UNITED STATES
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 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
INDUSTRIES INTERNATIONAL, INCORPORATED
(Exact name of Registrant as specified in charter)
NEVADA 87-0522115
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
1236 Wigwam Street, Mesquite, NV 89027
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (702) 346-4637
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class each class is to be registered
None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock
Par Value $.01
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TABLE OF CONTENTS
PART I Page
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. MANAGEMENT'S PLAN OF OPERATION 7
ITEM 3. DESCRIPTION OF PROPERTY 8
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIALOWNERS AND MANAGEMENT 9
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,PROMOTERS AND CONTROL PERSONS 10
ITEM 6. EXECUTIVE COMPENSATION 11
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 12
ITEM 8. DESCRIPTION OF SECURITIES 12
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'SCOMMON EQUITY AND
OTHER SHAREHOLDER MATTERS 12
ITEM 2. LEGAL PROCEEDINGS 13
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 14
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 14
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 14
PART F/S 14
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS. 15
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
History and Organization
Industries International, Incorporated (the "Company") was incorporated
under the laws of the State of Nevada on January 11, 1991.
In 1994 the Company located a site which it determined would be suitable
for the development of a golf course. Management secured the undeveloped land
from the owner through a long-term lease. (See below Item 3. Description of
Property.) The Company commenced an engineering and feasability study on the
property and engaged a golf course architect and a project engineer for the
development of the site. However, the Company was unable to secure adequate
funding for the project and assigned its interest in the property to a third
party for $30,000 in 1998. The transaction became subject to litigation when
the land owner refused to honor the original lease. (See below Part II, Item
2. Legal Proceedings.) The Company has been inactive since 1998, except for
its involvement in this litigation.
Proposed Business
If possible, the Company intends to seek land on which to develop a golf
course. Management intends to use the experience gained in the Company's
original project to locate a suitable site for a new golf course and to seek
the funding necessary to develop the site. This funding may take the form of
equity funding, joint venture funding, or other forms of corporate financing.
Management does not anticipate that bank or other traditional forms of
financing will be available to the Company to secure the land or develop the
golf course.
Management has not determined where it would seek and locate a golf
course, but anticipates that initial sites in southern Nevada would be sought
first. Management has not conducted any feasability studies on any sites and
has no agreements or arrangements for the purchase of land for a proposed
site.
If the Company is unable to locate a suitable golf course project with
the limited funds available to the Company, management intends to seek
potential business acquisitions or opportunities to enter into in an effort to
commence business operations. The Company does not propose to restrict its
search for such 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
participating in a business opportunity.
The Company's Board of Directors shall make the initial determination
whether to complete any such venture; however, the Board of Directors intends
to submit final approval of any proposed transaction to the shareholders. In
connection with such approval by the shareholders, the Company intends to
provide disclosure documentation to its shareholders as required under Section
14 of the Securities Exchange Act of 1934, and the rules and regulations
promulgated thereunder. The Company does not intend to seek shareholder
approval to proceed with a golf course project unless required by law.
The selection of a new business opportunity in which to participate is
complex and risky. Additionally, as the Company has no immediate resources
available to it, it may be difficult to find good opportunities. There can be
no assurance that the Company will be able to identify and acquire any
business opportunity based on management's business judgement.
The Company has not communicated with any other entity with respect to
any potential merger or acquisition transaction, and management has determined
to file this Registration Statement on a voluntary basis before seeking a
business venture. Management believes that being a reporting company may
increase the likelihood that existing business ventures may be willing to
negotiate with the Company. The Company also intends to seek quotation of its
common stock on the OTC Bulletin Board following such a transaction. In order
to have stock quoted on the OTC Bulletin Board, a company must be subject to
the reporting requirements of the 1934 Act, either by virtue of filing a
registration statement on Form 10 or Form 10-SB, or by filing a registration
statement under the 1933 Act. The Company anticipates that it would
voluntarily file periodic reports with the Securities and Exchange Commission,
in the event its obligation to file such reports is terminated under the
Securities Exchange Act of 1934, if the common stock of the Company were
quoted on the OTC Bulletin Board.
In connection with the application for quotation of the Company's common
stock on the OTC Bulletin Board, management intends to seek a broker-dealer to
become the initial market maker for the Company's common stock and to submit
the application to the OTC Bulletin Board in the future. There have been no
preliminary discussions or understandings between the Company, or anyone
acting on its behalf, and any market maker regarding such application or the
participation of any such market maker in the future trading market for the
Company's common stock. Management intends to contact broker-dealers who make
markets in Bulletin Board companies until one agrees to make the application.
There is no assurance that the Company will be successful in locating such a
broker-dealer, or that the application, if submitted, would be approved. The
Company does not intend to use outside consultants to obtain market makers.
In addition, the Company does not intend to use any of its shareholders to
obtain market makers.
In the selection of a site for a golf course, management intends to
consider a number of factors before proceeding with the project. These may
include the availability of financing for purchase of the land and
construction of the project on terms favorable to the Company; the initiation
of a feasability study for the site; the availability of water and other
utilities for the site; adequate zoning of the location; absence of any
endangered species; and any potential environmental issues.
