<PAGE>
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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
Annual Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
_______________________________________
For the fiscal year ended December 31, 1996
Commission File Number 0-4519
____________________INTER-CONTINENTAL SERVICES CORPORATION___________________
(Exact name of registrant as specified in its charter)
____________Missouri___________ _________44-0628974________
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5700 Broadmoor, Suite 712__________Mission,_Kansas_____________66202___
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code_____(913) 262-1604__
Securities_registered_pursuant_to_Section_12(b)_of_the_Act:
Title_of_Each_Class Name_of_Each_Exchange_on_Which_Registered
______NONE_________ __________________NONE___________________
Securities registered pursuant to Section 12(g) of the Act:
_______________Common_Stock,_No_Par_Value__________________
(Title of Class)
Indicate by check mark whether the registrant (1) has filed reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or for
such shorter period that the registrant was required to file such
report), and (2) has been subject to such filing requirements for
the past 90 days.
Yes__X__ No_____
Aggregate market value of voting stock of registrant held by persons other
than officers, directors, and greater than 5% shareholders as of the close
of business on December 31, 1996 was $862,935 based on a "Bid" of $0.875.
Number of shares of Common Stock outstanding at December 31, 1996: 1,896,572.
<PAGE>
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PART I
Item 1. Business
Inter-Continental Services Corporation (the "Company" or "ICSC") is a Missouri
corporation incorporated in 1958 under the name All State Credit & Research,
Inc. The Company changed its name to Inter-Continental Computing, Inc. in
September, 1968, and in June, 1969, it changed to its current name, Inter-
Continental Services Corporation.
The Company operates a credit card recovery and cardholder contact service,
as All State Credit in Kansas City, MO, Costa Mesa, CA and Phoenix, AZ. In
order to eliminate duplicate costs and realize certain economies of scale,
the Kansas City credit card operations merged with the Phoenix operation.
The Kansas City facility is scheduled for total elimination in fiscal 1997.
Initially, the services were for better control of oil credit charge cards.
In the late 1960's, with the introduction of bank cards and expanded appeal
of travel cards, All State's card recovery services were modified and adapted
to the more demanding requirements of the multi-purpose cards.
While technology has greatly decreased the need for card recovery, All State
has developed related services which focus on effecting issuer/customer
contact and developing pertinent facts and information relative to more
effective and less costly collection. All State's reputation, current
services, and adaptation to the contemporary challenges in the credit
industry should allow it to remain firm in service support to the ever-
changing and more demanding challenges of the portfolios of fewer but
larger credit grantors.
Substantially all of the revenues are concentrated with a few customers in
the credit card industry. During 1996, the Company obtained 93% of
operating revenue from two customers. In 1995, two customers provided 87%
of operating revenues. Two customers provided 80% of revenues in 1994.
Although the Company is directly affected by the well-being of its major
customers, management is uncertain as to the possiblity of significant loss
of customers at December 31, 1996.
As of December 31, 1996 the Company had 6 employees.
1.
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<PAGE><TABLE>
Item 2. Properties
The Company occupies 2,800 square feet in a two story building in Phoenix,
Arizona on a three year lease which commenced in September, 1994. The Company
also occupies 400 square feet in Costa Mesa, California and approximately
1,000 square feet in Mission, Kansas on month to month leases.
Item 3. Legal Proceedings
The Company is not currently involved in any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholders Matters
Prior to the third quarter of 1995 there was no established public trading
market for the Company's stock. Since then the principal trading has been in
the NASDAQ over the counter market. Listed below are the average bid and ask
quotations; which should be considered in the absence of an active public
trading market. There is no representation of actual transactions for 1994
and quarters one and two of 1995.
<CAPTION>
1996 1995 1994
Quarter Bid Ask Bid Ask Bid Ask
<S> <C> <C> <C> <C> <C> <C>
1st 1/4 5/8 1/4 1/2 1/4 1/2
2nd 1/4 3/4 1/4 1/2 1/4 1/2
3rd 1/4 3/4 3/8 1 1/8 1/4 1/2
4th 1/2 1 3/8 1/8 7/8 1/4 1/2
The approximate number of shareholders of record for the Company's stock at
December 31, 1996 was 511.
