SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
New Horizon Education, Inc.
(Name of Small Business Issuer in its charter)
Utah 87-0319410
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2250 W. Center Street, Springville, UT 84663
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 801-489-0222
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class is to be registered
_____________________________ ______________________________
_____________________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
Common, no par value
(Title of Class)
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ITEM NUMBER AND CAPTION Page
Part I
1. Description of Business 3
2. Management's Discussion and Analysis or Plan of Operations 6
3. Description of Properties 6
4. Security Ownership of Certain Beneficial Owners and Management 6
5. Directors, Executive Officers, Promoters and Control Persons 8
6. Executive Compensation 9
7. Certain Relationships and Related Transactions 9
8. Description of Securities 10
Part II
1. Market Price of and Dividends on the Registrant's 10
Common Equity and Related Stockholder Matters
2. Legal Proceedings 12
3. Changes in and Disagreements with Accountants 12
4. Recent Sales of Unregistered Securities 12
5. Indemnification of Directors and Officers 13
Part F/S Financial Statements 14
Part III
1. Index to Exhibits 15
2. Description of Exhibits 15
Signatures 16
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. For this purpose any statements contained in this Form 10-SB
that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, words
such as "may", "will", "expect", "believe", "anticipate", "estimate"
or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not
within the Company's control. These factors include but are not
limited to economic conditions generally and in the industries in
which the Company may participate; competition within the Company's
chosen industry, including competition from much larger competitors;
technological advances and failure by the Company to successfully
develop business relationships.
The Company is voluntarily filing this Registration Statement
with the Securities and Exchange Commission and is under no
obligation to do so under the Securities Exchange Act of 1934.
PART I
Item 1. Description of Business.
The Company originally incorporated in the State of Utah on May
9, 1972, under the name High-Line Investment & Development Company.
In 1977, the Company changed its name to Gayle Industries, Inc. In
1978 the Company merged into its subsidiary Swing Bike and kept the
Swing Bike name. In 1979 the Company changed its name to Horizon
Energy Corp. In 1992 the Company changed its name to Millennium
Entertainment Corp. And in 1993 the Company changed its name to New
Horizon Education, Inc. Later that year, the Company formed a new
subsidiary and began marketing computer education programs. The
Company was not successful in its marketing operations and in 1995
the Company sold its assets and ceased operations leaving both the
parent Company and its subsidiary with no operations. In 1997, the
Company sold the subsidiary. The Company has not had active business
operations since 1995, and is considered to have re-entered the
development stage as of January 1, 1998.
In June of 2000, the shareholders authorized a fifty (50) to one
(1) reverse split in an attempt to attract business opportunities and
to potentially develop a greater liquidity for the shares of the
Company. Holders of fractional shares were paid a fair market value
by the Company with a check sent to the shareholder's last known
address. Returned checks are being held by Company's counsel in an
escrow account pursuant to Utah law.
The Company intends to seek, investigate, and if warranted,
acquire an interest in a business opportunity. The Company does not
propose to restrict its search for a business opportunity to any
particular industry or geographical area and may, therefore, engage
in essentially any business in any industry. The Company has
unrestricted discretion in seeking and
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participating in a business opportunity, subject to the availability
of such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate
is complex and extremely risky and will be made by management in the
exercise of its business judgment. There is no assurance that the
Company will be able to identify and acquire any business opportunity
which will ultimately prove to be beneficial to the Company and its
shareholders.
The activities of the Company are subject to several significant
risks which arise primarily as a result of the fact that the Company
has no specific business and may acquire or participate in a business
opportunity based on the decision of management which will, in all
probability, act without the consent, vote, or approval of the
Company's shareholders.
Sources of Opportunities
It is anticipated that business opportunities may be available
to the Company from various sources, including its officers and
directors, professional advisers, securities broker-dealers, venture
capitalists, members of the financial community, and others who may
present unsolicited proposals.
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them
and other business and professional people. Although the Company
does not anticipate engaging professional firms specializing in
business acquisitions or reorganizations, if management deems it in
the best interests of the Company, such firms may be retained. In
some instances, the Company may publish notices or advertisements
seeking a potential business opportunity in financial or trade
publications.
Criteria
The Company will not restrict its search to any particular
business, industry or geographical location. The Company may acquire
a business opportunity or enter into a business in any industry and
in any stage of development. The Company may enter into a business
or opportunity involving a "start up" or new company. The Company
may acquire a business opportunity in various stages of its
operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management
group, or product or industry, but will be based upon the business
objective of seeking long-term capital appreciation in the real value
of the Company.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and
managerial resources; working capital and other financial
requirements; the history of operations, if any; prospects for the
future; the nature of present and expected competition; the quality
and experience of management services which may be available
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and the depth of the management; the potential for further research,
development or exploration; the potential for growth and expansion;
the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of
available facts, without reliance upon any single factor as
controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the
basis of that review, the legal structure or method of participation
deemed by management to be suitable will be selected. Such
structures and methods may include, but are not limited to, leases,
purchase and sale agreements, licenses, joint ventures, other
contractual arrangements, and may involve a reorganization, merger or
consolidation transaction. The Company may act directly or
indirectly through an interest in a partnership, corporation, or
other form of organization.
Procedures
As part of the Company's investigation of business
opportunities, officers and directors may meet personally with
management and key personnel of the firm sponsoring the business
opportunity, visit and inspect material facilities, obtain
independent analysis or verification of certain information provided,
check references of management and key personnel, and conduct other
reasonable measures.
The Company will generally request that it be provided with
written materials regarding the business opportunity containing such
items as a description of product, service and company history;
management resumes; financial information; available projections with
related assumptions upon which they are based; an explanation of
proprietary products and services; evidence of existing patents,
trademarks or service marks or rights thereto; present and proposed
forms of compensation to management; a description of transactions
between the prospective entity and its affiliates; relevant analysis
of risks and competitive conditions; a financial plan of operation
and estimated capital requirements; and other information deemed
relevant.
