UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended - May 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from:
Commission file number: 0-9879
VACATION OWNERSHIP MARKETING, INC.
(Name of Small Business Issuer in its charter)
Florida 13-2648442
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
444 Park Forest Way, Wellington, FL 33414
(Address of principal executive offices)
Issuer's telephone number: 561-798-4294
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
Common Stock, $0.01 par value per share
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(D) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [ ] NO [ X ]
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and
no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year.
$ -0-
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as
of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act):
-0-
Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court.
Yes [ ] No [ ] Not applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
15,000,000 as of May 31, 2000.
Transitional Small Business Disclosure Format (Check one):
Yes [ ]; No [ ]
PART I
ITEM 1. BUSINESS
Beginning in 1979, Vacation Ownership Marketing, Inc. (the
Company) was principally engaged in the development of vacation
time-sharing resorts and the marketing of timesharing units in
resorts.
The Company conducted its business mainly in Southeast Florida.
Its development activities through 1983 consisted of endeavoring
to purchase existing resort hotels with the anticipation of
renovating them by remodeling and upgrading the hotel units into
timeshare units. Additionally, the Company intended to serve as
a marketing agent for timeshare properties that were developed by
other entities. As a marketing agent, the Company would receive
commissions approximating 40% of the sales price of each
timeshare unit and would receive additional compensation in the
form of an interest in the net profits of the project.
In an effort to significantly expand its operations, the Company,
in early 1982, began marketing a number of resorts. Substantial
sums were expended by the Company to market those resorts, but
income in connection with sales made could not be realized by the
Company until specified sales levels were attained. Primarily
because of a poor 1982 tourist season, the national and
international economic downturn and the Company's lack of capital
resources, these sales levels were attained either later than
expected or not at all. As a result, the Company was not able to
generate sufficient cash to meet its needs and the Company
accumulated a significant amount of short term debt and accounts
payable.
The Company experienced difficulty in securing the capital
necessary to carry its development and marketing activities to
the point where sales and commission revenues could be realized.
As previously reported and discussed, the Company has had
significant capital commitments in connection with its purchase
of Lighthouse Cove Resorts through a joint venture. As it became
apparent that operational revenues were not sufficient to meet
these commitments and that other capital resources were not
available, the Company agreed to sell its interest in the joint
venture developing the Lighthouse Cove, while retaining a
marketing agreement for sales at that resort.
As a result of its sale of a property named Lighthouse Cove, the
Company had no material commitments for capital expenditures.
However, the Company did accumulate significant accounts payable
and short term debt as a result of liquidity problems during
1982. Over 1 million of unsecured debt was potentially in default
for various technical reasons other than non-payment under
certain provisions of the loan agreements. The significant
downturn in the economy, particularly real estate and banking
sectors in the 1980's, contributed to the demise of the company's
intended business plan. The Company has been dormant since.
The following officers and/or directors have since resigned from
the Company or are deceased and are therefore no longer
affiliated with the Company:
Evelyn Amazon 10/30/80
Doyle Martin 4/13/81
John McDonald 5/22/81
Earl Short 7/9/81
William Jackson Deceased
Ronald Crandal 11/19/82
Jack Secord 4/19/83
Murray Howe 4/19/83
Joseph Milsaps 4/19/83
Marco Milovar 4/19/83
Adolph Hirsch Deceased
In May of 2000, The Board, consisting solely of Mr. Peter Porath
appointed two new members and officers, Mick Schumacher and
George Powell, principals of the firm, Prime Rate Income and
Dividend, Inc. Management likewise secured the services of Prime
Rate Income and Dividend, Inc. (PRIDE) a consulting firm which
is expected to assist the company in its efforts to salvage value
for the benefit of its shareholders. The Company has opted to
become a "blank check" company and to further engage in any
lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. PRIDE contributed $10,000.00
as paid in capital to the Company and has agreed to pay all costs
of current accounting and filings with the Securities and
Exchange Commission so as to reactivate the Company as a
reporting company. PRIDE has also agreed to advise the Company
as to potential business combinations. In consideration for
these services and capital contribution(s), the Company issued
PRIDE 9,120,498 shares of its common stock representing 60.8% of
its common stock outstanding as of May 31, 2000.
