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UNITED STATES
SECURITY AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the year ended March 31, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period
Commission File Number: 001-03323
NEW HILARITY, INC.
(Exact name of registrant as specified in its charter)
NEVADA 91-197860
---------------------------------------- ------------------------
(State of Incorporation or Organization) (IRS Employer ID Number)
5102 S. MORRILL LANE, SPOKANE, WASHINGTON 99223
------------------------------------------------
(Address of Principal Executive Offices)
(509) 448-5128
--------------
(Registrant's Telephone Number)
Securities Registered Under Section 12 (b) of the Act:
NONE
(Title of Class)
Securities Registered Under Section 12 (g) of the Act:
COMMON STOCK, $.001 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section `3 or `5(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 in response 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 or any amendment to this Form
10-K. (X)
The aggregate market value based on the average bid and asked prices of the
registrant's Common Stock held by non-affiliates of the registrant at June 6,
2000 was approximately $1,718,952. As of June 6, 2000, there were 7,989,560
shares of the registrant's common stock outstanding.
<PAGE> 1
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matters to a Vote of Security Members 3
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 3-4
Item 6. Selected Financial Data 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4
Item 8. Financial Statements 5
Item 9. Changes in and Disagreements with Accountants 5
PART FS F1-F9
PART III
Item 10. Directors and Executive Officers of the Registrant 5
Item 11. Executive Compensation 5
Item 12. Security Ownership of Certain Beneficial Owners and Management 5
Item 13. Certain Relationships and Related Transactions 5
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 6
Exhibit 23 attached
Exhibit 27 attached
<PAGE> 2
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
PART I
Item 1 - BUSINESS
The registrant was incorporated under the laws of the State of Idaho on February
27, 1930, for the primary purpose of exploring and the development of mining
properties. Prior to 1993, the Company had owned fifteen unpatented lode mining
claims in the Coeur d'Alene Mining District of Shoshone County, Idaho. Due to
the increased fees from the Bureau of Land Management on unpatented mining
claims, and the depressed prices for silver and lead, the Company decided to
abandon these mining claims in 1993. In October of 1999, the company sold 37
acres of timbered real estate located in Shoshone County, Idaho for $30,000.
New Hilartiy Inc. is actively pursuing a suitable company with which to merge or
acquire. There is no assurance that such a merger or acquisition candidate will
be found.
Item 2 - PROPERTIES
None. (See item 1 above)
Item 3 - LEGAL PROCEEDINGS
The registrant is not a party to any litigation.
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
Item 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The registrant's common stock is traded on the OTC - Bulletin Board (symbol of
"NHYM").
<TABLE>
FISCAL YEAR MARCH 31, 1999
--------------------------
QUARTER LOW BID HIGH BID
---------------------------------- --------------- ----------------
<C> <S> <S>
April 1, 1998 to June 30, 1998 $ .03 $ .03
July 1, 1998 to September 30, 1998 $ .03 $ .03
October 1, 1998 to December 31, 1998 $ .03 $ .03
January 1, 1999 to March 31, 1999 $ .03 $ .18
</TABLE>
<PAGE> 3
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
Item 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS (Continued)
<TABLE>
FISCAL YEAR MARCH 31, 1999
--------------------------
QUARTER LOW BID HIGH BID
------------------------------------ --------------- ----------------
<C> <S> <S>
April 1, 1998 to June 30, 1999 $ .19 $ .25
July 1, 1998 to September 30, 1999 $ .19 $ .31
October 1, 1998 to December 31, 1999 $ .22 $ .25
January 31, 2000 to March 31, 2000 $ .22 $ .31
</TABLE>
As of March 31, 2000, there were 1,538 registered shareholders of the Company's
common stock.
Item 6 - SELECTED FINANCIAL DATA
The following data should be read in conjunction with the Company's financial
statements and the notes thereto:
<TABLE>
Year Ended
-----------------------------------------------
3/31/00 3/31/99 3/31/98 3/31/97 3/31/96
-------- -------- -------- -------- -------
<C> <S> <S> <S> <S> <S>
Operating Revenue $ -0- $ -0- $ -0- $ -0- $ -0-
Net Income (Loss) $ 9,121 $(44,448) $ (4,721) $(11,908) $ (40)
Net Income (Loss) Per Share $ NIL $ (.007) $ (.001) $ (.003) $ (NIL)
Total Assets $ 65,397 $ 58,343 $ 6,964 $ 6,964 $ 4,284
Working Capital $ 65,397 $ 56,276 $ (5,225) $ (504) $ 6,404
</TABLE>
Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Current assets increased $7,054 from March 31, 1999 to March 31, 2000. As of
March 31, 2000 the only asset was cash of $65,397, and there were no
liabilities.
