U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2000
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No.
-----------
2-86724-D
ENCIBAR, INC.
-------------------------------------
(Name of Small Business Issuer in its Charter)
UTAH 87-0396692
-------- ------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 SOUTH 900 EAST, SUITE 110 Salt Lake City, Utah
84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
ENCIBAR, INC.
-------------
(Former Name or Former Address, if changed since last Report)
311 South State Street, Suite 410
Salt Lake City, Utah 84111
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: Common
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 Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if 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 Company'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:
March 31, 2000 - $0.
<PAGE>
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.
March 31, 2000 - $136. There are approximately 136,000 shares of
common voting stock of the Company held by non-affiliates. Because there has
been no "public market" for the Company's common stock during the past five
years, the Company has arbitrarily valued these shares at par value of $0.001
per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None, Not applicable;
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 X
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
JUNE 30, 2000
1,903,224
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
Organization and Charter Amendments.
-----------------------------------
Encibar, Inc., (the "Company") was incorporated under the laws of the State
of Utah on June 3, 1983. The purposes for which the corporation was organized
were: (1) to engage in the specific business of making investments, including
investment in, purchase, and ownership of any and all kinds of products; (2) to
acquire by purchase, exchange, gift, bequest, subscription, or otherwise; and to
hold, own, mortgage, pledge, hypothecate, sell, assign, transfer, exchange, or
otherwise dispose or of deal in or with its own corporate securities or stock or
other securities including, without limitations, any shares of stock, bonds,
debentures, notes, mortgages, or other obligations, and any certificates,
receipts, or other instrumentalities thereof; to make payment therefor in any
lawful manner or to issue in exchange therefor its unreserved earned surplus for
the purchase or its own shares, and to exercise as owner or holder of any
securities, any and all rights, powers, and priviliges, in respect thereof.
The Company had an initial authorized capital of $100,000 consisting of
100,000,000 shares of $.001 par value common stock.
On or about September 23, 1983, the Company filed a S-18 Registration
Statement with the Securities and Exchange Commission.
On August 1, 1989, the Company was involuntarily dissolved from the state
of Utah for failure to file an annual report. On May 6, 1999, the Company was
reinstated with the State of Utah.
On May 12, 1999, the Articles of Incorporation were amended to reflect a
745 for 1 reverse split.
Public Offering.
---------------
In connection with the Company's corporate purpose, the Registrant made a
registered public offering of its $.001 par value common stock which became
effective January 13, 1984 and was closed out during March of 1984. Pursuant to
such offering, the Registrant sold 4,175,790 Units (4,175,790 shares) of its
common stock at the public offering price of $208,789.50. After deduction of
underwriting commissions and other expenses of the offering, net proceeds to the
Registrant were approximately $157,000. This offering was made pursuant to a
registration statement under the Securities Act of 1933 filed with the
Securities and Exchange Commission in Denver, Colorado on Form S-18.
Material Changes in Control Since Inception and Related Business History.
-------------------------------------------------------------------------
On May 31, 1985, the Company pursued real estate, real estate related
assets and business assets located in California and Utah. These operations
proved to be unsuccessful, and the Company became involuntarily dissolved from
the state of Utah August 1, 1989. On June 21, 1999, the Company was placed back
in good standing with the state of Utah.
On May 22, 1999, Danny Ramsay, the Company's Vice President/Treasurer and
Director resigned and appointed Lisa Howells as the Company's Vice
President/Treasurer and Director. On May 22, 1999, Steven R. Arter, the
Company's President and Director resigned and appointed Sarah Edson as President
and Director. On May 25, 1999, Richard Lee Sax, the Company's Secretary and
Director resigned and appointed Victoria Rosenkrantz as Secretary and Director.
On May 12, 1999, the Company authorized the issuance of 171,500
"unregistered" and "restricted" shares of its $.001 par value common stock to
Jenson Services, Inc. ("Jenson") in compensation for $171.50 in expenses Jenson
settled on behalf of the Company. Also the Company authorized the issuance of
260,000 "unregistered" and "restricted" shares of its $.001 par value common
stock to each of it's three officers.
On November 15, 1999, the Company authorized the issuance of 816,000
"unregistered" and "restricted" shares of its $.001 par value common stock to
Jenson in compensation for $816 in expenses Jenson settled on behalf of the
Company.
<PAGE>
Business.
