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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
1st AMENDMENT
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
TEKRON, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 3732 51-0395658
-------- ---- ----------
(STATE OR OTHER JURISDICTION OF (PRIMARY (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) SIC NUMBER) IDENTIFICATION NO.)
13123 Poway Road, Poway, CA 92064 619-692-5868
--------------------------------- ------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (TELEPHONE)
Andrew Chandler
13123 Poway Road, Poway, CA 92064 619-692-5868
--------------------------------- ------------
(NAME & ADDRESS OF AGENT FOR SERVICE) (TELEPHONE)
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
----------------------------------------------------------------------------------------------
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Offering Registration
Registered Registered Per Unit(1) Price(2) Fee
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 4,095,000 $0.10 $409,500 $108
</TABLE>
(1) Based on the price paid per share by the selling shareholders.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
TEKRON, INC.
4,095,000 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. See the section entitled
"Selling Shareholders". The shares were acquired by the 70 selling shareholders
directly from the Company in a private offering that was exempt from
registration under the U.S. Securities laws. See section entitled "Description
of Securities".
Our common stock is presently not traded on any market or securities exchange.
The purchase of the securities offered through this prospectus involves a high
degree of risk. See section entitled "Risk Factors".
Neither the Securities Exchange Commission nor any state securities commission
has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is: August 29, 2000
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary ................................................................. 4
Offering ................................................................ 4
Risk Factors ............................................................ 4
Forward Looking Statements .............................................. 6
Use of Proceeds ......................................................... 6
Determination of Offering Price ......................................... 6
Dilution ................................................................ 6
Dividend Policy ......................................................... 6
Selling Shareholders .................................................... 6
Plan of Distribution .................................................... 9
Legal Proceedings ....................................................... 10
Directors, Officers, Promoters and Control Persons ...................... 10
Security Ownership of Certain Beneficial Owners and Management .......... 11
Description of Securities ............................................... 12
Interests of Named Experts and Counsel .................................. 13
Securities Act Indemnification Disclosure ............................... 13
Organization within the Last Five Years ................................. 13
Description of Business ................................................. 13
Plan of Operation ....................................................... 20
Description of Property ................................................. 21
Certain Relationships and Related Transactions .......................... 21
Market for Common Equity and Related Stockholder Matters ................ 21
Executive Compensation .................................................. 22
Financial Statements .................................................... 23
Changes in or Disagreements with Accountants Disclosure ................. 23
Available Information ................................................... 24
</TABLE>
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SUMMARY
Tekron, Inc. was incorporated in Delaware on May 31, 1994 for the purpose of
developing a marine service company for boat owners that would offer on-site
preventative maintenance and repair services. From inception until December
1999, Management reviewed the marine services market while they continued to
work for their primary employers, and the Company had no material operating
activities.
In late 1999, Management decided to modify its original concept to include
pick-up and delivery services tailored specifically for boat owners in order to
capitalize on the increased fragmentation of the marine service industry, and
seek necessary capital in order that they could begin developing the Company's
boat servicing business.
The Company received its initial funding through the sale of common stock to
investors from the period of approximately December 1, 1997 until January 31,
1998. The Company offered and sold 91,000 common stock shares at $0.10 per share
to non-affiliated private investors. From inception until July 2000, the Company
had no material operating activities.
OFFERING
Securities Being Offered Up to 4,095,000 shares of common
stock. See section entitled "Description of
Securities to be Registered".
Securities Issued
And to be Issued 4,104,000 shares of common stock were issued and
outstanding as of the date of this prospectus. See
section entitled "Description of Securities to be
Registered".
Use of Proceeds We will not receive any proceeds from the sale of
the common stock by the selling shareholders. See
section entitled "Use of Proceeds".
RISK FACTORS
Investors in the Company should be particularly aware of the inherent risks
associated with the Company's business plan. These risks include but are not
limited to:
Development Stage Status of the Company
The Company is in the developing or starting stages of its business plan
and is therefore more vulnerable to unexpected or uncontrollable
business and economic forces. It lacks any loyalty or name recognition
from potential customers. A competitor may be able to market a similar
service before the Company can complete its development efforts.
Economic conditions such as a national recession or reduced boat sales
or boat usage could lower Company revenues.
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Going Concern Uncertainty
The Company may not have sufficient cash, assets, or revenues to cover
its operating costs and allow it to continue as a going concern.
Dependence on Equity Funding
The Company's business plan requires that it successfully raise capital
to advance its business plan through a private placement offering of its
common stock in order to raise $3,000,000. If the Company is
unsuccessful in raising funds, the Company will be forced to rely on its
existing cash in the bank and funds loaned by the directors and
officers. In such a restricted cash flow scenario, the Company would be
unable to complete its business plan steps.
Lack of Market Acceptance
The Company's long-term viability is substantially dependent upon the
widespread acceptance of the "auto-lube" concept for boats. There is no
historic evidence that this type of business will be successful against
competition from traditional boat repair and maintenance services.
Without sufficient customers or revenues, the Company would experience a
material adverse effect on the Company's business, financial condition,
operating results and cash flows.
Reliance on Current Management
The Company's performance and future operating results are substantially
dependent on the continued service and performance of its current
Management. The Company intends to hire a relatively small number of
additional technical and marketing personnel in the next year.
Competition for such personnel is intense, and there can be no assurance
that the Company will be able to retain its essential employees or that
it will be able to attract or retain highly-qualified technical and
managerial personnel in the future. The loss of the services of any of
the Company's current Management or other key employees or the inability
to attract and retain the necessary technical, and marketing personnel
could have a material adverse effect upon the Company's business,
financial condition, operating results and cash flows.
Management's Conflict of Interest
The current officers, Mr. Chandler and Mr. Fulton, are the sole officers
and directors of the company and have control in directing the
activities of the company. Mr. Chandler is involved in other business
activities and may, in the future, become involved in additional
business opportunities. If a specific business opportunity becomes
available, the officers and directors of the company may face a conflict
of interest. The Company has not formulated a plan to resolve any
conflicts that may arise. While the Company and its sole officers and
directors have not formally adopted a plan to resolve any potential or
actual conflicts of interest that exist or that may arise, they have
verbally agreed to limit their roles in all other business activities to
roles of passive investors and devote full time services to the Company
after the Company raises capital of $3,000,000 through the sale of
securities through a private placement and is able to provide officers'
salaries per its business plan.
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While Management believes its estimates of projected occurrences and events are
within the timetable of its business plan, there can be no guarantees or
assurances that the results anticipated will occur. Although Management intends
to implement its business plan through the foreseeable future and will do its
best to mitigate the risks associated with its business plan, there can be no
assurance that such efforts will be successful.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. You should not place too much reliance on these forward-looking
statements. Out actual results could differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
us as described in the "Risk Factors" section and elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling of the shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The offering price
will be determined by market factors and the independent decisions of the
selling shareholders. See section entitled "Selling Shareholders".
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly there will be no dilution to our
existing shareholders.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
the business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of the
4,095,000 shares of common stock offered through this prospectus. The shares
include the following:
1. 91,000 shares of our common stock that the selling shareholders acquired
from us in an
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offering that was exempt from registration pursuant to Section 4(2) as
amended of the Securities Act of 1933 and completed on January 31, 1998;
and
2. 4,004,000 shared of our common stock that the selling shareholders
received pursuant to an 45 for 1 forward stock split executed December
8, 1999.
