<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission File Number 2-29987
UPWARD TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
---------------
New York 11-1714403
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
301 City Avenue, Bala Cynwyd, PA 19004
- -------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 667-8225
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
----
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 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 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. [X]
Revenues for the most recent fiscal year were $9,234.
As of March 31, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant, based upon the average bid and asked prices of
such stock on that date was $500,000. Shares of Common Stock held by each
officer and director and by each person who owns 10% or more of the outstanding
Common Stock have been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not necessarily conclusive
and does not constitute an admission of affiliate status.
As of March 31, 2000, there were issued and outstanding 8,100,000 shares of the
registrant's Common Stock, par value $.02 per share.
<PAGE>
PART I
ITEM 1- BUSINESS
Upward Technology Corporation (the "Company"), was originally
incorporated under the laws of the State of New York in 1953 and was formerly
known as Marks Polarized Corporation. In May, 1989, the Company sold its
remaining operating assets, suspended all operations, except for necessary
administrative matters and ceased to be an operating company.
In February, 1992 the Company consummated an agreement with Beverly
Hills Bancorp ("BHB") wherein BHB acquired a controlling interest in the
Company. In April, 1996, BHB sold its entire interest in the Company (4,100,000
shares of the Company's Common Stock), to Messrs. Albert M. Zlotnick and Irving
I. Lassoff. In January, 1998, Mr. Lassoff sold an aggregate of 2,050,000 shares
of the Company's Common Stock, representing Mr. Lassoff's entire interest in the
Company, to Albert M. Zlotnick.
The Company currently has no full time employees. Its Chairman,
President and Chief Executive Officer is Albert M. Zlotnick. Ms. Felice Bravato
serves as the Company's Secretary.
The Company is currently seeking merger or acquisition partners so as
to best utilize the Company's cash and corporate structure.
ITEM 2 - PROPERTY
The Company presently maintains its corporate and administrative
offices at 301 City Avenue, Bala Cynwyd, PA. The Company utilizes a portion of
the premises occupied by Davic Associates, an investment firm owned by Albert M.
Zlotnick. Due to the curtailed nature of the Company's operations, Davic
Associates has, until further notice, waived the payment of rent by the Company.
No rent was paid in the fiscal years ended December 31, 1997 and 1996.
ITEM 3 - LEGAL PROCEEDINGS
As of March 31, 2000, the Company is not a party to any material legal
proceedings.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders by the Company
during the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5 - MARKET OF THE REGISTRANT'S COMMON EQUITY
AND RELATED SECURITY HOLDERS MATTERS
The Company's Common Stock, par value $.02 per share, is traded in the
over-the counter market.
The following table sets forth the range of high and low closing bid
prices for the Company's Common Stock for the periods indicated as reported by
the National Quotation Bureau, Inc. These prices represent quotations between
dealers, do not include retail markups, markdowns or commissions, and do not
necessarily represent actual transactions.
Calendar Years Bid Price
Low High
--- ----
1997: First Quarter $.02 $.03
Second Quarter $.03 $.03
Third Quarter $.03 $.03
Fourth Quarter $.02 $.03
-2-
<PAGE>
Bid Price
Low High
--- ----
1996: First Quarter $.02 $.04
Second Quarter $.02 $.03
Third Quarter $.02 $.03
Fourth Quarter $.02 $.03
As of March 31, 2000, the National Quotation Bureau, Inc. reported that
the closing bid and asked prices on the Company's Common Stock were $.11 and
$.14, respectively.
As of March 31, 2000, the Company's Common Stock, $.02 par value, was
held of record by approximately 690 record holders, including several brokers in
their names for their customers' accounts.
Holders of the Company's Common Stock are entitled to receive dividends
as and when they may be declared by the Company's Board of Directors. The
Company has not paid any cash dividends on its Common Stock since its inception,
and by reason of its present financial condition and contemplated financial
requirements, does not anticipate paying any cash dividends upon such stock in
the foreseeable future.
ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
In May 1989, the Company suspended all operations except for
necessary administrative matters and ceased to be an operating company. As such,
for the fiscal year ended December 31, 1997 and 1996, the Company had no
revenues from operations. Given the virtual suspension of the Company's
operations except for necessary administrative matters, the Company's officers
have waived further compensation.