There were no dividends paid in 1996, 1995 or 1994.
</TABLE>
2.
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<TABLE>
Item 6. Selected Financial Data
<CAPTION>
1996 1995 1994 1993 1992
Note 1 Note 1
<S> <C> <C> <C> <C> <C>
Operating revenues $199,480 $379,715 $427,345 $555,788 $372,192
Income (loss)
from continuing 60,681 (163,745) ($87,599) $146,479 ($53,669)
operations
Income (loss) from
continuing opera-
tions per share:
Primary $0.04 ($0.11) ($0.07) $0.11 ($0.04)
Fully Diluted $0.04 ($0.11) ($0.07) $0.08 ($0.04)
At year end:
Total assets $ 52,705 $ 70,575 $127,177 $110,861 $ 82,571
Note 1 - Amounts have been restated due to an audit performed where as
previously submitted items were unaudited.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
1996 vs. 1995
Operating revenue in 1996 decreased 47% to $199,480 from $379,715 in 1995.
Most of this decline was a result of management's decision to phase out
services which were no longer profitable.
Operating expenses in 1996 were $312,765. This was a reduction of $160,928,
or 34%, from $473,693 in 1995. There were fewer costs because of declining
revenue and loss of work force.
As a result, the loss from operations was $101,999. This was 38% less than
the $163,745 in 1995. The Company had an extraordinary gain of $162,680
resulting from the waiving of accrued interest on shareholder notes payable.
</TABLE>
3.
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1995 vs. 1994
Revenues decreased 11% in 1995 to $379,718 over the $427,345 in 1994,
as a result of the Company's customers replacing outside services with
their own staff. The Company also stopped doing higher cost lower revenue
business with smaller customers.
Operating expenses increased 5% to $473,693 over the $452,575 in 1994
largely because of costs associated with the listing of stock on the
market and the attempt to seek an infusion of capital. There were
additional computer software costs and costs with outsourcing of services.
The Company had a loss from operations of $163,745 in 1995 compared to
$87,599 in 1994 because of the lower revenues and increased costs.
LIQUIDITY AND FINANCIAL RESOURCES
The Company ended 1996 with anticipation for better operating results
in the future. Liquidity is needed as liabilities exceed assets.
Notes payable are lower in 1996 than 1995 because of note payments and
notes were canceled with an infusion of new investment funds. Management
believes that with some of the steps taken in 1996 future profitability would
allow the Company to expand its business base.
Management continues to actively seek a corporate merger or a source of
infusion of capital to allow the Company to expand and adequately market
its services. As of December 31, 1996, two major shareholders had reached
agreement with Mr. Robert Meyer and the Meyer Group Limited to purchase all
their shares and notes of the Company. It is expected that this transaction
will be completed during the first half of 1997. There are no commitments
for capital expenditures.
INFLATION
The impact of inflation is not material to the operations of the Company.
4.
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Item 8. Financial Statements
Index to Financial Statements
Page
Independent Auditor's Report 6
Balance sheet - December 31, 1996 and 1995 7
Statements of Operations - Years Ended
December 31, 1996, 1995 and 1994 8
Statements of Shareholders' Deficit - Years
Ended December 31, 1996, 1995 and 1994 9
Statements of Cash Flows - Years Ended
December 31, 1996, 1995 and 1994 10
Notes to Financial Statements 11-14
5.
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Independent Auditor's Report
Board of Directors
Inter-Continental Services Corporation
We have audited the balance sheet of Inter-Continental Services Corporation
as of December 31, 1996 and 1995, and the related statements of operations,
shareholders' deficit, and cash flows for each of the three years in the
period ended December 31, 1996. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentations. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Inter-Continental Services
Corporation at December 31, 1996 and 1995 and the results of its operations
and its cash flows for each of the three years in the period of December
31, 1996, 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 2 to the
financial statements, the Company has suffered recurring losses from
operations and has a net capital deficiency, which raise substantial doubt
about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
Our audits of the financial statements also included the schedules listed
in answer to Item 14(a)2. In our opinion, such schedules present fairly
the information required to be set forth therein.