The following table provides as of August 23, 2000, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:
1. The number of shares owned by each prior to this offering;
2. The total number of shares that are to be offered for each;
3. The total number of shares that will be owned by each upon completion of
the offering;
4. The percentage owned by each; and
5. The identity of the beneficial holder of any entity that owns the
shares.
To the best of our knowledge, the named parties in the table that follows are
the beneficial owners and have the sole voting and investment power over all
shares or rights to the shares reported. In addition, the table assumes that the
selling shareholders do not sell shares of common stock not being offered
through this prospectus and do not purchase additional shares of common stock.
The column reporting the percentage owned upon completion assumes that all
shares offered are sold, and is calculated based on 4,095,000 shares outstanding
on August 29, 2000.
<TABLE>
<CAPTION>
Shares Total of Total Percent
Owned Prior Shares Shares Owned
Name of To This Offered After After
Selling Shareholder Offering For Sale Offering Offering
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alice Arterberry 45,000 45,000 NIL NIL
Frank Asaro 90,000 90,000 NIL NIL
Lawrence Barrett 45,000 45,000 NIL NIL
John Batliner 135,000 135,000 NIL NIL
Paul Battista 45,000 45,000 NIL NIL
Jill Beam 45,000 45,000 NIL NIL
Irene Beauchamp 45,000 45,000 NIL NIL
Jacqueline Beer 45,000 45,000 NIL NIL
Brian Belknap 90,000 90,000 NIL NIL
David Bounds 45,000 45,000 NIL NIL
Sharon Boyd 45,000 45,000 NIL NIL
Daniel Costello 45,000 45,000 NIL NIL
Dennis Crooks 45,000 45,000 NIL NIL
Theodore Daniels 45,000 45,000 NIL NIL
Nancy Davis 45,000 45,000 NIL NIL
Dale Dukes 90,000 90,000 NIL NIL
Dominique Feeley 45,000 45,000 NIL NIL
Brian Frasier 45,000 45,000 NIL NIL
Tim Griffin 45,000 45,000 NIL NIL
Adolph Guerrero 45,000 45,000 NIL NIL
Mary Heavlin 180,000 180,000 NIL NIL
William Howe 45,000 45,000 NIL NIL
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Nichole Hudson 180,000 180,000 NIL NIL
Jeanette Huntley 45,000 45,000 NIL NIL
Amy Hurley 45,000 45,000 NIL NIL
Ray Kruger 90,000 90,000 NIL NIL
Russell Lajoie 45,000 45,000 NIL NIL
Jill Ann Lewis 90,000 90,000 NIL NIL
Debra McCall 45,000 45,000 NIL NIL
Susan McGarry 45,000 45,000 NIL NIL
Fred McNorton 45,000 45,000 NIL NIL
Ivette Keris Meade 45,000 45,000 NIL NIL
Daniel Paul Mix 45,000 45,000 NIL NIL
Simon Moghadamzadhe 45,000 45,000 NIL NIL
Anthony Musorofiti 45,000 45,000 NIL NIL
Ann Myers 45,000 45,000 NIL NIL
Shannon Nevett 180,000 180,000 NIL NIL
Patrizia Nickel 45,000 45,000 NIL NIL
Leslie O'Keefe 45,000 45,000 NIL NIL
Eric Peterson 45,000 45,000 NIL NIL
Kurt & Candice Pierson 90,000 90,000 NIL NIL
Terah Powell 45,000 45,000 NIL NIL
Mary Quimby 45,000 45,000 NIL NIL
Matthew Ramos 45,000 45,000 NIL NIL
Ryan Jordan Ramos 45,000 45,000 NIL NIL
Dustin Rikert 45,000 45,000 NIL NIL
Gerrie Rikert 45,000 45,000 NIL NIL
Stephen Samuels 45,000 45,000 NIL NIL
Elizabeth Schier 45,000 45,000 NIL NIL
John Shafer 90,000 90,000 NIL NIL
Arthur Sipple 45,000 45,000 NIL NIL
Rita Smith 90,000 90,000 NIL NIL
Terry Smith 45,000 45,000 NIL NIL
Shirley Spittle 45,000 45,000 NIL NIL
Andrew Stamets 45,000 45,000 NIL NIL
Daniel Stonesifer 45,000 45,000 NIL NIL
Stephanie Strange 45,000 45,000 NIL NIL
Deborah Sturch 90,000 90,000 NIL NIL
Katie Sturtevant 45,000 45,000 NIL NIL
Jeanette Talvy 90,000 90,000 NIL NIL
Cathy Jo Taylor 45,000 45,000 NIL NIL
Kenneth Twedt 45,000 45,000 NIL NIL
Tammy Vorrath 45,000 45,000 NIL NIL
Rodger Ward 45,000 45,000 NIL NIL
Connie White 45,000 45,000 NIL NIL
James Whitley 45,000 45,000 NIL NIL
Anne Winton 45,000 45,000 NIL NIL
Leonard Womack 45,000 45,000 NIL NIL
Linda Woodring 45,000 45,000 NIL NIL
Traci Woolley 45,000 45,000 NIL NIL
</TABLE>
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To our knowledge, none of the selling shareholders:
1. Has had a material relationship with Tekron other than as a shareholder
as noted above at any time within the past three years; or
2. Has ever been an officer or director of Tekron.
PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to sell their
shares. However, they may sell some or all of their common stock in one or more
transactions, including block transactions:
1. on such public markets or exchanges as the common stock may from time to
time be trading;
2. in privately negotiated transactions;
3. through the writing of options on the common stock;
4. in short sales; or
5. in any combination of these methods of distribution.
The sales price to the public may be:
1. the market price prevailing at the time of sale;
2. a price related to such prevailing market price; or
3. such other price as the selling shareholders determine from time to
time.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire the
common stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so acting as
agent for the selling shareholders, to purchase, as principal, any unsold shares
at the price required to fulfill the respective broker's or dealer's commitment
to the selling shareholders. Brokers or dealers who acquire shares as principals
may thereafter resell such shares from time to time in transactions in a market
or on an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such re-sales may pay or receive commissions to or from the purchasers of such
shares. These transactions may involve cross and block transactions that may
involve sales to and through other brokers or dealers. If applicable, the
selling shareholders also may have distributed, or may distribute, shares to one
or more of their partners who are unaffiliated with us. Such partners may, in
turn, distribute such shares as described above. We can provide no assurance
that all or any of the common stock offered will be sold by the selling
shareholders.
We are bearing all costs relating to the registration of the common stock. Any
commissions or other fees payable to brokers or dealers in connection with any
sale of the common stock, however, will
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be borne by the selling shareholders or other party selling such common stock.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their
common stock. In particular, during such times as the selling shareholders may
be deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and may,
among other things:
1. not engage in any stabilization activities in connection with our common
stock;
2. furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Securities Exchange Act.