Management intends to consider a number of factors prior to making
any decision as to whether to participate in any new business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to, an analysis of the quality of the
entity's management personnel; the anticipated acceptability of any new
products or marketing concepts; the merit of technological changes; its
present financial condition, projected growth potential and available
technical, financial and managerial resources; its working capital, history of
operations and future prospects; the nature of its present and expected
competition; the quality and experience of its management services and the
depth of its management; its potential for further research, development or
exploration; risk factors specifically related to its business operations; its
potential for growth, expansion and profit; the perceived public recognition
or acceptance of its products, services, trademarks and name identification;
and numerous other factors which are difficult, if not impossible, to properly
or accurately analyze, let alone describe or identify, without referring to
specific objective criteria.
Regardless, the results of operations of any new entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development stage, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any new business opportunity afforded to
the Company, visit and inspect material facilities, obtain independent
analysis or verification of information provided and gathered, check
references of management and key personnel and conduct other reasonably
prudent measures calculated to ensure a reasonably thorough review of any
particular business opportunity; however, due to time constraints of
management, these activities may be limited.
The Company is unable to predict the time as to when and if it may
actually locate a new site for a golf course or participate in any new
business endeavor. The Company anticipates that proposed sites for a golf
course or a new business ventures will be made available to it through
personal contacts of directors, executive officers and stockholders,
professional advisors, broker dealers in securities, venture capital
personnel, members of the financial community, attorneys and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
new business endeavor in which the Company eventually participates. Such
persons may include the Company's directors, executive officers, beneficial
owners or their affiliates. In this event, such fees may become a factor in
negotiations regarding a potential acquisition and, accordingly, may present a
conflict of interest for such individuals.
The Company's directors and executive officers have not used any
particular consultants, advisors or finders on a regular basis.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business
or company in which the Company's executive officers, directors, beneficial
owners or their affiliates may have an ownership interest. Current Company
policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Although it currently has no plans to do so, depending on the nature and
extent of services rendered, the Company may compensate members of management
in the future for services that they may perform for the Company. Because the
Company currently has extremely limited resources, and is unlikely to have any
significant resources until it has secured funding to develop a golf course or
completed a merger or acquisition, management expects that any such
compensation would take the form of an issuance of the Company's stock to
these persons; this would have the effect of further diluting the holdings of
the Company's other stockholders. However, due to the minimal amount of time
devoted to management by any person, there are no preliminary agreements or
understandings with respect to management compensation. Although it is not
prohibited by statute or its Articles of Incorporation, the Company has no
plans to borrow funds and use the proceeds to make payment to its management,
promoters or affiliates.
Fees are often paid in connection with the completion of acquisitions,
reorganizations or mergers. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement
to retire a portion of the shares of common stock owned by them. However,
management does not presently anticipate actively negotiating or otherwise
consenting to the purchase of all or any portion of its common stock as a
condition to, or in connection with, a proposed merger or acquisition. In the
event that such fees are paid, they may become a factor in negotiations
regarding any potential acquisition by the Company and, accordingly, may
present a conflict of interest for such individuals.
Neither the Company's present directors, executive officers or promoters,
nor their affiliates or associates, has had any talks or negotiations with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction with the Company.
Accordingly, there no present plans, proposals, arrangements or understandings
with any such persons regarding the possibility of any acquisition or merger
involving the Company.
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company possesses such
limited funds. In negotiating for a site for a golf course, the Company would
be severely hampered by the lack of immediate resources to purchase the land
or develop the project. After locating a suitable site, the Company may seek
a joint venture partner to assist in the financing of the project. In the
alternative, the Company may seek equity funding. Such equity funding could
significantly dilute the percentage ownership interest of existing
stockholders.
The Company has no employees and does not intend to employ anyone in the
future, unless its present business operations were to change. The Company is
not paying salaries or other forms of compensation to its present officers and
directors for their time and effort. Unless otherwise agreed to by the
Company, the Company does intend to reimburse its officers and directors for
out-of-pocket expenses.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The Company is a development stage company. Since its inception, the
Company has had no operations, except in connection with the design and
initial development of a proposed golf course in Nevada. In 1998 the Company
assigned its interest in the long-term land leases to a third party prior to
any actual improvements to the land. Since 1998 the only business of the
Company has been in connection with the litigation involving the long-term
leases. (See below Part II, Item 2. Legal Proceedings.)
The Independent Auditor's Report for the financial statements contained
in this registration statement contain a "going concern" limitation. The
Company does not have any significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover operating costs
and to allow it to continue as a going concern. The Company intends to use
the proceeds of the assignment of the leases for the property in Nevada to
seek additional locations for golf courses. There is no assurance that the
litigation will be concluded in the favor of the Company or when the $30,000
due from the assignees of the leases would be paid. The Company currently has
no proposed sites for golf courses available to it. Dan Shuput, the
President, a director and a principal shareholder of the Company, has
furnished the funds necessary to meet the minimal operating expenses of the
Company. Although Mr. Shuput has expressed his intention to continue to
provide funds for such minimum operating expenses, there is no agreement or
obligation on his part to do so. Such funds furnished to the Company by Mr.