Pursuant to the Articles of Incorporation, the Company is
authorized to issue 15,000,000 shares of Common Stock at $0.01
par value and 1,000,000 shares of Preferred Stock at $0.01 par
value. Each holder of the Common Stock shall be entitled to one
vote for each share of Common Stock held. The Preferred Stock may
be divided into Series or Classes by the management of the
Company upon the approval of a majority vote of the Directors of
the Company. As of May 31, 2000, there are 15,000,000 shares of
Common Stock and no shares of Preferred Stock outstanding.
Since 1983, the Company has not engaged in any operations and has
been dormant. As such, the Company may presently be defined as a
"shell" company, which sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The Company has opted to resume the filing of reporting
documentation in an effort to maximize shareholder value. The
best use and primary attraction of the Company as a merger
partner or acquisition vehicle will be its status as a reporting
public company. Any business combination or transaction may
potentially result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any offering of the
Company's securities, either debt or equity, until such time as
the Company has successfully implemented its business plan
described herein.
GENERAL BUSINESS PLAN
At this time, the Company's purpose is to seek, investigate and,
if such investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act
registered corporation. The Company will not restrict its search
to any specific business, industry, or geographical location and
the Company may participate in a business venture of virtually
any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter
into potential business opportunities. Management anticipates
that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited
financial resources. See Item 7. "FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA." This lack of diversification should be
considered a substantial risk to shareholders of the Company
because it will not permit the Company to offset potential
losses from one venture against gains from another.
The Company may seek a business opportunity with entities which
have recently commenced operations, or which wish to utilize the
public marketplace in order to raise additional capital in order
to expand into new products or markets, to develop a new product
or service, or for other corporate purposes. The Company may
acquire assets and establish wholly-owned subsidiaries in various
businesses or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company
privately. The Company has not yet prepared any notices or
advertisement.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available
capital, management believes that there are numerous firms
seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be
sought, providing liquidity for incentive stock options or
similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and
other factors. Potentially, available business opportunities may
occur in many different industries and at various stages of
development, all of which will make the task of comparative
investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, little or no capital
with which to provide the owners of business opportunities with
any significant cash or other assets. However, management
believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the
cost and time required to conduct an initial public offering.
The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of
preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the
"34 Act"), specifically requires that any merger or acquisition
candidate comply with all applicable reporting requirements,
which include providing audited financial statements to be
included within the numerous filings relevant to complying with
the 34 Act. Nevertheless, the officers and directors of the
Company have not conducted market research and are not aware of
statistical data which would support the perceived benefits of a
merger or acquisition transaction for the owners of a business
opportunity.
The analysis of new business opportunities will be undertaken by,
or under the supervision of, the officers and directors of the
Company. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be
brought to its attention through present associations of the
Company's officers and directors, or by the Company's
shareholder. In analyzing prospective business opportunities,
management will consider such matters as the available technical,
financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects
for the future; nature of present and expected competition; the
quality and experience of management services which may be
available and the depth of that management; the potential for
further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for
growth or expansion; the potential for profit; the perceived
public recognition of acceptance of products, services, or
trades; name identification; and other relevant factors.
Officers and directors of the Company do expect to meet
personally with management and key personnel of the business
opportunity as part of their investigation. To the extent
possible, the Company intends to utilize written reports and
investigation to evaluate the above factors. The Company will
not acquire or merge with any company for which audited
financial statements cannot be obtained within a reasonable
period of time after closing of the proposed transaction.
The Officers of the Company have limited experience in managing
companies similar to the Company and shall rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholder, in accomplishing the business purposes of
the Company. The Company may from time to time utilize outside
consultants or advisors to effectuate its business purposes
described herein. No policies have been adopted regarding use of
such consultants or advisors, the criteria to be used in
selecting such consultants or advisors, the services to be
provided, the term of service, or regarding the total amount of
fees that may be paid. However, because of the limited resources
of the Company, it is likely that any such fee the Company
agrees to pay would be paid in stock and not in cash.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of any
acquired business opportunity until such time as the Company has
successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in
the implementation of its business plan described herein.