---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations since approximately 1989. Subsenquently, April 26, 2000,
management resolved and arranged financing to commence business operations in
the snowmobile rental industry. Management secured funding in the amount of
$16,000, in debt financing. The Company will look to purchase snowmobiles for
the purpose of renting or leasing them to individuals and/or various companies.
Management believes that the rental industry could prove to be a profitable
industry to participate.
Principal Products and Services.
--------------------------------
Snowmobile rentals will be the product that the Company will offer, in
addition, the Company's plans on buying or leasing trailers, which in turn the
Company will rent to customers.
Distribution Methods of the Products or Services.
-------------------------------------------------
Management will seek out advertisements in local newspapers and through a
web site on the internet. The Company plans to generate business through these
types of advertisements and promotions.
Status of any Publicly Announced New Product or Service.
--------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
--------------------------------
Management believes that there are several other companies engaged in
endeavors similar to those engaged in by the Company; many of these companies
have substantial current assets and cash reserves. There is no reasonable way to
predict the competitive position of the Company or any other entity in the
strata of these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have substantive operations for the past several years.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
--------------------------------------------------------------------------
None; not applicable.
Dependence on One or a Few Major Customers.
-------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts.
--------------------------------------------------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
---------------------------------------------------------------------
The Company is subject to federal, state, provincial and local government
regulations including. The Company will attempt to comply with all applicable
regulations. However, it cannot guarentee that it will satisfy all regulations
or obtain all required approvals. Failure to comply with applicable regulations
can, among other things, result fines, suspensions, or regulatory approvals,
operating restrictions, and criminal prosecutions. Changes in or additions to
applicable regulations could also have a negative effect on the Company and its
business.
<PAGE>
Effect of Existing or Probable Governmental Regulations on Business.
-------------------------------------------------------------------
The integrated disclosure system for small business issuers adopted by the
Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however, an entity is not a small business issuer if it has a public float (the
aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25 million or more.
Research and Development.
-------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
-------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on the Company if its operations do not comply with
certain environmental laws.
Number of Employees.
--------------------
None.
Item 2. Description of Property.
-----------------------
Currently the Company's only assets are cash, in which it will use to
acquire property in which will help the Company continue forward with its
business objective; its principal executive office address and telephone number
are the business office address and telephone number of its shareholder, Duane
S. Jenson, and are currently provided at no cost.The Company will lease space to
store and maintain the rental vehicles. The Company's activities will be limited
to: advertising, maintaining rental equipment, keeping itself in good standing
in the State of Utah, seeking out acquisitions in the rental industry and
preparing and filing the appropriate reports with the Securities and Exchange
Commission.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the calendar year covered by this Report or during the two
previous calendar years. Further, there have been no meetings of stockholders
since before 1989.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
------------------
There is no "public market" for shares of common stock of the Company.
However, the Company intends to submit for quotations regarding its common stock
on the OTC Bulletin Board of the National Association of Securities Dealers
("NASD"); however, management does not expect any public market to develop
unless and until the Company completes an acquisition or merger. In any event,
no assurance can be given that any market for the Company's common stock will
develop or be maintained.
<PAGE>
Holders
-------
The number of record holders of the Company's common stock as of April
01, 2000, is approximately 587.
Dividends
---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
------------------------------------------------------------------------------
On May 12, 1999, the Company issued 171,500 "unregistered" and "restricted"
common shares to Jenson Services, Inc., in consideration of payment of $171.50
of expenses incurred on behalf of the Company.
On May 12, 1999, the Company issued 260,000 "unregistered" and "restricted"
common shares to each of it's three current officers and directors, for a total
of 780,000 "unregistered" and "restricted" shares. These shares were in
consideration of services rendered.
On November 2, 2000, the Company issued 816,000 "unregistered" and
"restricted" common shares to Jenson Services, Inc., in consideration of payment
of $816 of expenses incurred on behalf of the Company.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two calendar years. The Company's plan of
operation for the next 12 months is to commence operations in the snowmobile
rental industry.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to aquiring equipment for rental, advertising, servicing the
Company's rental equipment, maintaining the Company in good standing, which the
Company expects to pay from its cash resources. As of March 31, 2000, it had no
cash or cash equivalents. On April 26, 2000, additional funding has been secured
which will enable the Company to progess its business plan. Because the Company
has not identified all cash requirements that may be needed to participate in
the snowmobile rental industy as of that date of this Report, it is impossible
to predict the amount of any future financing needs.
Results of Operations.