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose one year terms
will expire 3/31/01, or at such a time as their successors shall be elected and
qualified are as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
<S> <C> <C> <C> <C>
Andrew Chandler President, 9/15/94 5/20/01
13123 Poway Rd. Secretary,
Poway, CA 92064 Director
Don Fulton Treasurer, 9/15/94 5/20/01
13123 Poway Rd. Director
Poway, CA 92064
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the Securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment
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advisor, underwriter, broker or dealer in the securities industry, or as an
affiliated person, director or employee of an investment company, bank, savings
and loan association, or insurance company or from engaging in or continuing any
conduct or practice in connection with any such activity or in connection with
the purchase or sale of any securities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Andrew Chandler, President, Secretary & Director
1994 - Current President and owner of Quik Lube, Inc. in Poway,
California. Quik Lube provides a full line of
automobile services from basic lubrication and oil
changes to extensive automobile repairs such as
radiators, brakes, air conditioning, electrical
systems, suspension parts, engine rebuilding, and
transmission repair.
Don Fulton, Treasurer & Director
Current Retired
1987 - 1999 Union Bank of California. Manager of corporate
commercial lending. Flag Member in good standing
with San Diego and Southwestern Yacht Clubs. Member
of PHRF Racing Association, a handicapping
association of buoy and off-shore race teams, since
1976. Member of the San Diego Racing Fleet. Has
participated in annual yacht races from California
to Mexico in the San Diego/Ensenada races and
Newport Beach/Ensenada races for over thirty years.
Also has participated in California yacht races
such as the Coronado Islands Regattas. Owner and
captain of three sailboats ranging in size from
twenty eight feet to thirty five feet.
1969 B.A. Political Science, San Diego State University
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - July 31, 2000:
<TABLE>
<CAPTION>
Title Of Amount & Percent
Class Name Nature of owner Owned
----- ---- --------------- -----
<S> <C> <C> <C>
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common Andrew Chandler 4,500 1%
Common Don Fulton 4,500 1%
Total Shares Owned by Officers
& Directors As a Group 9,000 2%
</TABLE>
(a) Mr. Chandler received 100 shares of the Company's common stock on September
15, 1994 for administrative services and services related to the Company's
business plan. 4,400 shares of the Company's common stock were issued to him per
a 45 for 1 stock split on December 8, 1999.
(b) Mr. Fulton received 100 shares of the Company's common stock on September
15, 1994 for administrative services and services related to the Company's
business plan. 4,400 shares of the Company's common stock were issued to him per
a 45 for 1 stock split on December 8, 1999.
DESCRIPTION OF SECURITIES
The Company's Certificate of Incorporation authorizes the issuance of 20,000,000
Shares of Common Stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of Common Stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of Common Stock
have cumulative voting rights. Holders of shares of Common Stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor. In
the event of a liquidation, dissolution, or winding up of the Company, the
holders of shares of Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of Common Stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares. All of the
outstanding Common Stock is, and the shares offered by the Company pursuant to
this offering will be, when issued and delivered, fully paid and non-assessable.
The Securities and Exchange Commission has adopted Rule 15g-9 which established
the definition of a "penny stock", for the purposes relevant to the Company, as
any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks are suitable for
that person and the person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form, (i) sets forth the basis on which the
broker or dealer made the suitability determination; and (ii) that the broker or
dealer received a signed, written agreement from the
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investor prior to the transaction. Disclosure also has to be made about the
risks of investing in penny stocks in both public offerings and in secondary
trading and about the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer or employee.
Jennifer Pulver, our independent counsel, has provided an opinion on the
validity of our common stock.
DISCLOSURE OF COMMISSION POSITION FOR SECURITIES ACT LIABILITIES
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or other controlling
persons in connection with the securities registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
The Company was incorporated in Delaware on May 31, 1994. In November of 1997
the board of directors voted to seek capital and began development of the
Company's business plan. During December 1997 and January 1998, the Company
received its initial funding through the sale of common stock to investors.
DESCRIPTION OF BUSINESS
ORGANIZATION
Tekron, Inc. was incorporated in Delaware on May 31, 1994 for the purpose of
developing a marine service company for boat owners that would offer on-site
preventative maintenance
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and repair services. From inception until December 1999, Management reviewed the
marine services market while they continued to work for their primary employers,
and the Company had no material operating activities.
In late 1999, Management decided to modify its original concept to include
pick-up and delivery services tailored specifically for boat owners in order to
capitalize on the increased fragmentation of the marine service industry, and
seek necessary capital in order that they could begin developing the Company's
boat servicing business.
The Company received its initial funding through the sale of common stock to
investors from the period of approximately December 1, 1997 until January 31,
1998. The Company offered and sold 91,000 common stock shares at $0.10 per share
to non-affiliated private investors. The Company relied upon Section 4(2) of the
Securities Act of 1933, as amended (the "Act").
BANKRUPTCY OR SIMILAR PROCEEDINGS
There have been no bankruptcy, receivership or similar proceedings.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
BUSINESS OF THE COMPANY
PRINCIPAL SERVICES AND MARKETS
The Company intends to become a primary provider of boat maintenance and
specialty services to two distinct target markets: the recreational boater who
"trailers" his boat, and the owner of the over 28' boat whose vessel is kept
moored and is in the water year-round. The first two markets the Company intends
to service are the high vessel capacity ports and marinas of Los Angeles and San
Diego, California.
According to the National Marine Manufacturers Association's research, most
owners don't want to be bothered with boat, engine and trailer maintenance and
repair. Over 40% of all marine maintenance is preventative ("Boating Market
Evaluation and Opportunities Study" (C) 1996 NMMA). The company will concentrate
on this preventative maintenance, while leaving the full repair services to the
traditional marine dealerships. The company will offer the boat owner the same
positive experience he's had when his car has been serviced by a typical fast
lube auto center.
The small boat owner will be offered a new concept in boat maintenance.
