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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K-SB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED SEPTEMBER 30, 2000
COMMISSION FILE NUMBER 0-30669
DEL CERRO ENTERPRISES, INC.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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NEVADA 88-0453649
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3428 TROPHY DRIVE, LA MESA, CA 91941
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 692-2141
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(ISSUER'S TELEPHONE NUMBER)
</TABLE>
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
Common Stock - .001 Par Value
(Title of Class)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10 KSB
or any amendment to this Form 10-KSB.
Yes [X] No [ ]
The issuer had no revenues for the year ended September 30, 2000.
As of September 30, 2000, the registrant had 8,449,000 shares of common stock,
$.001 par value, issued and outstanding.
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PART 1
ITEM 1
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
Form And Year Of Organization
Del Cerro Enterprises, Inc. was incorporated in Nevada on March 10, 1999 for the
purpose of developing a high performance driving school in conjunction with
annual nationwide open road races. During March 1999, the Company received its
initial funding through the sale of common stock to investors. From inception
until March 2000, the Company had no material operating activities.
Any Bankruptcy, Receivership, Or Similar Proceeding
There have been no bankruptcy, receivership or similar proceedings.
Any Material Reclassification, Merger, Consolidation, Or Purchase Or Sale Of A
Significant Amount Of Assets Not In The Ordinary Course Of Business
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 Products Or Services And Their Markets
The Company intends to offer high speed driving courses at local road racing
facilities in conjunction with established open road races. The extensive
instruction will include a structured curriculum of classroom and track sessions
that will provide an understanding of the fundamentals of road racing. Classroom
sessions will emphasize techniques, racing lines, equipment preparation,
technical inspections and safety procedures. For those participating in the open
road races, sessions will also be offered to cover timing, driver/navigator team
participation, pre-run videos and detailed course notes. Track time will be an
intensive series of slalom, braking and downshifting exercises that give the
participant the opportunity to utilize the techniques and skills discussed in
the classroom in a systematic and controlled environment. Additional track time
will allow the instructor to critique the racer's skill application in a series
of lapping sessions at progressively higher speeds, utilizing radio
communication between instructor and student.
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The Company will initially focus on the participants in the three established
open road races organized by Rodger Ward's Classic Auto Racing Society:
Big Bend Open Road Race
US Highway 285, Fort Stockton - Sanderson - Ft. Stockton, Texas. 120
mile "boomerang" event held each April.
Gambler's Run Twin 50's
Nevada State Route 225, Elko - Wild Horse - Elko, Nevada. 100 mile
"boomerang" event held each June.
Pony Express Open Road Race
Nevada State Route 305, Battle Mountain - Austin, Nevada. 84 mile event
held each September.
Open Road Races are conducted on a section of State or Federal Highway,
generally 50 miles or more in length. The participants race the entire distance
at a target speed that they have qualified for based upon the tech speed of
their vehicle. The cars are started in a staggered format with the faster cars
starting first at two to three minute intervals. There is virtually no passing
and no wheel to wheel competition. Participants are required to show proof of
completion of an approved high speed driving course. Awards are given to
participants who come closest to averaging their target speed. Speed divisions
are differentiated by vehicle safety equipment and driver's racing experience -
Touring: 95-110mph, Grand Touring: 115-130mph, Grand Sport: 135-160mph, Super
Sport: 170-180mph, and Unlimited: 180+ mph.
