Securities and Exchange Commission
Washington, D. C. 20549
_______________
Form 10-SB/A
First Amendment
______________
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
HALIFAX INTERNATIONAL, INC.
(Name of registrant in its charter)
NEVADA 58-2212465
(State of incorporation) (I. R. S. Employer Identification No.)
7 PIEDMONT CENTER, SUITE 500
ATLANTA, GEORGIA
(404) 816-6100
(Address and telephone number of principal executive offices and principal
place of business)
________________
Securities registered pursuant to Section 12(b) of the Act:
None
________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
Title of each class
<PAGE>
Table of Contents
PART I
Item 1: Description of Business ..........................................3
Item 2: Management's Discussion and Analysis or Plan of Operation.........7
Item 3: Description of Property...........................................8
Item 4: Security Ownership of Certain Beneficial Owners and Management....8
Item 5: Directors, Executive Officers, Promoters and Control Persons......9
Item 6: Executive Compensation...........................................10
Item 7: Certain Relationships and Related Transactions ..................10
Item 8: Description of Securities........................................11
PART II
Item 1: Market for Common Equity and Related Shareholder Matters.........11
Item 2: Legal Proceedings................................................12
Item 3: Changes In and Disagreements With Accountants ...................12
Item 4: Recent Sales of Unregistered Securities..........................12
Item 5: Indemnification of Directors and Officers........................13
PART F/S
Financial Statements.......................................................14
PART III
Item 1: Index to and Description of Exhibits..............................15
<PAGE>
FORWARD LOOKING STATEMENTS
In this registration statement references to "Halifax," "we," "us," and
"our" refer to Halifax International, Inc.
This Form 10-SB contains certain forward-looking statements. For this
purpose any statements contained in this Form 10-SB that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Halifax's control. These factors include but are not limited to economic
conditions generally and in the industries in which Halifax may participate;
competition within Halifax's chosen industry, including competition from much
larger competitors; technological advances and failure by Halifax to
successfully develop business relationships.
PART I
ITEM 1: DESCRIPTION OF BUSINESS
Business Development
Halifax International, Inc. was originally incorporated in the state of
Idaho on April 29, 1981, as Silver Strike Mining Company, Inc. ("Silver
Strike Idaho"). Silver Strike Idaho was organized to explore and mine natural
resources. In 1988 Silver Strike Idaho lost its mining claims and became
inactive. On February 27, 1996, Silver Strike Mining Company, Inc. was
incorporated in the state of Nevada ("Silver Strike Nevada"). In July of 1996
Silver Strike Idaho completed a change of domicile merger with Silver Strike
Nevada. On February 12, 1999, Silver Strike Nevada changed its name to
Halifax International, Inc.
On February 26, 1999, Halifax acquired Christopher Partners, Inc., a
Georgia corporation ("Christopher Partners") as a wholly owned subsidiary.
Pursuant to the acquisition agreement Halifax issued 5,414,000 shares to the
shareholders of Christopher Partners in exchange for 100% of that company's
issued shares. Christopher Partners had a wholly-owned subsidiary, Palau
Engineering & Construction Co., Ltd, a Bermuda corporation ("Palau
Engineering").
We have not recorded any revenues for the past two fiscal years and there
is substantial doubt whether we can continue as a going concern unless we
develop assets and profitable operations.
3
<PAGE>
Our Plan
We are a holding company operating through our wholly-owned subsidiary,
Palau Engineering. Since 1997 Palau Engineering has pursued a financial
advisor and real estate development contract with the government of Palau.
Palau is a tropical archipelago of several hundred Micronesia islands and
atolls 550 miles south of the Philippines, southeast of Guam and north of New
Guinea. However, after three years of negotiations Palau Engineering has not
been able to close the financial and real estate contracts and Halifax is now
seeking other business opportunities.
Our business plan is to seek, investigate, and, if warranted, acquire an
interest in a business opportunity. Our acquisition of a business opportunity
may be made by merger, exchange of stock, or otherwise. We have very limited
sources of capital, and we probably will only be able to take advantage of one
business opportunity. At the present time we are investigating business
opportunities in or related to Palau. However, we have not reached any
agreement or definitive understanding with any person concerning a business
opportunity.
Our search for a business opportunity will not be limited to any
particular geographical area, but because of the contacts we have made in
Palau we expect to focus our efforts during the next fiscal quarter in Palau.
Our management has unrestricted discretion in seeking and participating in a
business opportunity, subject to the availability of such opportunities,
economic conditions and other factors. Our management believes that companies
who desire a public market to enhance liquidity for current shareholders or
plan to acquire additional assets through issuance of securities rather than
for cash will be potential merger or acquisition candidates.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise of
its business judgement. There is no assurance that we will be able to
identify and acquire any business opportunity which will ultimately prove to
be beneficial to us and our shareholders.
Our activities are subject to several significant risks which arise
primarily as a result of the fact that we have no specific business and may
acquire or participate in a business opportunity based on the decision of
management which will, in all probability, act without consent, vote, or
approval of our shareholders.
Investigation and Selection of Business Opportunities
A decision to participate in a specific business opportunity may be made
upon our management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concept, the merit of technological changes, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, we anticipate that
the historical operations of a specific business opportunity may not
necessarily be indicative of the potential for the future because of the
possible need to substantially shift marketing approaches, expand
significantly, change product emphasis, change or substantially augment
management, or make
4
<PAGE>
other changes. We will be dependent upon the owners of a business opportunity
to identify any such problems which may exist and to implement, or be
primarily responsible for the implementation of, required changes.
Our management will analyze the business opportunities, and even though
they have business consulting experience, none are professional business
analysts (See "Directors and Executive Officers," below). Our management
might hire an outside consultant to assist in the investigation and selection
of business opportunities. Since our management has no current plans to use
any outside consultants or advisors to assist in the investigation and
selection of business opportunities, no policies have been adopted regarding
use of such consultants or advisors. We have not established the criteria to
be used in selecting such consultants or advisors, the service to be provided,
the term of service, or the total amount of fees that may be paid. However,
because of our limited resources, it is likely that any such fee we agree to
pay would be paid in stock and not in cash.