Weaver & Martin
Certified Public Accountants & Consultants
801 West 47th St., Suite 208
Kansas City, Missouri 64112
April 19, 1997
6.
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<TABLE>
Inter-Continental Services Corporation
Balance Sheet
<CAPTION>
December 31,
____1996____ ____1995____
<S> <C> <C>
Assets
Current Assets:
Cash $ 3,210 $ 36,145
Accounts receivable net of $2,300 allowance 44,010 25,045
---------- ----------
Total current assets 47,220 61,190
Fixed assets: (note 1)
Furniture and equipment 23,212 23,212
Accumulated depreciation (17,727) (13,827)
---------- ----------
5,485 9,385
---------- ----------
$ 52,705 $ 70,575
========== ==========
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts payable $ 37,000 $ --
Deposit for unissued stock (note 11) 25,250 --
Notes payable to shareholders (note 3) -- 71,500
Notes payable to bank (note 4) 25,000 25,000
Convertible notes payable (note 5) 109,700 354,099
Accrued interest on shareholders' notes (note 7) -- 181,641
Accrued interest on other notes (note 7) -- 4,500
Due to Shareholders' (note 6) 42,000 77,000
Accrued liabilities 2,414 4,575
---------- ----------
Total current liabilities 241,364 718,315
---------- ----------
Shareholders' deficit:
Common Stock, no par, authorized 3,000,000
shares, issued 2,237,543 in 1996 and
1,760,462 shares in 1995 1,787,817 1,389,417
Contributed capital 63,400 63,400
Accumulated deficit (1,878,138) (1,938,819)
---------- ----------
(26,921) (486,002)
Less treasury stock at cost, 340,971 shares (161,738) (161,738)
---------- ----------
Total shareholders' equity (188,659) (647,740)
---------- ----------
$ 52,705 $ 70,575
========== ==========
See notes to financial statements.
</TABLE>
7.
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<TABLE>
Inter-Continental Services Corporation
Statements of Operations
<CAPTION>
_______Year_Ended_December_31,______
___1996___ ___1995___ ___1994___
<S> <C> <C> <C>
Operating revenues $ 199,480 $ 379,715 $ 427,345
Operating expenses 312,765 473,693 452,575
---------- ---------- ----------
Income (Loss) from operations (113,285) (93,978) (25,230)
Other income (expense):
Interest expense (1,248) (71,299) (63,128)
Miscellaneous income 2,364 1,532 759
---------- ---------- ----------
1,116 (69,767) (62,369)
---------- ---------- ----------
Income (loss) before tax and
extraordinary item (112,169) (163,745) (87,599)
Income tax benefit (note 8) (10,170) -- --
---------- ---------- ----------
Income (loss) before
extraordinary item (101,999) (163,745) (87,599)
Extraordinary item - gain on
extinguishment of accrued interest on
shareholder & convertible notes, net
of tax effect of $10,170 (note 7) 162,680 -- --
---------- ---------- ----------
Net income (loss) $ 60,681 $ (163,745) $ (87,599)
========== ========== ==========
Per share of common stock (note 12):
Primary:
Loss before extraordinary item $ (0.06) $ (0.11) $ (0.07)
Extraordinary item 0.10 -- --
---------- ---------- ----------
Net income (loss) $ 0.04 $ (0.11) $ (0.07)
========== ========== ==========
Fully diluted:
Loss before extraordinary item $ (0.05) $ (0.11) $ (0.07)
Extraordinary item 0.09 -- --
---------- ---------- ----------
Net income (loss) $ 0.04 $ (0.11) $ (0.07)
========== ========== ==========
See notes to financial statements.
</TABLE>
8.
