<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
DICUT, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 52-2204952
-------- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12140 Cotorro Way, San Diego, CA 92128
-------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 692-2142
--------------
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASSNAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTEREDEACH CLASS IS TO BE REGISTERED
-------------------------------- --------------------------------
-------------------------------- --------------------------------
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
-----------------------------
(TITLE OF CLASS)
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PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
ORGANIZATION
Dicut, Inc. was incorporated in Delaware on May 31, 1994 for the purpose of
developing and marketing a residential Hydronic Low Pressure Heating and Air
Conditioning system ("Hydronic LPHVAC") that would operate at lower pressure
levels than large commercial systems. During December 1997 and January 1998, the
Company received its initial funding through the sale of common stock to
investors. From inception until December 1999, the Company had no material
operating activities. In December 1999, Management completed its development and
testing of the Company's Hydronic LPHVAC design. In January 2000 Management
decided to seek necessary capital in order to advance the Company's business
plan.
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 major supplier of its proprietary Hydronic Low
Pressure Heating and Air Conditioning System ("Hydronic LPHVAC") to the
residential construction industry and the residential air conditioning repair
and replacement industry, first in California, and then throughout the United
States. The Company's target market includes single family residences,
condominiums, and apartment buildings. The Company's residential Hydronic LPHVAC
product is a heating and air conditioning system consisting of a trade secret
design for a gas fired temperature transfer generator that heats or chills an
aquas solution using natural gas, and a series of metal pipes, concealed
radiators, electric fans, and thermostats that set individual room temperatures.
The Company's Hydronic LPHVAC system is based on currently available large scale
commercial building hydronic systems that utilize high pressure techniques to
heat and cool large buildings. Unlike these large scale commercial hydronic
systems, the Company's residential Hydronic LPHVAC system has been designed with
a proprietary hydronic aquas temperature control system and operates at low
pressure levels that are
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approximately 70 PSI, comparable to residential interior water pipe pressure of
approximately 80 pounds PSI.
Fred McNorton developed the Hydronic LPHVAC system from 1994 through 1999. On
August 15, 1994 Mr. McNorton accepted the position of President of the Company.
On March 15, 1997, the Company signed an exclusive license agreement with its
President for use of his Hydronic LPHVAC design in exchange for 70,500
restricted shares of the Company's common stock. The number of shares issued was
based upon an estimate of the total costs incurred by Mr. McNorton for product
development and testing.
Based upon Management's experience in the residential construction industry and
in the design and manufacture of heating and cooling systems, the Company's
Hydronic LPHVAC system will offer contractors and owners of residential
dwellings the following advantages for heating and air conditioning
requirements:
The target price of the Company's proprietary new heating and air
conditioning system is estimated by Management to be eight to twelve
percent less than traditional systems installed in residential new
construction.
The installed cost to replace an existing residential heating and air
conditioning system with the Company's new Hydronic LPHVAC system is
estimated by management to be approximately six to eight percent less
than purchasing traditional replacement heating and air conditioning
systems. The Hydronic LPHVAC system may be easily retrofitted through
an existing building's central heating and air conditioning system and
in-wall air ducts.
The Company's Hydronic LPHVAC system is designed to primarily use
natural gas as its source of heating and cooling energy. Natural gas is
less expensive than electricity or heating oil as an energy source.
National average costs per one hundred thousand btu of useable heat are
$1.79 for electricity, $1.24 for heating oil, and $.95 for natural gas
((C)2000 warmair.com). In California, the target market for the first
two years of the Company's business plan, the cost of running a gas
based heating and air conditioning system is about $.60 per hour
compared to an all electric system of about $1.40 per hour ((C)2000
sdge.com/energy).
The Company's Hydronic LPHVAC system incorporates design features that
maintain low pressure levels in all components for safety and building
code compliance for residential applications. The Hydronic LPHVAC
system consists of a proprietary design for a gas fired temperature
transfer generator that utilizes a self-contained constant temperature
fluid bath and aquas fluid mixture that maintains temperature within
plus or minus five degrees of any temperature setting between thirty
eight degrees and one hundred fifty degrees Fahrenheit. The aquas fluid
mixture is an integral part of the design which functions to maintain
the bath temperatures. The aquas fluid mixture is an important
intellectual property of the company and is protected by trade secret
laws. Traditional heating and air conditioning systems, engineered to
maintain temperature fluctuations of plus or minus ten degrees, use
more energy as they repeatedly correct for wider temperature variances.