For the fiscal year ended March 31, 2000, the Company realized net income of
$9,121. This net income was primarily the result of the sale of 37 acres of
timberland for $30,000. The cost of the property had been depleted many years
ago. This net income compares favorably with a net loss of $44,488 for the
fiscal year ended March 31, 1999, when there was virtually no revenue other than
a small amount of interest income.
<PAGE> 4
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
Item 8 - FINANCIAL STATEMENTS
A complete set of audited financial statements for the years ended March 31,
2000 and 1999 are included. (See F-1 - F-9)
Item 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None
PART III
Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
John R. Coghlan, 57, is the President of the company and a director. Mr.
Coghlan is a graduate of the University of Montana in 1965 with a major in
Business Administration. Mr. Coghlan is a Certified Public Accountant in the
State of Washington and is a member of the American Institute of Certified
Public Accountants. Mr. Coghlan was a founder of Labor Ready, Inc., a New York
Stock Exchange listed company, and he was employed by Labor Ready, Inc. from
March 1987 through December 1996, when he retired. Since his retirement, Mr.
Coghlan has worked in private investments.
Robert O'Brien, 65, is the Secretary of the Company and a director. Mr. O'Brien
is a graduate of Gonzaga University, with a degree in Economics and Business
Administration. Mr. O'Brien has recently served as an officer and director of
Gold Securities Corporation and Inland Resources, Inc. From 1977 to 1985, Mr.
O'Brien was self-employed as a general contractor, and from 1958 to 1976, he was
executive vice-president of Hamer's, Inc.
Item 11 - EXECUTIVE COMPENSATION
No executive received compensation for the fiscal year ended March 31, 2000
which would equal or exceed the required reporting amount of $100,000.
Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
John R. Coghlan, the President of the company, owns 1,284,820 shares of common
stock. Robert O'Brien, the Secretary Treasurer of the company, owns 404,000
shares of common stock. Terry Dunne, a shareholder, owns 1,245,000 shares of
common stock.
Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
<PAGE> 5
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
PART IV
Item 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The Financial Statements are found on pages F-1 through F-9 of this Form 10-K.
The Financial Statement Table of Contents is on Page F-1. The Consent of
Certified Public Accountants is attached as Exhibit 23. The Financial Data
Schedule required of electronic filers is attached as Exhibit 27. No other
exhibits are required to be filed with this Form 10-K.
No reports on Form 8-K were filed or required to be filed during the period
covered by this Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 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.
New Hilarity, Inc.
(Registrant)
/s/ Robert W. O'Brien
Dated: June 8, 2000 By:-----------------------------------------
Robert W. O'Brien, Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant and in
the capacity and on the date indicated.
/s/ Robert W. O'Brien
Dated: June 8, 2000 By:-----------------------------------------
Robert W. O'Brien, Secretary/Treasurer
<PAGE> 6
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
NEW HILARITY, INC.
FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTANTS
BANK OF AMERICA FINANCIAL CENTER
W 601 RIVERSIDE, SUITE 1940
SPOKANE, WA 99201
(509) 838-5111
NEW HILARITY, INC.
MARCH 31, 2000
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT F-2
FINANCIAL STATEMENTS
Balance Sheets F-3
Statements of Operations F-4
Statement of Stockholders' Equity F-5
Statements of Cash Flows F-6
NOTES TO FINANCIAL STATEMENTS F-7
<PAGE> F-1
NEW HILARITY, INC.
FORM 10-K
For the Year Ended March 31, 2000
Board of Directors
New Hilarity, Inc.
Spokane, Washington
INDEPENDENT AUDITOR'S REPORT
----------------------------
We have audited the accompanying balance sheets of New Hilarity, Inc. as of
March 31, 2000 and 1999, and the related statements of operations, cash flows,
and stockholders' equity 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 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 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 New Hilarity, Inc. as of March
31, 2000 and 1999, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
The March 31, 1998 financial statements were prepared by the Company's
management. We have not audited or reviewed the March 31, 1998 financial
statements and, accordingly, do not express an opinion or any other form of
assurance on them.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
May 9, 2000
<PAGE> F-2
NEW HILARITY INC.
