UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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 OCTOBER 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
Commission File No. 0-011228
SYSTEMS ASSURANCE CORPORATION.
(Exact name of Registrant as specified in its charter)
DELAWARE 02-0337028
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4505 SOUTH WASATCH BLVD SUITE 310, SALT LAKE CITY, UTAH 84121
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (801) 274-8600
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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.
[ X] YES [ ] NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. [ X ]
As of December 30, 1998 the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $ 0.
As of December 30, 1998 the number of shares outstanding of the Registrant's
Common Stock was 21,080,755.
Documents incorporated by reference: Not applicable.
in the development and expansion of its business.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company had no material revenue during the year ended October
31, 1998. Total stockholders' equity (deficit) was $(8,919), as compared to
$(9,374) at October 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company has no significant assets and is in the process of
looking for business opportunities to merge with or acquire. At minimum, the
Company will need to raise additional capital through private funding to meet
the financial needs of being a reporting company. There is no guarantee that
the Company will be successful in obtaining necessary funding to develop any
business opportunities.
RESULTS OF OPERATIONS
The Company sustained losses of $(28,545) and $(11,244) for the
years ended October 31,1998 and October 31, 1997 respectively. Expenses of
$28,545 and $11,244 for the periods consisted of professional services
and other administrative expenses incurred while the Company is seeking
business ventures with which to acquire or merge.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements and notes thereto as listed in
the accompanying index to financialstatements (Item 14) are filed as part of
this Annual Report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
On December 15, 1998 the Company engaged Crouch Bierwolf & Company
as its auditors. The new firm was engaged to prepare audit reports for the
years ended October 31, 1998 and 1997. This change in the Company's auditors
is not the result of disagreements with the Company's auditors.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to the Company's
Board of Directors and executive officers. There are no family relationship
between or among any of the Company's directors or executive officers.
DIRECTORS AND EXECUTIVE OFFICERS
Age Director
Name (1998) Since Position with
the Company
Dean Becker 45 1997 President, CEO
and Director
50 West Broadway
Suite 1130
Salt Lake City UT 84101
Paul Adams 37 1997 Vice President
1340 East Harrison Ave.
Salt Lake City UT 84105
Chris Turner 40 1997 Secretary
11712 South 2260 West
South Jordan UT 84095
Dean H. Becker, age 45 Practiced law in Sale Lake City, Utah since 1979. He
graduated from Brigham Young University in 1976 with a Bachelors of Arts in
English with University Scholar designation. He then attended law school at
the J. Reuben Clark School of Law at Brigham Young University where
he served as associate editor on the law review staff.
He has a general law practice with emphasis on corporate and business law, and
is involved in a number of community activities.
Paul Adams, age 37 President of Big Water Tackle for four years. Currently is
President of Tubes and Tails and has been since last fall.
Chris Turner, age 40 Customer Service Representative for United Health Care
from 1997-1998. Management for Master Tech from 1995-1996. Management for
Summer Breeze from 1994-1995. Customer Representative for San Segal from
1993-1994.
ITEM 10. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
During the current fiscal year, no one in the Company's management
received more than $60,000 in compensation.
EMPLOYMENT AGREEMENTS AND OTHER COMPENSATION ARRANGEMENTS
There are currently no agreements with members of management as to
employment or compensation.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
There is currently no compensation paid to non-employee directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of December 30, 1998, the number of
shares of the Company's common stock owned by persons who owned of record, or
were known to own beneficially, more than 5% of the outstanding shares of
the Company's common stock, sets forth the number of shares of the Company's
current directors and officers, and sets forth the number of shares owned by
all of the Company's directors and officers as a group:
The beneficial owners listed have sole voting and investment power with
respect to the shares unless otherwise indicated.
Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership Class
Dean H. Becker 20,000,000 94.9
Paul Adams 0 0
Chris Turner 0 0
Officers and Directors
as a Group (Three) 20,000,000 94.9
(1) These shares were issued subsequent to the fiscal year-end.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past year the Registrant has not entered into any transactions
with management which are to be reported under this Item.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(A) Exhibits
EXHIBIT
NO. DESCRIPTION
23.01 Consent of Crouch Bierwolf & Company, CPA
27.01 Financial Data Schedule
(b) The Registrant filed a Form 8-K on January 14, 1999, informing of a change
in Accountants.