----------------------
Other than restoring its good corporate standing in the State of Utah,
compromising and settling its debts and seeking the acquisition of assets,
properties or businesses that may benefit the Company and its stockholders, the
Company has had no material business operations in the two most recent calendar
years, or since its bankruptcy proceedings in 1993 .
At March 31, 2000, the Company had no assets. See the Index to
Financial Statements, Item 7 of this Report.
During the period ended March 31, 2000, the Company had a net loss of
$2,329. The Company has received no revenues in either of its two most recent
calendar years. See the Index to Financial Statements, Item 7 of this Report.
Liquidity.
---------
None;
<PAGE>
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
March 31, 2000 and 1999
Independent Auditors' Report
Balance Sheets - March 31, 2000
Statements of Operations for the years ended
March 31, 2000 and 1999
Statements of Stockholders' Equity for the
years ended March 31, 2000 and 1999
Statements of Cash Flows for the years ended
March 31, 2000 and 1999
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------
Mantyla, McReynolds & Associates, 5872 South 900 East, Suite 250, Salt Lake
City, Utah 84121, has been retained as the Company's auditor since May 12, 1999.
The Company's previous auditor was Pannell Kerr Forester, CPA, of San Diego,
California. The Company did not consult the new accountant regarding the
application of accounting principles to a specific completed or contemplated
transaction, the type of audit opinion that was to be rendered on the financial
statements, nor any written or oral advice was provided that was an important
factor considered by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue. Additionally, there have been no
disagreements between auditors or the Company and its auditors. For material
documentation respecting the change in the Company's auditors, see Item 13 of
the Company's Current Report on Form 8-K, as filed on December 7, 1999, which is
incorporated herein by this reference.
<PAGE>
PART III
Identification of Directors and Executive Officers
--------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
<S> <C> <C> <C>
Sarah K. Edson President 3/99 *
Director 3/99 *
Lisa Howells Vice President 3/99 *
Treasurer 3/99 *
Director 3/99 *
Vickie Rosenkrantz Secretary 3/99 *
Director 3/99 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
--------------------
Sarah K. Edson. President and Director. Ms. Edson is 27 years of age. She
graduated from the University of Utah in 1995 with a Bachelors of Science,
degree in Exercise and Sport Science. She currently has been the manager at
Cactus and Tropicals, a retail business in Salt Lake City. Ms. Edson has been a
director and executive officer of the Company since 1999.
Lisa Howells. Vice President/Treasurer and Director. Ms. Howells, age 37,
has been a director and executive officer of the Company since 1999. She
graduated from the University of Pheonix of Salt Lake City, in 1998 with a
Bachelor of Science, degree in marketing. She currently manages payroll
accounts at Simon Transportation.
Vickie Rosenkrantz. Secretary and Director. Ms. Rosenkrantz, age 32, has
been a director and executive officer of the Company since 1999. Ms. Rosenkrantz
has most recently worked at Costco, under the marketing department.
Significant Employees.
----------------------
The Company has one employee who is not an executive officers, but who is
expected to make a significant contribution to the Company's business. He will
act as the general manager for the Company.
Family Relationships.
---------------------
Other than the relationship between Vickie Rosenkrantz and Sarah Edson as
sisters by marriage, there are no family relationships between any current
directors or executive officers of the Company, either by blood or by marriage.
<PAGE>
Involvement in Certain Legal Proceedings.
-----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Form 3's have been filed for the Officers and Directors as well as the 10%
shareholder of the Company on October 7, 1999.
<PAGE>
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricte dlying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sarah K.
Edson, 3/31/00 0 0 0 260,000 0 0 0
President, 3/31/99 0 0 0 0 0 0 0
Director
Lisa
Howells 3/31/00 0 0 0 260,000 0 0 0
Vice Pres./ 3/31/99 0 0 0 0 0 0 0
Treasurer,
Director
Vickie 3/31/00 0 0 0 260,000 0 0 0
Rosenkrantz, 3/31/99 0 0 0 0 0 0 0
Secretary,
Director
Steven Arter, 3/31/98 0 0 0 0 0 0 0
Presiddent,
Director
Danny Ramsay, 3/31/98 0 0 0 0 0 0 0
Vice Pres./
Treasurer,
Director
Richard Sax, 3/31/98 0 0 0 0 0 0 0
Secretary,
Director
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ending March 31, 2000, 1999, or 1998, or the period ending on the date of
this Report.
Compensation of Directors.