Utilizing Management's experience in and knowledge of the motorsport industry,
the Company will conduct multi-day courses at a selection of the more than 25
road courses located in the states surrounding the open road races. These
include:
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Arizona
Firebird Intl. Raceway Chandler 1.6 mile
Phoenix Intl. Raceway Mesa 1.51 mile
California
Holtville Raceway Holtville 1.43 mile
Buttonwillow Raceway Buttonwillow 3 mile
Laguna Seca Monterey 2.24 mile
Sears Point Raceway Sonoma 2.52 mile
Willow Springs Motorsport Park Rosamond 2.5 mile
Colorado
Pueblo Motorsports Park Pueblo 2.2 mile
Aspen Sports Car Club Woody Creek 1.1 mile
</TABLE>
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<TABLE>
<S> <C> <C>
LaJunta Raceway LaJunta 1.6 mile
Mountain View Motor Sport Park Mead 1.8 mile
Pikes Peak Intl Raceway Fountain 1.3 mile
Second Creek Raceway Denver 1.7 mile
Nevada
Las Vegas Motor Speedway Las Vegas 2.5 mile
Reno-Fernley Raceway Fernley 15 mile
Texas
Cabaniss N.A.S. Corpus Cristi 2.6 mile
Texas Motor Speedway Fort Worth 2.5 mile
Texas World Speedway College Stn. 3.1 mile
Abilene Municipal Airport Abilene 1.7 mile
Oak Hill Raceway Henderson 1.8 mile
</TABLE>
Additional courses for those not participating in the open road races will also
be offered. These will include High Performance Driving - a course combining
advanced street driving skills with techniques refined through years on the
racetrack; Highway Survival Training - emphasizing defensive driving skills and
elements of car control such as accident avoidance, skid control and high-speed
braking; and Teenage Defensive Driving - teaching teens skills such as accident
avoidance, skid control, advanced braking and ABS techniques.
Auto Racing is the nation's fastest-growing spectator and TV sport, with an
attendance rising 11.4% annually over the past five years. According to a 1998
study conducted by Performance Research of Newport, RI, auto racing fans are the
most loyal of any sports fans to sponsor products and industry related
businesses. 78% of NASCAR fans and 68% of IndyCar fans claim they "almost
always" purchase a sponsor's product over a non-sponsor's product. Corporate
sponsorships for auto racing and race related businesses increased 9% in 1997
and is expected to continue at a growth rate of 5% - 10% annually. The study
shows the demographics of the auto racing audience to be:
<TABLE>
<CAPTION>
NASCAR INDYCAR
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Median Age 25-44 21-44
Gender 60% Male / 40% Female 69% Male / 31% Female
Marital Status 76% Married 71% Married
Median Income 38K - 49K 40K - 51K
Own 2 or more vehicles 86% 92%
Own 3 or more vehicles 61% 69%
</TABLE>
The Company's business plan proposes to utilize its founders' backgrounds to
develop its racing school. The business plan requires the Company during the
first six months of 2001 to raise capital of $2,500,000 through the sale of
common stock in a private placement. After raising the projected capital, the
Company has a planned budget for months seven through twelve of $957,000 for
development of its school to include $215,000 for five track vehicles and one
pre-run van, $240,000
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for one equipment hauler, $80,000 for two full-time instructors, $30,000 for
temporary track personnel, $180,000 for facility rentals - including insurance
and safety personnel, $25,000 for one marketing manager, $17,000 for one office
staff assistant, $25,000 for purchase of computers and fixed assets, $75,000 for
advertising, $20,000 for travel expenses, and $50,000 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
driving school through it's Directors' web site, www.openroadracing.com. In
addition, the Company will advertise in publications, such as AutoWeek,
AutoRacingDigest, and Grassroots Motorsports, maintain links on Internet web
pages such as racingschools.com, TheRaceNet.com, and RacingPress.com. Ads in
local newspapers and track publications surrounding the open road races will be
placed prior to each event. Sponsorships for drivers in local events will also
be considered.
Status Of Any Publicly Announced New Product Or Service
The Company has no new product or service planned or announced to the public.
Competitive Business Conditions And The Small Business Issuer's Competitive
Position In The Industry And Methods Of Competition
The size and financial strength of the Company's primary competitors, The
Bondurant School, Richard Petty Driving Experience and Skip Barber Racing School
are substantially greater than those of the Company. In examining major
competitors, Management has concluded none offer a driving school in conjunction
with a competitive open road race. The Bondurant and Barber racing schools
target the amateur and professional race car driver seeking to improve specific
areas of their driving and racing techniques. The Petty Driving Experience
targets racing enthusiasts with programs designed to provide them the
opportunity to drive a race car in a controlled environment. 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 motorsport market, however,
the Company at this time has no market share of this market.