Because the Company has no capital with which to pay these
anticipated expenses, present management of the Company will pay
these charges with their personal funds, as interest free loans
to the Company. However, the only opportunity which management
has to have these loans repaid will be from a prospective merger
or acquisition candidate. Management has agreed among themselves
that the repayment of any loans made on behalf of the Company
will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the
consummation of a transaction, it is probable that the present
management and shareholders of the Company will no longer be in
control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign
and be replaced by new directors without a vote of the Company's
shareholders or may sell their stock in the Company. Any and all
such sales will only be made in compliance with the securities
laws of the United States and any applicable state.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs,
of which there can be no assurance, it will be undertaken by the
surviving entity after the Company has successfully consummated a
merger or acquisition and the Company is no longer considered a
"shell" company. Until such time as this occurs, the Company
does not intend to register any additional securities. The
issuance of substantial additional securities and their potential
sale into any trading market which may develop in the Company's
securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of
which there is no assurance.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the
"Code"). In order to obtain tax-free treatment under the Code,
it may be necessary for the owners of the acquired business to
own 80% or more of the voting stock of the surviving entity. In
such event, the shareholders of the Company, would retain less
than 20% of the issued and outstanding shares of the surviving
entity, which would result in significant dilution in the equity
of such shareholders.
As part of the Company's investigation, officers and directors of
the Company may personally meet with management and key
personnel, may visit and inspect material facilities, obtain
analysis of verification of certain information provided, check
references of management and key personnel, and take other
reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.
The manner in which the Company participates in an opportunity
will depend on the nature of the opportunity, the respective
needs and desires of the Company and other parties, the
management of the opportunity and the relative negotiation
strength of the Company and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage
of the Company which the target company shareholders would
acquire in exchange for all of their shareholdings in the target
company. Depending upon, among other things, the target
company's assets and liabilities, the Company's shareholders will
in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to
significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition
effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's
then shareholders.
The Company will participate in a business opportunity only after
the negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require some specific
representations and warranties by all of the parties thereto,
will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of the
parties prior to and after such closing, will outline the manner
of bearing costs, including costs associated with the Company's
attorneys and accountants, will set forth remedies on default and
will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with
any entity which cannot provide independent audited financial
statements within a reasonable period of time after closing of
the proposed transaction. The Company is subject to all of the
reporting requirements included in the 1934 Act. Included in
these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K
to be filed with the Securities and Exchange Commission upon
consummation of a merger or acquisition, as well as the Company's
audited financial statements included in its annual report on
Form 10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the
requirements of the 1934 Act, or if the audited financial
statements provided do not conform to the representations made by
the candidate to be acquired in the closing documents, the
closing documents will provide that the proposed transaction will
be voidable, at the discretion of the present management of the
Company. If such transaction is voided, the agreement will also
contain a provision providing for the acquisition entity to
reimburse the Company for all costs associated with the proposed
transaction.
The Company does not intends to provide the Company's security
holders with any complete disclosure documents, including audited
financial statements, concerning an acquisition or merger
candidate and its business prior to the consummation of any
acquisition or merger transaction.
COMPETITION
The Company will remain an insignificant participant among the
firms which engage in the acquisition of business opportunities.
There are many established venture capital and financial concerns
which have significantly greater financial and personnel
resources and technical expertise than the Company. In view of
the Company's combined extremely limited financial resources and
limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the
Company's competitors.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company currently maintains a mailing address at 444 Park
Forest Way, Wellington, FL 33414, which is the address of
its President. The Company pays no rent for the use of this
mailing address. The Company does not believe that it will need
to maintain an office at any time in the foreseeable future in
order to carry out its plan of operations described herein.
ITEM 3. LEGAL PROCEEDINGS.
