<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
1st Amendment
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
TEKRON, INC.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 51-0395658
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
13123 Poway Road, Poway, CA 92064
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 692-5868
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(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
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(TITLE OF CLASS)
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PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
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 and repair services. From inception until December
1999, Management reviewed the marine services market while they completed
contractual obligations for other businesses, 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 1993, 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
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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:
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
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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
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.
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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.
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.
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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 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 second 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
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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.
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.
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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 is voluntarily filing this Form 10-SB in order
to make its financial information equally available to any interested parties or
investors. The Company will be subject to the disclosure rules of Regulation S-B
for a small business issuer under the Securities Exchange Act of 1934. The
Company anticipates it will become subject to disclosure filing requirements
effective sixty days after the date the Securities and Exchange Commission
accepts its original Form 10-SB filing, and, after that date, will be required
to file Form 10-KSB annually and Form 10-QSB quarterly. In addition, the Company
will be required to 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.
RISKS
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.
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
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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.
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. Management has no liquidation
plans should the Company be unable to receive funding. Should the Company be
unable to implement its business plan, Management would investigate all options
available to retain value for the shareholders. Among the options that would be
considered are: acquisition of another product or technology, or a merger or
acquisition of another business entity that has revenue and/or long-term growth
potential. However, there are no pending arrangements,
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understandings or agreements with outside parties for acquisitions, mergers or
any other material transactions.
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 second half 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.
ITEM 2
PLAN OF OPERATION
The Company's current cash balance is $9,100. Management believes the current
cash balance is sufficient to fund the current minimum level of operations
through the second 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.
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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 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.
ITEM 3
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.
ITEM 4
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 - January 31,2000:
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<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
<S> <C> <C> <C>
Common Andrew Chandler 4,500 (a) 1%
13123 Poway Road
Poway, CA 92064
Common Don Fulton 4,500 (b) 1%
13123 Poway Road
Poway, CA 92064
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.
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose one year terms
will expire 3/31/00, 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 40 President, 9/15/94 3/31/01
13123 Poway Road Secretary,
Poway, CA 92064 Director
Don Fulton 60 Treasurer, 9/15/94 3/31/01
13123 Poway Road Director
Poway, CA 92064
</TABLE>
Each of the foregoing persons, Mr. Chandler and Mr. Fulton, 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. Mr. Chandler and Mr.
Fulton are the only promoters of
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the Company.
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 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
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<PAGE> 14
ITEM 6
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
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
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<PAGE> 15
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.
ITEM 7
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.
ITEM 8
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
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<PAGE> 16
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 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.
PART II
ITEM 1
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" and "asks" as well as volume information.
As of the date of this filing, there is no public market for the Company's
securities. As of January 31, 2000, the Company had 72 shareholders of record.
The Company has paid no cash dividends. The Company has no outstanding options.
The Company has no plans to register any of its securities under the Securities
Act for sale by security holders. There is no public offering of equity and
there is no proposed public offering of equity.
ITEM 2
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
On September 15, 1994, the shareholders authorized the issuance of 100 shares of
common
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<PAGE> 17
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 1993, 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
1993, 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 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.
ITEM 5
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
By-Laws also allow for
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<PAGE> 18
reimbursement of certain legal defenses. 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.
PART F/S
The audited financial statements of the Company for the years ended March 31,
1998 and 1999, and the period ended January 31, 2000 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.
-18-
<PAGE> 19
PART III
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included in previous filing
Exhibit 3(ii) Bylaws Included in previous filing
Exhibit 4 Instruments defining the rights of holders None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Trademark Application Included in previous filing
Exhibit 11 Statement re: computation of per share earnings Included in previous filing
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel None
Exhibit 24 Power of Attorney None
Exhibit 27 Financial Data Schedule Included in previous filing
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Tekron, Inc.
Date 5/25/00 By /s/ Andrew Chandler
----------------- ------------------------------------------
Andrew Chandler, Pres., Sec. & Director
Date 5/25/00 By /s/ Don Fulton
----------------- ------------------------------------------
Don Fulton, Treasurer & Director
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