Competition
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition
is from other companies organized and funded for similar purposes,
small venture capital partnerships and corporations, small business
investment companies and wealthy individuals.
Employees
The Company has no full time employees. The Company's president
has agreed to
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allocate a portion of his time to the activities of the Company. The
president anticipates that the business plan of the Company can be
implemented by him devoting approximately 100 hours per month to the
business affairs of the Company and, consequently, conflicts of
interest may arise with respect to the limited time commitment by
such officer.
Reports to Security Holders.
Prior to the filing of this registration statement on Form 10-
SB, the Company was not subject to the reporting requirements of
Section 12(a) or 15(d) of the Exchange Act. Upon effectiveness of
this registration statement, the Company will file annual and
quarterly reports with the Securities and Exchange Commission
("SEC"). The public may read and copy any materials filed by the
Company with the 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 Company is an electronic filer and
the SEC maintains an Internet site that contains reports and other
information regarding the Company, which may be viewed at http://www.sec.gov.
Item 2. Management's Plan of Operation
At November 30, 2000, the Company had $15,160 in cash. The
Company believes that it has sufficient cash on hand to satisfy its
administrative needs for the next twelve months. Should the Company
obtain a business opportunity, it may be necessary to raise
additional capital. This may be accomplished by selling common stock
of the Company, taking loans from the officers or seeking other forms
of debt financing.
The Company was previously in the business of marketing computer
related educational systems. It ceased operations in 1995 and has
generated no revenue from operations for the past two fiscal years.
Currently, the Company has no ongoing operations, and has no material
commitments for capital expenditures for the next twelve months.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
Item 3. Description of Property
The Company does not currently own any property. The Company
utilizes office space on a rent-free basis from an officer located at
2250 West Center Street, Springville, UT 84663. This arrangement is
expected to continue until such time as the Company becomes involved
in a business opportunity that necessitates expansion or relocation.
Item 4. Security Ownership of Certain Beneficial Owners and
Management; Changes in Control
The following table sets forth as of December 27, 2000, the name
and the number of shares of the Registrant's Common Stock, no par
value, held of record or was known by the
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Registrant to own beneficially more than 5% of the 2,906,863 issued
and outstanding shares of the Registrant's Common Stock, and the name
and shareholdings of each officer and director individually and of
all officers and directors as a group.
Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Owner(1) Beneficial Ownership of Class
Common David Nemelka (2) 350,000 12%
1310 E. 1600 S.
Mapleton, UT 84664
Common Ingrid F. Nemelka (2) 350,000 12%
1310 E. 1600 S.
Mapleton, UT 84664
Common Angela G. White (3)(4) 1,530,000 52.6%
2250 W. Center Street,
Springville, UT 84663
Common Steven L. White (3)(4) 1,530,000 52.6%
2250 W. Center Street,
Springville, UT 84663
Common Loretta Jean -0- -0-
Hullinger(4)
178 S. 350 W.
Mona, UT 84645
Common Officers, Directors and 1,530,000 52.6%
Nominees as a Group:
2 persons
(1) For purposes of this table, a beneficial owner is one who,
directly or indirectly, has or shares with others (a) the power to
vote or direct the voting of the Voting Stock (b) investment power
with respect to the Voting Stock which includes the power to dispose
or direct the disposition of the Voting Stock.
(2) David Nemelka and Ingrid F. Nemelka are husband and wife. Mrs.
Nemelka directly owns 50,000 shares. Mr. Nemelka owns and controls
David's Odyssey, LLC and R. Odyssey Ventures, Inc., which both own
100,000 and 200,000 shares, respectively.
(3) Steven L. White and Angela G. White are husband and wife.
(4) Officer and/or director of the Company.
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There are no contracts or other arrangements that could result in a
change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The following table sets forth as of December 27, 2000, the
name, age, and position of each executive officer and director and
the term of office for each director of the Company.
Name Age Position Since
Steven L. White 46 Officer and Director July 1998
Angela G. White 44 Officer and Director July 1998
Loretta Jean Hullinger 53 Director December 2000
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until
their successors are duly elected and qualified.
The following is a brief biography of the officers and
directors.
Steven L. White, President and Director. Mr. White earned his
Bachelor of Science Degree from Brigham Young University in 1980 with
a major in Accounting and a Minor in English. He is a member of the
American Institute of Certified Public Accountants and has been
employed by one national and two local CPA firms. Since 1983, Mr.
White has been employed in private accounting and has been the
controller of several small businesses which include Phoenix Ink,
LLC, a financial newsletter publisher, from 1999 to present;
HomeQuest, Inc., an educational software marketing company, from 1993
to 1998; InfoLink Technologies, Inc., a software development company,
from 1991 to 1992; Jefferson Institute, Inc., an investment seminar
company, from 1986 to 1990; and Video Ventures, Inc., a publicly held
video rental company, from 1983 to 1985.
Angela G. White, Secretary and Director. Mrs. White's primary
and full time occupation for the last five years has been that of a
full time homemaker. Mrs. White is married to the other officer and
director of the Company, Steven L. White. In addition, to her full
time occupation as a homemaker, Mrs. White is a licensed practical
nurse and has been employed with Intermountain Health Care at its
Utah Valley Regional Medical Center since 1996.
Loretta Jean Hullinger, Director. Ms. Hullinger has been the
operations manager for a horse ranch, the Wagon Wheel Ranch, for the
past five years where she directs and oversees the training, feeding,
breeding and raising of racehorses. Ms. Hullinger schedules the
employees and directs their daily duties at the horse ranch. Ms.
Hullinger has been involved in this line of business for the majority
of her working career.
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Involvement in Certain Legal Proceedings
No director, executive officer, promoter or control person of the
Company has been involved in any of the following events during the
past five years:
a. Any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time;
b. Any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other
minor offenses) ;
c. Being subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; and
d. Being found by a court of competent jurisdiction (in a civil
action) , the Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended, or vacated.