At or about the time the Company discontinued its business, in
1983, it experienced adverse litigation and judgments were
rendered against the Company. In official records of Broward and
Palm Beach Counties in the state of Florida, and other relevant
jurisdictions, persons holding judgments did not re-certify or re-
file their judgments within the time limits as required by the
state of Florida. In the opinion of counsel there are no known
outstanding judgments against the Company, nor any pending
litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted during the fourth quarter of the
calendar year covered by this report to a vote of security
holders.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) Market Information.
There is not a market for the Company's securities.
(b) Holders.
As of May 31, 2000, there were approximately 1,200 holders of the
Company's Common Stock.
(c) Dividends.
The Company has never paid a cash dividend on its Common Stock
and has no present intention to declare or pay cash dividends on
the Common Stock in the foreseeable future. The Company intends
to retain any earnings which it may realize in the foreseeable
future to finance its operations. Future dividends, if any, will
depend on earnings, financing requirements and other factors.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITIONS.
The following discussion should be read in conjunction with the
information contained in the financial statements of the Company
and the Notes thereto appearing elsewhere herein.
Results of Operations
The Company incorporated in Delaware as Magnum Communications
Corp. in 1969 changed its name to its present name in 1980. Its
principal business included the development and marketing of
timeshare condominiums which continued until 1983. During that
year, the Company experienced financial difficulties and
encountered adverse litigation. The Company's charter expired
until May 7, 2000 when a certificate of renewal was issued.
In the year 2000, management, in an effort to salvage value for
the sake of their shareholders and therefore optimize their
interests, decided to structure the Company as a potential merger
candidate or "blank check" company. It caused to be filed five
years of the most recent annual audited financial statements of
the Company so as to resume reporting status.
The Company believes that while there is some doubt as to the
Company's continuance is going concern its success is dependent
upon its ability to meet its financing requirements and the
success of its future operations or completion of a successful
business combination. Management believes that actions planned
and presently being taken to revise the Company's operating and
financial requirements provide the opportunity to the Company to
continue as a going concern.
At or about the time the Company discontinued its business, in
1983, it experienced adverse litigation and judgments were
rendered against the Company. In official records of Broward and
Palm Beach Counties in the state of Florida, and other relevant
jurisdictions, persons holding judgments did not recertify or
refile their judgments within the time limits as required by the
state of Florida. In the opinion of counsel there are no known
outstanding judgments against the Company, nor any pending
litigation.
Since 1983, the Company has ceased all substantive operations.
Liquidity and Capital Resources.
From the Company's date of inception until May of 2000, the
Company had issued an aggregate of 15,000,000 shares of its
common stock. On May 10, 2000, the Company issued 9,120,498
shares which amount is included in the aggregate 15,000,000
issued and outstanding for services rendered or to be rendered
and a capital contribution of $10,000. In consideration of the
issuance of the above-mentioned common stock, the receiving
company has agreed to pay all costs of current accounting and
filings with the Securities and Exchange Commission to reactivate
the Company as a reporting company. As further consideration,
the receiving company has agreed to provide future consultation
to assist the Company in either starting a new business or
locating a business combination. It is the opinion of the
management that the fair value of stock issued for future
services is $91,205. The measurement date for the issuance of
stock was May 10, 2000.
As of May 31, 2000, the Company had net operating losses
available for carry forward of $784, expiring in years through
2020. Future utilization of this carry over may be limited due
to changes in control of the Company. As of May 31, 2000, the
Company has total deferred tax assets of approximately $118 due
to operating loss carry forwards. However, because of the
uncertainty of the potential realization of these tax assets, the
Company has provided a valuation allowance for the entire $118.
Thus, no tax assets have been recorded in the financial statement
as of May 31, 2000.
The Company has no operating history as a blank check company and
no material assets. The Company has $10,000 in cash and cash
equivalents as of May 31, 2000.