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<TABLE>
Inter-Continental Services Corporation
Statements of Shareholders' Deficit
<CAPTION>
Total
Common Paid in Accumulated Treasury Shareholders'
___Stock__ Capital __Deficit__ __Stock__ ___Deficit___
<S> <C> <C> <C> <C> <C>
January 1, 1994 $1,389,417 $63,400 ($1,687,475) ($186,738) ($421,396)
Net loss -- -- (87,599) -- (87,599)
---------- ------- ----------- --------- -------------
December 31, 1994 1,389,417 63,400 (1,775,074) (186,738) (508,995)
Reissued treasury
stock -- -- -- 25,000 25,000
Net loss -- -- (163,745) -- (163,745)
---------- ------- ----------- --------- -------------
December 31, 1995 1,389,417 63,400 (1,938,819) (161,738) (647,740)
Issuance of common
stock (note 11) 398,400 -- -- -- 398,400
Net income -- -- 60,681 -- 60,681
----------- ------- ---------- --------- ------------
December 31, 1996 $1,787,817 $63,400 $(1,878,138) $(161,738) $ (188,659)
========== ======= =========== ========= =============
</TABLE>
See notes to financial statements.
9.
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<TABLE>
Inter-Continental Services Corporation
Statements of Cash Flows
<CAPTION>
_______Year_Ended_December_31,______
___1996___ ___1995___ ___1994___
<S> <C> <C> <C>
Operating activities:
Net income (loss) $ 60,681 $ (163,745) $ (87,599)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities-
Depreciation 3,900 4,003 2,114
Reissued treasury stock -- 25,000 --
Changes in assets and liabilities-
Accounts receivable (18,965) 56,807 (43,241)
Prepaid expenses -- -- 5,121
Other assets -- 4,500 6,469
Accrued interest (186,141) 63,060 55,354
Due to Shareholders (35,000) 77,000 --
Accrued liabilities (2,160) (5,630) 3,661
Deposit for unissued stock 25,250 -- --
Accounts payable 37,000 -- --
---------- ---------- ----------
Net cash provided by (used in)
operating activities (115,435) 60,995 (58,121)
---------- ---------- ----------
Cash used in investing activities:
Additions to fixed assets -- (7,849) (3,567)
---------- ---------- ----------
Cash provided by (used in) financing
activities:
Issuance of common stock 119,000 -- --
Payment on notes payable (36,500) (52,287) 44,900
---------- ---------- ----------
82,500 (52,287) 44,900
---------- ---------- ----------
Increase (decrease) in cash (32,935) 859 (16,788)
Cash at beginning of year 36,145 35,286 52,074
---------- ---------- ----------
Cash at end of year $ 3,210 $ 36,145 $ 35,286
========== ========== ==========
Supplemental cash flow information:
Interest paid $ 1,200 $ 10,700 $ 5,300
Income taxes -- -- --
See notes to financial statements.
10.
</TABLE>
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Inter-Continental Services Corporation
Notes to Financial Statements
December 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations:
- --------------------
The Company operates a credit card recovery and cardholder contact service
business. Substantially all of the revenues and accounts receivable are
concentrated with a few customers in the credit card industry. During 1996
the Company obtained approximately $185,000 in revenue from two customers.
During 1995 the Company obtained approximately $330,000 in revenue from two
customers. During 1994 the Company obtained approximately $341,000 in revenue
from two customers. At December 31, 1996 approximately $44,000 of accounts
receivable was from one customer. Although the Company is directly affected
by the well-being of its major customers, management is uncertain as to the
possibility of a significant loss of customers at December 31, 1996.
(See Note 2)
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 amounts reported in the financial statements and notes.
Actual results could differ from those estimates, but management does not
believe such differences will materially affect the Company's financial
position, results of operations or cash flows.
Cash Equivalents:
- ----------------
The Company's cash equivalents consist principally of cash and money market
accounts with high quality financial insitutions. The investment policy
limits the amount of credit exposure to any one financial institution.
Fixed assets:
- ------------
Fixed assets are depreciated on accelerated methods over the estimated
useful lives (5-7 years) of the asset.
Reclassification:
- ----------------
Certain reclassifications have been made in the 1995 and 1994 financial
statements to conform to the classifications in the current year.
11.
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Notes to financial statements (con't.)