--------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
<PAGE>
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
-------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of April 01, 2000, with the computations being based upon 1,903,224 shares
of common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name Beneficially Owned of Class (1)
---------------- ------------------ --------
<S> <C> <C>
Jenson Services, Inc.* 987,500 51.9%
Sarah Edson 260,000 13.7%
Lisa Howells 260,000 13.7%
Vickie Rosenkrantz 260,000 13.7%
------- -----
1,767,500 93%
* Duane Jenson is the President of Jenson Services, Inc., and may be deemed
the beneficial owner of Jenson Services, Inc.
</TABLE>
<PAGE>
Security Ownership of Management.
---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of the April 01, 2000:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
---------------- ------------------------- --------
<S> <C> <C>
Sarah K. Edson 260,000 13.7%
Lisa Howells 260,000 13.7%
Vickie Rosenkrantz 260,000 13.7%
------- ------
All directors and
executive officers 780,000 41.1%
as a group (3 persons)
</TABLE>
Changes in Control.
-------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of 'Unregistered' and 'Restricted' Securities Over the Past Three Years"
of Item I.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
-------------------
See the Company's Current Report on Form 8-K as filed on December 7, 1999,
for information relating to the change in the Compay's auditors, and other
matters, as described in Part I, Item 8, above.
<PAGE>
Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
Number Description*
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
Form 8-K as filed on December 7, 1999, for information relating to the
change in the Compay's auditors, and other matters, as described in Item I, Part
I, above.
*Summaries of all exhibits contained in this Report are modiified in their
entirety by reference to these Exhibits.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ENCIBAR, INC.
Date: 6/29/00 /S/SARAH EDSON
Sarah Edson
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
ENCIBAR, INC.
Date: 6/29/00 /S/SARAH EDSON
Sarah Edson
President and Director
Date: 6/29/00 /S/VICKIE ROSENKRANTZ
Vickie Rosenkrantz
Secretary and Director
<PAGE>
ENCIBAR, INC.
[A Development Stage Company]
Financial Statements and Independent Auditors' Report
March 31, 2000
<PAGE>
<TABLE>
<CAPTION>
Encibar, Inc.
[A Development Stage Company]
TABLE OF CONTENTS
Page
<S> <C>
Independent Auditors' Report 1
Balance Sheet -- March 31, 2000 2
Statements of Operations for the periods ended March 31, 2000 and 1999, and
for the period from Reactivation [March 22, 1999] through March 31, 2000
3
Statements of Stockholders' Deficit for the periods ended March 31, 2000 and
1999, and for the period from Reactivation [March 22, 1999] through
March 31, 2000 4
Statements of Cash Flows for the periods ended March 31, 2000 and 1999,
and for the period from Reactivation [March 22, 1999] through March 31, 5
2000
Notes to Financial Statements 6 -- 8
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Encibar, Inc.[a development stage company]
We have audited the accompanying balance sheet of Encibar, Inc. [a development
stage company] as of March 31, 2000, and the related statements of operations,
stockholders' deficit, and cash flows for the periods ended March 31, 2000 and
1999, and for the period from Reactivation [March 22, 1999] through March 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 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 Encibar, Inc. [a development
stage company] as of March 31, 2000, and the results of operations and cash
flows for the periods ended March 31, 2000 and 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has accumulated losses from
operations, no assets, and a net working capital deficiency that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/S/MANTYLA MCREYNOLDS
Mantyla McReynolds
Salt Lake City, Utah
May 26, 2000
<PAGE>
<TABLE>
<CAPTION>
Encibar, Inc.
[A Development Stage Company]
Balance Sheet
March 31, 2000
ASSETS
<S> <C> <C>
Assets $ -0-
------------------
Total Assets $ -0-
==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Current Liabilities:
Accounts Payable $ 2,266
Payable to shareholders - Note 4 1,341
------------------
Total Liabilities 3,607
Stockholders' Deficit:
Capital Stock -- 100,000,000 shares authorized having a
par value of $.001 per share; 1,904,190 shares issued
and outstanding - Note 4 1,904
Additional Paid-in Capital 252,575
Accumulated Deficit (258,086)
------------------
Total Stockholders' Deficit (3,607)
------------------
Total Liabilities and Stockholders' Deficit $ -0-
==================
See accompanying notes to financial statements.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Encibar, Inc.