Year 2000 Issue
Year 2000 issues are not currently material to the Company's
business, operations or financial condition, and the Company does
not currently anticipate that it will incur any material expenses
to remediate Year 2000 issues it may encounter. However, Year
2000 issues may become material to the Company following its
completion of a business combination transaction. In that event,
the Company will be required to adopt a plan and a budget for
addressing such issues.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
___________________________________________________________________
INDEX TO FINANCIAL STATEMENTS
VACATION OWNERSHIP MARKETING, INC.
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Report of F-2
Independent
Certified Public
Accountants
Financial
Statements:
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in F-5
Stockholders' Equity
Statements of Cash Flows F-6
Notes to Financial Statements F-7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Vacation Ownership Marketing, Inc.
Denver, CO
We have audited the accompanying balance sheets of Vacation
Ownership Marketing, Inc. as of May 31, 2000 and 1999, and the
related statements of operations, stockholders' equity and cash
flows for the two years ended May 31, 2000. These financial
statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above,
present fairly, in all material respects, the financial position
of Vacation Ownership Marketing, Inc. as of May 31, 2000 and
1999, and the results of its operations, changes in its
stockholders' equity and its cash flows for the two years ended
May 31, 2000 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 described
in Note 2, the Company has suffered prior operating losses since
inception that raise substantial doubts about its ability to
continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
Miller and McCollom
Certified Public Accountants
7400 W. 14th Avenue
Lakewood, CO 80215
June 30, 2000
VACATION OWNERSHIP MARKETING, INC.
BALANCE SHEETS
ASSETS
May 31, May 31,
2000 1999
Current Assets
Cash and cash $ 10,000 $ -
equivalents
Prepaid expenses 91,205 -
Total Current Assets 101,205 -
TOTAL ASSETS $ 101,205 $ -
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 784 $ -
Total Current Liabilities 784 -
TOTAL LIABILITIES $ 784 $ -
Commitments and contingencies - -
(Notes 2 and 3)
Stockholders' Equity:
Common stock, $.01 par value
15,000,000 shares authorized,
5,879,502 issued and
outstanding
at May 31, 1999 and
15,000,000
issued and outstanding at
May 31, 2000 150,000 58,795
Additional paid-in capital 2,017,488 2,007,488
Accumulated (deficit) (2,067,067) (2,066,283)
TOTAL STOCKHOLDERS' EQUITY 100,421 -
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY $ 101,205 $ -
The accompanying notes are an integral part of the financial
statements.
VACATION OWNERSHIP MARKETING, INC.
STATEMENTS OF OPERATIONS
Year Ended Year Ended
May 31, 2000 May 31, 1999
Revenue $ - $ -
Expenses Administrative and 784 -
other
784 -
Net (Loss) $ (784) $ -
Per Share $ nil $ nil
Weighted Average Shares 6,639,544 5,879,502
Outstanding
The accompanying notes are an integral part of the financial statements.
VACATION OWNERSHIP MARKETING, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from May 31, 1998 through May 31, 2000
Common Stock Additional Accumulated Total
No./Shares Amount Paid-in (Deficit)
Capital
Balance at May 5,879,502 $ 58,795 2,007,488 (2,066,283) -
31, 1998
Change for the - - - - -
period ended
May 31, 1999
Balance at May 5,879,502 58,795 2,007,488 (2,066,283)
31, 1999
Issuance of 9,120,498 91,205 - - 91,205
stock
Capital - - 10,000 - 10,000
contributed
Net (loss) for - - - (784) (784)
the year ended
May 31, 2000
Balance at May 15,000,000 $150,000 $ $ $100,421
31, 2000 2,017,488 (2,067,067)
The accompanying notes are an integral part of the financial statements.
VACATION OWNERSHIP MARKETING, INC.