Sources And Availability Of Raw Materials And The Names Of Principal Suppliers
Management will rely on their combined experience and knowledge in the auto
racing business to arrange for the acquisition of vehicles for the racing
school. The Company will utilize road race chassis builders to design and
assemble its vehicles and purchase engines from motorsport engine builders to be
installed in the cars. While the Company has no current contracts with chassis
or engine builders, Management is aware of chassis builders such as Neely
Motorsports, Hutcherson-Pagan Enterprises and S&W Race Cars, and engine
builders such as Gustaf Engine & Machine, Draime Racing Engines and Skip Govia
Motorsports, Inc. Miscellaneous parts and safety equipment are available from
many suppliers such as Trac Dynamics, Simpson Racing, BSR
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Products and Port City Racing. Management is also aware of opportunities to
purchase turn-key vehicles from professional race teams at auctions held
annually throughout the U.S. and will consider the most cost-efficient means for
the acquisition of the vehicles while meeting all safety specifications. The
Company will enter into agreements with chassis and engine builders per its
business plan after raising capital during the first six months of 2001 per 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 is the millions of auto racing fans in the U.S. There are
currently 1,585 race tracks located in the United States, 286 of those located
in the states surrounding the road races organized by the Company's Directors.
"Auto Racing is the fastest growing sport in America today, the economics of the
motor-sports industry are very, very attractive". (Raymond James & Assoc.,
Investment Analysts) "Speed Sells... Auto Racing is America's new Favorite sport
and it's hottest new marketing vehicle. Over nine million people attended NASCAR
events alone in 1998, with over 2 billion tickets sold for auto racing events
worldwide. Attendance is up 63% since 1990, and retail revenues are expected to
exceed $1 billion this year, up from only $80 million in 1990." (Fortune
Magazine 4/12/99). A typical Open Road Formula One race is watched by a European
television audience of 310 million. U.S. promoters are building the American
audience for road racing by bringing top European racers to the U.S. (www.
businessweek.com/1997/32/b3539109.htm).
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or
Labor Contracts, Including Duration
The Company has no current plans for any registrations such as patents,
trademarks, copyrights, franchises, concessions, royalty agreements or labor
contracts. When the Company has sufficient funding, management will seek legal
council to determine if any such registrations would be in its best interests.
Need 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. Open Road Races are organized with State or Federal
Highway officials allowing promoters to shut down a designated section of
highway for a period of 8 to 10 hours. Drivers participating in the school will
be required to show a valid state, military or international driver's license.
Effect Of Existing Or Probable Governmental Regulations On The 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
safety standards for the vehicles used in its driving schools. Management
personnel are familiar with all state and local safety requirements based on
their experience operating open road racing events.
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Estimate Of The Amount Spent During Each Of The Last Two Fiscal Years On
Research And Development Activities, And If Applicable The Extent To Which The
Cost Of Such Activities Are Borne Directly By Customers
The Company has not expended funds for research and development costs since
inception.
Costs And Effects Of Compliance With Environmental Laws
The Company has not expended any funds for compliance with environmental laws
and does not anticipate its business plan will encompass any such compliance
requirements.
Number Of Total Employees And Number of Full Time 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 four new employees during the next twelve months.
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.
Despite Management's belief that the Company can effectively compete because of
its courses being offered in conjunction with existing open road race events,
the Company's ability to succeed will depend upon a number of factors, including
its ability to secure funding through a private placement, hire instructors,
coordinate rental of track facilities, and convince participants to utilize the
driving school in order to maintain ongoing sales.
The Company's long-term viability is substantially dependent upon market
acceptance. The potential lack of acceptance by purchasers of the Company's
racing programs 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 drivers 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 drivers
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 drivers 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. Ward and Mrs. Ward, are the sole officers and
directors of the company
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and have control in directing the activities of the company. They 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 $2,500,000 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 motorsport business. These risks include a lack of a proven market for
the Company's school, 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 a 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, understandings or
agreements with outside parties for acquisitions, mergers or any other material
transactions.
Year 2000 Disclosure
Before 2000, business users of computers were 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 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.
As of the date of this filing, 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.