Item 6. Executive Compensation.
The Company has no formal arrangements for the remuneration of
its officers and directors, except that they will receive
reimbursement for actual, demonstrable out-of-pocket expenses,
including travel expenses, if any, made on the Company's behalf in
the investigation of business opportunities.
Although there is no formal arrangement, the Company paid Steven
L. White an annual salary of $4,800 and $23,000 for the fiscal years
ended December 31, 1998 and 1999, respectively, for services rendered
on behalf of the Company as President. For the eleven months ended
November 30, 2000, Mr. White has been paid $50,775, and is scheduled
to receive a total of $56,000 for the fiscal year 2000. Mr. White
has received no other compensation in the form of bonuses, options,
warrants, stocks, awards or any other conceivable form of annual or
long-term compensation.
Employment Contracts, Termination of Employment and Change in Control
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person
which would in any way result in payments to any such person's
employment with the company or its subsidiaries, or any change in
control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
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Item 7. Certain Relationships and Related Transactions.
In 1999, the Company had advanced $1,770 for payroll taxes that
were paid on behalf of Steven L. White, an officer and a director of
the Company. The Company utilizes office space provided by Steven L.
White at no charge to the Company.
Item 8. Description of the Securities.
The Company is presently authorized to issue 100,000,000 shares
of no par value common stock. All shares, when issued, will be fully
paid and non-assessable. All shares are equal to each other with
respect to liquidation and dividend rights. Holders of voting shares
are entitled to one vote for each share they own at any shareholders'
meeting.
Holders of shares of common stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds
legally available there for, and upon liquidation are entitled to
participate pro-rata in a distribution of assets available for such
distribution to shareholders. There are no conversion, preemptive,
or other subscription rights or privileges with respect to any
shares.
The common stock of the Company does not have cumulative voting
rights, which means that the holders of more than 50% of the voting
shares voting for election of directors may elect all of the
directors if they choose to do so. In such event, the holders of the
remaining shares aggregating less than 50% will not be able to elect
any directors.
The Company has appointed Alpha Tech Stock Transfer Business
Trust, 929 East Spiers Lane, Draper, Utah 84020, telephone number
(801) 571-5118, as the transfer agent and registrar for the Company's
securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
The Company's common stock is listed on the Pink Sheets under
the symbol "NHZN". At December 27, 2000, the Company had 559
shareholders holding 2,906,863 shares of common stock, of which
146,777 are free trading. The following table shows the highs and
lows of the closing bid and ask on the Company's stock for fiscal
years 1998, 1999, to the current quarter.
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YEAR CLOSING BID CLOSING ASK
1998 HIGH LOW HIGH LOW
First Quarter .001 .001 .10 .10
Second Quarter .001 .001 .10 .10
Third Quarter .001 .001 .10 .10
Fourth Quarter .001 .001 .10 .04
1999
First Quarter .04 .001 .53125 .04
Second Quarter .02 .01 .10 .03
Third Quarter .03 .01 .08 .02
Fourth Quarter .02 .01 .09 .03
2000
First Quarter .02 .02 .25 .04
Second Quarter .01 .01 .25 .03
July 3 to July 28 .01 .005 .03 .01
July 31 to .03 .03 1 .25
September 30 (1)
(1) July 31, 2000 to September 25, 2000 represents the listing price
of the Company's stock after a fifty (50) for one (1) reverse stock
split.
The above quotations, as provided by the National Quotation
Bureau, LLC, represent prices between dealers and do not include
retail markup, markdown or commission. In addition, these quotations
do not represent actual transactions.
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is
subject to limitations imposed by Utah law. Under Section 16-10a-640
of the Utah Revised Business Corporation Act, dividends maybe paid to
the extent that the corporation's assets exceed its liabilities and
it is able to pay its debts as they become due in the usual course of
business and does not affect preferential shareholders rights upon
dissolution.
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Item 2. Legal Proceedings.
No legal proceedings are pending against the Company or any of
its officers or directors. There is a potential for litigation in
relation to the Company's wholly owned subsidiary (Main$treet
Alliance) that was sold in 1997. The agreement required the Company
to pay $5,500 in payroll taxes in exchange for approximately $180,000
in debt relief. If the sold subsidiary does not pay off its debt,
the Company may be named as a co-defendant with the sold subsidiary.
Management believes that all corporate formalities regarding wholly
owned subsidiaries were strictly followed. Further, the Company does
not believe it is liable for any of the sold subsidiary's
liabilities, and does not anticipate any claims being made against
it.
Furthermore, none of the Company's officers or directors or
affiliates of the Company are parties against the Company or have any
material interests in actions that are adverse to the Company's
interests.
Item 3. Changes in and Disagreements with Accountants.
None.
Item 4. Recent Sales of Unregistered Securities.
The following is a detailed list of securities sold by the
Company within the past three years without registration under the
Securities Act. All issuances are numerically reported in post-split
form.
In February of 1998 the Company issued 110,000 shares of common
stock to an entity for debt relief in the amount of $5,500. The
shares were issued to an accredited investor in a private transaction
that did not involve any public solicitation or sales and without
registration in reliance on the exemption provided by 4(2) of the
Securities Act.
In June of 1998, the Company issued 200,000 shares of common
stock to an entity for cash in the amount of $10,000. The shares
were issued to an accredited investor in a private transaction that
did not involve any public solicitation or sales and without
registration in reliance on the exemption provided by 4(2) of the
Securities Act.
In June of 1998, the Company issued 30,000 shares of common
stock to an individual for services rendered and valued in the amount
of $1,500. The shares were issued in a private transaction that did
not involve any public solicitation or sales and without registration
in reliance on the exemption provided by 4(2) of the Securities Act.
In 1999 and 2000, the Company issued 308,736 shares of common
stock to an entity for cash in the amount of $15,437. The shares
were issued to an accredited investor in a private transaction that
did not involve any public solicitation or sales and without
registration in reliance on the exemption provided by 4(2) of the
Securities Act.