Utilizing marine service centers and mobile service trucks that can provide many
of the services dockside or in the owner's driveway, the company will offer the
following Marine Services Menu to the small boat owner:
14
<PAGE> 15
Basic Engine/Drive Periodic Maintenance: Oil/Filter Change, Fuel Filter
Service, Lubrication, Hydraulic Fluid Top-Off, Multi-point Equipment
Check
Supplemental Engine/Drive Service Options: Winterization/Storage Prep,
Engine Flush/Water Pump Check, Coolant Fill/Replacement, Fuel System
Treatment, Prop Shaft Lube and Prop Check/Replacement, Corrosion
Protection Treatment, Touch-Up Painting
Boat Trailer Service Options: Wheel Bearing Lubrication,
Lights/Harness/Connector Repair/Replacement, Winch/Line
Check/Lube/Replacement, Tire Check/Replacement
Boat Service Options: Pressure Spray Bottom Cleaning, Detailing, Shrink
Wrap, Battery Maintenance/Replacement, Bilge Pump Check/Replacement,
Fire Extinguisher Check/Replacement
For the 28' and larger boats which are typically left in the water for the
boating season, the Company plans to provide on-site service where the boat is
being docked (marinas, yacht clubs, personal docks, boat yards, etc.). The
service requirements of this segment of the boating industry are highly
specialized and require a commitment to the environment as well as the boat
owner. Basic services, similar to those provided to the small boat owner, will
be offered by "a lube shop on the water". The company will utilize marine
quality high-pressure hoses to extract waste fluids from the engine, bilges and
storage tanks. Multiple adapters such as metering guns will then be used to fill
the engine or tanks with fresh oil. The utilization of advanced systems and
engineering design will provide an environmentally safe and efficient way of
handling hazardous fluids on the water. In addition to the marine services
offered to the small boat owner, the following menu of Marine Services will be
offered to the large boat owner:
Bilge Cleaning: Anti-bacterial citrus-based degreaser pre-treatment,
pressurized water cleaning, removal of bilge water and wastes, complete
rinse
Maintenance Plans: Weekly/Monthly complete system check, cleaning, bilge
pump checks, safe harbor storm prep
Specialty Services: Onboard delivery of water and ice, groceries,
overnight laundry service, garbage pickup
Based upon Management's experience in the boating industry, the size and nature
of the market is diverse and continues to grow at a steady rate. According to
the National Marine Manufacturers Association, Market Statistics Department,
January 2000((C) 2000 NMMA), in the United States, expenditures for boating
have doubled from $11.2 million in 1993 to $22.9 million in 1999. The estimated
number of boats owned in the U.S. in 1999 was 16.8 million. Per the Market
Statistics Department analysis, the demographics of recent new boat buyers,
excluding personal water craft and small aluminum fishing boats is comprised of
the following:
<TABLE>
<CAPTION>
Fiberglass
Total Cruiser Runabout Fishing
----- ------- -------- -------
<S> <C> <C> <C> <C>
Median Age 47 50 44 46
Median Income $71K $134K 67K 64K
</TABLE>
15
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C>
Married 86% 86% 84% 89%
Managerial/Professional 58% 70% 49% 44%
Retired 11% 11% 13% 9%
Other 31% 19% 38% 47%
</TABLE>
The "Boating Market Evaluation & Opportunities Study" issued by the National
Marine Manufacturers Association ((C) 1996 NMMA) stated "The American consumer's
hunger for water-based recreation and desire to own pleasure boats may be at an
all-time high. But in order to grow, the industry providing products, sales and
service to this widespread market will need to make fundamental changes to keep
current boat owners satisfied and attract new customers." The report goes on to
state the service segment needs a "Cultural Change". "The treatment boat owners
receive when seeking service will need to improve dramatically. Boat owners,
like most other consumer durable product owners, are comparing service treatment
to that of auto dealerships and find it hardly measures up. Service is the
number one area cited that needs improvement." Members of the RPC (Research and
Sales Promotion Committee) suggested that new service methods need to be
researched.
The Company has a current business plan which proposes to utilize its founders'
backgrounds to develop its business from the current concept stage into a unique
marine service company offering quality and convenience coupled with basic
servicing needs to a wide range of boating clientele. The business plan projects
the Company will obtain a listing on the NASD's Over the Counter Electronic
Bulletin Board during months one through three, prepare a private placement
memorandum during months one through three, and raise capital of $3,000,000
through the sale of common stock in the private placement by, selling 3,000,000
shares at $1.00 per share, to accredited or sophisticated investors during
months four through six. During month seven, after raising capital, the Company
intends to open one service site for boats in Los Angeles, and one in San Diego,
California. During months seven through twelve, in order to operate both service
sites, the Company intends to expend $60,000 for two manager-service
technicians, $120,000 for four service assistants, $25,000 for two office
clerical employees, $20,000 for inventory, $200,000 for the purchase and
outfitting of four service vehicles, $600,000 for purchase of four service
vessels, $10,000 for set-up and maintenance of the Company's web site, $125,000
for advertising, $30,000 for one marketing manager, $110,000 for purchase of
computers and fixed assets, and $62,000 for rent and other operating expenses.
The Company's current business plan provides for funding solely through private
placement investment. Through Management's experience in business and banking,
alternate sources of business funding include venture capital investment,
personal loans from Management, and institutional loans. In the event the
Company is not successful in obtaining funding through a private placement,
Management believes the best alternative to advance the Company's business plan
is for Management to loan funds to the Company sufficient to maintain the
Company at a minimum level and delay the business plan steps until such time as
private placement investment becomes available. The Company's officers and
directors have not, as of the date of this filing loaned any funds to the
Company. There are no formal commitments or arrangements to advance or loan
funds to the Company or repay any such advances or loans. At this time,
Management believes institutional loans are unavailable to the Company due to
its development stage nature, and venture capital investment is not beneficial
to the existing shareholders due to the fifty percent or greater amount of
ownership normally required for venture capital funding.
16
<PAGE> 17
DISTRIBUTION METHODS OF PRODUCTS OR SERVICES
The Company intends to offer information on its services to prospective clients
on its web site, www.marineservice.net, which will feature available services,
contact information and links. It also plans to advertise its web site and
services on existing boating industry web sites, such as local yacht clubs in
the Company's service area (i.e. the San Diego Yacht Club www.sdyc.org,) and
purchase "banner ads" on the web pages of well-known regional boat supply
companies such as West Marine and Boat-US. Magazine advertising in such trade
publications as "Sail", "Sailing", "Boating", "Sea Magazine" and "Yachting" will
also be researched, as well as area boat show booth rentals and direct
distribution of marketing flyers to local marinas and yacht clubs.
PLANNED NEW PRODUCT OR SERVICE
The Company has no new product or service planned or announced to the public.
COMPETITION AND COMPETITIVE POSITION
The size and financial strength of the Company's primary competitors,
traditional boat repair companies, Boatside Services, Inc., and Naut-A-Care
Marine Services are substantially greater than those of the Company. In
examining major competitors Management has found at traditional boat repair
companies, an average maintenance/repair takes two days and almost half of the
repairs took four. The owner is also required to trailer his boat to the
business, or for larger boats the maintenance must be done at the marina site of
the business. The other two major competitors cater to the large boat owner,
specializing in on-water service, but fail to address the needs of the small
boat owner. However, the Company's competitors have longer operating histories,
larger customer bases, and greater brand recognition than the Company.
Management is not aware of any significant barriers to the Company's entry into
the boat servicing market, however, the Company at this time has no market share
of this market.
SUPPLIERS AND SOURCES OF RAW MATERIALS
Management will rely on their combined experience and knowledge in the auto lube
and boating industries. While the Company has no current contracts with boating
service suppliers, Management is familiar with these manufacturers and suppliers
such as Aqua Power Marine, Fram/Allied Signal, LubriMatic, Racor, Quaker State
and Shell. Management feels that availability will not be a problem at any time,
since it is aware of over two hundred suppliers of quality boating products. The
Company will enter into agreements with manufacturers and suppliers per its
business plan after raising capital during the first six months of its plan.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
The Company will not depend on any one or a few major customers. The "Boating
Market Evaluation & Opportunities Study" issued by the National Marine
Manufacturers Association ((C) 1998 NMMA) reported United States Coast Guard
boat registration filings for California as 895,000. The Company's target market
for the first two years of its business plan is small and
17
<PAGE> 18
large boat owners in the harbors of San Diego, and Los Angeles California
estimated at over 40% of the approximately 895,000 boats currently registered in
the State of California. After two years of marketing in California, the Company
intends to expand into the following boating markets identified by the NMMA 1998
study: Oregon and Washington - 250,000 registered boats, Northeastern seaboard
states - 1,132,236 registered boats, Southeastern seaboard states - 1,503,552
registered boats, Great Lakes states - 2,834,545 registered boats.