NOTE 2 - CONTINUED EXISTENCE OF THE COMPANY
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has sustained
operating losses in recent years. In addition, the Company has used
substantial amounts of working capital in its operations. Further, at
December 31, 1996, current liabilities exceed current assets by $194,149,
and total liabilities exceed total assets by $188,659.
In view of these matters, realization of a major portion of the assets in
the accompanying balance sheet is dependent upon continued operations of
the Company, which in turn is dependent upon the Company's ability to meet
its financing requirements, and the success of its future operations.
Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern.
NOTE 3 - NOTES PAYABLE TO SHAREHOLDERS
Notes payable to shareholders were repaid in the year ending December 31,
1996. These were demand notes. The interest accrued on these notes was
waived by the note holders. (See Note 7) A $106,000 note reported as a
demand note in 1995 was reclassified as a convertible note in 1996 as
documentation of the note being convertible was obtained.
NOTE 4 - NOTE PAYABLE TO BANK
Note payable to bank consists of a loan at prime plus 2%. The bank was taken
over by the Federal Deposit Insurance Corporation and it is unknown who
currently owns the note. No interest payments have been made since the third
quarter of 1993. Interest is not being accrued by the Company. (See Note 7)
NOTE 5 - CONVERTIBLE NOTES PAYABLE
Convertible notes payable are demand notes. In the year ending December 31,
1996 $244,399 of the notes were canceled. (See Note 12) In conjunction with
the cancellation, accrued interest on the ntoes was waived. Remaining notes
of $109,700, including the $106,000 note discussed in Note 3, can convert
into common stock at a rate of $.50 per share (219,400 shares).
NOTE 6 - DUE TO SHAREHOLDERS
During 1995, the Company obtained advances from shareholders. There are no
repayment terms associated with the advance and no interest was accrued.
NOTE 7 - EXTRAORDINARY ITEM
In fiscal 1996 interest owed to shareholders on convertible notes and share-
holders notes $(178,350) was waived in lieu of 10,000 shares of newly issued
(valued at $10,000) stock. Also interest accrued on the note payable to bank
($4,500) was written off. The total $172,850, less tax effect of $10,170
was recorded as an extraordinary item.
12.
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Notes to financial statements (cont'd.)
NOTE 8 - INCOME TAXES
In fiscal 1996 the Company utilized approximately $61,000 of net operating
loss carryforward resulting in a tax benefit of approximately $10,170.
The Company has net operating loss carryforwards for financial statement
purposes of approximately $700,000 expiring in 1999 through 2010.
The potential deferred tax asset resulting from the loss carryforwards
has been fully reserved with a valuation allowance equal to the benefit.
The deferred tax asset and valuation allowance are as follows:
1994 $234,000
1995 $270,000
1996 $238,000
The reduction in 1996 resulted in the utilization of loss carryforwards.
The difference between statutory tax rates (34%) and rates utilited is the
surtax exemption.
NOTE 9 - RELATED PARTY TRANSACTIONS
The Company reimbursed affiliated companies and a shareholder (formerly
an officer) for certain overhead items. Payments for the year ended
December 31, 1996, 1995 and 1994 were approximately $35,000, $49,000 and
$23,000, respectively. Included in accounts payable is $3,650 for advances
from an affiliate.
NOTE 10 - RENTAL AGREEMENTS
The Company leases office space under operating leases expiring in 1997
and on a monthly basis. Minimum rental payments under non-cancelable
operating leases having remaining terms in excess of one year at December 31,
1996 are 1997-$27,000. Rent payments for the years ended December 31,
1996, 1995 and 1994 were approximately $50,000, $54,000 and $50,500,
respectively.
NOTE 11 - ISSUANCE OF COMMON STOCK
During fiscal 1996 a shareholder of the Company contributed $119,000 in cash,
$35,000 in canceled note payable to shareholder and $206,640 in canceled
convertible notes (convertible at $.50 per share or 413,280 shares) in
exchange for 416,666 shares of newly issued common stock. There was no
documentation of Board of Director minutes or shareholder minutes approving
the transactions, or any other inducements made to the shareholder.