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In March of 2000, the Company issued 100,000 shares of common
stock to an entity for cash in the amount of $5,000. The shares were
issued to an accredited investor in a private transaction that did
not involve any public solicitation or sales and without registration
in reliance on the exemption provided by 4(2) of the Securities Act.
In March of 2000, the Company issued 50,000 shares of common
stock to an individual for cash in the amount of $2,500. The shares
were issued to an accredited investor in a private transaction that
did not involve any public solicitation or sales and without
registration in reliance on the exemption provided by 4(2) of the
Securities Act.
In June of 2000, the Company issued 50,000 shares of common
stock to an entity for cash in the amount of $2,500. The shares were
issued in a private transaction that did not involve any public
solicitation or sales and without registration in reliance on the
exemption provided by 4(2) of the Securities Act.
In July of 2000, the Company issued 100,000 shares of common
stock to an entity for cash in the amount of $5,000. The shares were
issued in a private transaction that did not involve any public
solicitation or sales and without registration in reliance on the
exemption provided by 4(2) of the Securities Act.
In August of 2000, the Company issued 1,500,000 shares of common
stock to an officer of the Company for cash in the amount of $30,000.
The shares were issued in a private transaction that did not involve
any public solicitation or sales and without registration in reliance
on the exemption provided by 4(2) of the Securities Act.
Item 5. Indemnification of Directors and Officers.
The Company's Articles of Incorporation provides indemnification
for its officers and directors as follows:
Article IX. The Company shall indemnify to the fullest extent
allowable under the Utah Revised Business Corporation Act, any and
all persons who may serve at any time as directors or officers of the
Company, against any and all expenses, including amounts paid upon
judgments, counsel fees and amounts paid in settlement (before or
after suit is commenced), actually and necessarily incurred by such
persons in connection with the defense or settlement of any claim,
action, or suit which may be asserted against or any of them, by
reason of being or having been directors or officers of the Company.
Such indemnification shall be in addition to any other rights to
which those indemnified may be entitled under any law, bylaw,
agreement, vote of shareholders or otherwise.
Furthermore, Section 16-10a-903 of the Utah Revised Corporation
Act mandates indemnification, and states "[u]nless limited by its
articles of incorporation, a corporation shall indemnify a director
who was successful, on the merits or otherwise, in the defense of any
proceeding, or in the defense of any claim, issue, or matter in the
proceeding, to which he was a party because he is or was a director
of the corporation, against reasonable expenses incurred by
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him in connection with the proceeding or claim with respect to which
he has been successful." U.C.A. 1953 16-10a-903
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers and directors of
the Company pursuant to the provisions of the Company's Certificate
of Incorporation, the Company has been informed that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and
is therefore unenforceable.
PART F/S
The financial statements of the Company appear at the end of
this registration statement beginning with the Index to Financial
Statements on page 17.
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PART III
Item 1 and 2. Index to and Description of Exhibits.
Exhibit SEC Ref.
Number No. Title of Document Location
1 3(i) Articles of Incorporation filed March 9, 1972 Attached
2 3(i) Amendment to Articles of Incorporation of the Attached
Company to change the name to Gayle Industries,
Inc. dated May 18, 1977.
3 2 Plan and Articles of Merger of a Subsidiary Attached
Corporation (Swing Bike) into the Company thereby
changing the name of the Company to Swing Bike
dated January 11, 1978.
4 3(i) Amendment to Articles of Incorporation of the Attached
Company changing the name to Horizon Energy
Corporation dated December 19, 1979.
5 3(i) Amendment to Articles of Incorporation of the Attached
Company authorizing 100,000,000 shares of
common no par value stock dated August 18, 1989.
6 3(i) Amendment to Articles of Incorporation of the Attached
Company changing the name to Millennium
Entertainment Corp. dated December 10, 1992.
7 3(i) Amendment to Articles of Incorporation of the Attached
Company changing the name to New Horizon
Education, Inc. dated May 28, 1993.
8 3(i) Amendment to Articles of Incorporation of the Attached
Company authorizing a one (1) for fifty (50)
reverse stock split dated September 27, 2000.
9 3(i) Amended and Restated Articles of Incorporation Attached
dated December 26, 2000.
10 3(ii) By-Laws Attached
11 27 Financial Data Schedules Attached
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
NEW HORIZON EDUCATION, INC.
Date:December 29, 2000 By:/s/ Steve L. White
Steve L. White
President and Director
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THE NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
Page INDEX TO FINANCIAL STATEMENTS
Number
18 Balance Sheet, November 30, 2000 (Unaudited)
19 Statements of Operations, for the eleven months ended
November 30, 2000 and for the cumulative period from
January 1, 1998 to November 30, 2000 (Unaudited)
20 Statement of Stockholders' Deficit, from January 1,
1998 through November 30, 2000 (Unaudited)
21 Statements of Cash Flows, for the eleven months ended
November 30, 2000 and for the cumulative period from
January 1, 1998 to November 30, 2000 (Unaudited)
22 Notes to Unaudited Financial Statements
26 Report of Independent Accountants
27 Balance Sheets as of December 31, 1999 and 1998
(Audited)
28 Statements of Operations for the years ended December
31, 1999 and 1998, and cumulative from the re-entering
of development stage on January 1, 1998 through
December 31, 1999 (Audited)
28 Statement of Comprehensive (Loss), for the years ended
December 31, 1999 and 1998 and from re-entering of
development stage on January 1, 1998 through December
31, 1999 (Audited)
29 Statements of Stockholders' Equity from the re-entering
of the development stage on January 1, 1999 through
December 31, 1999 (Audited)
30 Statements of Cash Flows for the years ended December
31, 1999 and 1998 and from the re-entering of
development stage on January 1, 1998 through December
31, 1999 (Audited)
33 Notes to Audited Financial Statements
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NEW HORIZON EDUCATION, INC.