Results of Operations
During the year ended December 31, 1997 ("Fiscal 97"), the Company
earned interest of $9,234 as compared to $9,625 of interest earned in the year
ended December 31, 1996 ("Fiscal 96"), a decrease of $391. During Fiscal 97, the
Company incurred general and administrative expenses of $12,407, an increase of
$3,560 as compared with Fiscal 96 expenses of $8,847.
Liquidity and Capital Resources
During Fiscal 97, the Company satisfied its working capital needs
from cash on hand at the beginning of the year and cash generated from interest
income during the year. As of December 31, 1997, the Company had working capital
of $195,971. This working capital is expected to be sufficient to provide the
Company with sufficient capital while it seeks a merger, acquisition or other
arrangement by and between the Company and a viable operating entity, although
there is no assurance that this will occur.
-3-
<PAGE>
Market Risk
The Company's market risk includes the potential decrease in interest
earned on its cash and cash equivalents arising from a decline in interest
rates.
Forward-Looking Statements
The Company desires to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995 and is making this
cautionary statement in connection with such safe harbor legislation. This Form
10-KSB, and the Annual Report to Shareholders, Form 10-QSB or Form 8-K of the
Company or any other written or oral statements made by or on behalf of the
Company may include forward-looking statements which reflect the Company's
current views with respect to future events and financial performance. The words
"believe," "expect," "anticipate," "intends," "estimate," "forecast," "project,"
"should" and similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Report Act
of 1995. All forecasts and projections in this Form 10-KSB are "forward-looking
statements," and are based on management's current expectations of the Company's
near-term results, based on current information available pertaining to the
Company, including the risk factors noted below.
The Company wishes to caution investors that any forward looking
statements made by or on behalf of the Company are subject to uncertainties and
other factors that could cause actual results to differ materially from such
statements. These uncertainties and other risk factors include, but are not
limited to: changing economic and political conditions in the United States and
in other countries, changes in governmental spending and budgetary policies,
governmental laws and regulations surrounding various matters such as
environmental remediation, contract pricing and international trading
restrictions, customer product acceptance and continued access to capital
markets and foreign currency risks. The Company wishes to caution investors that
other factors may, in the future, prove to be important in affecting the
Company's results of operations. New factors emerge from time to time and it is
not possible for management to predict all such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or
a combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements.
Investors are further cautioned not to place undue reliance on such
forward-looking statements as they speak only to the Company's views as of the
date the statement is made. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
ITEM 7 - FINANCIAL STATEMENTS
The Financial Statements of Upward Technology, Inc. for the years ended
December 31, 1997 and 1996 are included as part of this report following the
signature page of this report:
Cover page F-1
Independent Auditor's Report
(Margolis & Company P.C.) F-3
Balance sheet F-4
Statement of operations F-5
Statement of shareholders' equity F-6
Statement of cash flows F-7
Notes to financial statements for the
years ended December 31, 1997 and 1996 F-8 & F-9
-4-
<PAGE>
ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no disagreements with its independent accountants
during the Company's most recent fiscal years. The Company changed its
independent accounts during fiscal 1996 and did not have any disagreements with
the previous independent accountants.
PART III
ITEM 9 - DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Albert M. Zlotnick 75 Chairman, President and Chief Executive Officer
Felice Bravato 40 Secretary
</TABLE>
Albert M. Zlotnick has served as the Company's Chairman and Chief
Executive Officer since March 1992. Due to the curtailed nature of the Company's
business activities, Mr. Zlotnick does not devote full time to the affairs of
the Company. Mr. Zlotnick's primary occupation is as a private investor and
financial consultant. Mr. Zlotnick currently serves as the Chairman of the Board
of Directors of the following publicly traded companies: P.H.C Inc., Bala Cynwyd
Corporation, Robin Industries, Inc., Electronic Data Controls Corp. and
Convention Centers, Inc. He also serves as a director of Comprehensive Holding
Corporation, S.A. of Geneva, Switzerland.
Felice Bravato has served as Secretary to the Corporation for the past
four years. She has worked for Davic Financial Services as an Administrative
Assistant for the past nine years and is involved in all facets of the business.
The Company's By-Laws provide for the election of directors at the
annual meeting of shareholders, such directors to hold office until the next
annual meeting and until their successors are duly elected and qualified. The
By-Laws also provide that the annual meeting of shareholders be held each year
at such time, date and place as the Board of Directors shall determine by
resolution. Directors may be removed at any time for cause by the Board of
Directors and with or without cause by a majority of the votes cast by the
shareholders entitled to vote for the election of directors.