BALANCE SHEETS
<TABLE>
March 31,
---------------------------------
2000 1999
--------------- ---------------
<C> <S> <S>
A S S E T S
CURRENT ASSETS
Cash $ 65,397 $ 48,030
Prepaid expenses - 10,313
--------------- ---------------
TOTAL CURRENT ASSETS 65,397 58,343
--------------- ---------------
PROPERTY - -
--------------- ---------------
TOTAL ASSETS $ 65,397 $ 58,343
=============== ===============
L I A B I L I T I E S & S T O C K H O L D E R S '
E Q U I T Y
CURRENT LIABILITIES
Accounts payable $ - $ 2,067
--------------- ---------------
TOTAL CURRENT LIABILITIES - 2,067
--------------- ---------------
COMMITMENTS AND CONTINGENCIES - -
--------------- ---------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
100,000,000 shares authorized;
7,989,560 and 7,989,560 shares
issued and outstanding, respectively 7,990 7,990
Additional paid-in capital 539,382 539,382
Accumulated deficit (481,975) (491,096)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 65,397 56,276
--------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 65,397 $ 58,343
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-3
NEW HILARITY, INC.
STATEMENT OF OPERATIONS
<TABLE>
For the Years Ended March 31,
---------------------------------------------------
1998
2000 1999 (Unaudited)
--------------- --------------- ---------------
<C> <S> <S> <S>
REVENUES $ - $ - $ -
--------------- --------------- ---------------
OPERATING EXPENSES
Transfer and filing fees 1,336 6,922 2,221
Mine cleanup work - 705 2,500
Consulting 10,313 17,188 -
Professional fees 8,956 10,005 -
Printing and postage 35 1,555 -
Other operating expenses 2,186 270 -
Directors' fees - 1,500 -
--------------- --------------- ---------------
Total Operating Expenses 22,826 38,145 4,721
--------------- --------------- ---------------
LOSS FROM OPERATIONS (22,826) (38,145) (4,721)
--------------- --------------- ---------------
OTHER INCOME (EXPENSES)
Gain on sale of property 30,000 - -
Loss on marketable securities - (2,043) -
Interest expense - (80) -
Interest income 1,947 601 -
--------------- --------------- ---------------
Total Other Income (Expenses) 31,947 (1,522) -
--------------- --------------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES 9,121 (39,667) (4,721)
PROVISION FOR INCOME TAXES - 4,821 -
--------------- --------------- ---------------
NET INCOME (LOSS) $ 9,121 $ (44,488) $ (4,721)
=============== =============== ===============
NET INCOME (LOSS) PER SHARE,
BASIC AND DILUTED $ nil $ (0.01) $ nil
=============== =============== ===============
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES
OUTSTANDING, BASIC AND DILUTED 7,989,560 6,001,594 3,750,000
=============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-4
NEW HILARITY MINING COMPANY
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
Common Stock Additional
---------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
---------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance,
April 1, 1997 3,750,000 $ 3,750 $ 437,633 $ (441,887) $ (504)
Net loss for
the year ended
March 31, 1998 - - - (4,721) (4,721)
---------- ---------- ----------- ----------- ------------
Balance,
March 31, 1998 ,750,000 3,750 437,633 (446,608) (5,225)
Common stock
issued for debt
at $0.025
per share 387,560 388 9,301 - 9,689
Common stock
issued for
directors fees
at $0.025
per share 60,000 60 1,440 - 1,500
Common stock
issued for
accounting
services at
$0.025 per share 168,000 168 4,032 - 4,200
Common stock
issued for
consulting at
$0.025 per share 1,100,000 1,100 26,400 - 27,500
Common stock
issued for fees
at $0.025
per share 24,000 24 576 - 600
Common stock
issued for cash at
$0.025 per share 2,500,000 2,500 60,000 - 62,500
Net loss for the
year ended
March 31, 1999 - - - (44,488) (44,488)
---------- ---------- ----------- ----------- ------------
Balance,
March 31, 1999 7,989,560 7,990 539,382 (491,096) 56,276
Net income for
the year ended
March 31, 2000 - - - 9,121 9,121
---------- ---------- ----------- ----------- ------------
Balance,
March 31, 2000 7,989,560 $ 7,990 $ 539,382 $ (481,975) $ 65,397
========== ========== =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-5
NEW HILARITY, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
For the Years Ended March 31,
---------------------------------------------------
1998
2000 1999 (Unaudited)
--------------- --------------- ---------------
<C> <S> <S> <S>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 9,121 $ (44,488) $ (4,721)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Issuance of common stock
for services - 33,800 -
Gain on sale of land (30,000) - -
Income taxes - 4,821 -
(Increase) decrease in:
Marketable securities - 2,143 -
Prepaid expenses 10,313 (10,313) -
Increase (decrease) in:
Accounts payable (2,067) 2,067 -
Advances from shareholder - - -
Advances from officer - - 2,221
Accrued expenses - (2,500) 2,500
--------------- --------------- ---------------
NET CASH USED BY OPERATING ACTIVITIES (12,633) (14,470) -
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 30,000 - -
--------------- --------------- ---------------
NET CASH PROVIDED BY INVESTING
ACTIVITIES 30,000 - -
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of
common stock - 62,500 -
--------------- --------------- ---------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES - 62,500 -
--------------- --------------- ---------------
NET INCREASE IN CASH 17,367 48,030 -
CASH AT BEGINNING OF YEAR 48,030 - -
--------------- --------------- ---------------
CASH AT END OF YEAR $ 65,397 $ 48,030 $ -
=============== =============== ===============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ 80 $ -
=============== =============== ===============
Taxes paid $ - $ - $ -
=============== =============== ===============
Non-cash financing activities:
Common stock issued for services $ - $ 33,800 $ -
Common stock issued for debt $ - $ 9,689 $ -
The accompanying notes are an integral part of these financial statements.