UNAUDITED BALANCE SHEET
ASSETS
November 30,
2000
___________
CURRENT ASSETS:
Cash $ 15,160
Receivable - related party 1,059
___________
Total Current Assets 16,219
___________
$ 16,219
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Payable - related party $ 1,687
Payroll tax payable 4,004
___________
Total Current Liabilities 5,691
STOCKHOLDERS' DEFICIT:
Common stock, no par value, 50,000,000
shares authorized,2,903,827 shares issued
and outstanding 7,269,483
Contributed capital 53,519
Retained (deficit) (7,054,134)
(Deficit) accumulated during development stage (258,340)
___________
Total Stockholders' Deficit 10,528
___________
$ 16,219
___________
The accompanying notes are an integral part of this financial
statement.
18
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
UNAUDITED STATEMENTS OF OPERATIONS
Cumulative from
For the Eleven January 1,
Months Ended 1998 Through
November 30, November 30,
2000 2000
________________________
REVENUE $ - $ -
________________________
EXPENSES:
General and administrative 79,751 120,899
________________________
TOTAL EXPENSES 79,751 120,899
________________________
LOSS FROM OPERATIONS (79,751) (120,899)
OTHER EXPENSES:
Loss on sale of securities held for sale (57,441) (137,441)
________________________
LOSS BEFORE TAX PROVISION (137,192) (258,340)
________________________
CURRENT TAX EXPENSE - -
DEFERRED TAX EXPENSE - -
________________________
NET LOSS $ (137,192) $ (258,340)
________________________
LOSS PER COMMON SHARE $ (.24) $ (.08)
________________________
The accompanying notes are an integral part of these financial
statements.
19
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
UNAUDITED STATEMENT OF STOCKHOLDERS' DEFICIT
FROM JANUARY1, 1998 THROUGH NOVEMBER 30, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
From the
Re-entering of
the Development
Stage on January 1,
Common Stock Capital in Unrealized 1998 through
___________________ Excess of Retained Holding November 30,
Shares Amount Par Deficit Gain/(Loss) 2000
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 456,827 $7,192,049 $ 53,519$ (7,054,134) $1,250,000 $ -
February 1998, shares issued
at $.05 per share for debt
relief 110,000 5,500
June 1998, shares issued
at $.05 per share for cash 200,000 10,000
June 1998, shares issued
at $.05 per share for
services rendered 30,000 1,500
Unrealized holding (loss) (770,755)
Net income for the year
ended December 31, 1998 (12,028)
BALANCE, December 31, 1998 796,827 7,209,046 53,519 (7,054,134) 479,245 (12,028)
During 1999, shares issued
at $.05 per share for cash 231,552 11,578
Unrealized holding (loss) (446,527)
Net income for the year
ended December 31, 1999 (109,120)
BALANCE, December 31, 1999 1,028,379 7,226,624 53,519 (7,054,134) 32,718 (121,148)
During 2000, shares issued
at $.05 per share for cash 377,184 18,859
August 2000, shares issued
at $.02 per share for cash 1,500,000 30,000
Cancelled shares (1,736)
Reconciling shares 3,036
Unrealized holding (loss) (32,718)
Net (loss) for period ended
November 30, 2000 (137,192)
BALANCE, Nov. 30, 2000 2,906,863 $7,269,483 $ 53,579$ (7,054,134) $ - $ (258,340)
</TABLE>
The accompanying notes are an integral part of this financial
statement.
20
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
UNAUDITED STATEMENTS OF CASH FLOWS
NET INCREASE (DECREASE) IN CASH
Cumulative from
For the Eleven January 1,
Months Ended 1998, Through
November 30, November 30,
2000 2000
______________________
Cash Flows from Operating Activities:
Net (loss) $ (137,192) $ (258,340)
______________________
Adjustments to reconcile net income (loss)
to net cash used by operating activities:
Stock issued for services - 1,500
Losses from sale of securities held for sale 57,441 137,441
Change in assets and liabilities:
(Increase) in receivable - related party - (1,059)
Increase in payable - related party 500 1,687
Increase in payroll taxes payable 405 4,004
______________________
Net Cash Flows (Used) by Operating Activities (78,846) (114,767)
_______________________
Cash Flows from Investing Activities:
Proceeds from sale of securities held for sale 38,314 58,314
_______________________
Net Cash Flows (Used) by Investing Activities 38,314 58,314
_______________________
Cash Flows from Financing Activities:
Proceeds from sale of common stock 48,859 70,437
_______________________
Net Cash Flows Provided by Financing Activities 48,859 70,437
_______________________
Net Increase (Decrease) in Cash 8,327 13,984
Cash at Beginning of Period 6,123 1,176
_______________________
Cash at End of Period $ 15,160 $ 15,160
_______________________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the period ended November 30, 2000:
The Company recorded $32,718 in unrealized holding losses.
The accompanying notes are an integral part of these financial
statements.
21
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was incorporated under the laws of the
state of Utah on May 9, 1972 as High-Line Investment & Development
Company.
In 1993, the Company changed its name to New Horizon Education, Inc.
Also during 1993, the Company's wholly owned subsidiary merged with
Ruff Network Marketing, Inc. and began network marketing computer
education programs.
In 1995, the Company entered an agreement with New Horizon Education,
Inc., whereby the Company sold off all assets associated with its
education software along with $100,000 to New Horizon Education, Inc.
in exchange for debt relief, notes receivable, and preferred stock of
Homequest.
At December 31, 1997, the Company sold its wholly owned subsidiary.
The agreement called for the Company to pay $5,500 toward taxes in
exchange for debt relief of all the shares of the subsidiary. The
Company is considered to have re-entered the development stage as of
January 1, 1998. The Company is currently seeking potential business
mergers and ventures.
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7.