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, LABOR
CONTRACTS
The Company owns its Internet domain name, has setup its first web page
"marineservice.net", has applied for U.S. trademark protection, and will expand
its web site in the fourth quarter of 2000. The Company has no current plans for
any additional registrations such as patents, other trademarks, copyrights,
franchises, concessions, royalty agreements or labor contracts. The Company will
assess the need for any additional copyright, trademark or patent applications
on an ongoing basis.
REQUIREMENTS FOR GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES
The Company is not required to apply for or have any government approval for its
products or services.
EFFECT OF GOVERNMENTAL REGULATIONS ON THE COMPANY'S BUSINESS
The Company will be subject to Federal environmental laws and regulations that
relate directly or indirectly to its operations including the National
Environmental Policy Act, the Clean Air Act, the Clean Water Act, the Safe
Drinking Water Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Comprehensive Environmental Response, Compensation
and Liability Act, and their implementing regulations, as well as numerous state
and local environmental laws. These laws and regulations include: a) controlling
the discharge of materials into the environment, b) requiring removal and
cleanup under certain circumstances, c) requiring the proper handling and
disposal of waste materials, and, d) requirements otherwise relating to the
protection of the environment. These laws and regulations have become more
stringent in recent years and may, in certain circumstances, assess
administrative, civil and criminal penalties and impose "strict liability",
rendering a company liable for environmental damage without regard to negligence
or fault on the part of the company. Such laws and regulations may expose the
Company to liability for the conduct of or conditions caused by others or for
acts of the Company that were in compliance with all applicable laws and
regulations at the time such acts were performed. The application of these
requirements or the adoption of new requirements could have a material adverse
effect on the Company. The Company will conduct its operations in substantial
compliance with all applicable environmental laws and regulations.
RESEARCH AND DEVELOPMENT FUNDING DURING THE LAST TWO YEARS
The Company has not expended funds for research and development costs since
inception.
18
<PAGE> 19
COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
Environmental regulations have had no materially adverse effect on the Company's
operations to date, but no assurance can be given that environmental regulations
will not, in the future, result in a curtailment of service or otherwise have a
materially adverse effect on the Company's business, financial condition or
results of operation. Public interest in the protection of the environment has
increased dramatically in recent years. The trend of more expansive and stricter
environmental legislation and regulations could continue. To the extent that
laws are enacted or other governmental action is taken that imposes
environmental protection requirements that result in increased costs, the
business and prospects of the Company could be adversely affected.
The Company's business plan allows for maintaining insurance coverage against
certain environmental liabilities, but there can be no assurance that such
insurance will continue to be available or carried by the Company or, if
available and carried, will be adequate to cover the Company's liability in the
event of a catastrophic occurrence.
NUMBER OF EMPLOYEES
The Company's only current employees are its two officers who will devote as
much time as the board of directors determines is necessary to manage the
affairs of the Company. The officers intend to work on a full time basis when
the Company raises capital per its business plan. The Company's business plan
calls for hiring thirteen new full time employees during the next twelve months.
REPORTS TO SECURITY HOLDERS
The Company's bylaws do not require the Company to deliver an annual report to
its shareholders and the Company has not in the past provided an annual report
to its shareholders. The Company makes its financial information equally
available to any interested parties or investors through compliance with the
disclosure rules of Regulation S-B for a small business issuer under the
Securities Exchange Act of 1934. The Company became subject to disclosure filing
requirements effective April 14, 2000, was cleared of all comments on August 24,
2000, and is current in its required filings, including Form 10-KSB annually and
Form 10-QSB quarterly. In addition, the Company will file Form 8 and other proxy
and information statements from time to time as required. The Company does not
intend to voluntarily file the above reports in the event its obligation to file
such reports is suspended under the Exchange Act.
The public may read and copy any materials the Company files with the Securities
and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 450
Fifth Street NW, 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-0330.
The SEC maintains an Internet site (http://www.sec.gov) that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC.
19
<PAGE> 20
Year 2000 Disclosure
During the last five years, almost all users of computers in public and business
applications were made aware that time-sensitive software might cause their
computer systems to recognize a date using "00" as the year 1900 rather than the
year 2000. Computer users were concerned that this software date problem might
result in system failures or miscalculations causing disruption of normal
business activities, primarily in the first weeks of 2000.
The Company's business plan directs the purchase of computer equipment and
software during the fourth quarter of 2000. The Company's Management has
hands-on familiarity with all of the software that will be utilized in its
business plan and has experienced no Year 2000 related systems problems as of
the date of this filing. Management has discussed Year 2000 computer systems
issues with proposed goods and services suppliers for the Company's business
plan and they have confirmed their computer related systems are already Year
2000 compatible.
Therefore, Management has made no Year 2000 compliance plans, other than to plan
purchases of computer systems and software which are already Year 2000
compatible. Management has no Year 2000 contingency plans and does not intend to
prepare future contingency plans related to Year 2000 compliance worst case
scenarios. Management reasonably anticipates that the Company will experience no
adverse operational or cash flow effect from Year 2000 computer related software
problems.
PLAN OF OPERATION
The Company's current cash balance is $1,588. Management believes the current
cash balance is sufficient to fund the current minimum level of operations
through the fourth quarter of 2000, however, in order to advance the Company's
business plan the Company must raise capital through the sale of equity
securities. To date, the Company has sold $9,100 in equity securities. Sales of
the Company's equity securities have allowed the Company to maintain a positive
cash flow balance.
The Company's business plan encompasses the following steps to implement its
boat servicing business plan: after raising capital of $3,000,000 during the
first six months, the Company intends to open one service site for boats in Los
Angeles, and one in San Diego, California during month seven. During months
seven through twelve, in order to operate both service sites, the Company
intends to expend $60,000 for two manager-service technicians, $120,000 for four
service assistants, $25,000 for two office clerical employees, $20,000 for
inventory, $200,000 for the purchase and outfitting of four service vehicles,
$600,000 for purchase of four service vessels, $10,000 for set-up and
maintenance of the Company's web site, $125,000 for advertising, $30,000 for one
marketing manager, $110,000 for purchase of computers and fixed assets, and
$62,000 for rent and other operating expenses.
Management has made initial progress in implementing its business plan by
registering its Internet domain name on the Internet, applying for U.S.
trademark protection, and plans to setup its web site in the second quarter of
2000. The Company will only be able to continue to advance its business plan
after it receives capital funding through the sale of equity securities. After
raising capital, Management intends to hire employees, rent commercial space in
San Diego and Los Angeles, purchase vehicles and equipment, and begin
development of its boat service operations. The
20
<PAGE> 21
Company intends to use its equity capital to fund the Company's business plan
during the next twelve months as cash flow from sales is not estimated to begin
until year two of its business plan. The Company will face considerable risk in
each of its business plan steps, such as difficulty of hiring competent
personnel within its budget, longer than anticipated development of its service
vehicles and vessels, and a shortfall of funding due to the Company's inability
to raise capital in the equity securities market. If no funding is received
during the next twelve months, the Company will be forced to rely on its
existing cash in the bank and funds loaned by the directors and officers. The
Company's officers and directors have not, as of the date of this filing loaned
any funds to the Company. There are no formal commitments or arrangements to
advance or loan funds to the Company or repay any such advances or loans. In
such a restricted cash flow scenario, the Company would be unable to complete
its business plan steps, and would, instead, delay all cash intensive
activities. Without necessary cash flow, the Company may be dormant during the
next twelve months, or until such time as necessary funds could be raised in the
equity securities market.