A key feature of The Company's Hydronic LPHVAC system allows individual
rooms
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within a residential building to be adjusted for temperature variances
up to ten degrees instead of a traditional system of heating or cooling
the building to only one temperature setting. Thus the rooms on the
side of a building facing the sun may be cooled more than the rooms on
the shady side of the building.
The Company's trade secret Hydronic LPHVAC constant temperature
controller and aquas bath system was designed to utilize existing
off-the-shelf components such as heating and electrical parts used in
gas furnaces, low pressure pipes, radiators, electric fans and
thermostats, all of which are available in building code approved
formats.
The Company has a current business plan which proposes to utilize its founders'
backgrounds to develop its business from the current design stage into a unique
affordable alternative to residential contractors for their new residential HVAC
and replacement HVAC needs.
The business plan requires the Company during the first two quarters to raise
capital of $5,000,000 through the sale of common stock in a private placement.
During the third quarter, after raising capital, the Company intends to utilize
subcontract manufacturers in California to begin production of its proprietary
residential Hydronic LPHVAC system for sale in California. The Company intends
to expend $2,500,000 for subcontractor production of its proprietary residential
Hydronic LPHVAC system, $75,000 for a marketing manager, $75,000 for two
salesmen, $30,000 for two office clerical employees, $20,000 for set-up and
maintenance of the Company's web site, $500,000 for advertising, $50,000 for
purchase of computers and fixed assets, and $75,000 for rent and other operating
expenses.
DISTRIBUTION METHODS OF PRODUCTS OR SERVICES
For the first two years of its business plan, the Company will advertise its
products through direct mailings to all major plumbing, heating, and air
conditioning companies in California. In addition, the Company will advertise
weekly in medium to large city construction newspapers and in developer,
construction, and plumbing trade journals throughout California. The Company
intends to offer information on its product to prospective contractor and
homeowner customers on its web site, www.hydronicsamerica.com, which will
feature product information and local plumbing contractors who will sell and
service the Company's Hydronic LPHVAC systems.
Based upon Management's experience in the heating and air conditioning
manufacturing business and the construction business, the Company will sell its
complete residential Hydronic LPHVAC product in a range of approximately $2,100
for a 2,000 sq. ft. building to $30,000 for a 25,000 sq. ft. building. This
compares to traditional complete heating and air conditioning products priced in
a range of approximately $2,500 for a 2,000 sq. ft. building to $37,500 for a
25,000 sq. ft. building per information from the Air Conditioning &
Refrigeration Institute ((C)2000 ari.org). These selling prices are for all
components including controls and air ducts, but exclude installation labor
which is approximately $1.25 to $1.50 per sq. ft. for the Company's Hydronic
LPHVAC product, the same installation labor price for traditional heating and
air conditioning systems.
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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 residential heating and air conditioning manufacturers, Carrier,
Rheem, Trane, and Lennox are substantially greater than those of the Company.