Shuput are loaned at an annual interest rate of 10% and are due upon demand.
If the Company is unsuccessful in locating additional golf properties,
management intends to take advantage of any reasonable business proposal
presented which management believes will provide the Company and its
stockholders with a viable business opportunity. The Board of Directors will
make the final approval in determining whether to complete any acquisition.
The Company intends to seek stockholders' approval for the acquisition of any
new business venture.
The investigation of new sites for golf courses or new specific business
opportunities and the negotiation, drafting, and execution of relevant
agreements, disclosure documents, and other instruments will require
substantial management time and attention and will require the Company to
incur costs for payment of accountants, attorneys, and others. If a decision
is made not to participate in or complete the acquisition of a specific
business opportunity, the costs incurred in a related investigation will not
be recoverable. Further, even if an agreement is reached for the
participation in a specific business opportunity by way of investment or
otherwise, any failure to consummate the particular transaction may result in
the loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources that
will be necessary to locate and develop another golf course or to locate and
acquire or merge with a new business prospect. There is no assurance that the
Company will be able to acquire an interest in any such golf course, or other
prospects, products, or opportunities that may exist or that any activity of
the Company, regardless of the completion of any transaction, will be
profitable. If and when the Company locates a potential site for a new golf
course or a new business opportunity, management of the Company will give
consideration to the potential and cost of development of a golf course, the
availability of financing for the course, or, in the case of a new existing
business project, the dollar amount of that entity's profitable operations and
the adequacy of its working capital in determining the terms and conditions
under which the Company would consummate such an acquisition. Potential
business opportunities, no matter which form they may take, will most likely
result in substantial dilution for the Company's shareholders due to the
likely issuance of stock to acquire such an opportunity.
ITEM 3. DESCRIPTION OF PROPERTY
On February 14, 1994, Dan Shuput entered into a lease agreement with Bert
Brimhall to lease approximately 120 acres of undeveloped real property located
in Clark County, Nevada, approximately 50 miles north of Las Vegas, Nevada.
The lease is renewable every 20 years for a total term of 99 years, provided
that the lessee is not in default. Annual rent on the property is $100 per
acre for the first five years and is adjusted beginning in the sixth and every
five years thereafter according to the cost of living index. Lease payments
are due semi-annually. The lease requires that the property be used for
development of a golf course and/or other real estate development. The lessee
also has a right of first refusal to purchase the property. The lease also
provides for the lease of 203 water shares at an annual rate of $40 per
share. The lease also contains contingencies requiring lessee to obtain
adjacent land; secure adequate water rights; obtain soil testing demonstrating
the ability to grow turf grass on the land; obtaining the necessary zoning
changes or use permits; approval of the development from Clark County;
approval for the project from the Environmental Protection Agency and the
Bureau of Land Management; and no negative impact by any municipal or
governmental agency or department. The lease was assigned to the Company on
March 29, 1994.
In September 1994 the Company entered into a lease agreement with Bert
Brimhall to lease approximately 80 acres of undeveloped real property adjacent
to the foregoing parcels leased in February 1994. The terms of this lease are
identical to the terms of the February 14, 1994, lease.
In August 1998 the Company entered into an Agreement for Assignment of
Lease dated August 27, 1998, with Richard Bowler in which the Company agreed
to assign to Mr. Bowler its interest in the two foregoing leases covering
approximately 200 acres. Mr. Bowler agreed to pay $30,000 to the Company for
the assignment and $48,125 to the original lessor for the arrearage in the
lease payments for the property. The agreement is subject to the lessor of
the original leases accepting the arrearage check.
The original lessor refused to accept or return the arrearage check and
on December 11, 1998, the Company and the assignees in the August 1998
assignment agreement filed a lawsuit against the original lessor. (See below
Part II, Item 2. Legal Proceedings.)
Dan Shuput, the President, a director, and a principal shareholder of the
Company, furnishes space in his home in Mesquite, Nevada, for the office and
mailing address of the Company. This space is furnished at no cost to the
Company.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by current
management concerning the ownership of Common Stock of the Company as of
October 25, 2000, of (i) each person who is known to the Company to be the
beneficial owner of more than 5 percent of the Common Stock; (ii) all
directors and executive officers; and (iii) directors and executive officers
of the Company as a group:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership (1) Percent of Class
Dan Shuput 3,744,000 74.93%
1236 Wigwam St.
Mesquite, NV 89027
William S. Roberts 200,000 4%
Gayle Terry 20,000 *
Executive Officers and
Directors as a Group
(3 Persons) 3,964,000 79.33%
* Represents less than 1%.
(1) Unless otherwise indicated, this column reflects amounts as to which
the beneficial owner has sole voting power and sole investment power.