During the fourth quarter the Company collected $15,250 from investors for the
issuance of 27,000 shares (prices from $.50 to $.75 per share). The shares
were not issued at December 31, 1996. There was documentation of Board of
Director minutes or shareholder minutes approving the transaction. The trans-
action was recorded as a deposit for unissued stock as of December 31, 1996.
13.
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Notes to financial statements (cont'd.)
During the fourth quarter the Company, in conjunction with the waiving of
accrued interest on shareholder notes and convertible notes, agreed to issue
10,000 shares of stock (priced determined to be $1 per share) (See Note 7).
The stock was unissued at December 31, 1996. The transaction was recorded
as a deposit for unissued stock at December 31, 1996.
The Company issued 30,000 treasury shares for services rendered in 1995 at a
valuation of $.50 per share. The Company issued 50,000 treasury shares to an
employee for services in 1995 valued at $.20 per share.
NOTE 12 - EARNINGS PER SHARE
Earnings per share amounts are computed based on the weighted average number
of shares actually outstanding. The number of outstanding shares used in the
computation are 1,658,032 in 1996; 1,419,491 in 1995 and 1,339,491 in 1994.
The number of outstanding shares used in fully diluted computations was
1,877,432 in 1996.
NOTE 13 - CONTINGENCIES
The Company has not filed appropriate documents with the Security and Exchange
Commission disclosing Director resignation and a material event. The Company
had one Board of Director meeting minutes and no shareholder meeting minutes.
The Company has issued stock in exchange for cash and canceled notes without
acquiring the notes and has issued a significant amount of new shares without
a shareholder meeting. The effect of these transactions can not be determined
nor are any loss contingencies recorded in the financial statements as of
December 31, 1996.
NOTE 14 - SUBSEQUENT EVENT
On January 7, 1997 the Company announced a Carrier International Long Distance
Service Agreement whereby the Company agreed to forward telecommunication
services. The effect of this agreement could significantly impact the
operations of the Company, however, at the current time it is not determin-
able if or when the Company will begin realizing revenue.
14.
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Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None.
The Company's board of Directors does not have a standing audit committee.
Item 10. Directors and Executive Officers of the Registrant
(a) The Directors presently serving will hold office until the next
annual meeting and until their successors are elected and have qualified.
Directors serve one year terms.
(b) Executive officers of the Company are not elected to a specific
term of office.
Directors and Executive Officers
Robert N. Meyer President, Chief Executive Officer
Age: 34 and Chairman of the Company
Director since: 1996
Thomas F. Fangrow President, Sunrise Drilling, Inc.
Age: 72 Louisburg, Kansas
Director since: 1958
Carol M. Maltby Vice President and Secretary
Age: 57
Barry J. Weidenhammer Vice President and Treasurer
Age: 58
(c) Business Experience:
Mr. Meyer became president, chief executive officer and chairman of the Company
on September 18, 1996. Prior to this position, Mr. Meyer served as President,
Chief Executive Officer and Chairman of Meyer Group Limited and Access Medical
Systems, Inc. in Costa Mesa, California where he resides.
Mr. Fangrow assisted in the development of Sunrise Drilling, Inc. during 1981
and subsequently became its owner and President. Prior to his involvement
with Sunrise Drilling, Mr. Fangrow was Vice President of the Company for a
period in excess of five years.
With twenty five years experience in general management, sales and marketing,
Ms. Maltby served as a director and an executive officer for international and
national companies. Most recently, Ms. Maltby served as vice president and
secretary of Meyer Group Limited and Acess Medical Systems, Inc. She resides
in Carlsbad, California.
Mr. Weidenhammer has thirty years experience in general management. Most
recently, he served as general manager of Eaton Aerospace in Costa Mesa,
California. Mr. Weidenhammer resides in Newport Beach, California.
Item 11. Executive Compensation
No compensation was paid to any officer or director and there were not any
director's fees. No employee was paid above $100,000.
