarter ended December 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Royal Acquisitions, Inc.
By:/s/ Anthony DeMint
Anthony N. DeMint, President
Dated: February 2, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
NAME OFFICE DATE
/s/ Anthony DeMint
Anthony N. DeMint Director February 2, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF STOCKHOLDERS' EQUITY F-4
STATEMENT OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6-F-7
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board Of Directors January 17,2000
Royal Acquisitions, Inc.
Las Vegas, Nevada
I have audited the Balance Sheet of Royal Acquisitions, Inc., (A
Development Stage Company), as of December 31, 1999, and the related
Statements of Operations, Stockholders' Equity and Cash Flows for the period
November 22, 1999, (inception) to December 31, 1999. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Royal
Acquisitions, Inc., (A Development Stage Company), at December 31, 1999, and
the results of its operations and cash flows for the period November 22,
1999, (inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #3 to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are also described in Note #3.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Barry Friedman
Barry L. Friedman
Certified Public Accountant
<PAGE>
<TABLE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
December 31, 1999
BALANCE SHEET
ASSETS
<S> <C>
CURRENT ASSETS $ 0
-----------
TOTAL CURRENT ASSETS $ 0
-----------
OTHER ASSETS $ 0
-----------
TOTAL OTHER ASSETS $ 0
-----------
TOTAL ASSETS $ 0
===========
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
CURRENT LIABILITIES
Officers Advances (Note #6) $ 305
------------
TOTAL CURRENT LIABILITIES $ 305
-----------
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value
authorized 5,000,000 shares;
issued and outstanding at
November 28, 1999-None $ 0
Common stock, $.001 par value,
authorized 20,000,000 shares;
issued and outstanding at
November 28, 1999-5,000,000 shares $ 5,000
Additional paid-in capital 0
Deficit accumulated during
development stage (5,305)
-----------
TOTAL STOCKHOLDER'S EQUITY $ (305)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 0
============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
November 22, 1999,(Inception) to December 31, 1999
STATEMENT OF OPERATIONS
<S> <C>
INCOME
Revenue $ 0
-------------
EXPENSE
Services $ 5,000
General and
Administrative 305
-------------
TOTAL EXPENSES $ 5,305
-------------
NET LOSS $ (5,305)
============
Net Loss
Per Share $ (.0011)
============
Weighted average
number of common
shares outstanding 5,000,000
=============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
accumulated
Additional during
Common Stock paid-in development
Capital stage
Shares Amount
-------- ------- --------- --------
<S> <C> <C> <C> <C>
November 22, 1999
issued for services 5,000,000 $ 5,000 $ 0 $ 0
Net loss, November
22,1999(inception)
To December 31, 1999 (5,305)
---------- -------- --------- -----------
Balance,
December 31, 1999 5,000,000 $5,000 $ 0 $(5,305)
======== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
November 22, 1999,(Inception) to December 31, 1999
STATEMENT OF CASH FLOWS
<S> <C>
Cash Flows from
Operating Activities
Net loss $ (5,305)
Issue common stock for services 5,000
Changes in assets and
Liabilities
Officers Advances 305
-------------
Cash Flows from
Operating Activities $ 0
Cash Flows from
Investing Activities 0
Cash Flows from
Financing Activities 0
--------------
Net increase in cash $ 0
Cash,
beginning of period 0
-------------
Cash,
end of period $ 0
==============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized November 22, 1999, under the laws of the State
of Nevada, as Royal Acquisitions, Inc. The Company currently has no
operations and, in accordance with SFAS #7, is considered a development stage
company.
On November 22, 1999, the Company issued 5,000,000 shares of its $.001
par value common stock for services of $5,000.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
common shares outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
4. In April 1998, the American Institute of Certified Public
Accountant's issued Statement of Position 98-5 ("SOP 98-511), Reporting on
the Costs of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start-up activities and organization costs to be expensed as incurred. SOP
98-5 is effective for fiscal years beginning after December 15, 1998, with
initial adoption reported as the cumulative effect of a change in accounting
principle. With the adoption of SOP 98-5, there has been little or no effect
on the Company's financial statements.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company has no current source of
revenue. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. It is management's plan to seek
additional capital through a merger with an existing operating company.
<PAGE>
ROYAL ACQUISITIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 4 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to issue any additional
shares of common or preferred stock of the Company.
NOTE 5 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real or personal property. Office
services are provided without charge by a director. Such costs are immaterial
to the financial statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with
an existing operating company, an officer of the Company has advanced funds
on behalf of the Company to pay for any costs incurred by it. These funds are
interest free.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 305
<BONDS> 0
0
0
<COMMON> 5000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5305
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,305)
<INCOME-TAX> (5,305)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,305)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