The Company is seeking a new golf course development project or potential
business acquisitions or opportunities. (See "Item 1. Description of
Business.") Acquisition of a new business opportunity could result in a
change of control of the Company, by virtue of issuing a controlling number of
shares in the transaction, change of management, or otherwise.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth as of October 20, 2000, the name, age, and
position of the executive officers and directors of the Company and the term
of office of such directors:
Name Age Position(s) Director Since
Dan Shuput 70 Director, President, & CEO 1991
William S. Roberts 59 Director, Secretary, & Treasurer 1998
Gayle Terry 43 Director & Vice-President 1998
Directors are elected until the next succeeding annual meeting of
shareholders and until their successors are elected and qualified. Annual
meetings of the stockholders, for the selection of directors to succeed those
whose terms expire, are to be held on the second Tuesday of March of each year
at 9:00 am. If the day fixed for the annual meeting is a legal holiday, the
meeting will be held on the next succeeding business day. The annual meeting
may be held at any place, either within or without the State of Nevada,
designated by the Board of Directors. Officers of the Company are elected by
the Board of Directors, which is required to consider that subject at its
first meeting after every annual meeting of stockholders. Each officer holds
his office until his successor is elected and qualified or until his earlier
resignation or removal.
Set forth below is certain biographical information regarding the
Company's current executive officers and directors:
DAN SHUPUT has been semi-retired since 1998. From 1994 until 1998 he
worked as a salesman and finance manager for D.P Auto, a used car and truck
dealership in Salt Lake City, Utah. He was vice-president of the Company from
its inception in 1991 until 1994 and has been president and CEO since 1994.
WILLIAM S. ROBERTS has been Secretary and Treasurer of the Company since
1998. Since March 2000 Mr. Roberts has been President and Chairman of Kubla
Khan, Inc., a company involved in the sale of deep discounted, distress
merchandise to retailers and the general public. Kubla Khan, Inc. is not a
reporting company under the Securities Exchange Act, but has filed a
registration statement under the Securities Act. From July 1999 until June
2000 he was a national account manager for Amembal Capital Corp., an equipment
leasing company. From January 1998 until September 1998 he was an area sales
manager for Data Transmission Network, a satellite information systems
company. Since 1992 he has been self-employed as a business consultant to
companies entering the public arena. From 1980 until 1992 he was employed by
a number of stock brokerage firms in Salt Lake City, Utah. From 1972 until
1979 he was vice-president, financial principal, and chief financial officer
of two stock brokerage firms in Salt Lake City, Utah. From 1994 until 1996 he
was president of AAOGI Investment Corp., a NASD member securities firm which
was subsequently sold. Mr. Roberts received his accounting degree in 1968
from Stevens Henager College.
Over twenty years ago, Mr. Roberts signed a consent decree with the U.S.
Securities and Exchange Commission in regard to an SEC investigation of Le
Barron Securities, Inc. without admitting or denying guilt. Mr. Roberts was
vice-president and financial principal of Le Barron Securities, Inc. The
penalties imposed under the decree were spread over an eight month period.
For the first four months Mr. Roberts was barred from being associated in the
securities industry. For the following four months he was allowed to be
involved in the securities industry as a registered representative but was
barred from being a registered principal. At the end of the eight months, Mr.
Roberts was allowed to resume full involvement in the securities industry.
GAYLE TERRY has been a vice-president of the Company since 1998. Since
1994 she has been employed by First Security Investor Services, a securities
brokerage firm, as an operating officer and cashiering manager.
Ms. Terry is the niece of Dan Shuput.
Management devotes only nominal time to the activities of the Company.
ITEM 6. EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by, or paid to any of
the executive officers of the Company during the fiscal years ended December
31, 1999, 1998, and 1997.
Directors are not entitled to receive compensation for their services as
directors. However, directors may, pursuant to a resolution of the Board,
receive a fixed sum and expenses for actual attendance at each regular or
special meeting of the Board. The Board of Directors of the Company has not
adopted a resolution providing for paying such a fixed sum or expenses but.
The Company has no employment agreements or compensatory plans or
arrangements with any of its executive officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By virtue of his stock ownership of the Company, Dan Shuput, the
President and a director of the Company, may be deemed to control the Company
and therefore may be a parent of the Company. Mr. Shuput beneficially owns
3,744,000, or 74.93%, of the outstanding stock of the Company.
ITEM 8. DESCRIPTION OF SECURITIES
The Company has authorized 20,000,000 shares of common stock, par value
$.01 per share (the "Common Stock"). As of October 25, 2000, the Company had
outstanding 4,996,860 shares of Common Stock. All Common Shares are equal to
each other with respect to voting, and dividend rights, and, are equal to each
other with respect to liquidation rights. The Articles of Incorporation
provide that the Common Stock cannot be issued in series or broken into
additional classes. Special meetings of the shareholders may be called by the
Board of Directors, President, or the holders of not less than two-thirds of
the outstanding shares of the Company entitled to vote at the meeting.