SIGNATURES
Pursuant to the requirements of 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.
Systems Assurance Corporation.
By: Dean H. Becker
/s/ Dean H. Becker
Dated: January 25, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Dean H. Becker President and Director
(Principal Executive and
Financial Officer) January 25, 1999
Director January 25, 1999
Secretary,Treasurer
and Director January 25, 1999
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant. . . . . . . . F-1
Financial Statements:
Balance Sheets - October 31, 1998 . . . . . . . . . . . . F-2
Statements of Operations - For the years ended
October 31, 1998 and
October 31, 1997 . . . . . . . . . . . . . . . . . . . . F-3
Statement of Stockholders' Equity - For the period from
November 1, 1996 to October 31, 1998 . . . . . . . . . . F-4
Statement of Cash Flows - For the years ended October
31, 1998 and October 31, 1997 . . . . . . . . . . . . . . F-5
Notes to Financial Statements . . . . . . . . . . . . . . F-6
SYSTEMS ASSURANCE CORPORATION
Report of Financial Statements
Years Ended October 31, 1998 and 1997
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of Systems Assurance Corporation
We have audited the accompanying balance sheet of Systems Assurance
Corporation as of October 31 1998, and the related statements of operations,
stockholders (deficiency), and cash flows for the year then ended. These
financial statements are the responsibility of the management of Systems
Assurance Corporation. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements for the
period ended October 31, 1997 were audited by other auditors whose report
dated January 26, 1998 expressed an unqualified opinion on those statements.
We conducted our audit 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 auditalso 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 Systems Assurance Corporation.
as of October 31, 1998, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
January 4, 1999
SYSTEMS ASSURANCE CORPORATION.
( A Development Stage Company)
Balance Sheet
ASSETS
October 31,
1998
CURRENT ASSETS $ -
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 8,919
Total Current Liabilities 8,919
STOCKHOLDERS' EQUITY
Class A Preferred stock, $.001 value,
0 shares issued and outstanding (Note 5) -
Class B Preferred stock, $.001 value,
0 shares issued and outstanding(Note 5) -
Class C Preferred stock, $.001 value,
0 shares issued and outstanding (Note 5) -
Common Stock 30,000,000 shares
authorized at $.0001 par value;
21,080,755 shares issued and outstanding (Note 5) 21,080
Capital in Excess of Par Value 10,142,134
Retained Deficit (10,172,133)
Total Stockholders' Equity (8,919)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -
SYSTEMS ASSURANCE CORPORATION.
(A Development Stage Company)
Statements of Operations
For the Year For the Year
Ended Ended
October 31, October 31,
1998 1997
REVENUE $ - $ -
EXPENSES
General and Administrative 28,545 10,323
Interest - 921
Total Expenses 28,545 11,244
NET INCOME (LOSS) - Before Taxes $(28,545) $ (11,244)
Taxes (Note 1) - -
INCOME (LOSS) $ (28,545) $ (11,244)
Loss Per Common Share $ - $ (0.07)
Average Outstanding Shares 17,597,422 159,073
SYSTEMS ASSURANCE CORPORATION.
(A Development Stage Company)
Statements of Stockholders' Equity
For the Period November 1, 1996 through October 31, 1998
Additional
Common Common Paid in Retained
Shares Stock Capital (Deficit)
Balance, November
1, 1996 100,114 $ 100 $10,081,285 $(10,132,344)
Issuance of common shares
for debt satisfaction 80,000 80 52,749 -
Net (loss) - - - (11,244)
Balance, October 31,
1997 180,114 180 10,134,034 (10,143,588)
Issuance of common shares
for services 20,000,000 20,000 - -
Issuance of common shares
for cash 900,000 900 8,100 -
Rounding due to Reverse
Stock Split (Note 5) 641 - - -
Net (loss) - - - (28,545)
Balance, October
31, 1998 21,080,755 $ 21,080 $10,142,134 $(10,172,133)
SYSTEMS ASSURANCE CORPORATION.