The Company intends to compete against these manufacturers by offering a product
that is approximately the same cost to install, but is less costly to run than
their systems. There are major competitors for large commercial building
hydronics systems, such as Kitec and Bio-Radiant Energy, Inc. However, none of
the current hydronics systems manufacturers offer products that incorporate the
Company's trade secret low pressure constant temperature features designed to
handle residential heating and air conditioning requirements in compliance with
building codes. 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 residential heating and air conditioning manufacturing 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 heating
and air conditioning manufacturing and construction businesses to arrange for
the manufacturer of its hydronic parts. The Company will utilize hydronic parts
manufacturers to produce and assemble its Hydronic LPHVAC product. While the
Company has no current contracts with hydronic parts manufacturers, Management
is aware of manufacturers and suppliers such as Sparco Hydronic Heating,
Plumbing, and Energy Products, Amtrol, Inc. and Haydon Thermogenic. Management
is aware that general manufacturing costs for its Hydronic LPHVAC product
currently average approximately fifty percent of its projected wholesale selling
price. 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 Company's
target market for the first two years of its business plan will be California
heating and air conditioning units installed in new housing starts and
replacement units for housing over fifteen years old. This market is served by
heating and air conditioning contractors in California estimated by Management
at over six thousand throughout the State. According to United States Census
Bureau housing data (census.gov/const) for residences of one to four units,
California averaged the following new construction starts per year:
<TABLE>
<CAPTION>
Time Period Average Number of New Housing Starts Per Year
<S> <C>
1980 - 1989 199,355
</TABLE>
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<TABLE>
<S> <C>
1990 - 1998 74,000
1999 103,888
</TABLE>
California's existing housing units total over 8,500,000 built before 1990 per
United States Census Bureau housing data (census.gov/const). Based upon an
average life for heating and air conditioning systems of fourteen to fifteen
years (Air Conditioning & Refrigeration Institute - (C)2000 ari.org), the
Company will target this large potential replacement market with its Hydronic
LPHVAC product. After the first two years of marketing in California, the
Company intends to expand into the national heating and air conditioning market.
The national residential housing market that the Company will target with its
Hydronic LPHVAC system includes single family residences, condominiums, and
apartment buildings averaging over 1,000,000 new housing starts per year, for a
total national market of existing units over 47,000,000 built since 1959 per
United States Census Bureau housing data (census.gov/const).
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, LABOR
CONTRACTS
The Company has setup its first web page "hydronicsamerica.com", and will expand
its web site in the third quarter of 2000. The Company has no current plans for
any additional registrations such as patents, trademarks, copyrights,
franchises, concessions, royalty agreements or labor contracts at this time. The
Company will assess the need for any additional copyright, trademark or patent
applications on an ongoing basis. The Hydronic LPHVAC system consists of a
proprietary design for a gas fired temperature transfer generator that utilizes
a self- contained constant temperature fluid bath and aquas fluid mixture that
maintains temperature within plus or minus five degrees of any temperature
setting between thirty eight degrees and one hundred fifty degrees Fahrenheit.
The aquas fluid mixture an integral part of the design which functions to
maintain the bath temperatures. The aquas fluid mixture is an important
intellectual property of the company and is protected by trade secret laws.
On March 15, 1997, the Company signed an exclusive license agreement with its
President for use of his Hydronic LPHVAC design in exchange for 70,500
restricted shares of the Company's common stock. The Company issued 70,500
shares of its common stock in exchange for a ten year exclusive right to
development, manufacturing, marketing, sale, sublicensing, and any and all
usages of the Hydronic LPHVAC design in the United States and throughout the
world. After ten years the license is subject to automatic renewal each year
thereafter, subject to written notification, sixty days in advance to the
renewal, by both parties of the license agreement.
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's business is not subject to material regulation by federal
governmental agencies. The Company will be required to meet all state and local
governmental building codes and standards for the manufacturer of its
residential Hydronics HVAC product.
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Management personnel are familiar with all California state and local building
codes, plumbing and health department regulations, and contractor licensing
requirements.
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 intends to hire
five new full time employees during the first twelve months of its business
plan.
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.
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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
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.
The Company's long-term viability is substantially dependent upon the widespread
acceptance of its residential Hydronics HVAC product. There is no historic
evidence that this type of new product will be accepted by the Company's
end-user, the residential home market or by the construction industry. The
potential lack of acceptance by purchasers of residential HVAC products could
have a material adverse effect upon the Company's business, financial condition,
operating results and cash flows.
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.
The current officers, Mr. McNorton and Mr. Davis, are the sole officers and
directors of the company and have control in directing the activities of the
company. Both officers are 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 $5,000,000 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. Investors in the Company
should be particularly aware of the inherent risks associated with the Company's
planned business. These risks include a lack of a proven
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market for the Company's residential Hydronics HVAC product, lack of equity
funding, and the size of the Company compared to the size of its competitors.