STATEMENTS OF CASH FLOWS
Year Ended Year Ended
May 31, 2000 May 31, 1999
Cash Flows from Operating Activities:
Net (Loss) $ (784) $ -
Adjustment to reconcile net
(loss) to net cash provided
by operating activities:
Increase in accounts payable 784 -
Net Cash (Used in) Operating
Activities - -
Cash Flows Provided by Investing
Activities - -
Cash Flows Provided by Financing
Activities:
Capital contributed 10,000 -
Net Cash Provided by Financing
Activities 10,000 -
Increase in Cash 10,000 -
Cash, Beginning of Period - -
Cash, End of Period $ 10,000 $ -
Supplemental disclosure of cash flow
information:
Interest Paid $ - $ -
Income Taxes Paid $ - $ -
Supplemental disclosure of non-cash-investing and investing activities:
During the period ending May 31, 2000, the Company issued 9,120,498 shares
of common stock for services to be rendered in the future, valued at
$91,205. (See Note 4)
The accompanying notes are an integral part of the financial statements.
VACATION OWNERSHIP MARKETING, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 and 1999
(1) Summary of Accounting Policies
Vacation Ownership Marketing, Inc. ("Company") was
incorporated in Delaware as Magness Communications Corp. in
1969 and changed its name to its present name in 1980.
Coinciding with the name change, the Company changed its
business to the development and marketing of time-shared
condominiums which it continued until 1983. During that
year, the Company experienced financial difficulties and
encountered adverse litigation. The Company's charter
expired until May 7, 2000, when a certificate of renewal was
issued.
(a) Description of Business
It is management's plan to start a new business or seek
a business combination. The Company has selected May
31 as its year end.
(b) Per Share Information
Per share information is based upon the weighted
average number of shares outstanding during the period.
(c) Use of Estimates in the Preparation of Financial
Statements
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from
those estimates.
(d) Risks and Uncertainties
The Company is subject to substantial business risks
and uncertainties inherent in seeking a new business or
business combination candidate. There is no assurance
that the Company will be able to generate sufficient
revenues or obtain sufficient funds necessary for
starting a new business nor finding a satisfactory
business combination.
VACATION OWNERSHIP MARKETING, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 and 1999
(1) Summary of Accounting Policies, Continued
(d) Prepaid Expenses
The Company adopted Statement of Position No. 98-5
("SOP 98-5"), "Reporting the Costs of Start-Up
Activities." SOP 98-5 requires that all non-
governmental entities expense the cost of start-up
activities, including organizational costs as those
costs are incurred. The prepaid expenses will be
amortized as the related costs are incurred.
(d) Fair Value of Financial Instruments
Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No.
107 ("SFAS 107"), "Disclosures About Fair Value of
Financial Instruments." SFAS 107 requires disclosure
of fair value information about financial instruments
when it is practicable to estimate that value. The
carrying amount of the Company's cash and cash
equivalents approximates their estimated fair values
due to their short-term maturities.
(d) Cash and Cash Equivalents
For purposes of the statements of cash flows, cash
and cash equivalents consist of demand deposits in
banks and cash on hand with an initial maturity of 90
days or less.
(d) Stock-Based Compensation
The FASB issued Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), "Accounting for Stock-
Based Compensation," which defines a fair value based
method of accounting for stock-based compensation. The
common stock was issued based upon the estimated value
of services to be rendered. (See Note 4)
(i) Comprehensive Income
The Company has adopted Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income." SFAS 130 establishes standards
for reporting and display of comprehensive income and
its components in a full set of general-purpose
financial statements. The Company does not have any
components of comprehensive income other than net
income (loss).
VACATION OWNERSHIP MARKETING, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 and 1999
(1) Summary of Accounting Policies, Continued
(j) Segments of Business
The Company has adopted Statement of Financial
Accounting Standards No. 131 ("SFAS 131"), "Disclosures
about Segments of an Enterprise and Related
Information". SFAS 131 changes the way public
companies report information about segments of their
business in their annual financial statements and
requires them to report selected segment information in
their quarterly reports issued to shareholders. It
also requires entity-wide disclosures about the
products and services an entity provides, the material
countries in which it holds assets and reports revenues
and its major customers. As of May 31, 2000, the
Company had not established any business segments.
(k) Recent Accounting Pronouncements
In June of 1998, the FASB issued Statement of
Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities."