In our analysis of a business opportunity we anticipate that we will
consider, among other things, the following factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) Our perception of how any particular business opportunity will be
received by the investment community and by our stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable our
securities to qualify for listing on a exchange or on a national automated
securities quotation system, such as NASDAQ.
(4) Capital requirements and anticipated availability of required
funds, to be provided by us or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar size
and experience within the industry segment as well as within the industry as a
whole;
(7) Strength and diversity of existing management, or management
prospect that are scheduled for recruitment;
(8) The cost of our participation as compared to the perceived tangible
and intangible values and potential; and
5
<PAGE>
(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
No one of the factors described above will be controlling in the
selection of a business opportunity. Management will attempt to analyze all
factors appropriate to each opportunity and make a determination based upon
reasonable investigative measures and available data. Potentially available
business opportunities may occur in many different industries and at various
stages of development. Thus, the task of comparative investigation and
analysis of such business opportunities will be extremely difficult and
complex. Potential investors must recognize that, because of our limited
capital available for investigation of an opportunity and management's limited
experience in business analysis, we may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.
Form of Acquisition
We cannot predict the manner in which we may participate in a business
opportunity. Specific business opportunities will be reviewed as well as the
respective needs and desires of us and the promoters of the opportunity. The
legal structure or method deemed by management to be suitable will be selected
based upon our review and our relative negotiating strength. Such structure
may include, but is not limited to, leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements. We may act
directly or indirectly through an interest in a partnership, corporation or
other form of organization. We may be required to merge, consolidate or
reorganize with other corporations or forms of business organization. In
addition, our present management and stockholders most likely will not have
control of a majority of our voting shares following a merger or
reorganization transaction. As part of such a transaction, our existing
directors may resign and new directors may be appointed without any vote by
our stockholders.
Competition
We expect to encounter substantial competition in our effort to locate
attractive business opportunities. Business development companies, venture
capital partnerships and corporations, ventures capital affiliates of large
industrial and financial companies, small investment companies, and wealthy
individuals will be our primary competition. Many of these entities will have
significantly greater experience, resources and managerial capabilities than
we do and will be in a better position to obtain access to attractive business
opportunities.
Employees
We currently have no employees. Our management expects to confer with
consultants, attorneys and accountants as necessary. We do not anticipate a
need to engage any full-time employees so long as we are seeking and
evaluating business opportunities. We will determine the need for employees
based upon the specific business opportunity.
6
<PAGE>
Reports to Security Holders
Halifax has voluntarily elected to file this Form 10-SB registration
statement in order to become a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Following the effective date of
this registration statement, we will be required to comply with the reporting
requirements of the Exchange Act. We will file annual, quarterly and other
reports with the Securities and Exchange Commission ("SEC"). We also will be
subject to the proxy solicitation requirements of the Exchange Act and,
accordingly, will furnish an annual report with audited financial statements
to our stockholders.
Available Information
Copies of this registration statement may be inspected, without charge,
at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0300. Copies of this material
also should be available through the Internet by using the SEC's EDGAR
Archive, which is located at http://www.sec.gov.
ITEM 2: MANAGEMENTS' DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
We have had no revenues and have experienced losses from inception.
Since inception, we have primarily financed our operations through the sale of
our common stock. As of December 31, 1999, we had no cash on hand and $60,000
in total assets.
Our material commitments consist of approximately $26,570 for office
space for the next twelve months. We had a bank overdraft of $313,486 as of
December 31, 1999. We also owe $1,015,750 in promissory notes due on February
2, 2000. We intend to pay these commitments and pay the notes with cash
raised from private placements of our common shares or we may also negotiate a
60 to 90 day rollover and/or issue common shares for the notes.
We believe that our current cash needs for at least the next twelve
months can be met by sales of our securities and loans from our directors,
officers and shareholders. Management anticipates that we will continue our
Rule 505 private offering (See "Recent Sales of Unregistered Securities",
below). We have no plans to make a public offering of our common stock at
this time. However, we cannot assure that our private placement will be
successful. We also note that if we issue more shares of our common stock our
shareholders may experience dilution in the value per share of their common
stock.
If we fail to raise the necessary funds through stock sales, we
anticipate we will require debt financing. We have investigated the
availability, source and terms for external financing but have not entered in
to any agreements at this time for such financing. We can not assure that
funds will be available from any source, or, if available, that we will be
able to obtain the funds on terms agreeable to us. Any additional debt could
result in a substantial portion of our cash
7
<PAGE>
flows from operations, if any, being dedicated to the payment of principal and
interest on the indebtedness, and could render us more vulnerable to
competitive and economic downturns.
Our management intends to actively pursue business opportunities during
the next twelve months.
ITEM 3: DESCRIPTION OF PROPERTY
We do not currently own or lease any property. We utilize office space
in the office of our Secretary/Treasurer, Philip Lundquist, for a monthly fee
of approximately $1,845.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our
outstanding common stock of; (i) each of our executive officers, (ii) each of
our director's and (iii) all executive officers and directors as a group.
There is not any other person or group known by us to own beneficially more
than 5% of our outstanding common stock. Beneficial ownership is determined
in accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities. Except as indicated by footnote,
the persons named in the table below have sole voting power and investment
power with respect to all shares of common stock shown as beneficially owned
by them. The percentage of beneficial ownership is based on 7,382,221 shares
of common stock outstanding as of December 31, 1999.
MANAGEMENT
Common Stock Beneficially Owned
-------------------------------
Name and Address of Number of Shares of Percentage
Beneficial Owners Common Stock of Class
- ------------------ --------------------- ------------
Victor A. Hinojosa 1,162,500 15.7%
515 East Las Olas Blvd., #1150
Ft. Lauderdale, Florida 33301
Philip E. Lundquist 1,162,500** 15.7%
7 Piedmont Center, #500
Atlanta, Georgia 30305
Ronan A Harris 32,323 *
Sango Bldg 1/F, 3-5-9 Jingumae
Shibuya-Ku, Tokyo 150-0001
Japan
8
<PAGE>
All executive officers and
directors as a group 2,357,323 31.8%
* Less than 1%
** Mr. Lundquist shares voting and investment power of 250,000 common shares
held by Arista Capital.