Holders of shares of Common Stock are entitled to one vote at any meeting of
the shareholders for each share of Common Stock they own as of the record date
fixed by the Board of Directors. At any meeting of shareholders, a majority
of the outstanding shares of Common Stock entitled to vote, represented in
person or by proxy, constitutes a quorum. A vote of the majority of the
shares of Common Stock represented at a meeting will govern, even if this is
substantially less than a majority of the shares of Common Stock outstanding.
Holders of shares are entitled to receive such dividends as may be declared by
the Board of Directors out of funds legally available therefor, and upon
liquidation are entitled to participate pro rata in a distribution of assets
available for such a distribution to shareholders. There are no conversion,
pre-emptive or other subscription rights or privileges with respect to any
shares. Reference is made to the Articles of Incorporation and Bylaws of the
Company as well as to the applicable statutes of the State of Nevada for a
more complete description of the rights and liabilities of holders of shares.
The shares of the Company do not have cumulative voting rights, which means
that the holders of more than fifty percent of the shares of Common Stock
voting for election of directors may elect all the directors if they choose to
do so. In such event, the holders of the remaining shares aggregating less
than fifty percent will not be able to elect directors.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
There is no public trading market for the common stock of the Company.
None of the common shares is subject to outstanding options or warrants to
purchase, or securities convertible into, Common Stock of the Company. Of the
4,996,860 outstanding common shares, all are restricted securities as defined
in Rule 144 under the Securities Act; management believes that all of these
shares are currently eligible for resale under Rule 144. The Company has not
agreed to register any of these shares under the Securities Act for sale by
the securities holder. The Company is not currently, and has not proposed to,
publicly offer any of its Common Stock.
At October 25, 2000, the Company had approximately 37 shareholders of
record of its Common Stock. The Company has appointed Interwest Transfer
Company, Inc., 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117, to
act as its transfer agent.
During the last two fiscal years ended December 31, 1999 and 1998, and
during the interim period through September 30, 2000, the Company has not
declared any dividends on its Common Stock and the Company does not anticipate
that it will pay dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
On December 11, 1998, the Company, Dan Shuput (the president, a director
and principal shareholder of the Company), Joseph Bowler Jr., Joseph Bowler
III, and Richard Bowler (the "Plaintiffs") filed a complaint in the District
Court of Clark County, Nevada, against Bert Brimhall, individually and as
trustee of the Bert Brimhall Revocable Living Trust of 1996, J. Thomas Baggs,
as guardian of Bert Brimhall, Glen Brimhall, individually and as trustee of
the Bert Brimhall Revocable Living Trust of 1996, and June Coleman (the
"Defendants"). The complaint arises out of a transaction whereby the Company
attempted, in 1998, to sell and assign its interest in three parcels of
property located near Overton, Nevada, to Joseph Bowler Jr., Joseph Bowler
III, and Richard Bowler, subject to confirmation of the validity of the
original lease. The land had been leased in 1994 from Bert Brimhall by Mr.
Shuput and the Company. Mr. Shuput had transferred his interest in the
property to the Company shortly after the original lease transaction. At the
time of the assignment to the Bowlers, the Company was in arrears in the
payment of the lease payments on the land. The Company tendered the arrearage
amount to the assignor who claimed that the lease had been terminated.
Plaintiffs claim that lessor failed to properly terminate the lease and was
therefore obligated to accept the arrearage payment and recognize the validity
of the original lease. The Plaintiffs are seeking a declaratory judgment that
the leases have not been terminated and are still binding and effective; for
damages caused by Defendant's breach of the lease agreements; for judgment
that the Company still holds leasehold interests in the land; and for damages
proximately caused by Defendant's intentional interference with Bowlers'
prospective economic advantage.
One of the defendants, Glen Brimhall, brought a counterclaim against the
plaintiffs, including the Company. The essence of these counterclaims is to
declare that the Company and other plaintiffs have no interest in the
property.
Although the Company is a plaintiff in the matter, the legal costs of the
case are being advanced by the assignee plaintiffs. The case has proceeded
through the discovery stage and currently the parties are waiting for a trial
date.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
No change in accountant is reportable pursuant to this item.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
No securities were sold within the last three years by the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada law expressly authorizes a Nevada corporation to indemnify its
directors, officers, employees, and agents against liabilities arising out of
such persons' conduct as directors, officers, employees, or agents if they
acted in good faith, in a manner they reasonably believed to be in, or not
opposed to, the best interests of the company, and, in the case of criminal
proceedings, if they had no reasonable cause to believe their conduct was
unlawful. Generally, indemnification for such persons is mandatory if such
person was successful, on the merits or otherwise, in the defense of any such
proceeding, or in the defense of any claim, issue, or matter in the
proceeding. In addition, as provided in the articles of incorporation,
bylaws, or an agreement, the corporation may pay for or reimburse the
reasonable expenses incurred by such a person who is a party to a proceeding
in advance of final disposition if such person furnishes to the corporation an
undertaking to repay such expenses if it is ultimately determined that he did
not meet the requirements. In order to provide indemnification, unless
ordered by a court, the corporation must determine that the person meets the
requirements for indemnification. Such determination must be made by a
majority of disinterested directors; by independent legal counsel; or by a
majority of the shareholders.