SFAS 133 establishes accounting and reporting standards
for derivative instruments, including certain
derivative instruments embedded in other contracts, and
for hedging activities. It requires that an entity
recognize all derivatives as either assets or
liabilities on the balance sheet at their fair value.
This statement, as amended by SFAS 137, is effective
for financial statements for all fiscal quarters to all
fiscal years beginning after June 15, 2000. The
Company does not expect the adoption of this standard
to have a material impact on its results of operation,
financial position or cash flows as it currently does
not engage in any derivative or hedging activities.
(2) Basis of Presentation - Going Concern
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 prior operating
losses since inception. This fact raises substantial doubt
about the Company's ability to continue as a going concern.
Management is attempting to obtain capital for a new
business or locate a business combination candidate.
VACATION OWNERSHIP MARKETING, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 and 1999
(2) Basis of Presentation - Going Concern, Continued
In view of these matters, continuing as a going concern is
dependent upon the Company's ability to meet its financing
requirements, raise additional capital, and the success of
its future operations or completion of a successful business
combination. Management believes that actions planned and
presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the
Company to continue as a going concern.
(2) Contingencies
At about the time the Company discontinued its business in
1983, it experienced adverse litigation, and judgments were
rendered against the Company. In official records of
Broward and Palm Beach counties in the State of Florida,
persons holding judgments did not recertify or refile their
judgments within the time limits as required by Florida
statutes. In the opinion of counsel, there are no known
outstanding judgments against the Company.
(2) Common Stock
From the Company's date of inception until May of 2000, the
Company had issued an aggregate of 5,879,502 shares of its
common stock. On May 10, 2000, the Company issued the
balance of its 15,000,000 shares of common stock authorized,
9,120,498 shares, for services. In consideration of the
issuance of the above-mentioned common stock, the receiving
company has agreed to pay all costs of current accounting
and filings with the Securities and Exchange Commission to
reactivate the Company as a reporting company. As further
consideration, the receiving company has agreed to provide
future consultation to assist the Company in either starting
a new business or locating a business combination. It is
the opinion of management that the fair value of stock
issued for future services is $91,205. The measurement date
for the issuance of stock was May 10, 2000. The receiving
company has contributed $10,000 to the Company as additional
paid in capital.
(2) Income Taxes
As of May 31, 2000, the Company had net operating losses
available for carry forward of $784, expiring in years
through 2020. Future utilization of these carry overs may
be limited due to changes in control of the Company. As of
May 31, 2000, the Company has total deferred tax assets of
approximately
VACATION OWNERSHIP MARKETING, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 and 1999
(5) Income Taxes, Continued
$118 due to operating loss carry forwards. However, because
of the uncertainty of the potential realization of these tax
assets, the Company has provided a valuation allowance for
the entire $118. Thus, no tax assets have been recorded in
the financial statements as of May 31, 2000.
____________________________________________________________________
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
OFFICERS AND DIRECTORS
The following table sets forth certain information concerning
each of the Company's directors and executive officers:
NAME AGE POSITION
Peter Porath 69 Chairman of the
Board, President,
Chief Executive
Officer
Mick Schumacher 50 Vice President
George Powell 73 Secretary and
Treasurer
Peter J. Porath has been President and a director of the Company
since its formation on April 30, 1979. Shortly after the Company
ceased operations, Mr. Porath was a director for Plants For
Tomorrow, an environmental litigation concern through the years
from 1989-1991. Since 1990 Mr. Porath, semi-retired has operated
a retail magic supply store in Fort Lauderdale Florida, Merlin's
Festival of Magic. From 1978 to 1979, Mr. Porath was executive
vice-president and director of International Resort Properties,
Inc. a timesharing company in Hillsboro Beach, Florida where he
was responsible for the development of a 20-unit project. Prior
to 1978, Mr. Porath was Vice President of Investment Corporation
of Florida, a public company, and developer in Wellington and
Palm Beach, now a city of 30,000 people. Mr. Porath holds a
Bachelor of the Arts Degree in English from Ripon College and a
Juris Doctor from De Paul University in Chicago.