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 or anticipated arrangements, understandings or agreements with outside
parties for acquisitions, mergers or any other material transactions
YEAR 2000 DISCLOSURE
For several years, users of computers in business applications were concerned
that time-sensitive software might cause their computer systems to recognize a
date using "00" as the year 1900 rather than the year 2000. This date error
problem was expected to cause computer system errors adversely affecting normal
business activities 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.
Management's sole Year 2000 compliance plan is to purchase computer systems and
software which are already Year 2000 compatible. Other than the aforementioned
plan, Management has no current or contemplated Year 2000 contingency plans
related to Year 2000 compliance problems.
ITEM 2
PLAN OF OPERATION
The Company's current cash balance is $9200.00. 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 $9200.00 in equity securities. Sales
of the Company's equity securities have allowed the Company to maintain a
positive cash flow balance.
Management has made initial progress in implementing its business plan by
obtaining an exclusive licence for the use of the HVAC proprietary design,
registering its Internet domain name on the Internet, and opening its own web
page on the Internet. 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
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space in San Diego, and begin production and marketing of its residential
Hydronics LPHVAC product. 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 time for subcontractors to manufacture its residential Hydronics
LPHVAC product, 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 no formal commitments or arrangements to advance or
loan funds to the Company. 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 $50,000 in furniture, computers, and
software during the next twelve months from proceeds of its equity security
sales. The Company's business plan provides for an increase of five employees
during the next twelve months.
ITEM 3
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 12140 Cotorro Way, San
Diego, CA 92128. The principal executive office and telephone number are
provided by 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 $5,000,000 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 - February 29, 2000:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
<S> <C> <C> <C>
Common Fred McNorton 3,172,500(a) 38%
12140 Cotorro Way
San Diego, CA 92128
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common Richard Davis 1,057,500(b) 13%
12140 Cotorro Way
San Diego, CA 92128
Total Shares Owned by Officers & Directors
As a Group 4,230,000 51%
</TABLE>
(a) Mr. McNorton received 70,500 shares of the Company's common stock on March
15, 1997 for a license agreement related to the Company's business plan.
3,102,000 shares of the Company's common stock were issued to him per a 45 for 1
stock split on January 15, 2000.
(b) Mr. Davis received 23,500 shares of the Company's common stock on March 15,
1997 for administrative services and services related to the Company's business
plan. 1,034,000 shares of the Company's common stock were issued to him per a 45
for 1 stock split on January 15, 2000.
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 3/31/01, 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>
Fred McNorton 60 President, 9/15/94 3/31/01
12140 Cotorro Way Director
San Diego, CA 92128
Richard Davis 41 Secretary, 9/15/94 3/31/01
12140 Cotorro Way Treasurer,
San Diego, CA 92128 Director
</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
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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
Fred McNorton, President & Director
<TABLE>
<S> <C>
1999 - Current President, Real Estate Consulting Group, Inc.,
responsible for operations and marketing of company
specializing in construction inspection in Southern
California.
1997 - 1999 Director of Manufacturing, Williams Materials
Corporation, Colton, California, responsible for
manufacturing, purchasing, product distribution,
personnel - over 370 employee manufacturing firm
specializing in heating and air handling systems.
1988 - 1997 Director of Operations, Temtex Industries, Perris,
California, responsible for manufacturing, product
distribution, personnel - over 140 employee
manufacturing firm specializing in wood and gas
fireplace systems.
1959 - 1997 BS Mathematics, University of Louisville, MBA
studies, University of Louisville, Engineering
studies, Purdue University, Finance and Accounting
studies, Wartburg College.
Richard Davis, Secretary, Treasurer & Director
1995 - Current Order Coordinator, Ninteman Construction, San Diego,
California, largest commercial contractor in San
Diego, responsible for scheduling, purchasing,
logistics of construction materials and equipment for
an average of thirty five concurrent large scale
commercial construction projects.
1984 - 1995 General Contractor, San Diego, California, owned and
managed construction firm specializing in small
commercial projects and residential home
construction.