ITEM 5: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages, positions
and term of office are set forth below. Biographical information for each of
those persons is also presented below. Our bylaws require three directors who
serve for terms of one year and our executive officers are chosen by our Board
of Directors and serve at its discretion. There are no existing family
relationships between or among any of our executive officers or directors.
Director or
Name Age Position Held Officer Since
- ------------------ ----- ------------------------------- -------------
Victor A. Hinojosa 61 President and Director January 26, 1999
Philip E. Lundquist 64 Secretary/Treasurer and
Chairman of the Board January 26, 1999
Ronan A. Harris 27 Director December 3, 1999
Victor A. Hinojosa - Mr. Hinojosa was the President of Christopher Partners
since 1996. He was appointed as our President and Director in January of
1999. He has served since 1981 as President of Government Consultants Inc., a
Bermuda-resident Panamanian corporation providing world-wide consulting
services to business and government relating to agriculture,
telecommunications, energy, housing, chemicals and international trade. He is
a graduate of Rollins College located in Winter Park, Florida, with a
bachelors degree in political science and an MBA in international trade
finance,
Philip E. Lundquist - Mr. Lundquist was the Secretary/Treasurer and a Chairman
of the Board of Christopher Partners since 1996. He was appointed to the same
offices for Halifax in January of 1999. From 1988 to the present he has been
the Chairman of the Board and President of Lundquist Advisory Company, which
provides corporate finance advisory services. He has held management
positions at Reynolds Securities, Montgomery Securities, Inc. and Alex Brown &
Sons in Miami, San Francisco and Baltimore. He was Director of Corporate
Finance of Deloitte & Touche, Atlanta, Georgia. Mr. Lundquist graduated from
Williams College in Williamstown, Massachusetts with a bachelors degree in
political science and economics in 1957. During 1962 to 1964, he attended the
Institute of Investment Banking at the Wharton School of Business, University
of Pennsylvania.
9
<PAGE>
Ronan A. Harris - Mr. Harris was appointed Director in December of 1999.
From 1996 to 1999 he was a financial consultant at JJ International, a
financial consulting business. From December 1993 to February 1996 he was an
engineer at Mitsubishi Corporation.
ITEM 6: EXECUTIVE COMPENSATION
During the fiscal years ended 1998 and 1997, none of our officers
received cash compensation, bonuses, stock appreciation rights, long term
compensation, stock awards or long-term incentive rights long term
compensation, stock awards or long-term incentive rights in excess of
$100,000. The following table shows the compensation paid to our executive
officers during fiscal year 1999.
COMPENSATION TABLE
Annual Compensation
- ----------------------------------------------------------------------
Name and Principal Position Fiscal Salary Bonus Other Annual
Year Compensation
- --------------------------- -------- --------- ------- -------------
Victor Hinojosa
President 1999 $0 $0 $198,376*
Philip Lundquist
Secretary/Treasurer 1999 0 0 111,507*
*Consulting Fees and expenses
Compensation of Directors
We do not have any standard arrangement for compensation of our directors
for any services provided as director, including services for committee
participation or for special assignments.
Employment Contracts
We have not entered into employment agreements with our officers or
directors.
TEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have not engaged in during the past two years, nor do we propose to
engage in, certain transactions in excess of $60,000 involving our executive
officers, directors, 5% stockholders or immediate family members of such
persons.
10
<PAGE>
ITEM 8: DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 20,000,000 shares of common stock, par value
$.001, of which 7,382,221 were issued and outstanding as of December 31, 1999.
All shares of common stock have equal rights and privileges with respect to
voting, liquidation and dividend rights. Each share of common stock entitles
the holder thereof (i) to one non-cumulative vote for each share held of
record on all matters submitted to a vote of the stockholders, (ii) to
participate equally and to receive any and all such dividends as may be
declared by the Board of Directors out of funds legally available; and (iii)
to participate pro rata in any distribution of assets available for
distribution upon liquidation of the Company. Our stockholders have no
preemptive rights to acquire additional shares of common stock or any other
securities.
Preferred Stock
We are authorized to issue 10,000,000 shares of preferred stock, valued
at $.001. We have not issued preferred stock.
PART II
ITEM 1: MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Our common stock is listed on the OTC NASDAQ Electronic Bulletin Board
under the symbol "HFAX". We have had minimal trading activity in our stock as
of this filing. The following table represents the range of the high and low
bid prices of our stock as reported by the Nasdaq Trading and Market Services
for each fiscal quarter for the last two fiscal years ending December 31,
1999. We have approximately 285 stockholders of record as of December 31,
1999. 2,327,926 common shares are free trading and the balance are restricted
shares as that term is defined in Rule 144.
Quarter ended High Low
---------------- ---- -----
June 30, 1999 5.00 3.00
September 30, 1999 3.00 0.50
December 31, 1999 3.00 1.0625
Dividends
We have not declared dividends on our common stock and do not anticipate
paying dividends on our common stock in the foreseeable future.
11
<PAGE>
OTC Bulletin Board Eligibility Rule
In January of 1999, the SEC granted approval of amendments to the NASD
OTC Bulletin Board Eligibility Rules 6530 and 6540. These amendments now
require a company listed on the OTC Bulletin Board to be a reporting company
and current in its reports filed with the SEC. As a result of this rule
change we have voluntarily filed this registration statement in order to
become a fully reporting company and maintain the listing of our common stock
on the OTC Bulletin Board. The NASD eligibility rule requires that the SEC
come to a position of no further comment regarding any Form 10 registration
statement before the NASD considers a company compliant. We cannot assure that
the SEC will come to such a position in regards to this registration statement
prior to our phase-in-date of April 5, 2000. According to the eligibility
rule, if we are not in compliance at our phase-in-date our common stock will
be removed from the OTC Bulletin Board. In that event, we intend to move our
listing to the National Quotation Bureau's Pink Sheets. This delisting may
adversely affect the market, if any, in our stock.