Officers will normally be elected at the annual meeting of the Board of
Directors held immediately following the annual meeting of shareholders, to hold
office for the term for which elected and until their successors are duly
elected and qualified. Officers may be removed by the Board of Directors at any
time with or without cause.
ITEM 10 - EXECUTIVE COMPENSATION
Due to the reduced level of the Company's operations, no compensation
has been paid to any of the Company's executive officers during the fiscal years
ended December 31, 1997 and 1996.
The Company does not presently have any option, bonus, retirement or
profit sharing plan.
The Company has not paid and does not presently propose to pay any
director for acting in such capacity compensation, except for nominal sums for
attending Board of Directors meetings and reimbursement for reasonable expenses
in attending those meetings.
-5-
<PAGE>
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of March 31, 2000 by (I) each person or entity
known by the Company to own beneficially 5% or more of its outstanding Common
Stock, (ii) each director, and (iii) each executive officer, and (iv) all
directors and executive officers of the Company as a whole. Except as otherwise
noted below, the listed beneficial owner has sole voting and investment power
with respect to such shares and the address of the listed beneficial owner is
that of the Company.
NAME AND ADDRESS NO. OF SHARES OWNED PERCENT OF CLASS
- ---------------- ------------------- ----------------
Albert M. Zlotnick 4,100,000 50.6%
All directors and executive
officers as a group 4,100,000 50.6%
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company utilizes a portion of the premises occupied by Davic
Associates, with which Mr. Zlotnick is a principal. Due to the curtailed nature
of the Company's operations Davic Associates has, until further notice, waived
the payment of rent by the Company.
ITEM 13 - EXHIBITS, REPORTS ON FORM 8-K AND FINANCIAL STATEMENTS
(a) Exhibits:
The following Exhibits are filed as part of this report. Where such
filing is made by incorporation by reference (I/B/R), reference is made to
Commission file number 2-29987 unless another statement or report is identified
in parentheses.
Exhibit No. Description
- ----------- -----------
3A Articles of Incorporation of Registrant I/B/R
3B By - Laws of Registrant I/B/R
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the fourth
quarter of the year ended December 31, 1997.
(c) Financial Statements
The financial statements and related notes of the Company begin on page
F-1 in the appendix. The report of the independent certified public accountants
on the Company's financial statements is on page F-3 in the appendix.
-6-
<PAGE>
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.
UPWARD TECHNOLOGY CORPORATION
By:/s/Albert M. Zlotnick
----------------------------
ALBERT M. ZLOTNICK, Chairman
and Chief Executive Officer
Dated: March 31, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the capacities and
on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Albert M. Zlotnick Chairman, Secretary, March 31, 2000
- ---------------------- Chief Executive Officer
ALBERT M. ZLOTNICK (Principal Executive Officer and
Principal Accounting Officer)
-7-
<PAGE>
UPWARD TECHNOLOGY, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1997 AND 1996
F-1
<PAGE>
UPWARD TECHNOLOGY, INC.
TABLE OF CONTENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
PAGE
NUMBER
------
Independent Auditor's Report F-3
Financial Statements:
Balance sheet F-4
Operations F-5
Shareholders' equity F-6
Cash flows F-7
Notes to financial statements F-8 & F-9
F-2
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Upward Technology, Inc.
Bala Cynwyd, Pennsylvania
We have audited the accompanying balance sheet of Upward Technology, Inc. as of
December 31, 1997 and 1996, and the related statements of operations,
shareholders' equity and cash flows for the years then ended. 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 presentation.
We believe that our audits provide 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 Upward Technology, Inc. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
Certified Public Accountants
Bala Cynwyd, PA
December 29, 1999
F-3
<PAGE>
UPWARD TECHNOLOGY, INC.
BALANCE SHEET
- -------------------------------------------------------------------------------
DECEMBER 31,
1997 1996
----------- -----------
ASSETS
Cash and cash equivalents $ 200,279 $ 206,267
Prepaid expenses 422 422
----------- -----------
$ 200,701 $ 206,689
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accrued expenses $ 4,730 $ 7,545
----------- -----------
Shareholders' equity:
Common stock, $.02 par value; 24,000,000 shares
authorized, 8,100,000 shares issued
and outstanding 162,000 162,000
Additional paid-in capital 1,983,208 1,983,208
Accumulated deficit (1,949,237) (1,946,064)
----------- -----------
Net shareholders' equity 195,971 199,144
----------- -----------
$ 200,701 $ 206,689
=========== ===========
The notes to financial statements are an integral part of the above statement.