</TABLE>
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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>
F McNorton 1996 -0- -0- -0- -0- -0- -0- -0-
President 1997 -0- -0- -0- 7,050 -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
R Davis 1996 -0- -0- -0- -0- -0- -0- -0-
Secretary 1997 -0- -0- -0- 2,350 -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. McNorton 70,500 shares of common stock for an
exclusive license agreement on March 15, 1997. The stock was valued at the price
unaffiliated investors paid for stock sold by the Company, $.10 per share. On
January 15, 2000, 3,102,000 shares of the Company's common stock were issued to
him per a 45 for 1 stock split.
The Board agreed to pay Mr. Davis for administrative services and services
related to the Company's business plan 23,500 shares of the Company's common
stock on March 15, 1997. The stock was valued at the price unaffiliated
investors paid for stock sold by the Company, $.10 per share. On January 15,
2000, 1,034,000 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 $25,000 at each month end. When
positive cash flow reaches $25,000 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
-13-
<PAGE> 14
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.
McNorton, 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 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.
-14-
<PAGE> 15
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 February 29, 2000, the Company had 73 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 March 15, 1997, the shareholders authorized the issuance of 70,500 shares of
common stock to Mr. McNorton for a license agreement related to the Company's
business plan and 23,500 shares to Mr. Davis for administrative services and
services related to the Company's business plan for a total of 94,000 Rule 144
shares. The Company relied upon Section 4(2) of
-15-
<PAGE> 16
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 92,000 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 was a "sophisticated" purchaser, having prior investment
experience or education, and having adequate and reasonable opportunity to
access and review any corporate information necessary to make an informed
investment decision. These investors were known or familiar to the Officers and
Directors of the Company. This offering was not accompanied by general
advertisement or general solicitation and the shares were issued with a Rule
144 restrictive legend. The funds received were specifically allocated to
operating expenses of the Company.
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 January 15, 2000, the Board of Directors authorized a forward stock split of
45 for 1 resulting in a total of 8,370,000 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 reimbursement of certain legal defenses. As to
indemnification for liabilities arising under the
-16-
<PAGE> 17
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 February 29, 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.
-17-
<PAGE> 18
DICUT, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
FEBRUARY 29, 2000
MARCH 31, 1999
MARCH 31, 1998
<PAGE> 19
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-7-11
</TABLE>
<PAGE> 20
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors March 1 , 2000
Dicut, Inc.
Poway, California
I have audited the accompanying Balance Sheets of Dicut, Inc. (A
Development Stage Company), as of February 29, 2000, March 31, 1999, and March
31, 1998, and the related statements of operations, stockholders' equity and
cash flows for the period April 1, 1999 to February 29, 2000, and the two years
ended 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 Dicut, Inc. (A
Development Stage Company), as of February 29, 2000, March 31, 1999, and March
31, 1998, and the related statements of operations, stockholders' equity and
cash flows for the period April 1, 1999 to February 29, 2000, and the two years
ended 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, NV 89123
(702) 361-8414
F-1
<PAGE> 21
DICUT, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
FEBRUARY 29, MARCH 31, MARCH 31,
2000 1999 1998
------------ --------- ---------
<S> <C> <C> <C>
CURRENT ASSETS
CASH $9,200 $9,200 $9,200
------ ------ ------
TOTAL CURRENT ASSETS $9,200 $9,200 $9,200
------ ------ ------
OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $9,200 $9,200 $9,200
------ ------ ------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
<PAGE> 22
DICUT, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
FEBRUARY 29, MARCH 31, MARCH 31,
2000 1999 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 -
186,000 shares $ 2
March 31, 1999 -
186,000 shares $ 2
Common stock
Par value $0.001
Authorized 20,000,000 shares
Issued and outstanding at
February 29, 2000 -
8,370,000 shares $ 8,370
Additional Paid-In Capital +10,230 +18,598 +18,598
Deficit accumulated during
Development stage -9,400 -9,400 -9,400