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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 provided an annual report to its
shareholders in the past. The Company is voluntarily filing this Form 10K-SB in
order to make its financial information equally available to any interested
parties or investors. The Company is subject to the disclosure rules of
Regulation S-B for a small business issuer under the Securities Act of 1933 and
the Securities Exchange Act of 1934. The Company is 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 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, N. W., Washington D. C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-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 SEC.
ITEM 2
DESCRIPTION OF PROPERTY
The Company's principal executive office address is 3428 Trophy Drive, La Mesa,
CA 91941. 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 $2,500,000 and then begins hiring new employees
per its business plan.
ITEM 3
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended September 30, 2000, there
were no submissions of matters to a vote of security holders.
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PART II
ITEM 5
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 September 30, 2000, the Company had 61 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 6
PLAN OF OPERATION
The Company's current cash balance is $1,554. Management believes the current
cash balance is sufficient to fund the current minimum level of operations
through December 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 $5,900 in equity securities and used approximately $4,346
for audit and bank fees. 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
goals: during months one through six of 2001 raise capital of $2,500,000 through
the sale of common stock in a private placement; during months seven through
twelve budget $957,000 for development of its school to include $215,000 for
five track vehicles and one pre-run van, $240,000 for one equipment hauler,
$80,000 for two full-time instructors, $30,000 for temporary track personnel,
$180,000 for facility rentals - including insurance and safety personnel,
$25,000 for one marketing manager, $17,000 for one office staff assistant,
$25,000 for purchase of computers and fixed assets, $75,000 for advertising,
$20,000 for travel expenses, and $50,000 for rent and other operating expenses.
The Company will only be able 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 La Mesa,
California, purchase furniture and equipment, and begin development of its
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, difficulty in securing track
facility rental, 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
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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 $25,000 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 four employees
during the next twelve months.
ITEM 7
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The required financial statements begin on page F-1 of this document.
ITEM 8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING CONTROL
AND FINANCIAL DISCLOSURE
None.
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DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
SEPTEMBER 30, 1999
<PAGE> 14
TABLE OF CONTENTS
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PAGE #
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INDEPENDENT AUDITORS REPORT F-1
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ASSETS F-2
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LIABILITIES AND STOCKHOLDERS' EQUITY F-3
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STATEMENT OF OPERATIONS F-4
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STATEMENT OF STOCKHOLDERS' EQUITY F-5
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STATEMENT OF CASH FLOWS F-6
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NOTES TO FINANCIAL STATEMENTS F-7-11
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</TABLE>
<PAGE> 15
[BARRY L. FRIEDMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors October 23, 2000
DEL CERRO ENTERPRISES, INC.
San Diego, California
I have audited the accompanying Balance Sheets of DEL CERRO ENTERPRISES,
INC. (A Development Stage Company), as of September 30, 2000, and September 30,
1999, and the related statements of operations, stockholders' equity and cash
flows for the year ended September 30, 2000, and the period March 10, 1999,
(inception), to September 30, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that 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 DEL CERRO
ENTERPRISES, INC. (A Development Stage Company), as of September 30, 2000, and
September 30, 1999, and the related statements of operations, stockholders'
equity and cash flows for the year ended September 30, 2000, and the period
March 10, 1999, (inception), to September 30, 1999, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, Nevada 89123
702-361-8414
F-1
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DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER SEPTEMBER
30, 2000 30, 1999
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<S> <C> <C>
CURRENT ASSETS
CASH $ 1,554 $ 5,900
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TOTAL CURRENT ASSETS $ 1,554 $ 5,900
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OTHER ASSETS $ 0 $ 0