Article VIII of the Articles of Incorporation of the Company provides
that the Company shall indemnify its directors and officers. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to directors, officers, controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
PART F/S
Financial Statements. The following financial statements are included in
this statement:
Page
Independent Auditor's Report F-1
Balance Sheet as of December 31, 1999 and 1998 (audited)
and September 30, 2000 (unaudited) F-2
Statements of Operations for the years ended December 31, 1999
and 1998 (audited), the nine months ended September 30,
2000 (unaudited), and from inception through September
30, 2000 (unaudited) F-3
Statement of Stockholders' Equity from inception to December
31, 1999 (audited) and for the nine months ended
September 30, 2000 (unaudited) F-4
Statements of Cash Flows for the years ended December 31, 1999
and 1998 (audited), the nine months ended September 30,
2000 (unaudited), and from inception through September
30, 2000 (unaudited) F-6
Notes to Financial Statements F-7
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
FINANCIAL STATEMENTS
WITH
INDEPENDENT AUDITOR'S REPORT
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
CONTENTS PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Operations 3
Statement of Stockholders' Equity 4-5
Statements of Cash Flows 6
Notes to Financial Statements 7-9
<PAGE>
Independent Auditor's Report
Board of Directors and Stockholders
Industries International, Incorporated
Mesquite, Nevada
I have audited the accompanying balance sheets of Industries International,
Incorporated (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 from the beginning of the
development stage on January 11, 1991 (inception) through December 31, 1999.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on the financial
statements based on my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I 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 audits provide 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 Industries International,
Incorporated (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 from the beginning of the development stage on
January 11, 1991 (Inception) through December 31, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the company is a development stage company with no
significant operating results to date and with no operating capital, which
raises substantial doubt about the Company's ability to continue as a going
concern. Management's plans with regard to these matters are also described in
Note 4. The financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue as a going concern.
/s/ David T. Thomson P.C.
Salt Lake City, Utah
August 10, 2000
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
BALANCE SHEETS
September 30, December 31, December 31,
2000 1999 1998
(Unaudited)
ASSETS
CURRENT ASSETS
Prepaid expenses $5,000 $6,000 $-
------ ------ -------
Total Current Assets 5,000 6,000 -
------ ------ -------
TOTAL ASSETS $5,000 $6,000 $-
====== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $- $- $-
Payable to stockholder 19,041 14,485 7,233
------ ------ -------
Total Current Liabilities 19,041 14,485 7,233
------ ------ -------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; $.01 par value,
20,000,000 shares authorized,
4,996,860, 4,996,860 and
4,996,860 shares issued and
outstanding respectively 49,969 49,969 49,969
Capital in excess of par value 404,210 402,560 400,360
Deficit accumulated during the
development stage (468,220) (461,014) (457,562)
------ ------ -------
Total Stockholders' Equity
(Deficit) (14,041) (8,485) (7,233)
------ ------ -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,000 $6,000 $-
====== ====== =======
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
STATEMENTS OF OPERATIONS
From the
Beginning of the
Development
For the For the For the Stage on
Nine Months Year Year January 11, 1991
Ended Ended Ended through
September 30, December 31, December 31, September 30,
2000 1999 1998 2000
(Unaudited) (Unaudited)
REVENUE $- $- $- $-
------ ------ ------ -------
EXPENSES
General and administrative 137 218 210 8,128
Professional fees and
commissions 5,900 2,200 600 385,258
Development costs
- golf project - - - 69,135
Amortization expense - - - 1,000
Advertising and promotions - - - 339
6,037 2,418 810 463,860
------ ------ ------ -------
NET LOSS BEFORE OTHER
INCOME (EXPENSE) (6,037) (2,418) (810) (463,860)
------ ------ ------ -------
OTHER INCOME (EXPENSE)
Interest expense (1,169) (1,034) (648) (4,360)
------ ------ ------ -------
NET INCOME (LOSS) $(7,206) $(3,452) $(1,458) $(468,220)
====== ====== ====== =======
EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.18)
====== ====== ====== =======
WEIGHTED AVERAGE NUMBER
OF SHARES 4,996,860 4,996,860 4,996,860 2,625,083
====== ====== ====== =======
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Capital in During The
Common Stock Excess of Development
Shares Amount Par Value Stage
BALANCE, January 11, 1991 - $- $- $-
------ ------ ------ --------
Shares issued at inception to
individuals for services rendered
and payment of expenses and costs
at $.01 per share 100,000 1,000 - -
Net income (loss) for the year ended