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY $ 9,200 $ 9,200 $ 9,200
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,200 $ 9,200 $ 9,200
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE> 23
DICUT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Year Year May 31, 1994
Ended Ended Ended (Inception)
Feb. 29, Mar. 31, Mar. 31, to Feb. 29,
2000 1999 1998 2000
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ----------
EXPENSES
General, Selling and
Administrative $ 0 $ 0 $ 0 $ 9,400
---------- ---------- ---------- ----------
TOTAL EXPENSES $ 0 $ 0 $ 0 $ 9,400
---------- ---------- ---------- ----------
NET PROFIT/LOSS (-) $ 0 $ 0 $ 0 $ -9,400
---------- ---------- ---------- ----------
Net Profit/Loss (-)
per weighted share
(Note #1) $ NIL $ NIL $ NIL $ NIL
---------- ---------- ---------- ----------
Weighted average
Number of common
shares outstanding 8,370,000 8,370,000 8,370,000 8,370,000
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE> 24
DICUT, 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 94,000 $ 1 $ 9,399 $ -9,400
January 31, 1998
Issued For Cash 92,000 1 9,199
Net loss year ended
March 31, 1998 0
--------- --------- --------- ---------
Balance,
March 31, 1998 186,000 $ 2 $ 18,598 $ -9,400
Net loss year ended
March 31, 1999 0
--------- --------- --------- ---------
Balance,
March 31, 1999 186,000 $ 2 $ 18,598 $ -9,400
October 25, 1999
Changed Par Value
From $0.00001
To $0.001 +184 -184
January 15, 2000
Forward Stock Split
45 for 1 8,184,000 +8,184 -8,184
Net Loss
April 1, 1999 to
February 29, 2000 0
--------- --------- --------- ---------
Balance,
February 29, 2000 8,370,000 $ 8,370 $ 10,230 $ -9,400
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE> 25
DICUT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Year Year May 31,1994
Ended Ended Ended (Inception)
Feb. 29, Mar. 31, Mar. 31, to Feb. 29,
2000 1999 1998 2000
--------- --------- --------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $ 0 $ 0 $ 0 $ -9,400
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services 0 0 0 +9,400
Changes in assets and
Liabilities 0 0 0 0
--------- --------- --------- ---------
NET CASH USED IN
OPERATING ACTIVITIES $ 0 $ 0 $ 0 $ 0
CASH FLOWS FROM
INVESTING ACTIVITIES 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of Common
Stock for Cash 0 0 +9,200 +9,200
--------- --------- --------- ---------
Net Increase (decrease) $ 0 $ 0 $ 0 $ 0
Cash,
Beginning of period 9,200 9,200 0 0
--------- --------- --------- ---------
Cash, End of Period $ 9,200 $ 9,200 $ 9,200 $ 9,200
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE> 26
DICUT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 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 DICUT, 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 February 29, 2000.
F-7
<PAGE> 27
DICUT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 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 February 29, 2000, the Company had no dilative
common stock equivalents such as stock options.
F-8
<PAGE> 28
DICUT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 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 February 29,
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, 1999 is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $100
Valuation allowance $100
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire in 2015.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
F-9
<PAGE> 29
DICUT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 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
Dicut, Inc. has no preferred stock.
On August 15, 1994, the Company issued 94,000 shares of its $0.00001 par
value common stock in consideration of $0.10 per-share ($9,400.00) to
its directors.
On January 31, 1998, the Company issued 92,000 shares of its $0.00001
par value common stock for cash of $9,200.
On October 25, 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 January 15, 2000, the Company approved a forward stock split on the
basis of 45 for 1, thus increasing the common stock from 186,000 shares
8,370,000 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> 30
DICUT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 2000, MARCH 31, 1999, and MARCH 31, 1998
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
share 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> 31
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 Licensing Agreement Included in Previous Filing
Exhibit 11 Statement re: computation of per share earnings See Financial Stmts.
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 27 Financial Data Schedule Included
</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.
Dicut, Inc.
Date 7/18/00 By /s/ FRED MCNORTON
---------------------- --------------------------------------
Fred McNorton, President & Director
Date 7/18/00 By /s/ RICHARD DAVIS
---------------------- --------------------------------------
Richard Davis, Sec., Treas. & Director