There are no current plans for additional product research and development. The
Company plans to purchase approximately $110,000 in furniture, computers,
software during the next twelve months from proceeds of its equity security
sales. The Company's business plan provides for an increase of thirteen
employees during the next twelve months.
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 13123 Poway Road, Poway, CA
92064. The principal executive office and telephone number are provided by Mr.
Chandler, an officer of the corporation. The costs associated with the use of
the telephone and mailing address were deemed by management to be immaterial as
the telephone and mailing address were almost exclusively used by the officer
for other business purposes. Management considers the Company's current
principal office space arrangement adequate until such time as the Company
achieves its business plan goal of raising capital of $3,000,000 and then begins
hiring new employees per its business plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The principal executive office and telephone number are provided by Mr.
Chandler, an officer of the corporation. The costs associated with the use of
the telephone and mailing address were deemed by management to be immaterial as
the telephone and mailing address were almost exclusively used by the officer
for other business purposes.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company plans to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers (NASD). The OTC
Electronic Bulletin Board is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network which provides
information on current "bids", "asks" and volume.
21
<PAGE> 22
As of the date of this filing, there is no public market for the Company's
securities. There has been no public trading of the Company's securities, and,
therefore, no high and low bid pricing of the Company's securities. As of July
31, 2000, the Company had 72 shareholders of record. The Company has paid no
cash dividends. The Company has no outstanding options. There is no pending or
proposed public offering of equity.
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
Summary Compensation Table
<TABLE>
<CAPTION>
Other
Name & annual Restricted LTIP All other
principle Salary Bonus compen- stock Options Payouts compen-
position Year ($) ($) sation ($) awards ($) SARs ($) sation ($)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A Chandler 1996 -0- -0- -0- -0- -0- -0- -0-
President 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
D Fulton 1996 -0- -0- -0- -0- -0- -0- -0-
Director 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
The Board agreed to pay Mr. Chandler for administrative services and services
related to the Company's business plan 100 shares of the Company's common stock
on September 15, 1994. The stock was valued at the price unaffiliated investors
paid for stock sold by the Company, $.10 per share. On December 8, 1999, 4,400
shares of the Company's common stock were issued to him per a 45 for 1 stock
split.
The Board agreed to pay Mr. Fulton for administrative services and services
related to the Company's business plan 100 shares of the Company's common stock
on September 15, 1994. The stock was valued at the price unaffiliated investors
paid for stock sold by the Company, $.10 per share. On December 8, 1999, 4,400
shares of the Company's common stock were issued to him per a 45 for 1 stock
split.
The terms of these stock issuances were as fair to the Company, in the Board's
opinion, as could have been made with an unaffiliated third party.
The officers currently devote an immaterial amount of time to manage the affairs
of the Company. The Directors and Principal Officers have agreed to work with no
remuneration until such time as the Company receives sufficient revenues
necessary to provide proper salaries to all Officers and compensation for
Directors' participation. The Officers and the Board of Directors have the
22
<PAGE> 23
responsibility to determine the timing of remuneration for key personnel based
upon such factors as positive cash flow to include stock sales, product sales,
estimated cash expenditures, accounts receivable, accounts payable, notes
payable, and a cash balance of not less than $15,000 at each month end. When
positive cash flow reaches $15,000 at each month end and appears sustainable the
board of directors will readdress compensation for key personnel and enact a
plan at that time which will benefit the Company as a whole. At this time,
management cannot accurately estimate when sufficient revenues will occur to
implement this compensation, or the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.
FINANCIAL STATEMENTS
The audited financial statements of the Company for the years ended March 31,
2000 and 1999 and related notes which are included in this offering have been
examined by Barry Friedman, CPA, and have been so included in reliance upon the
opinion of such accountants given upon their authority as an expert in auditing
and accounting. The Company's unaudited financial statements for the quarter
ended June 30, 2000 are also included in this filing. These documents are also
included in the Company's Form 10K and Form 10Q and are available on the
Securities and Exchange Commission's web site (www.sec.gov) or at the SEC's
Public Reference Room at 450 Fifth Street NW, Washington, DC 20549.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING CONTROL
AND FINANCIAL DISCLOSURE
None.
23
<PAGE> 24
TEKRON, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
MARCH 31, 2000
MARCH 31, 1999
MARCH 31, 1998
<PAGE> 25
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
------
<S> <C>
INDEPENDENT AUDITORS REPORT F-1
ASSETS F-2
LIABILITIES AND STOCKHOLDERS' EQUITY F-3
STATEMENT OF OPERATIONS F-4
STATEMENT OF STOCKHOLDERS' EQUITY F-5
STATEMENT OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7 - F-11
</TABLE>
<PAGE> 26
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors May 30, 2000
Tekron, Inc.
Poway, California
I have audited the accompanying Balance Sheets of Tekron, Inc. (A
Development Stage Company), as of March 31, 2000, March 31, 1999, and March 31,
1998, and the related statements of operations, stockholders' equity and cash
flows for the three years ended March 31, 2000, March 31, 1999, and March 31,
1998. 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 we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
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 Tekron, Inc. (A
Development Stage Company), as of March 31, 2000, March 31, 1999, and March 31,
1998, and the related statements of operations, stockholders' equity and cash
flows for the three years ended March 31, 2000, March 31, 1999, and March 31,
1998, 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 #5 to the
financial statements, the Company has suffered recurring losses from operations
and 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 is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, Nevada 89123
(702) 361-8414
<PAGE> 27
TEKRON, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
MARCH MARCH MARCH
31, 2000 31, 1999 31, 1998
-------- -------- --------
<S> <C> <C> <C>
CURRENT ASSETS
CASH $4,873 $9,100 $9,100
------ ------ ------
TOTAL CURRENT ASSETS $4,873 $9,100 $9,100
------ ------ ------
OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $4,873 $9,100 $9,100
------ ------ ------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
<PAGE> 28
TEKRON, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH MARCH MARCH
31, 2000 31, 1999 31, 1998
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES $ 0 $ 0 $ 0
------ ------ ------
TOTAL CURRENT LIABILITIES $ 0 $ 0 $ 0
------ ------ ------
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.00001
Authorized 20,000,000 shares
Issued and outstanding at
March 31, 1998 -
91,200 shares $ 1
March 31, 1999 -
91,200 shares $ 1
Common stock
Par value $0.001
Authorized 20,000,000 shares
Issued and outstanding at
March 31, 2000 -
4,104,000 shares $4,104