ITEM 2: LEGAL PROCEEDINGS
We are not a party to any proceedings or threatened proceedings as of the
date of this filing.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Pursuant to the acquisition agreement, we continue to employ Christopher
Partners, Inc.'s principal independent accountant, The Jeffries Group,
Certified Public Accountants. For the past two fiscal years we have not had
any disagreements regarding accounting practices, financial statement
disclosure, or auditing scope or procedure with our former independent
accountant, Crouch, Bierwolf and Chisholm, located in Salt Lake City, Utah;
nor have their reports contained an adverse opinion or disclaimer of opinion.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
The following discussion describes all securities sold by us within the
past three years without registration:
On September 26, 1997 Silver Strike issued 120,824 common shares to three
unrelated persons for legal and consulting services valued at $30,000. The
issuance of such shares was exempt from registration under the Securities Act
of 1933 by reason of Sections 3(b) and 4(2) as a private transaction not
involving a public distribution.
Beginning on May 1, 1999 we began a private placement pursuant to Rule
505 of Regulation D. The total offering amount was $3,000,000 and no
commissions were paid for this offering. As of December 31, 1999 we have
sold an aggregate of 965,610 common shares to 61
12
<PAGE>
accredited investors and eight purchasers for cash and services valued at
$902,125. The services rendered were for operating expenses such as
accounting and legal fees, insurance and consulting fees.
In connection with each transaction listed above, we believe that each
purchaser (i) was aware that the securities had not been registered under
federal securities laws, (ii) acquired the securities for his/her/its own
account for investment purposes and not with a view to or for resale in
connection with any distribution for purpose of the federal securities laws,
(iii) understood that the securities would need to be indefinitely held unless
registered or an exemption from registration applied to a proposed disposition
and (iv) was aware that the certificate representing the securities would bear
a legend restricting their transfer. We believe that, in light of the
foregoing, the sale of our securities to the respective acquirers did not
constitute the sale of an unregistered security in violation of the federal
securities laws and regulations by reason of the exemptions provided under
Section 3(b) and 4(2) of the Securities Act, and the rules and regulations
promulgated thereunder.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Nevada Revised Statutes Section 78.7502 and 78.751 our
Articles of Incorporation and bylaws provide for the indemnification of
present and former directors and officers and each person who serves at our
request as our officer or director. Indemnification for a director is
mandatory and indemnification for an officer, agent or employee is permissive.
We will indemnify such individuals against all costs, expenses and liabilities
incurred in a threatened, pending or completed action, suit or proceeding
brought because such individual is our director or officer. Such individual
must have conducted himself in good faith and reasonably believed that his
conduct was in, or not opposed to, our best interest. In a criminal action he
must not have had a reasonable cause to believe his conduct was unlawful.
This right of indemnification shall not be exclusive of other rights the
individual is entitled to as a matter of law or otherwise.
We will not indemnify an individual adjudged liable due to his negligence
or wilful misconduct toward us, adjudged liable to us, or if he improperly
received personal benefit. Indemnification in a derivative action is limited
to reasonable expenses incurred in connection with the proceeding. Also, we
are authorized to purchase insurance on behalf of an individual for
liabilities incurred whether or not we would have the power or obligation to
indemnify him pursuant to our bylaws.
Our bylaws provide that individuals may receive advances for expenses if
the individual provides a written affirmation of his good faith belief that he
has met the appropriate standards of conduct and he will repay the advance if
he is judged not to have met the standard of conduct.
13
<PAGE>
PART F/S
Index to Financial Statements
Halifax International, Inc. Financial Statement December 31, 1999
Halifax International, Inc. Financial Statement February 28, 1999, December
31, 1998 and 1997
Christopher Partners, Inc. Financial Report December 31, 1998
14
<PAGE>
_____________________________________________
THE JEFFRIES GROUP
Certified Public Accountants
______________________________________________
INDEPENDENT AUDITORS REPORT
---------------------------
To the Board of Directors and Shareholders
Halifax International, Inc.
Atlanta, Georgia
We have audited the accompanying balance sheets of Halifax International, Inc.
(a corporation) as of December 31, 1999 and the related statements of income,
retained earnings and cash flows for the twelve months then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these statements based on our
audits.
We have conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance that the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management as well as evaluating the overall
consolidated financial statement presentation. We believe that our a audit
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects the financial position of Halifax International, Inc. as
of December 31, 1999 and the results of their operations and their cash flows
for the twelve months then ended in conformity with generally accepted
accounting principles consistently applied.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included
in the report is presented for the purpose of additional analysis and is not a
required part of the basic financial statements of Halifax International, Inc.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ The Jeffries Group
THE JEFFRIES GROUP
Certified Public Accountants
Atlanta, Georgia
February 21, 2000
_____________________________________________________________________________
1277 Victor Road * Atlanta, Georgia * 30324 * 404-231-4353 * FAX 404-231-4338
_____________________________________________________________________________
<PAGE> 15
HALIFAX INTERNATIONAL, INC.
Balance Sheet
December 31,1999
ASSETS
-------
Current Assets
Cash $ -
Other Assets
Deposits 60,000
-------------
Total Other Assets 60,000
TOTAL ASSETS $ 60,000
=============
LIABILITIES AND STOCKHOLDERS EQUITY
------------------------------------
Current Liabilities
Bank Overdraft 313,486
Notes Payable 1,015,750
-------------
Total Current Liabilities $ 1,329,236
Stockholders' Equity
Common Stock - 20,000,000 shares authorized, $ 2,730,639
7,383,221 issued and outstanding
Retained earnings (3,999,875)
-------------
Total Stockholders' Equity $ (1,269,236)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 60,000
=============
2
<PAGE> 16
HALIFAX INTERNATIONAL, INC.
Statement of Income and Expense
For the Twelve Months Ended December 31, 1999
Income
Fees $ -
Expenses
Automobile expenses 5,238
Bank charges 4,090
Consulting fees 324,967
Contributions 2,892
Entertainment and promotion 30,899
Insurance 6,610
Miscellaneous 1,734
Professional fees 79,650
Rent 36,414
Telephone 8,719
Travel 84,883
-------------
Total Expenses 586,096
Net Income from Operations $ (566,096)
Other Income and Expense
Gain (Loss) on Contracts (1,338,330)
-------------
$ (1,924,426)
=============
3
<PAGE> 17
HALIFAX INTERNATIONAL, INC,
Statement of Retained Earnings
For the Twelve Months Ended December 31, 1999
Retained Earnings - January 1, 1999 $ (2,075,449)
Net Income (1,924,426)
-------------
Retained Earnings - December 31, 1999 $ (3,999,875)
=============
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 18
HALIFAX INTERNATIONAL, INC.