December 31, 1991 - - - (200)
------ ------ ------ --------
BALANCE, December 31, 1991 100,000 1,000 - (200)
Net income (loss) for the year ended
December 31, 1992 - - - (200)
------ ------ ------ --------
BALANCE, December 31, 1992 100,000 1,000 - (400)
Net income (loss) for the year ended
December 31, 1993 - - - (565)
------ ------ ------ --------
BALANCE, December 31, 1993 100,000 1,000 - (965)
Shares issued for services rendered
at $.01 per share, January and
March 1994 2,050,000 20,500 - -
Shares issued for cash at $.15 per
share, April through December 1994 364,000 3,640 50,960 -
Net income (loss) for the year ended
December 31, 1994 - - - (30,049)
------ ------ ------ --------
BALANCE, December 31, 1994 2,514,000 25,140 50,960 (31,014)
Shares issued for services rendered
at $.15 per share, October 1995 57,000 570 7,980 -
Shares issued for cash at $.15 per
share, May, June, July, and
December 1995 88,334 883 12,367 -
Net income (loss) for the year ended
December 31, 1995 - - - (40,879)
------ ------ ------ --------
BALANCE, December 31, 1995 2,659,334 $26,593 $71,307 $(71,893)
====== ====== ====== ========
Continued on next page
The accompanying notes are and integral part of these financial statements
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Capital in During The
Common Stock Excess of Development
Shares Amount Par Value Stage
BALANCE, December 31, 1995 2,659,334 $26,593 $71,307 $(71,893)
------ ------ ------ --------
Shares issued for services
rendered at $.15 per share,
January 1996 2,270,000 22,700 317,800 -
Shares issued for cash at $.15
per share, February 1996 67,526 676 9,453 -
Net income (loss) for the year
ended December 31, 1996 - - - (341,847)
------ ------ ------ --------
BALANCE, December 31, 1996 4,996,860 49,969 398,560 (413,740)
Contributed capital - - 1,200 -
Net income (loss) for the year
ended December 31, 1997 - - - (42,364)
------ ------ ------ --------
BALANCE, December 31, 1997 4,996,860 49,969 399,760 (456,104)
Contributed capital - - 600 -
Net income (loss) for the year
ended December 31, 1998 - - - (1,458)
------ ------ ------ --------
BALANCE, December 31, 1998 4,996,860 49,969 400,360 (457,562)
Contributed capital - - 2,200 -
Net income (loss) for the year
ended December 31, 1999 - - - (3,452)
------ ------ ------ --------
BALANCE, December 31, 1999 4,996,860 49,969 402,560 (461,014)
Contributed capital (Unaudited) - - 1,100 -
Net income (loss) for the nine
months ended September 30, 2000
(Unaudited) - - - (7,206)
------ ------ ------ --------
BALANCE, September 30, 2000
(Unaudited) 4,996,860 $49,969 $403,660 $(468,220)
====== ====== ====== ========
The accompanying notes are and integral part of these financial statements
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
From the
Beginning of the
Development
For the For the For the Stage on
Nine Months Year Year January 11, 1991
Ended Ended Ended through
September 30, December 31, December 31, September 30,
2000 1999 1998 2000
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $(7,206) $(3,452) $(1,458) $(468,220)
Adjustments to reconcile
net income (loss) to
net cash used by operating
activities
Expenses paid by issuance
of stock - - - 370,550
Contributed capital -
noncompensated services 1,650 2,200 600 5,650
Changes in assets and
liabilities
(Increase) decrease in
prepaid expenses 1,000 (6,000) - (5,000)
Increase in payable to
shareholder 4,556 7,252 858 19,041
------ ------ ------ --------
Net Cash use by Operating
Activities - - - (77,979)
------ ------ ------ --------
CASH FLOWS FROM INVESTING
ACTIVITIES - - - -
------ ------ ------ --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common stock
for cash - - - 77,979
------ ------ ------ --------
Net Cash provided by Financing
Activities - - - 77,979
------ ------ ------ --------
NET INCREASE (DECREASE) IN CASH - - - -
CASH - BEGINNING OF PERIOD - - - -
------ ------ ------ --------
CASH - END OF PERIOD $- $- $- $-
====== ====== ====== ========
CASH PAYMENTS FOR
Income taxes $- $- $- $-
Interest $- $- $- $-
====== ====== ====== ========
NONCASH TRANSACTIONS
Common stock issued to pay
for expenses $- $- $- $370,550
====== ====== ====== ========
Contributed capital -
noncompensated services $1,650 $2,200 $600 $5,650
====== ====== ====== ========
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of
Nevada on January 11, 1991 and has elected a fiscal year end of December
31st. The Company was formed to engage in any business activity but from
January 1991 through 1996 all activity of the Company was directed towards the
development of a golf course in the Moapa or Overton valley area of Nevada.
This endeavor was not successful and the Company has been basically dormant
since 1997. However, the Company is involved in litigation related to the
golf course project. (see note 5). The Company has not commenced planned
principle operations and is considered a development stage Company as defined
in SFAS No. 7. The Company has, at the present time, not paid any dividends
and any dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Net income (loss) per Share - The computation of net income (loss) per share
of common stock is based on the weighted average number of shares outstanding
during the periods presented.