(A Development Stage Company)
Statements of Cash Flows
For the Year For the Year
Ended Ended
October 31, October 31,
1998 1997
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Income (Loss) $ (28,545) $(11,244)
Adjustment to reconcile net (loss) to net
cash (used in) operating activities
Stock for Services 20,000 -
Changes in operating assets and liabilities
Decrease in income taxes refundable 1,442 -
Increase (Decrease) in accounts
payable and accrued expenses (2,500) 11,149
Net Cash used in Operating Activities (9,603) (95)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceed s from sale of common stock 9,000 -
Net Cash provided by Financing Activities 9,000 -
Net (DECREASE) increase in cash (603) (95)
Cash, beginning of year 603 698
Cash, end of year $ - $ 603
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Issuance of common stock to satisfy stockholder
advances and assumption of liabilities and/or
services
Common stock, at par value $20,000 $ 80
Additional paid-in capital $- $ 52,749
CASH PAID DURING THE PERIOD FOR:
Taxes $ - $ -
Interest $ - $ 921
SYSTEMS ASSURANCE CORPORATION.
(A Development Stage Company)
Notes to the Financial Statements
October 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS OF THE COMPANY
Systems Assurance Corporation (the "Company") has been inactive
since October 31, 1991 and consequently has had no operating revenues since
that time. The Company is presently seeking a business opportunity to merge
with or acquire.
INCOME TAXES
The Company records income taxes under the provisions of Statement
of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for
Income Taxes". SFAS 109 requires the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred income taxes
are recognized for the tax consequences of temporary differences by applying
enacted statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax bases of existing assets
and liabilities. Under SFAS 109, the effect on deferred taxes of a change
in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is recorded based on a determination of the
ultimate realizability of future deferred tax assets.
NET INCOME (LOSS) PER SHARE
Net income (loss) per share of Common Stock is computed by dividing
net income by the weighted average number of shares of Common Stock and
Common Stock Equivalents, if dilutive, outstanding during the year.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - RELATED PARTY TRANSACTIONS
On February 4, 1997, the Company issued 80,000 shares of its common
stock to an investment firm to satisfy the note payable described in Note 6.
SYSTEMS ASSURANCE CORPORATION.
(A Development Stage Company)
Notes to the Financial Statements
October 31, 1998
NOTE 3- INCOME TAXES
The Company had no deferred tax liabilities at either October 31,
1998 and 1997. Significant components of the Company's deferred tax assets at
October 31, 1998 and 1997 are as follows:
October 31,
1998 1997
Net operating loss carryforwards $19,767 $ 10,062
Valuation allowance (19,767) (10,062)
$ - $-
Due to the purchase of shares by certain individuals and other
corporations during the years ended October 31, 1995 and 1998, the Company
exceeded the limits allowable under the Tax Reform Act of 1986 related to
changes in ownership percentage governing future utilization of any
carryforwards existing at the date of purchase. The tax losses for the years
ended October 31, 1996 through 1998 are not subject to any such limitation.
NOTE 4 - LITIGATION
The Company is the defendant in an action brought in Massachusetts
Superior Court, County of Suffolk, by McDevitt Recruitment Advertisement, Inc.
The complaint was served in December 1986 and alleges a breach of an oral
warranty of fitness for a particular purpose of a computer system sold to
plaintiff in 1982, which allegedly never performed properly. Plaintiff
seeks damages of $30,000. The Company believes that it is not liable for any
damages; however, in order to save the cost of potential litigation, has
offered a settlement in the amount of $1,000 to attorneys for the plaintiff
which it believes is sufficient to settle the case. At this date, the
attorneys have not been able to locate the plaintiff.
NOTE 5 - STOCKHOLDERS' EQUITY
On January 24, 1997, the Company's stockholders approved a one-for-seventy
(1:70) reverse common stock split. On December 19, 1997, the Company's
stockholders approved a one-for-five (1:5) reverse common stock split, and
changed the par value of the common shares from $.01 to $.001.
Accordingly, all historical per share amounts, references to number of shares
and the Statements of Stockholders' Equity have been restated to reflect these
reverse stock splits. In the January meeting, the stockholders also approved
the creation of three classes of preferred stock, par value $.001 with rights
and privileges to be set by the board of directors. As of the audit date, the
Company has not filed with the state of Delaware to create the preferred
classes of stock and the change in the par value of the common stock.
ACCOUNTANT'S CONSENT
We hereby consent to the use of our audit report of Systems Assurance
Corporation dated January 4, 1999 for the years ended October 31, 1998 and
1997 in the Form 10KSB Annual Report for the year 1998.
/s/ Crouch, Bierwolf & Chisholm
January 29, 1999
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