Statement of Cash Flows
For the Twelve Months Ended December 31, 1999
Cash Flow From 0perating Activities
Net Income $ (1,924,426)
Changes in:
Accounts Receivable 290,200
-------------
Net cash used by operating activities (1,634,226)
Cash Flows From Financing Activities
Issuance of promissory notes 32,000
Issuance of Common Stock 565,805
Acquisition of Common Stock (125,000)
-------------
Net cash used by financing activities 472,805
Cash Flows From Investing Activities
Disposal of Palau Contract 938,330
-------------
Net cash used by investing activities 938,330
Net Increase (Decrease) in Cash (223,091)
Cash - Beginning of Period (90,395)
-------------
Cash - End of Period $ (313,486)
=============
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 19
HALIFAX INTERNATIONAL, INC.
Notes to Financial Statements
December 31, 1999
NOTE 1 - PLAN OF REORGANIZATION AND ACQUISITION
- -----------------------------------------------
On February 26,1999, Halifax International, Inc- (formerly Silver Strike
Mining Company, "the Company") acquired Christopher Partners, Inc. through the
issuance of 5,414,111 shares of common stack. Shareholders of Silver Striker
Vining Company received a total of 1,022,500 shares of Halifax International
Inc. common stock and $125,000. The Company also authorized a name change to
Halifax International, Inc. upon the effective date of the merger. This merger
is treated as a reverse acquisition and, therefore, all historical information
is that of the accounting survivor Christopher Partners, Inc.
NOTE 2 - CONSOLIDATION POLICY
- ------------------------------
These consolidated financial statements include the books of Halifax
International, Inc. (formerly Silver Strike Mining Company) and its wholly
owned subsidiary Christopher Partners, Inc. All intercompany transactions and
accounts have been eliminated.
NOTE 3 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Fees and expenses paid to related parties (officers and shareholders) for the
year ended December 31, 1999 consisted of the following:
Payee Amount
------ ---------
Victor J. Hinojosa $ 198,376
Philip E. Lundquist 111,507
Lundquist Advisory Corporation 350
6
<PAGE> 20
HALIFAX INTERNATIONAL, INC.
Schedule Stockholders' Equity
From September 25, 1995 (Inception) through December 31, 1999
Common Stock Retained Stockholders'
Shares Amount Earnings Equity
------------ ----------- ----------- ------------
Founders' Stock, 9/25/95 6,000,000 -
Issuance of Common Stock 1,000,000 $ 100,000
(investor group)
------------ -----------
Balance 12/31/95 7,000,000 100,000 $ - $ -
Issuance of Common Stock 754,500 754,500
Services 672,500
Net income (734,591)
------------ ----------- ------------ ------------
Balance, 12/31/96 8,427,000 854,500 (734,591) 119,909
Issuance of Common Stock 444,900 444,900
Services 285,500
Net Income (435,353)
------------ ----------- ----------- ------------
Balance, 12/31/97 9,157,400 1,299,400 (1,169,944) 129,456
Issuance of Common Stock 1,064,990 990,434
Services 605,832
Net Income (905,505)
------------ ----------- ----------- ------------
Balance, 12/31/98 10,828,222 2,289,834 (2,075,449) $ 214,385
Reverse stock split (2:1)
2/26/99 (5,414,111)
Issuance of Common Stock
for Cash 1,022,500 (125,000)
Issuance of Common Stock 634,200 565,805 - -
Services 311,410
Net income (1,924,426)
------------ ----------- ----------- ------------
Balance, 12/31/99 7,382,221 $2,730,639 $(3,999,875) $(1,269,236)
============ =========== =========== ============
See independent auditors' report on this supplemental information.
7
<PAGE> 21
Halifax International, Inc.
(formerly known as Silver Strike Mining Company)
Financial Statements
February 28, 1999, December 31, 1998 and 1997
<PAGE> 22
C O N T E N T S
Independent Auditors' Report.............................................. 3
Balance Sheets ............................................................4
Statements of Operations ..................................................5
Statements of Stockholders' Equity ........................................6
Statements of Cash Flows ................................................. 8
Notes to the Financial Statements ........................................ 9
<PAGE> 23
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Halifax International, Inc.
We have audited the accompanying balance sheets of Halifax International, Inc.
(a development stage company) as of February 28, 1999, December 31, 1998 and
1997 and the related statements of operations, stockholders' equity and cash
flows for the two months ended February 28, 1999 and for the years ended
December 31, 1998, 1997 and 1996 and from inception on April 29, 1981 through
February 28, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statement 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 included assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Halifax International, Inc.