Income Taxes - the Company has experienced operating losses each year from
inception in 1991 through December 31, 1999. No provision for income taxes has
been included in these financial statements, and there are no deferred income
taxes resulting from income and expense items being reported for financial
accounting and tax reporting purposes in different periods. The Company has
not filed its Federal tax returns since inception. It has no operating loss
carryforwards because losses it has had since inception have not been
established for tax purposes by the filing of applicable tax returns.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Use of 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Unaudited Interim Information - In the opinion of management, the unaudited
financial statements reflect all adjustments, consisting only of normal
adjustments, necessary to present fairly, the financial position of the
Company at September 30, 2000 and the results of operations and cash flows for
the nine months then ended. The results of operations and cash flows for the
nine months ended September 30, 2000 should not necessarily be taken as
indicative of the results of operations and cash flows for the entire year
ended December 31, 2000.
<PAGE>
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development State Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - RELATED PARTY TRANSACTIONS
Since 1997, the Company has not compensated officers, directors and
stockholders for time and services rendered to the Company and for use of
space in their homes as a Company office. The fair value cost for the above
has been estimated to be $1,200, $600, $2,200, and $1,650 for the years 1997,
1998, 1999 and the nine months of 2000 respectively and is shown as
contributed capital in the statement of stockholders' equity.
An officer and stockholder of the Company has advanced money to the Company to
pay certain expenses of the Company. The amounts advanced are accruing
compound interest at a 10% rate based on average balances owed and the advance
plus accrued interest is shown as a payable to stockholder in the financial
statements.
NOTE 3 - COMMON STOCK TRANSACTIONS
The Company has issued its common stock, recorded at fair value at time of
issuance, for services rendered and also as payment for various expenses
incurred by the Company. During the period from inception through December
31, 1999, the Company issued 2,150,000 common shares at par value of $.01 per
share and issued 2,327,000 common shares at $.15 per share as payment for
services rendered and various expenses incurred. In addition, the Company
issued 364,000, 88,334, and 67,526 shares of common stock for cash at $.15 per
share during 1994, 1995, and 1996 respectively. Details of these transactions
are shown in the statement of stockholders' equity.
NOTE 4 - CONTINUANCE OF BUSINESS
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of
the Company as a going concern and the realization of assets and liquidation
of liabilities in the normal course of business. However, the Company is in
the development stage and does not have cash or operating capital with its
only asset being prepaid expenses, nor does it have an established source of
revenues to cover its operating costs and to allow it to continue as a going
concern.
In view of these matters, realization of a major portion of the assets in the
accompanying balance sheets are dependent upon the Company' ability to meet
its future plans which are to remain in good corporate standing until it
enters into a business venture. In the past and interim, a shareholder of the
Company has paid expenses of the Company to maintain its existence and it is
anticipated the stockholder will continue to help the Company meet its minimal
operating expenses.
NOTE 5 - LITIGATION
The Company and its President, along with other unrelated parties, are
plaintiffs in a lawsuit involving a dispute over the rights to two leased
parcels of unimproved real property located in or around Overton, Nevada. The
two parcels were leased by the Company during 1994 as part of its efforts to
develop a golf course project.
INDUSTRIES INTERNATIONAL, INCORPORATED
(A Development State Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - LITIGATION - CONTINUED
The Company has been in arrears on payments for both leases since 1996.
During 1998, the Company conditionally assigned its rights to the two parcels
of real estate to the unrelated parties named as co-plantiffs in consideration
of $30,000 cash and an agreement to assume liability for any and all payments
in arrears under the Company's lease agreements. The assignment is contingent
upon the determination by the courts that the leases are valid and binding.
One of the defendants has brought counterclaims against the plaintiffs ,
including the Company.
The Company does not control the litigation. Legal counsel has contracted
with plaintiffs other than the Company and its President for the provision of
legal services related to the lawsuit. Thus, the Company has not made any
payments for legal services to legal counsel, as other plaintiffs have done so.
Legal Counsel believes that the probability of an unfavorable outcome which
would cause the Company to experience a material loss is not likely. Also, in
regard to the counterclaims the Company believes that it is asserting valid
defenses to those counterclaims, which should preclude material loss.
<PAGE>
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS.
The following exhibits are included as part of this statement:
Exhibit No. Description Location
2.1 Articles of Incorporation filed June 11, 1991 Attached
2.2 Current Bylaws Attached
4.1 Form of Common Stock Certificate Attached
6.1 Lease Agreement dated February 14, 1994, as amended Attached
6.2 Assignment of Lease dated March 29, 1994 Attached
6.3 Lease Agreement dated September 1, 1994 Attached
6.4 Agreement for Assignment of Lease dated
August 27, 1998 Attached
<PAGE>
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 by
the undersigned, thereunto duly authorized.
Industries International, Incorporated
Date: November 9, 2000 By /s/ Dan Shuput, President
Date: November 9, 2000 By /s/ William S. Roberts,
Chief Financial & Principal
Accounting Officer