<PAGE> F-6
NEW HILARITY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was originally incorporated as Lexington Mining Company on February
27, 1930 under the laws of the State of Idaho for the primary purpose of mining
and exploring for nonferrous and precious metals, primarily silver, lead and
zinc. On April 17, 1945, the Company was reorganized, and the name changed to
New Hilarity Mining Company. For many years the Company explored for precious
metal deposits, but no commercial ore bodies were discovered. In early 1993,
the Company abandoned its fifteen unpatented lode-mining claims located in the
Coeur d'Alene Mining District of Shoshone County, Idaho.
The Company reorganized under the laws of the State of Nevada and changed its
name to New Hilarity, Inc. in April 1999.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of New Hilarity, Inc. is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the company's management,
which is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Accounting Method
------------------
The Company's financial statements are prepared using the accrual method of
accounting.
Cash Equivalents
-----------------
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Basic and Diluted Loss Per Share
-------------------------------------
Net loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Basic and diluted loss
per share was the same, as there were no common stock equivalents outstanding.
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 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Marketable Securities
----------------------
Marketable trading securities are carried at market value, which is based on
published over-the-counter market quotes.
<PAGE> F-7
NEW HILARITY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
Impaired Asset Policy
-----------------------
In March 1995, the Financial Accounting Standards Board issued a statement
titled "Accounting for Impairment of Long-lived Assets." In complying with this
standard, the Company will review its long-lived assets quarterly to determine
if any events or changes in circumstances have transpired which indicate that
the carrying value of its assets may not be recoverable. The Company determines
impairment by comparing the undiscounted future cash flows estimated to be
generated by these assets to their respective carrying amounts. The Company
does not believe any adjustments are needed to the carrying value of its assets
at March 31, 2000, nor at March 31, 1999.
Derivative Instruments
-----------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This new standard 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 in the balance sheet and measure those instruments at fair value.
At March 31, 2000, the Company has not engaged in any transactions that would be
considered derivative instruments or hedging activities.
Year 2000 Issues
------------------
Like other companies, New Hilarity, Inc. could be adversely affected if the
computer systems the Company, its suppliers or customers use do not properly
process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as the "Year
2000" issue. Additionally, this issue could impact non-computer systems and
devices such as production equipment and elevators, etc. At this time, the
Company does not have any evidence of problems associated with the Year 2000
issue.
Revenue Recognition
--------------------
Revenues and cost of revenues are recognized when services and products are
furnished or delivered.
NOTE 3 - MARKETABLE SECURITIES
The Company owned 857,100 shares of the common stock of United Mines, Inc., the
value of which was reduced at March 31, 1997 to $0.0025 per share. In the year
ending March 31, 1999, these securities were sold at a realized loss of $2,043.
NOTE 4 - PROPERTY SALE
During October 1999, the Company sold a 37-acre tract of land in Shoshone
County, Idaho for a net gain of $30,000. In the years prior to the sale, timber
had been harvested from the land and all capitalized costs expensed.
<PAGE> F-8
NEW HILARITY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 5 - COMMON STOCK
The Company was originally incorporated in 1930, with an authorized capital of
2,000,000 shares of assessable common stock with a par value of $0.05 per share.
On April 17, 1945, the shareholders increased the authorized common stock to
3,000,000 shares with a par value of $0.10 per share and changed the common
stock from assessable to non-assessable. On August 18, 1982, the shareholders
increased the authorized common stock to 15,000,000 shares with a par value of
$0.10 per share.
In April 1999, the shareholders increased the authorized common stock to
100,000,000 shares with a par value of $0.001 per share. All references in the
accompanying financial statements to the number of common shares and per-share
amounts for 1999 have been restated to reflect the change in par value.
NOTE 6 - INCOME TAXES
The Company has a net operating loss carryover of approximately $392,000 at
March 31, 2000. The Company's loss carryovers will commence to expire in 2007.
The Company has not recorded a deferred tax asset for the net operating loss
carryover because it is uncertain if the Company will have adequate future
taxable income to offset these losses.
F-9
</TABLE>