15.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table shows the amount of common stock owned as of December 31,
1996 by each person known by the Company to own directly or beneficially more
than five percent (5%) of the outstanding shares of the Company's stock.
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ -------------------- --------
Dr. David Ganch
27 W. 041 Walz Drive
Wheaton, Illinois 60187 545,666 28.77%
James F. Bell
5700 Broadmoor, Suite 712
Mission, Kansas 66202 (1) 174,674 9.21%
(1) Includes 70,674 shares held by Mr. Bell's wife.
The following table shows the amount of common stock owned as of December 31,
1996 as well as beneficial ownership of the Common Stock by the Company's
Directors and by all Directors and Officers as a group.
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ -------------------- --------
Thomas Fangrow
1995 West 247th Street
Louisburg, Kansas 66053 (2) 190,020 10.02%
(2) Includes 12,000 shares held by Mr. Fangrow's wife and 33,000 shares held
by her as custodian for their child, beneficial ownership of which is
disclaimed by Mr. Fangrow. Does not include 219,400 shares available from
conversion of convertible note.
Item 13. Certain Relationships and Related Transactions
As of December 31, 1996 the Company was indebted to the following:
Thomas Fangrow, President and Director $109,700
The indebtedness is convertible notes with no stated interest. Unpaid
interest has not been accrued.
The Company paid a management charge in 1996 of $25,300 to an affiliate in
which James F. Bell was more than a 10% owner.
16.
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PART IV
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
(a)(1) The following financial statements are included in Part II Item 8:
Page
Independent Auditor's Report 6
Balance sheet - December 31, 1996 and 1995 7
Statements of Operations - Years Ended
December 31, 1996, 1995 and 1994 8
Statements of Shareholders' Deficit - Years
Ended December 31, 1996, 1995 and 1994 9
Statements of Cash Flows - Years Ended
December 31, 1996, 1995 and 1994 10
Notes to Financial Statements 11-14
(2) The following financial statement schedules should be read in
conjunction with the financial statements referred to above.
Page
Years Ended December 31, 1996, 1995, and 1994
Schedule II - Amounts Receivable from Related
Parties and Underwriters, Promoters and
Employees other than Related Parties 18
Schedule V - Property, Plant and Equipment 19
Schedule VI - Accumulated Depreciation of
Property, Plant and Equipment 19
Schedule VIII - Valuation and Qualifying Accounts 20
Schedule IX - Short-term Borrowings 21
Schedule X - Supplementary Income Statement 22
Information
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
No reports on Form 8-K have been filed by the registrant during the last
quarter of the period covered by this report.
17.
<PAGE>
<PAGE>
<TABLE>
Inter-Continental Services Corporation
Schedule II
Amounts Receivable from Related Parties and Underwriters, Promoters, and
Employees Other than Related Parties
<CAPTION>
Balance at Balance at
Beginning Written ____End_of_Period___
of Period Additions Collected Off Current Not Current
---------- --------- --------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Year Ended
December 31, 1996
Mr. R.L. Ernst -- -- -- -- -- --
====== ====== ====== ====== ====== ======
Year Ended
December 31, 1995
Mr. R.L. Ernst $4,500 -- $4,500 -- -- --
====== ====== ====== ====== ====== ======
Year Ended
December 31, 1994
Mr. R.L. Ernst $4,000 $4,500 $4,000 -- -- $4,500
====== ====== ====== ====== ====== ======
18.
</TABLE>
<PAGE>
<PAGE>
Inter-Continental Services Corporation
Schedule V
Property, Plant and Equipment
<TABLE>
<CAPTION>
Balance at Balance at
Beginning End of Period
of Period Additions Retirements Period
---------- --------- ----------- -------------
<S> <C> <C> <C> <C>
Furniture and Equipment
Year Ended
December 31, 1996 $23,212 -- -- $23,212
======= ====== ====== =======
Furniture and Equipment
Year Ended
December 31, 1995 $15,363 $7,849 -- $23,212
======= ====== ====== =======
Furniture and Equipment
Year Ended
December 31, 1994 $11,796 $3,567 -- $15,363
======= ====== ====== =======
Estimated lives are 5 to 7 years.