(a development stage company) as of February 28, 1999, December 31, 1998 and
1997 and the results of its operations and cash flows for the two months ended
February 28, 1999 and for the years ended December 31, 1998, 1997 and 1996 and
from inception on April 29, 1981 through February 28, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
CROUCH, BIERWOLF & CHISHOLM
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
March 26, 1999
<PAGE> 24
Halifax International, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
February 28, December 31,
1999 1998 1997
------------- ------------ -------------
Mining Claims (Note 1) $ - $ - $ -
------------- ------------ -------------
TOTAL ASSETS $ - $ - $ -
============= ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable (Note 6) $ 76,567 $ 75,864 $ 71,880
Accounts payable - related party
(Note 4) - - 10,000
------------- ------------ -------------
Total Liabilities 76,567 75,864 81,880
------------- ------------ -------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value;
20,000,000 shares authorized;
1,022,500 shares issued and
outstanding 1,023 1,023 1,023
Additional paid-in capital 470,724 470,724 460,493
Deficit Accumulated during the
development stage (548,314) (547,611) (543,396)
------------- ------------ -------------
Total Stockholders' Equity (76,567) (75,864) (81,880)
------------- ------------ -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ - -
============= ============ =============
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 25
Halifax International, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Two From
months For the Years Ended Inception on
ended December 31, April 29, 1981
February 28, ----------------------------------------- to February 28,
1999 1998 1997 1996 1999
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
------------- ------------- ------------- ------------- -------------
EXPENSES
General & Administrative, - - 29,731 10,000 40,232
Loss on Discontinued
Operations - - - - 473,662
------------- ------------- ------------- ------------- -------------
TOTAL EXPENSES - - 29,731 10,000 513,894
------------- ------------- ------------- ------------- -------------
OPERATING LOSS - - (29,731) (10,000) (513,894)
OTHER EXPENSES
Interest Expense (703) (4,215) (4,215) (4,215) (34,420)
------------- ------------- ------------- ------------- -------------
NET LOSS $ (703) $ (4,215) $ (33,946) $ (14,215) $ (548,314)
============= ============= ============= ============= =============
LOSS PER SHARE $ (.001) $ (0.004) $ (0.035) $ (0.016) $ (0.647)
============= ============= ============= ============= =============
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,022,500 1,022,500 962,420 901,676 847,098
============= ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements
-5-
</TABLE>
<PAGE> 26
Halifax International, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on April 29, 1981 through February 28, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
--------------------------- Paid-In Development
Shares Amount Capital Stage
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Issuance of shares for cash 250,000 $ 250 $ 49,750 $ -
Issuance of shares for mining claims 250,000 250 49,750 -
Issuance of common stock to the public
for $.25 per share 100,000 100 99,900 -
Net (loss) from inception to December 31, 1981 - - - (600)
Net (loss) for the year ended December 31, 1982 - - - (63,030)
Issuance of common stock for services 53,500 54 53,447 -
Net (loss) for the year ended December 31, 1983 - - - (140,198)
Issuance of common stock to the public for
$.25 per share 100,000 100 99,900 -
Net (loss) for the year ended December 31, 1984 - - - (48,453)
Net (loss) for the year ended December 31, 1985 - - - (62,661)
Net (loss) for the year ended December 31, 1986 - - - (2,193)
Net (loss) for the year ended December 31, 1987 - - - (231)
Stock dividend issued 12,511 13 2,488 (2,502)
Stock issued for services 98,165 98 37,916 -
Stock issued for cash at $.25 per share 37,500 37 37,463 -
Net (loss) for the year ended December 31, 1988 - - - (39,998)
Net (loss) for the year ended December 31, 1989 - - - (381)
Net (loss) for the year ended December 31, 1990 - - - (113,594)
Net (loss) for the year ended December 31, 1991 - - - (4,215)
Net (loss) for the year ended December 31, 1992 - - - (4,125)
Net (loss) for the year ended December 31, 1993 - - - (4,125)
------------- ------------- ------------- --------------
Balance - December 31, 1993 901,676 902 430,614 (486,306)
Net (loss) for the year ended December 31, 1994 - - - (4,714)
------------- ------------- ------------- --------------
Balance - December 31, 1994 901,676 902 430,614 (491,020)
Net (loss) for the year ended December 31, 1995 - - - (4,215)
------------- ------------- ------------- --------------
Balance - December 31, 1995 901,676 902 430,614 (495,235)
Net (loss) for the year ended December 31, 1996 - - - (14,215)
------------- ------------- ------------- --------------
Balance - December 31, 1996 901,676 902 430,614 (509,450)
Issuance of common stock for services 120,824 121 29,879 -
Net (loss) for the year ended December 31, 1997 - - - (33,946)
------------- ------------- ------------- --------------
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE> 27
Halifax International, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on April 29, 1981 through February 28, 1999
(Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
--------------------------- Paid-In Development
Shares Amount Capital Stage
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance - December 31, 1997 1,022,500 1,023 460,493 (543,396)
Forgiveness of Debt by Shareholders - - 10,231 -
Net (loss) for the year ended December 31, 1998 - - - (4,215)
------------- ------------- ------------- -------------
Balance - December 31, 1998 1,022,500 1,023 470,724 (547,611)
Net (loss) for the two month period ended
February 28, 1999 - - - (703)
------------- ------------- ------------- -------------
Balance - February 28, 1999 1,022,500 $ 1,023 $ 470,724 $ (548,314)
============= ============= ============= =============
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE> 28
Halifax International, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION> From
Inception on
For the two For the years ended April 29, 1981
months ended December 31, Through
February 28, ----------------------------------------- February 28,
1999 1998 1997 1996 1999
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating
Activities
Net los/s $ (703) $ (4,215) $ (33,946) $ (14,215) $ (548,314)
Less non-cash items:
Depreciation & amortization - - - - 104,040
Increase (decrease) in
accounts payable 703 (6,016) 3,946 14,215 76,567
Stock issued for services - - 30,000 - 124,016
------------- ------------- ------------- ------------- --------------
Net Cash Provided (Used)
by Operating Activities - (10,231) - - (243,691)
------------- ------------- ------------- ------------- --------------
Cash Flows from Investing
Activities
Cash paid for purchase of
assets - - - - (48,456)
Cash paid for organization
costs - - - - (5,584)
------------- ------------- ------------- ------------- --------------
Net Cash Provided (Used)
by Investing Activities - - - - (54,040)
------------- ------------- ------------- ------------- --------------
Cash Flows from Financing
Activities
Issuance of common stock - - - - 287,500
Forgiveness of debt by
shareholders - 10,231 - - 10,231
------------- ------------- ------------- ------------- --------------
Net Cash Provided (Used)
by Financing Activities - 10,231 - - 297,731
------------- ------------- ------------- ------------- --------------
Increase in Cash - - - - -
------------- ------------- ------------- ------------- --------------
Cash and Cash Equivalents at
Beginning of Period - - - - -
------------- ------------- ------------- ------------- --------------
Cash and Cash Equivalents at
End of Period $ - $ - $ - $ - $ -
============= ============= ============= ============= ==============
Supplemental Non-Cash Financing
Transactions:
Stock issued for mining
claims $ - $ - $ - $ - $ 50,000
Cash paid for:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
-8-
</TABLE>
<PAGE> 29
Halifax International, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization
Halifax International, Inc. (the Company), an Idaho corporation, was
incorporated on April 29, 1981 as Silver Strike Mining Company, for the
purpose of engaging in various mining activities. Prior to incorporating, the
Company was a partnership engaging in a joint venture mining operation in
Blaine County, Idaho. The Company developed their claims through 1988 and
then lost the claims due to non payment of the renewal fees. The Company has
been inactive since that time and is in the development stage. On February
12, 1999 the Company changed the name of the Company to Halifax International,
Inc.
b. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes have been recorded due to net operating
loss carryforwards totalling approximately $484,684 that will be offset
against future taxable income. These NOL carryforwards began to expire in the
year 1997. No tax benefit has been reported in the financial statements
because the Company believes there is a 50% or greater chance the carryforward
will expire unused.