Michael L. Schumacher has been Vice-President of Vacation
Ownership Marketing, Inc. since May of 2000. Mr. Schumacher
devotes most of his time and efforts to a public company named
Prime Rate Income and Dividend Enterprises, Inc. (PRIDE) where he
functions as President and CEO of that company. Mr. Schumacher is
also the director and President of Schumacher & Associates, Inc.,
a certified public accounting firm located in Englewood, Colorado
that provides audit services, principally to public companies on
a national basis throughout the U.S.A. Mr. Schumacher is a
Certified Public Accountant, Certified Management Accountant and
an Accredited Financial Planning Specialist. Mr. Schumacher has
a Bachelor of the Sciences Degree in Business Administration with
a major in accounting from the University of Nebraska at Kearney
and a Masters in Business Administration from the University of
Colorado.
George A. Powell has been Secretary and Treasurer of the Company
since May of 2000. Mr. Powell is concurrently a director, vice-
president and secretary of PRIDE. Mr. Powell was previously a
director and president of Continental Investors Life, Inc., a
public reporting insurance company. Since Mr. Powell's
retirement from the insurance business in 1988, he has been self-
employed as a business consultant.
SIGNIFICANT EMPLOYEES
The Company has no regular employees. Peter Porath, Michael L.
Schumacher and George A. Powell each devote approximately 10% of
their time to the Company's business.
ITEM 10. EXECUTIVE COMPENSATION.
Presently, none of the Company's current officers or directors
receive any compensation for their respective services rendered
unto the Company, nor have they received such compensation in the
past 17 years. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected
to occur until the Company has generated revenues from operations
after consummation of a merger or acquisition. The Company
currently has no funds available to pay officer or directors.
Further, none of the officer or directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or a number of members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity that proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will
receive any finders fee, either directly or indirectly, as a
result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Company for the benefit of its employees.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of May 31,
2000 regarding the beneficial ownership of the Company's Common
Stock by (i) each stockholder known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock,
(ii) by each Director and executive officer of the Company and
(iii) by all executive officer and Directors of the Company as a
group. Each of the persons named in the table has sole voting and
investment power with respect to Common Stock beneficially owned.
NAME AND ADDRESS NUMBER OF PERCENTAGE
SHARES OWNED OF SHARES
OR CONTROLLED OWNED
Peter Porath 944,134 6.3%
Prime Rate Income & Dividend, Inc. 9,120,498 60.8%
ALL DIRECTORS AND OFFICERS AS A 10,064,632 67.1%
GROUP
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In May of 2000, The Board, consisting solely of Mr. Peter Porath
appointed two new members and officers, Mick Schumacher and
George Powell, principals of the firm, Prime Rate Income and
Dividend, Inc. Management likewise secured the services of Prime
Rate Income and Dividend, Inc. (PRIDE) a consulting firm which
is expected to assist the company in its efforts to salvage value
for the benefit of its shareholders. The Company has opted to
become a "blank check" company and to further engage in any
lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. PRIDE contributed $10,000.00
as paid in capital to the Company and has agreed to pay all costs
of current accounting and filings with the Securities and
Exchange Commission so as to reactivate the Company as a
reporting company. PRIDE has also agreed to advise the Company
as to potential business combinations. In consideration for
these services and capital contribution(s), the Company issued
PRIDE 9,120,498 shares of its common stock representing 60.8% of
its common stock outstanding as of May 31, 2000.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) Financial Statements are contained in Item 7.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of
the period covered by this report.
(c) Exhibits.
* 3.1 Articles of Incorporation
* 3.2 Bylaws of the Company
* These documents are rendered as previously filed and
incorporated by reference to the Company's previous filings
with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
VACATION OWNERSHIP MARKETING, INC.
Date: August 15, 2000
By:
__________________________________
/s/Peter Porath
President, Chief Executive Officer
Date: August 15, 2000
By:
_________________________________
/s/Michael Schumacher
Vice President