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TOTAL OTHER ASSETS $ 0 $ 0
------------ ------------
TOTAL ASSETS $ 1,554 $ 5,900
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</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
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DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER SEPTEMBER
30, 2000 30, 1999
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<S> <C> <C>
CURRENT LIABILITIES $ 0 $ 0
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TOTAL CURRENT LIABILITIES $ 0 $ 0
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STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.001
Authorized 50,000,000 shares
Issued and outstanding at
September 30, 1999-
119,000 shares $ 119
September 30, 2000-
8,449,000 shares $ 8,449
Additional Paid-In Capital +3,451 +11,781
Deficit accumulated during
The Development stage -10,346 -6,000
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TOTAL STOCKHOLDERS' EQUITY $ 1,554 $ 5,900
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,554 $ 5,900
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</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
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DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR MAR. 10, MAR. 10, 1999
ENDED 1999, TO (INCEPTION)
SEP. 30, SEP. 30, TO SEP. 30,
2000 1999 2000
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<S> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0
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EXPENSES
General, Selling and
Administrative $ 4,346 $ 6,000 $ 10,346
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TOTAL EXPENSES $ 4,346 $ 6,000 $ 10,346
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NET PROFIT/LOSS (-) $ -4,346 $ -6,000 $ -10,346
------------- ------------- ---------------
Net Profit/Loss (-)
per weighted share
(Note #1) $ -.0005 $ -.0007 $ -.0012
------------- ------------- ---------------
Weighted average
Number of common
shares outstanding 8,449,000 8,449,000 8,449,000
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</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE> 19
DEL CERRO ENTERPRISES, 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>
March 24, 1999
Issued For Services 60,000 $ 60 $ 5,940
April 2, 1999
Issued For Cash 59,000 59 5,841
Net loss year ended
March 10, 1999
(Inception) to
September 30, 1999 $ -6,000
------------- ------------- ------------ -------------
Balance,
September 30, 1999 119,000 $ 119 $11,781 $ -6,000
March 15, 2000
Forward Stock Split
70 for 1 8,330,000 +8,330 -8,330
Net Loss Year Ended
September 30, 2000 -4,346
------------- ------------- ------------ -------------
Balance,
September 30, 2000 8,449,000 $ 8,449 $ 3,451 $-10,346
------------- ------------- ------------ -------------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE> 20
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR MAR. 10, MAR. 10, 1999
ENDED 1999, TO (INCEPTION)
SEP. 30, SEP. 30, TO SEP. 30,
2000 1999 2000
--------- --------- -----------
<S> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss $-4,346 $-6,000 $-10,346
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services 0 +6,000 +6,000
Changes in assets and
Liabilities 0 0 0
------ ------ ---------
Net cash used in
Operating activities $-4,346 $ 0 $ -4,346
Cash Flows from
Investing Activities 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock for Cash 0 +5,900 +5,900
------ ------ ---------
Net Increase (decrease) $-4,346 $+5,900 +1,554
Cash,
Beginning of period +5,900 0 0
------ ------ ---------
Cash, End of Period $1,554 $5,900 $ 1,554
------ ------ ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE> 21
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized March 10,1999, under the laws of the State of
Nevada as DEL CERRO ENTERPRISES, 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.
F-7
<PAGE> 22
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999
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 September 30, 2000, the Company had no dilative
common stock equivalents such as stock options.
F-8
<PAGE> 23
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year End
The Company has selected September 30th as its fiscal year-end.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended September
30, 2000. The Company's total deferred tax asset as of September 30,
2000, is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 10,346
Valuation allowance $ 10,346
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire between 2019
and 2020.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
F-9
<PAGE> 24
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 50,000,000
shares with a par value $0.001 per share.
Preferred Stock
The Company has no preferred stock.
On March 24, 1999, the Company issued 60,000 shares of its $0.001 par
value common stock for services of $6,000 to its directors.
On March 24, 1999, the State of Nevada approved the Company's restated
Articles of Incorporation, which changed the par value from no par to
$0.001. Also, the Company's authorized common stock was increased from
25,000 shares to 50,000,000 shares.
On March 15, 2000, the Company approved a forward stock split on the
basis of 70 for 1, thus increasing the common stock from 119,000 shares
8,449,000 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, if necessary.