Deferred tax asset and the valuation account is as follows at February
28, 1999 December 31, 1998 and 1997:
February 28, December 31,
1999 1998 1997
------------ ------------ ------------
Deferred tax asset:
NOL carryforward $ 164,793 164,554 $ 184,551
Valuation allowance (164,793) (164,554) (184,551)
------------ ------------ -------------
$ - $ - $ -
============ ============ =============
-9-
<PAGE> 30
Halifax International, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies (continued)
f. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. The company has no assets and
has had recurring operating losses for the past several years and is dependent
upon financing to continue operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to find an operating company to merge
with, thus creating necessary operating revenue.
NOTE 3 - Capitalization
In 1981, the Company issued 500,000 shares of common stock for all the
assets and liabilities of the Silver Strike Mining Company Partnership. The
assets consisted of $50,000 cash, mining claims and lease options. The value
of this issuance was $100,000.
In 1981, the Company completed a public offering of 100,000 shares of
its previously authorized, but unissued common stock. An offering price of
$1.00 per share of common stock was determined by the Company. The gross
proceeds to the Company from the offering was $100,000.
In 1983 and 1984, the Company issued 53,500 shares of stock for
services valued at $53,500.
Also in 1983 and 1984 the Company completed its second public offering
of 100,000 shares at $1.00 per share. Gross proceeds received was $100,000.
In 1988, the Company issued 98,165 shares of stock to creditors and
officers of the Company in satisfaction for liabilities due in the amount of
$38,014. A stock dividend was also authorized, issuing 12,511 shares, and
37,500 shares were issued for cash of $37,500.
In 1997, the Company issued 120,824 shares of stock for legal and
professional services valued at $30,000.
-10-
<PAGE> 31
Halifax International, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 4 - Related Party Transactions
The Company rented various mining equipment from Sun Valley
Lead-Silver Mines Inc. (Sun Valley), during their operations in the 1980's.
Some Company officers were also officers in Sun Valley. The debt was
eventually paid with 32,500 shares of the company. No debt currently exists
for this related party.
During 1996 the Company had $10,000 of legal fees paid for it by a
majority shareholder. The balance is non-interest bearing and the Company
intended to repay the balance within one year. During 1998 the debt was
forgiven by the majority shareholder. The forgiveness was classified as a
capital contribution.
During 1998, a shareholder paid a debt owed by the company in the
amount of $231. The payment was classified as a capital contribution.
NOTE 5 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and searching for a business operation
with which to merge, or assets to acquire, in order to generate significant
operations.
NOTE 6 - Commitments and Contingencies
On December 3, 1990, a judgement was entered against the Company to
pay an individual the sum of $42,146 for non payment of a note payable.
Reasonable attorney fees and court costs were included. The judgement also
included interest to be paid at the highest legal rate until the judgement is
satisfied. The accrued interest and the judgement liability are included in
accounts payable at each period presented. The judgment is contested by the
Company.
NOTE 7 - Reverse Stock Split
On December 22, 1995, the board of directors authorized a one for four
reverse stock split. These financial statements have been retroactively
restated to reflect the reverse split.
NOTE 8 - Change in Par Value and Authorized Shares
In 1996, the Company changed the par value of its common stock from
$0.05 to $0.001. The change has been shown retroactively in the financial
statements.
NOTE 9 - Prior Period Adjustment
Common stock shares issued and outstanding have been retroactively
restated to account for an additional 22,500 shares issued in a prior period.
-11-
<PAGE>32
CHRISTOPHER PARTNERS, INC.
FINANCIAL REPORT
DECEMBER 31, 1998
TABLE OF CONTENTS
------------------
Page
----
Independent Auditors' Report 1
Balance Sheet 2
Statement of Income and Expense and Retained Earnings 3
Statement of Cash Flows 4
Notes to Financial Statements 5
Supplemental Information
--------------------------
Schedule of Stockholders' Equity 7
<PAGE> 33
_____________________________________________
THE JEFFRIES GROUP
Certified Public Accountants
______________________________________________
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Christopher Partners, Inc.
Atlanta, Georgia
We have audited the accompanying balance sheets of Christopher Partners Inc.
(a Georgia corporation) as of December 31, 1998 and the related statements of
income, retained earnings and cash flows for the twelve months then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these statements based on our
audits.
We have conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance that the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management as well as evaluating the overall
consolidated financial statement presentation. We believe that out audit
provide a reasonable basis for our opinion,
In our opinion, the financial statements referred to above present fairly in
all material respects the financial position of Christopher Partners, Inc. as
of December 31, 1998 and the results of their operations and their cash flows
for the twelve months then ended in conformity with generally accepted
accounting principles consistently applied.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included
in the report is presented for the purpose of additional analysis and is not a
required part of the basic financial statements of Christopher Partners, Inc.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in out opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.
/s/ The Jeffries Group
THE JEFFRIES GROUP
Certified Public Accountants
Atlanta, Georgia
March 20, 1999
_____________________________________________________________________________
1277 Victor Road * Atlanta, Georgia * 30324 * 404-231-4353 * FAX 404-231-4338
_____________________________________________________________________________
<PAGE> 34
CHRISTOPHER PARTNERS, INC.
Balance Sheet
December 31, 1998
ASSETS
-------
Current Assets
- --------------
Cash $ -
Accounts Receivable 590,200
--------------
Total Current Assets 590,200
Other Assets
- ------------
Investment in Palau Contract 644,830
Deposits 85,000
--------------
Total Other Assets 729,830
TOTAL ASSETS $ 1,320, 030
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
Current Liabilities
- -------------------
Bank Overdraft 104,895
Notes Payable 1,000,750
--------------
Total Current Liabilities $ 1,105,645
Stockholders' Equity
- --------------------
Common Stock - 50,000,000 shares authorized, $ 2,289,834
10,878,222 issued and outstanding
Retained earnings (2,075,449)
--------------
Total Stockholders' Equity $ 214,385
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,320,030
=============
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 35
CHRISTOPHER PARTNERS, INC.