Depreciation is computed on an accelerated basis.
</TABLE>
Schedule VI
Accumulated Depreciation of Property, Plant and Equipment
<TABLE>
<CAPTION>
Balance at Balance at
Beginning End of Period
of Period Additions Retirements Period
---------- --------- ----------- -------------
<S> <C> <C> <C> <C>
Furniture and Equipment
Year Ended
December 31, 1996 $13,827 $3,900 -- $17,727
======= ====== ====== =======
Furniture and Equipment
Year Ended
December 31, 1995 $ 9,824 $4,003 -- $13,827
======= ====== ====== =======
Furniture and Equipment
Year Ended
December 31, 1994 $ 7,710 $2,114 -- $ 9,824
======= ====== ====== =======
19.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Inter-Continental Services Corporation
Schedule VIII
Valuation and Qualifying Accounts
<CAPTION>
Balance at ______Charged______ Balance at
Beginning Cost & Other Other End of
Description of Period Expense Accounts Changes Period
- ----------- ---------- --------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Allowance for
Doubtful Accounts
Year Ended
December 31, 1996 $2,500 200 -- -- $2,300
====== ====== ====== ====== ======
Allowance for
Doubtful Accounts
Year Ended
December 31, 1995 $2,500 -- -- -- $2,500
====== ====== ====== ====== ======
Year Ended
December 31, 1994 $2,500 -- -- -- $2,500
====== ====== ====== ====== ======
</TABLE>
20.
<PAGE>
<PAGE>
<TABLE>
Inter-Continental Services Corporation
Schedule IX
Short-Term Borrowings
<CAPTION>
Weighted Maximum Average Weighted
Balance Average Outstanding Outstanding Average
at End Interest During During Interest Rate
Category of Period Rate Period Period During Period
- ----------- --------- --------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Note Payable
to Bank
1996 $25,000 12.00% $25,000 $25,000 12.00%
======= ====== ======= ======= ======
1995 $25,000 12.00% $25,000 $25,000 12.00%
======= ====== ======= ======= ======
1994 $25,000 12.00% $25,000 $25,000 12.00%
======= ====== ======= ======= ======
An interest rate of 12% was assumed. The bank was assumed by the Federal
Deposit Insurance corporation in 1993, and the Company has not made any
payments since the third quarter 1993 because they have not been contacted.
Prior to 1993 interest was at prime plus 2%. No interest was charged in 1996.
Notes Payable
to Shareholders
1996 -- 12.00% $ 71,500 $ 49,625 12.00%
======== ====== ======== ======== ======
1995 $ 71,500 12.00% $101,500 $ 86,500 12.00%
======== ====== ======== ======== ======
1994 $191,500 12.00% $101,500 $ 76,500 12.00%
======== ====== ======== ======== ======
An interest rate of 12% was assumed.
Notes are demand notes.
The average outstanding during the year represents the average quarterly
balances.
Convertible Notes
Payable to
Shareholders
1996 $109,700 12.00% $248,099 $179,400 12.00%
======== ====== ======== ======== ======
1995 $354,099 12.00% $376,386 $365,243 12.00%
======== ====== ======== ======== ======
1994 $376,386 12.00% $381,486 $378,936 12.00%
======== ====== ======== ======== ======
An interest rate of 12% was assumed.
Notes are demand notes convertible into common stock at rates of $.50 and
$.625 per share.
</TABLE>
21.
<PAGE>
<PAGE>
<TABLE>
Inter-Continental Services Corporation
Schedule X
Supplementary Income Statement Information
<CAPTION>
_______Year_Ended_December_31,______
___1996___ ___1995___ ___1994___
<S> <C> <C> <C>
Maintenance and Repairs -- $326 $5,204
22.
</TABLE>
<PAGE>
<PAGE>
INTER-CONTINENTAL SERVICES CORPORATION
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.
Inter-Continental Services Corporation
DATE: March 31, 1997___
BY: Robert N. Meyer, President
DATE: March 31, 1997___
BY: Thomas F. Fangrow, Director
23.