Additional Paid-In Capital +5,016 +9,119 +9,119
Deficit accumulated during
The Development stage -4,247 -20 -20
------ ------ ------
TOTAL STOCKHOLDERS' EQUITY $4,873 $9,100 $9,100
------ ------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $4,873 $9,100 $9,100
------ ------ ------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE> 29
TEKRON, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR YEAR YEAR MAY 31, 1994
ENDED ENDED ENDED (INCEPTION)
MAR. 31, MAR. 31, MAR. 31, TO MAR. 31,
2000 1999 1998 2000
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ----------
EXPENSES
General, Selling and
Administrative $ 4,227 $ 0 $ 0 $ 4,247
---------- ---------- ---------- ----------
TOTAL EXPENSES $ 4,227 $ 0 $ 0 $ 4,247
---------- ---------- ---------- ----------
NET PROFIT/LOSS (-) $ -4,227 $ 0 $ 0 $ -4,247
---------- ---------- ---------- ----------
Net Loss per share -
Basic and diluted
(Note #2) $ -.0010 $ NIL $ NIL $ -.0010
---------- ---------- ---------- ----------
Weighted average
Number of common
shares outstanding 4,104,000 4,104,000 4,104,000 4,104,000
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE> 30
TEKRON, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL ACCUMU-
COMMON STOCK PAID-IN LATED
SHARES AMOUNT CAPITAL DEFICIT
--------- --------- --------- -------
<S> <C> <C> <C> <C>
Balance,
March 31, 1997 200 $ 1 $ 19 $ -20
January 31, 1998
Issued For Cash 91,000 0 9,100
Net loss year ended
March 31, 1998 0
--------- --------- --------- -------
Balance,
March 31, 1998 91,200 $ 1 $ 9,119 $ -20
Net loss year ended
March 31, 1999 0
--------- --------- --------- -------
Balance,
March 31, 1999 91,200 $ 1 $ 9,119 $ -20
September 16, 1999
Changed Par Value
From $0.00001
To $0.001 +90 -90
December 8, 1999
Forward Stock Split
45 for 1 4,012,800 +4,013 -4,013
Net Loss year ended
March 31, 2000 -4,227
--------- --------- --------- -------
Balance,
March 31, 2000 4,104,000 $ 4,104 $ 5,016 $-4,247
--------- --------- --------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE> 31
TEKRON, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR YEAR YEAR MAY 31, 1994
ENDED ENDED ENDED (INCEPTION)
MAR. 31, MAR. 31, MAR. 31, TO MAR. 31,
2000 1999 1998 2000
------ ------ ------ ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $-4,227 $ 0 $ 0 $-4,247
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services 0 0 0 +20
Changes in assets and
Liabilities 0 0 0 0
------- ------ ------ -------
NET CASH USED IN
OPERATING ACTIVITIES $-4,227 $ 0 $ 0 $-4,227
CASH FLOWS FROM
INVESTING ACTIVITIES 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of Common
Stock for Cash 0 0 +9,100 +9,100
------- ------ ------ -------
Net Increase (decrease) $-4,227 $ 0 $ 0 $+4,873
Cash,
Beginning of period 9,100 9,100 0 0
------- ------ ------ -------
Cash, End of Period $ 4,873 $9,100 $9,100 $ 4,873
------- ------ ------ -------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE> 32
TEKRON, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized MAY 31, 1994, under the laws of the State of
Delaware as TEKRON, INC. The Company currently has no operations and in
accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
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 statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of March 31, 2000.
F-7
<PAGE> 33
TEKRON, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires
most 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 the adoption of SOP
98-5, there has been little or no effect on the company's
financial statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of March 31, 2000, the Company had no dilative common
stock equivalents such as stock options.
F-8
<PAGE> 34
TEKRON, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year End
The Company has selected March 31st as its fiscal year-end.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended March 31,
2000, due to the net loss and no state income tax in Delaware, the state
of the Company's domicile and operations. The Company's total deferred
tax asset as of March 31, 2000 is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 4,247
Valuation allowance $ 4,247
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire between 2015
and 2020.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
F-9
<PAGE> 35
TEKRON, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 20,000,000
shares with a par value $0.001 per share.
Preferred Stock
Tekron, Inc. has no preferred stock.
On September 15, 1994, the Company issued 200 shares of its $0.00001 par
value common stock in consideration of $0.10 per-share ($20.00) to its
directors.
On January 31, 1998, the Company issued 91,000 shares of its $0.00001
par value common stock for cash of $9,100.
On September 16, 1999, the State of Delaware approved the Company's
restated Articles of Incorporation, which changed the par value from
$0.00001 to $0.001.
On December 8, 1999, the Company approved a forward stock split on the
basis of 45 for 1, thus increasing the common stock from 91,200 shares
4,104,000 shares.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using 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 does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. The stockholders/officers and/or directors
have informally committed to advancing the operating costs of the
Company interest free.
F-10
<PAGE> 36
TEKRON, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
MARCH 31, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. 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.
F-11
<PAGE> 37
TEKRON, INC.
( a Development Stage Company)
BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
3 MONTHS YEAR
ENDED ENDED
6/30/00 3/31/00
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS
CASH 1,588 4,873
----- -----
TOTAL CURRENT ASSETS 1,588 4,873
FIXED ASSETS
----- -----
NET FIXED ASSETS 0 0
OTHER ASSETS
ORGANIZATION COSTS 0 0
LESS AMORTIZATION 0 0
----- -----
TOTAL OTHER ASSETS 0 0
----- -----
TOTAL ASSETS 1,588 4,873
===== =====
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
----- -----
TOTAL CURRENT LIABILITIES 0 0
LONG TERM LIABILITIES
----- -----
TOTAL LONG TERM LIABILITIES 0 0
----- -----
TOTAL LIABILITIES 0 0
STOCKHOLDERS' EQUITY
COMMON STOCK - $.001 par value 4,104 4,104
20,000,000 shares authorized, 4,104,000 issued
and outstanding at 6/30/00 and 4,104,000
issued and outstanding at 3/31/00
ADDITIONAL PAID IN CAPITAL 5,016 5,016
BEGINNING RETAINED DEFICIT -4,247 -20
NET LOSS -3,285 -4,227
----- -----
ENDING RETAINED DEFICIT -7,532 -4,247
----- -----
TOTAL STOCKHOLDERS' EQUITY 1,588 4,873
----- -----
TOTAL LIAB & STOCKHOLDERS' EQUITY 1,588 4,873
===== =====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-12
<PAGE> 38
FINANCIAL STATEMENTS (continued)
TEKRON, INC.
STATEMENTS OF OPERATIONS
(a Development Stage Company)
UNAUDITED
<TABLE>
<CAPTION>
5/31/94
3 MONTHS 3 MONTHS YEAR YEAR (INCEPTION)
ENDED ENDED ENDED ENDED TO
6/30/00 6/30/99 3/31/00 3/31/99 6/30/00
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
REVENUE
--------- --------- --------- --------- ---------
TOTAL REVENUE 0 0 0 0 0
DIRECT COSTS
--------- --------- --------- --------- ---------
TOTAL COST OF GOODS SOLD 0 0 0 0 0
--------- --------- --------- --------- ---------
GROSS PROFIT 0 0 0 0 0
EXPENSES
GENERAL, SELLING, AND ADMINISTRATIVE 3,285 0 4,227 0 7,532
--------- --------- --------- --------- ---------
TOTAL OPERATING EXPENSES 3,285 0 4,227 0 7,532
--------- --------- --------- --------- ---------
LOSS FROM OPERATIONS -3,285 0 -4,227 0 -7,532
OTHER INCOME & EXPENSE
--------- --------- --------- --------- ---------
TOTAL OTHER INCOME & EXPENSE 0 0 0 0 0
--------- --------- --------- --------- ---------
LOSS BEFORE TAXES -3,285 0 -4,227 0 -7,532
--------- --------- --------- --------- ---------
NET LOSS -3,285 0 -4,227 0 -7,532
========= ========= ========= ========= =========
NET LOSS PER SHARE -0.0008 NIL -0.0010 NIL -0.0018
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 4,104,000 4,104,000 4,104,000 4,104,000 4,104,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-13
<PAGE> 39
TEKRON, INC.