Statement of Income and Expense and Retained Earnings
For the a Year Ended December 31, 1998
Income
- ------
Fees $ -
Expenses
- --------
Automobile expenses 10,155
Bank charges 5,641
Commission 550
Consulting fees 487,625
Contributions 3,391
Entertainment and promotion 15,333
Insurance 1,000
Licensing 190
Miscellaneous 2,949
Postage 62
Professional fees 130,172
Rent 44,755
Subscriptions 181
Telephone 58,217
Travel 145,284
-------------
Total Expenses 905,505
Net Income $ (905,505)
---------- =============
Retained Earnings - January 1, 1998 (1,169,944)
-----------------------------------
Retained Earnings --December 31, 1998 $ (2,075,449)
------------------------------------- =============
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 36
CHRISTOPHER PARTNERS, INC.
Statement of Cash Flows
For the Twelve Months Ended December 31,1998
Cash Flows From Operating Activities
- ------------------------------------
Net Income $ (905,505)
Adjustments to reconcile net income to cash flows
from operating activities
Increase in accounts receivable (450,000)
Increase in deposits (25,000)
--------------
Net cash used by operating activities (1,380,505)
Cash Flows From Financing Activities
- ------------------------------------
Issuance of promissory notes 479,750
Issuance of Common Stock 964,434
--------------
Net cash used by financing activities 1,444,184
Cash Flows From Investing Activities
- -------------------------------------
Investment in contract (189,397)
--------------
Net cash used by investing activities (189,397)
Net Increase In Cash (125,718)
Cash - Beginning of Period 20,823
- -------------------------- --------------
Cash- End of Period $ (104,895)
- -------------------- ==============
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 37
CHRISTOPHER PARTNERS, INC.
Notes to Financial Statements
For the Twelve Months Ended December 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization and Operations
- -------------------------------------
The Company is a Georgia corporation that was formed in January, 1996 as a
holding company to acquire Modulex, Inc. in Quebec City, Canada. Modulex, Inc.
is a manufacturer of pre-engineered homes.
Palau Engineering and Construction, Ltd., a wholly-owned subsidiary, has
entered into a contract for the design and development of a resort property on
the Pacific island of Palau.
Method of Accounting
- --------------------
The financial statements are prepared using the accrual basis of accounting.
The preparation of these 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.
Accounts Receivable
- -------------------
No allowance for doubtful accounts has been provided. Management has evaluated
the accounts and believes that all accounts are fully collectible.
Investment in Contract
- ----------------------
The Company's investment in a contract is recorded at cost. Contract costs
include all direct travel, entertainment, architectural and professional fees
related to the development and acquisition of the contract.
2. INVESTMENT IN CONTRACT
- -------------------------
Palau Engineering and Construction, Ltd., a wholly-owned subsidiary, has
entered into a contract for the design and development of a resort property on
the Pacific island of Palau.
5
<PAGE> 38
CHRISTOPHER PARTNERS, INC.
Schedule Stockholders' Equity
From September 25, 1995 (Inception) through December 31, 1998
Common Stock Retained Stockholders'
Shares Amount Earnings Equity
------------ ----------- ----------- ------------
Founders' Stock, 9/25/95 6,000,000 -
Issuance of Common Stock 1,000,000 $ 100,000
(investor group)
------------ -----------
Balance 12/31/95 7,000,000 100,000 $ - $ -
Issuance of Common Stock 754,600 754,500
Services 672,500
Net income (734,591)
------------ ----------- ------------ ------------
Balance, 12/31/96 8,427,000 854,500 (734,591) 119,909
Issuance of Common Stock 444,900 444,900
Services 285,500
Net Income (435,353)
------------ ----------- ----------- ------------
Balance, 12/31/97 9,157,400 1,299,400 (1,169,944) 129,456
Issuance of Common Stock 1,092,990 990,434
Services 627,832
Net Income (905,505)
------------ ----------- ----------- ------------
Balance, 12/31/98 10,878,222 $2,289,834 $(2,075,449) $ 214,385
============ =========== =========== ============
See independent auditors' report on this supplemental information.
7
<PAGE> 39
PART III
INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibits
Exhibit
Number Description Location
- ------- ------------ ----------
2.1 Articles of Incorporation of Silver Strike Mining Filed January
Company, Inc. 13, 2000
2.2 Certificate of Amendment to the Articles of Filed January
Incorporation filed July 8, 1996. 13, 2000
2.3 Articles of Merger filed July 18, 1996 Filed January
13, 2000
2.4 Certificate of Amendment to Articles of Incorporation Filed January
filed July 23, 1998. 13, 2000
2.5 Certificate of Amendment to Articles of Incorporation Filed January
filed February 12, 1999. 13, 2000
2.6 Articles of Share Exchange filed February 26, 1999. Filed January
13, 2000
2.7 Amended and Restated Bylaws of Halifax Filed January
International, Inc. 13, 2000
8.1 Agreement and Plan of Reorganization between Silver Filed January
Strike Nevada (Halifax International, Inc.) and 13, 2000
Christopher Partners, Inc., dated January 29, 1999.
10 Letter of Agreement from Crouch. Bierwolf & Chisholm, Filed January
Dated January 11, 2000 13, 2000
27 Financial Data Schedule See attached
<PAGE> 40
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, who is duly authorized.
Date 2/24/00
HALIFAX INTERNATIONAL, INC.
/s/ Victor Hinojosa
By: ________________________________
Victor Hinojosa , President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<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> 60,000
<CURRENT-LIABILITIES> 1,329,236
<BONDS> 0
0
0
<COMMON> 2,730,639
<OTHER-SE> (3,999,875)
<TOTAL-LIABILITY-AND-EQUITY> 60,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 586,096
<OTHER-EXPENSES> 1,338,530
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,924,426)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,924,426)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,924,426)
<EPS-BASIC> (.289)
<EPS-DILUTED> (.289)
</TABLE>