F-4
<PAGE>
UPWARD TECHNOLOGY, INC.
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
1997 1996
----- ----
Revenue, interest income $ 9,234 $9,625
General and administrative expenses 12,407 8,847
-------- -------
Net income (loss) ($ 3,173) $ 778
========= =======
Net income (loss) per share, basic and diluted ($ -) $ -
========= =======
The notes to financial statements are an integral part of the above statement.
F-5
<PAGE>
UPWARD TECHNOLOGY, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT
---------- ------------- -------------
<S> <C> <C> <C>
Balance, December 31, 1995 $162,000 $1,983,208 ($1,946,842)
Net income for year ended
December 31, 1996 778
------------ -------------- -------------
Balance, December 31, 1996 162,000 1,983,208 ( 1,946,064)
Net (loss) for year ended
December 31, 1997 ( 3,173)
------------ -------------- -------------
Balance, December 31, 1997 $162,000 $1,983,208 ($1,949,237)
============ ============== =============
</TABLE>
The notes to financial statements are an integral part of the above statement.
F-6
<PAGE>
UPWARD TECHNOLOGY, INC.
STATEMENT OF CASH FLOWS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997 1996
---------- ----------
INCREASE (DECREASE) IN CASH
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($ 3,173) $ 778
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
(Decrease) in accrued expenses ( 2,815) ( 454)
---------- ----------
Net cash provided by (used in) operating activities ( 5,988) 324
---------- ----------
Net increase (decrease) in cash and cash equivalents ( 5,988) 324
Cash and cash equivalents at beginning of year 206,267 205,943
---------- ----------
Cash and cash equivalents at end of year $200,279 $206,267
========== ==========
</TABLE>
The notes to financial statements are an integral part of the above statement.
F-7
<PAGE>
UPWARD TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
1. Nature of Business and Summary of Significant Accounting Policies
Nature of business - The Company presently conducts no business, but is
searching for appropriate investment and acquisition opportunities. Its
only income consists of interest from investments.
Earnings per share - The Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share," which establishes
standards for computing basic and diluted earnings per share. Per share
data is computed using the weighted average number of common shares
outstanding. The Company does not have any outstanding options or
warrants. The weighted average number of common shares was 8,100,000
for both basic and dilutive in 1997 and 1996.
Cash equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments purchased with
maturities of three months or less to be cash equivalents.
Short-term investments potentially subject the Company to
concentrations of credit risk. To limit this risk, the Company places
its short-term cash investments with high credit quality financial
institutions.
The carrying value of the financial instruments, including cash and
cash equivalents, approximates fair value as of December 31, 1997 and
1996, because of the short maturity of these financial instruments.
Use of estimates - The presentation 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.
Income taxes - The Company follows the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
which requires the recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the
differences between the financial statement and tax bases of assets and
liabilities using tax rates in effect for the year in which the
differences are expected to reverse.
F-8
<PAGE>
UPWARD TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
2. Income Taxes
The Company is classified as a personal holding company for federal
income tax purposes for each of the years presented. The Company is
subject to a federal tax equal to 39.6% of its undistributed earnings,
in addition to any other income taxes payable.
At December 31, 1997, the Company had net operating loss carryforwards
of approximately $28,000 which will expire in years 2007 through 2012
for federal income tax purposes. For personal holding company tax
purposes, only the preceding year's net operating loss is allowed to
reduce undistributed personal holding company income.
A valuation allowance is provided to reduce deferred tax assets to a
level which, more likely than not, will be realized. The valuation
allowance provided effectively eliminated the deferred tax asset
resulting from net operating loss carryforwards.
The Company did not incur a personal holding income tax or state income
tax for the years ended December 31, 1997 and 1996, due to operating
losses incurred in 1997 and utilization of net operating loss
carryforwards in 1996.
F-9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UPWARD TECHNOLOGY, INC. AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 200,279
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 200,701
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 200,701
<CURRENT-LIABILITIES> 4,730
<BONDS> 0
0
0
<COMMON> 162,000
<OTHER-SE> 33,971
<TOTAL-LIABILITY-AND-EQUITY> 200,701
<SALES> 0
<TOTAL-REVENUES> 9,234
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,407
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,173)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,173)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,173)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