STATEMENTS OF CASH FLOWS
(a Development Stage Company)
UNAUDITED
<TABLE>
<CAPTION>
5/31/94
3 MONTHS 3 MONTHS YEAR YEAR (INCEPTION)
ENDED ENDED ENDED ENDED TO
6/30/00 6/30/99 3/31/00 3/31/99 6/30/00
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS -3,285 0 -4,227 0 -7,532
ADJ TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES 0 0 0 0 20
ISSUE COMMON STOCK
------ ----- ------ ----- ------
NET CASH USED IN OPERATING ACTIVITIES -3,285 0 -4,227 0 -7,512
CASH FLOWS FROM INVESTING ACTIVITIES 0 0 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES 0 0 0 0 9,100
------ ----- ------ ----- ------
NET INCREASE (DECREASE) -3,285 0 -4,227 0 1,588
CASH BEGINNING OF PERIOD 4,873 9,100 9,100 9,100 0
------ ----- ------ ----- ------
CASH END OF PERIOD 1,588 9,100 4,873 9,100 1,588
------ ----- ------ ----- ------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-14
<PAGE> 40
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The Board
of Directors will make determination regarding the indemnification of the
director, officer or employee as is proper under the circumstances if he/she has
met the applicable standard of conduct set forth in subsections (a) and (b) of
Section 145 of the Delaware General Corporation Law.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable. See section entitled
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities".
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 108
Accounting fees and expenses $2000
Legal fees $ 500
Total $2608
</TABLE>
The Company will pay all expenses of the offering listed above. No portion of
these expenses will be borne by the selling shareholders.
RECENT SALES OF UNREGISTERED SECURITIES
On September 15, 1994, the shareholders authorized the issuance of 100 shares of
common stock for services to each of the officers and directors of the Company
for a total of 200 Rule 144 shares. The Company relied upon Section 4(2) of
Securities Act of 1933, as amended (the "Act"). The Company issued the shares in
satisfaction of management services rendered to officers and directors, which
does not constitute a public offering.
From the period of approximately December 1, 1997 until January 31, 1998, the
Company offered and sold 91,000 shares at $0.10 per share to non-affiliated
private investors. The Company relied upon Section 4(2) of the Securities Act of
1933, as amended (the "Act"). Each prospective investor was given a private
placement memorandum designed to disclose all material aspects of an investment
in the Company, including the business, management, offering details, risk
factors and financial statements. Each investor also completed a subscription
confirmation letter and private placement subscription agreement whereby the
investors certified that they were purchasing the shares for their own accounts,
with investment intent and that each investor was either "accredited", or were
"sophisticated" purchasers, having prior investment experience or education, and
having adequate and reasonable opportunity and access to any corporate
information necessary to make
24
<PAGE> 41
an informed investment decision. This offering was not accompanied by general
advertisement or general solicitation and the shares were issued with a Rule 144
restrictive legend.
Under the Securities Act of 1933 , all sales of an issuers' securities or by a
shareholder, must either be made (i) pursuant to an effective registration
statement filed with the SEC, or (ii) pursuant to an exemption from the
registration requirements under the 1933 Act.
Rule 144 under the 1933 Act sets forth conditions which if satisfied, permit
persons holding control securities (affiliated shareholders, i.e., officers,
directors or holders of at least ten percent of the outstanding shares) or
restricted securities (non-affiliated shareholders) to sell such securities
publicly without registration. Rule 144 sets forth a holding period for
restricted securities to establish that the holder did not purchase such
securities with a view to distribute. Under Rule 144, several provisions must be
met with respect to the sales of control securities at any time and sales of
restricted securities held between one and two years. The following is a summary
of the provisions of Rule 144: (a) Rule 144 is available only if the issuer is
current in its filings under the Securities an Exchange Act of 1934. Such
filings include, but are not limited to, the issuer's quarterly reports and
annual reports; (b) Rule 144 allows resale of restricted and control securities
after a one year hold period, subjected to certain volume limitations, and
resales by non-affiliates holders without limitations after two years; ( c ) The
sales of securities made under Rule 144 during any three-month period are
limited to the greater of: (i) 1% of the outstanding common stock of the issuer;
or (ii) the average weekly reported trading volume in the outstanding common
stock reported on all securities exchanges during the four calendar weeks
preceding the filing of the required notice of the sale under Rule 144 with the
SEC.
On December 8, 1999, the Board of Directors authorized a forward stock split of
45 for 1 resulting in a total of 4,104,000 shares of common stock issued and
outstanding.
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit 1 Underwriting Agreement None
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation and Amendment Included
Exhibit 3(ii) Bylaws Included
Exhibit 4 Instruments defining the rights of holders None
Exhibit 5 Opinion re: Legality Included
Exhibit 8 Opinion re: Tax Matters None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material Contracts None
Exhibit 11 Statement re: computation of per share earnings See Financials
Exhibit 13 Annual or Quarterly Reports
The Company's 10K-SB for the year ended 3/31/00 and the Company's
10QSB for the quarter ended 6/30/00 are available through Edgar
on the Securities and Exchange Commission web site (www.sec.gov)
Exhibit 15 Letter on unaudited interim financial information None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included
</TABLE>
25
<PAGE> 42
<TABLE>
<S> <C> <C>
Exhibit 24 Power of Attorney None
Exhibit 25 Statement of eligibility of trustee None
Exhibit 26 Invitations for competitive bids None
Exhibit 27 Financial Data Schedule Included
</TABLE>
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement to:
1. Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
2. Reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement; and
3. Include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post- effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and
that the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities is asserted by
one of our directors, officers, or other controlling persons in connection with
the securities registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the final adjudication of such issue.
26
<PAGE> 43
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of San Diego, state
of California, on September 13, 2000.
Tekron, Inc.
By /s/ Andrew Chandler
--------------------------------------
Andrew Chandler, President & Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
dates stated.
/s/ Andrew Chandler , President, Secretary & Director 9/13/00
--------------------------- -------------
Andrew Chandler Date
/s/ Don Fulton , Treasurer 9/13/00
--------------------------- & Director -------------
Don Fulton, Date
27
<PAGE> 44
EXHIBIT INDEX
EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
<S> <C> <C>
Exhibit 1 Underwriting Agreement None
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation and Amendment Included
Exhibit 3(ii) Bylaws Included
Exhibit 4 Instruments defining the rights of holders None
Exhibit 5 Opinion re: Legality Included
Exhibit 8 Opinion re: Tax Matters None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material Contracts None
Exhibit 11 Statement re: computation of per share earnings See Financials
Exhibit 13 Annual or Quarterly Reports
The Company's 10K-SB for the year ended 3/31/00 and the Company's
10QSB for the quarter ended 6/30/00 are available through Edgar
on the Securities and Exchange Commission web site (www.sec.gov)
Exhibit 15 Letter on unaudited interim financial information None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included
Exhibit 24 Power of Attorney None
Exhibit 25 Statement of eligibility of trustee None
Exhibit 26 Invitations for competitive bids None
Exhibit 27 Financial Data Schedule Included
</TABLE>