Loss Per Share - The computation of loss per share of common stock is
based on the weighted average number of shares outstanding during the
periods presented, in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the reported
amounts of assets and liabilities, the disclosures of contingent
assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimated by
management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", SFAS
No. 134, "Accounting for Mortgage-Backed Securities.", SFAS No. 135,
"Rescission of FASB Statement No. 75 and Technical Corrections", SFAS
No. 136, "Transfers of Assets to a not for profit organization or
charitable trust that raises or holds contributions for others", and
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - deferral of the effective date of FASB statement No. 133
( an amendment of FASB Statement No. 133.)," were recently issued.
SFAS No. 132, 133, 134, 135, 136 and 137 have no current
applicability to the Company or their effect on the financial
statements would not have been significant.
22
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Recapitalization - In July 2000, the Company effected a 1 for 50
reverse stock split. The reported shares and prices have been
reported to reflect this recapitalization.
NOTE 2 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes"
which requires the liability approach for the effect of income taxes.
The Company has available at November 30, 2000, unused operating loss
carryforwards of approximately $7,300,000, which may be applied
against future taxable income and which expire in various years
through 2020. If certain substantial changes in the Company's
ownership should occur, there could be an annual limitation on the
amount of net operating loss carryforward which can be utilized. The
amount of and ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part,
upon the tax laws in effect, the future earnings of the Company and
other future events, the effects of which cannot be determined.
Because of the uncertainty surrounding the realization of the loss
carryforwards the Company has established a valuation allowance equal
to the tax effect of the loss carryforwards (approximately
$2,480,000) at November 30, 2000, therefore, no deferred tax asset
has been recognized for the loss carryforwards. The change in the
valuation allowance is equal to the tax effect of the current
period's net loss approximately $40,000.
NOTE 3 - RELATED PARTY TRANSACTIONS
Management Compensation - For the period ended November 30, 2000, the
Company paid an officer $50,775.
Office Space - The Company has not had a need to rent office space.
A officer/shareholder of the Company is allowing the Company to share
office space and mailing address, as needed, at no expense to the
Company.
NOTE 4 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern. However,
the Company has no on-going operations and has incurred losses since
its inception. Further, the Company has current liabilities in
excess of assets and has no working capital to pay its expenses.
These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard, management
is proposing to raise any necessary additional funds not provided by
operations through loans or through sales of its common stock or
through a possible business combination with another company. There
is no assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.
23
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income (loss)
per share and the effect on income and the weighted average number of
shares of dilutive potential common stock for the years ended
November 30, 2000 and for the period from the re-entering of
development stage on January 1, 1998 through November 30, 2000:
Cumulative from
the Re-entering of
Development Stage
For the on January 1,
Period Ended1998 through
November 30, September,
2000 2000
________________________________
(Loss) from continuing operations
available to common stockholders
(numerator) $ (137,192) $ (258,340)
________________________________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 1,761,648 1,071,090
________________________________
Dilutive earnings per share was not presented, as the Company had no
common equivalent shares for all periods presented that would effect
the computation of diluted earnings (loss) per share.
NOTE 6 - COMMENTS AND CONTINGENCIES
On December 31, 1997, the Company sold all shares associated with its
wholly owned subsidiary. The agreement called for the Company to pay
$5,500 in payroll taxes and for debt relief of approximately
$180,000. Should the subsidiary not pay off the debt, the Company
may be held liable Management believes that the Company is not liable
for any existing liabilities related to its former subsidiary. The
Company is not currently named nor is it aware of any such claims or
suits against the Company. No amounts have been reflected or accrued
in these financial statements for any contingent liability.
24
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - STOCK TRANSACTIONS
In February 2000, the Company issued 77,184 post-split shares of
common stock at $.05 per share for cash in the amount of $3,859.
In March 2000, the Company authorized 150,000 post-split shares of
common stock at ($.05 per share) for cash in the amount of $7,500.
In June 2000, the Company authorized 50,000 post-split shares of
common stock for $2,500 or $.05 per share.
In July 2000, the Company authorized 100,000 post-split shares of
common stock for $5,000 or $.05 per share.
In July 2000, the Company effected a one for fifty reverse stock
split and purchased all shares of less than one share for $.01 per
share. The Company immediately cancelled these shares, which were
approximately 1,736 post-split shares of common stock.
In August 2000, the Company issued 1,500,000 post-split shares at
$.02 per share for cash in the amount of $30,000.
25
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
NEW HORIZON EDUCATION, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheets of New Horizon
Education, Inc. [A Development Stage Company] as of December 31,
1999 and 1998, and the related statements of operations,
stockholders' equity and cash flows for the years ended December
31, 1999 and 1998 and for the period from the re-entry of the
development stage on January 1, 1998 through December 31, 1999.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial 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. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present
fairly, in all material respects, the financial position of New
Horizon Education, Inc. [A Development Stage Company] as of
December 31, 1999 and 1998, and the results of its operations and
its cash flows for the years ended December 31, 1999 and 1998 and
for the period from the re-entry of the development stage on
January 1, 1998 through December 31, 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 4 to the financial statements, the Company has incurred
losses since its inception and has not yet been successful in
establishing profitable operations, raising substantial doubt
about its ability to continue as a going concern. Management's
plans in regards to these matters are also described in Note 4.