F-10
<PAGE> 25
DEL CERRO ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company
are involved in other business activities and may in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
F-11
<PAGE> 26
PART III
ITEM 9
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>
<S> <C> <C> <C> <C>
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
Rodger Ward 79 President, 3/15/99 3/31/01
3428 Trophy Drive Treasurer,
La Mesa, CA 91941 Director
Sherrie Ward 49 Secretary, 3/15/99 3/31/01
3428 Trophy Drive Director
La Mesa, CA 91941
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the Securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment 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
Rodger Ward, President, Treasurer & Director
1995-Current President, Classic Auto Racing Society, El Cajon, California.
Company specializes in staging open road competition races in
various states. Responsible for staff and safety personnel
training, public relations, marketing, technical rule
enforcement, technical inspection personnel
13
<PAGE> 27
training, course design and selection.
1980-Current Racing Analyst, Speaker
1979-1984 Director of Special Events, Circus Circus Hotel & Casino, Las
Vegas, NV Manager, Circus Circus Unlimited Hydroplane Racing
Team
1975 - 1978 Owner/Promoter, Owasso Motor Speedway, Michigan
1969 - 1972 Director of Public Relations, Ontario Motor Speedway, California
Indianapolis 500 Champion 1959 & 1962
USAC National Champion 1959 & 1962
Sherrie Ward, Secretary & Director
1994-Current Secretary, Treasurer, Classic Auto Society, El Cajon,
California. Company specializes in staging open road competition
races in various states. Responsible for licensing, state and
local permits, pre event planning and setup, administration,
accounting, contract preparation, television broadcasting
negotiations, event scheduling, sponsorships, and daily
operations management.
ITEM 10
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>
R Ward 1999 -0- -0- -0- 3,000 -0- -0- -0-
Pres., Tres., 2000 -0- -0- -0- -0- -0- -0- -0-
Director
S Ward 1999 -0- -0- -0- 3,000 -0- -0- -0-
Secretary, 2000 -0- -0- -0- -0- -0- -0- -0-
Director
</TABLE>
There are no current employment agreements between the Company and its executive
officers.
The Board agreed to pay Mr. Ward for administrative services 30,000 shares of
the Company's common stock on March 12, 1999. The stock was valued at the price
unaffiliated investors paid for stock sold by the Company, $.10 per share. On
March 15, 2000, 2,100,000 shares of the Company's common stock were issued to
him per a 71 for 1 stock split.
14
<PAGE> 28
The Board agreed to pay Mrs. Ward for administrative services 30,000 shares of
the Company's common stock on March 12, 1999. The stock was valued at the price
unaffiliated investors paid for stock sold by the Company, $.10 per share. On
March 15, 2000, 2,100,000 shares of the Company's common stock were issued to
her per a 71 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 that benefits 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 11
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 - September 30, 2000:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
----- ------- --------------- -------
<S> <C> <C> <C>
Common Rodger Ward 2,130,000(a) 25%
3428 Trophy Drive
La Mesa, CA 91941
Common Sherrie Ward 2,130,000(b) 25%
3428 Trophy Drive
La Mesa, CA 91941
Total Shares Owned by Officers & Directors
As a Group 4,260,000 50%
</TABLE>
15
<PAGE> 29
(A) Mr. Ward received for administrative services 30,000 shares of
the Company's common stock on March 12, 1999. 2,100,000 shares
of the Company's common stock were issued to him per a 71 for 1
forward stock split on March 15, 2000.
(B) Mrs. Ward received for administrative services 30,000 shares of
the Company's common stock on March 12, 1999. 2,100,000 shares
of the Company's common stock were issued to her per a 71 for 1
forward stock split on March 15, 2000.
ITEM 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The principal executive office and telephone number are provided by Mr. Ward, 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 13
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
Exhibit 23 Consent of Experts and counsel
Exhibit 27 Financial Data Schedule
</TABLE>
Reports filed on Form 8-K: None
Reports required to be filed by Regulation S-X: None
<PAGE> 30
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Del Cerro Enterprises, Inc.
<TABLE>
<S> <C>
Date October 20, 2000 By /s/ Rodger Ward
--------------------------------
Rodger Ward, President, Secretary &
Director
Date October 20, 2000 By /s/ Sherrie Ward
--------------------------------
Sherrie Ward, Treasurer & Director
</TABLE>