The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
September 19, 2000
Salt Lake City, Utah
26
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
BALANCE SHEETS
ASSETS
December 31,
______________________________
1999 1998
____________________________
CURRENT ASSETS:
Cash $ 6,123 $ 98
Receivables - related party 1,770 550
Marketable securities 128,473 675,000
____________________________
Total Current Assets 136,366 675,648
____________________________
$ 136,366 $ 675,648
______________________________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Payable - related party $ 1,187 $ -
Accrued expenses 3,600 -
____________________________
Total Current Liabilities 4,787 -
____________________________
STOCKHOLDERS' EQUITY:
Common stock, 100,000,000 shares
authorized, no par value, 1,028,379
and 796,827 shares issued and
outstanding, respectively 7,220,624 7,209,046
Contributed capital 53,519 53,519
Unrealized holding gain/loss 32,718 479,245
Retained (deficit) (7,054,134) (7,054,134)
(Deficit) accumulated during
development stage (121,148) (12,028)
____________________________
Total Stockholders' Equity 131,579 675,648
____________________________
$ 136,366 $ 675,648
______________________________
The accompanying notes are an integral part of these unaudited
financial statements
27
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
Cumulative from
the Re-entering of
For the Development Stage
Years Ended on January 1,
December 31, 1998 through
_________________ December 31,
1999 1998 1999
_________ ________ _________
REVENUE $ - $ - $ -
_________ ________ _________
EXPENSES:
General and administrative 29,120 12,028 41,148
_________ ________ _________
Total Expenses 29,120 12,028 41,148
_________ ________ _________
LOSS BEFORE OTHER (EXPENSE) (29,120) (12,028) (41,148)
OTHER (EXPENSE):
Loss on sale of securities
available for sale (80,000) - (80,000)
_________ ________ _________
LOSS BEFORE INCOME TAXES (109,120) (12,028) (41,148)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
_________ ________ _________
NET (LOSS) $ (109,120) $ (12,028) $ (121,148)
_________ ________ _________
LOSS PER COMMON SHARE $ (.13) $ (.02) $ (.16)
_________ ________ _________
The accompanying notes are an integral part of these unaudited
financial statements
28
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
STATEMENT OF COMPREHENSIVE (LOSS)
Cumulative from
the Re-entering of
For the Development Stage
Years Ended on January 1,
December 31, 1998 through
__________________ December 31,
1999 1998 1999
________ ________ _________
NET (LOSS) $ (109,120) $ (12,028) $ (121,148)
OTHER COMPREHENSIVE INCOME:
Unrealized holding (loss)
marketable securities (446,527) (770,755) (1,217,282)
________ ________ __________
COMPREHENSIVE (LOSS) $ (555,047) $ (782,783) $ (1,338,430)
_____________________________________
The accompanying notes are an integral part of these unaudited
financial statements
29
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE RE-ENTERING OF THE DEVELOPMENT STAGE ON
JANUARY 1, 1998 THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
From the
Re-entering of
the Development
Stage on January,
Common Stock Capital in Unrealized 1998 through
________________ Excess of Retained Holding December 31,
Shares Amount Par Deficit Gain/(Loss) 1999
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
January 1, 1998 456,827 $7,192,049 $53,519 $(7,054,134) $1,250,000 $ -
February 1998, shares issued
at $.05 per share for debt
relief 110,000 5,500
June 1998, shares issued
at $.05 per share for cash 200,000 10,000
June 1998, shares issued
at $.05 per share for
services rendered 30,000 1,500
Unrealized holding (loss) on
marketable securities (770,755)
Net income for the year
ended December 31, 1998 (12,028)
BALANCE,
December 31, 1998 796,827 7,209,046 53,519 (7,054,134) 479,245 (12,028)
During 1999, shares issued
at $.05 per share for cash 231,552 11,578
Unrealized holding (loss) on
marketable securities (446,527)
Net income for the year
ended December 31, 1999 (109,120)
BALANCE,
December 31, 1999 1,028,379 $7,226,624 $53,519 $(7,054,134) $ 32,718 $ (121,148)
</TABLE>
The accompanying notes are an integral part of this financial
statement
30
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
Cumulative from
the Re-entering of
For the Development Stage
Years Ended on January 1,
December 31, 1998 through
_______________ December 31,
1999 1998 1999
________________________________
Cash Flows From Operating Activities:
Net loss $(109,120) $(12,028) $(121,148)
Adjustments to reconcile net loss to
net cash used by operating activities:
Realized loss on sale of securities
available for sale 80,000 - 80,000
Stock issued to officers 1,500 1,500
Changes in assets and liabilities:
(Increase) in receivable - related party (1,219) (550) (1,770)
Increase in payable - related party 1,187 - 1,187
Increase in accrued expenses 3,600 - 3,600
____________________________
Net Cash (Used) by Operating Activities (25,552) (11,078) (36,630)
____________________________
Cash Flows From Investing Activities
Proceeds from sale of securities available
for sale 20,000 - 20,000
____________________________
Net Cash (Used) by Investing Activities 20,000 - 20,000
____________________________
Cash Flows From Financing Activities:
Proceeds from issuance of common stock 11,578 10,000 21,578
____________________________
Net Cash (Used) by Financing Activities 11,578 10,000 21,578
____________________________
Net Increase in Cash 6,026 (1,078) (4,947)
Cash at Beginning of the Year 98 1,176 1,176
____________________________
Cash at End of the Year $ 6,123 $ 98 $ 6,123
_____________________________
[Continued]
31
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[CONTINUED]
Cumulative from
the Re-entering of
For the Development Stage
Years Ended on January 1,
December 31, 1998 through
________________ December 31,
1999 1998 1999
______________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the year ended December 31, 1999:
In 1999, the Company had unrealized holding losses of $446,527
relating to securities available for sales.
For the year ended December 31, 1998:
In 1998, the Company converted $94,755 notes receivable -
related party and 1,000 shares of preferred stock into 200,000
shares of Warp Radio, Inc. (formerly HomeQuest, Inc.).
In 1998, the Company converted $5,500 note payable - related
party into 5,500,000 shares of common stock at $.001 per
share.
In 1998, the Company had unrealized holding losses of $770,755
relating to securities available for sale.
The accompanying notes are an integral part of these unaudited
financial statements
32
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was incorporated under the laws of the
state of Utah on May 9, 1972 as High-Line Investment &
Development Company.
On May 18, 1977 the Company changed its name to Gayle Industries,
Inc. On January 11, 1978 the Company merged into Swing Bike. On
December 19, 1979 the Company changed its name to Horizon Energy
Corporation. On December 10, 1992 the Company changed its name
to Millennium Entertainment Corp.
In 1993, the Company changed its name to New Horizon Education,
Inc. Also during 1993, the Company's wholly owned subsidiary
merged with Ruff Network Marketing, Inc. and began network
marketing computer education programs.
In 1995, the Company entered an agreement with Homequest, Inc.,
whereby the Company sold off all assets associated with its
education software along with $100,000 to Homequest, Inc. in
exchange for debt relief, notes receivable, and preferred stock
of Homequest.
At December 31, 1997, the Company sold its wholly owned
subsidiary. The agreement called for the Company to pay $5,500
toward taxes in exchange for debt relief of all the shares of the
subsidiary. The Company is considered to have re-entered the
development stage as of January 1, 1998. The Company is
currently seeking potential business mergers and ventures.
Investments - The Company accounts for investments in debt and
equity securities in accordance with Statement of Financial
Accounting Standards (SFAS) 115, "Accounting for Certain
Investments in Debt and Equity Securities." Investments in
available-for-sale securities are carried at fair value.
Unrealized gains and losses, net of the deferred tax effects, are
included as a separate element of stockholders' equity.
Marketable Securities - At December 31, 1997, the Company held
marketable securities valued at $1,350,000, of which $1,250,000
was recorded as unrealized gains. During 1998, the Company
converted $95,755 of notes payable into marketable securities.
At December 31, 1998, the Company held marketable securities
valued at $675,000, of which $479,245 was recorded as unrealized
gains. During 1999, the Company sold marketable securities for
$20,000. The Company recognized a loss of $80,000 on the sale of
these securities. At December 31, 1999, the Company held
marketable securities valued at $128,473, of which $32,718 was
recorded as unrealized gains.
Comprehensive Income - The Company adopted the provisions of SFAS
No. 130, "Reporting Comprehensive Income."
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7. Subsequent to December 31,
1999 and 1998, the Company under went a change in the officers
and Board of Director's of the Company.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 6].
33
<PAGE>
NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
Restatement - In July 2000, the Company effected a 1 for 50
reverse stock split. The reported shares and prices have been
reported to reflect this recapitalization [See Note 8].
NOTE 2 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires the liability approach for the
effect of income taxes.
The Company has available at December 31, 1999 and 1998, unused
operating loss carryforwards of approximately $7,200,000 and
$7,100,000, respectively, which may be applied against future
taxable income and which expire in various years through 2019 and
2018. If certain substantial changes in the Company's ownership
should occur, there could be an annual limitation on the amount
of net operating loss carryforward which can be utilized. The
amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards (approximately $2,250,000 and $2,410,000,
respectively) at December 31, 1999 and 1998, therefore, no
deferred tax asset has been recognized for the loss
carryforwards. The change in the valuation allowance is equal to
the tax effect of the current period's net loss (approximately
$40,000 and $4,000 for December 31, 1999 and 1998, respectively).
34
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NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS
Management Compensation - For the years ended December 31, 1999
and 1998, the Company paid an officer $23,000 and $4,800,
respectively.
Related Party Receivables and Payables - At December 31, 1998,
the Company had advanced $551 to a Company related through common
control. At December 31, 1999, the Company was owed $1,770 from
an officer of the Company for payroll taxes paid by the Company
on behalf of the officer. Also at December 31, 1999, the Company
owed a total of $1,187 to companies related through common
control and equity securities.
NOTE 4 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has no on-going operations and has incurred
losses since its inception. Further, the Company has current
liabilities in excess of assets and has no working capital to pay
its expenses. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans or through sales
of its common stock or through a possible business combination
with another company. There is no assurance that the Company
will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of
these uncertainties.
NOTE 5 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the years ended December 31, 1999 and 1998 and for the period
from the re-entering of development stage on January 1, 1998
through December 31, 1999:
Cumulative from
the Re-entering of
For the Development Stage
Years Ended on January 1,
December 31, 1998 through
_______________________ December 31,
1999 1998 1999
____________________________________
(Loss) from continuing operations
available to common stockholders
(numerator) $ (109,120) $ (12,028) $ (121,148)
_____________________________________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 828,335 678,361 753,348
_____________________________________
35
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NEW HORIZON EDUCATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - EARNINGS (LOSS) PER SHARE [CONTINUED]
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
On December 31, 1997, the Company sold all shares associated with
its wholly owned subsidiary. The agreement called for the
Company to pay $5,500 in payroll taxes and for the subsidiary to
be responsible for the remaining debt of approximately $180,000.
Should the subsidiary not pay off the debt, the possibility
exists that the Company may be held liable. Management believes
that the Company is not liable for any existing liabilities
related to its former subsidiary. The Company is not currently
named nor is it aware of any such claims or suits against the
Company. No amounts have been reflected or accrued in these
financial statements for any contingent liability.
NOTE 7 - STOCK TRANSACTIONS
During 1999, the Company issued 231,552 shares of common stock
(at $.05 per share) for cash in the amount of $11,578.
During 1998 the Company issued 110,000 shares of common stock (at
$.05 per share) for debt relief of $5,500.
During 1998, the Company issued 200,000 shares of common stock
(at $.05 per share) for cash in the amount of $10,000.
During 1998, the Company issued 30,000 shares of common stock (at
$.05 per share) for services rendered valued at $1,500.
NOTE 8 - SUBSEQUENT EVENTS
In February 2000, the Company issued 77,184 post-split shares of
common stock at $.05 per share for cash in the amount of $3,859.
In March 2000, the Company authorized 150,000 post-split shares
of common stock at ($.05 per share) for cash in the amount of
$7,500.
In June 2000, the Company authorized 50,000 post-split shares of
common stock for $2,500 or $.05 per share.
In July 2000, the Company authorized 100,000 post-split shares of
common stock for $5,000 or $.05 per share.
In July 2000, the Company purchased all shares from shareholders
which held one share or less. The approximate number of shares
cancelled were 1,666 post-split shares. The Company then
effected a one for fifty reverse stock split and cancelled all
shares from shareholders with less than one share. The
approximate number of shares cancelled were 70 post-split shares.
In August 2000, the Company issued 1,500,000 post-split shares at
$.02 per share for cash in the amount of $30,000.
36
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