[A Development Stage Company]
Statements of Operations
For the Periods Ended March 31, 2000 and 1999, and for the Period from Reactivation [March
22, 1999] through March 31, 2000
Reactivation
through
March 31,
2000 1999 2000
-------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0-
General & Administrative Expenses 1,145 780 1,925
-------------- --------------- ---------------
Operating Loss (1,145) (780) (1,925)
-------------- --------------- ---------------
Net Loss Before Income Taxes (1,145) (780) (1,925)
Current Year Provision for Income Taxes 1,184 100 1,284
-------------- --------------- ---------------
Net Loss $ (2,329) $ (880) $ (3,209)
============== =============== ===============
Loss Per Share $ (.01) $ (.01) $ (.01)
============== =============== ===============
Weighted Average Shares Outstanding 1,809,585 135,724 1,726,979
============== =============== ===============
See accompanying notes to financial statements.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Encibar, Inc.
[A Development Stage Company]
Statements of Stockholders' Deficit
For the Periods Ended March 31, 2000 and 1999, and for the Period from Reactivation [March
22, 1999] through March 31, 2000
Additional Net
Common Common Paid-in Accumulated Stockholders'
Shares Stock Capital Deficit Deficit
------------ ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, March 22, 1999 74,482,210 74,482 178,229 (254,877) (2,166)
(date of reactivation)
Net loss for the Period from
March 23, 1999 through March
31, 1999 (880) (880)
------------ ---------- ------------ ------------ -------------
Balance, March 31, 1999 74,482,210 74,482 178,229 (255,757) (3,046)
Reverse split shares 1 for 745,
May 12, 1999 (74,345,520) (74,346) 74,346 -0-
Issued post-split shares to
Stockholder for debt, May 12,
1999 171,500 172 172
Issued post-split shares to
officers for services due prior
year, May 12, 1999 780,000 780 780
Issued shares to Stockholder for
debt, November 11, 1999 816,000 816 816
Net loss for the Year Ended
March 31, 2000 (2,329) (2,329)
------------ ---------- ------------ ------------ -------------
Balance, March 31, 2000 1,904,190 $ 1,904 $ 252,575 $ (258,086) $ (3,607)
============ ========== ============ ============ =============
See accompanying notes to financial statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Encibar, Inc.
[A Development Stage Company]
Statements of Cash Flows
For the Periods Ended March 31, 2000 and 1999, and for the Period from Reactivation [March
22, 1999] through March 31, 2000
Reactivation
through
March 31,
2000 1999 2000
Cash Flows from Operating Activities
<S> <C> <C> <C>
Net Loss $ (2,329) $ (880) $ (3,209)
Adjustments to reconcile net income to net cash provided by
operating activities:
Increase in current liabilities 2,329 880 3,209
----------- ---------- -------------
Net Cash Used for Operating Activities -0- -0- -0-
Net Increase/(Decrease) in Cash -0- -0- -0-
Beginning Cash Balance -0- -0- -0-
----------- ---------- -------------
Ending Cash Balance $ -0- $ -0- $ -0-
=========== ========== =============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ -0- $ -0- $ -0-
Cash paid during the year for income taxes -0- -0- -0-
Supplemental Disclosure of Non-Cash Activities
Issued common stock to reduce shareholder/officer d$bt 1,768 -0- $ 1,768
See accompanying notes to financial statements.
5
</TABLE>
<PAGE>
Encibar, Inc.
[A Development Stage Company]
Notes to Financial Statements
March 31, 2000
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
Encibar, Inc. incorporated under the laws of the State of Utah on
June 3, 1983. The Company engaged in various investment
activities through 1987. These investing activities were
unsuccessful and the Company was involuntarily dissolved in
August, 1989 for failure to file an annual report. Since that
time the Company was left dormant until March 22, 1999 when it
was reactivated.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies:
(b) Income Taxes
The Company uses the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for
Income Taxes. The Statement requires an asset and liability
approach for financial accounting and reporting for income taxes,
and the recognition of deferred tax assets and liabilities for
the temporary differences between the financial reporting bases
and tax bases of the Company's assets and liabilities at enacted
tax rates expected to be in effect when such amounts are realized
or settled. Prior years' consolidated financial statements have
not been restated to apply the provisions of the Statement. The
cumulative effect of this change in accounting for income taxes
as of March 31, 2000 is $0 due to the valuation allowance
established as described in Note 3.
(c) Net Loss Per Common Share
Loss per common share is based on the weighted-average number of
shares outstanding. Diluted loss per share is computed using
weighted average number of common shares plus dilutive common
share equivalents outstanding during the period using the
treasury stock method. There are no common stock equivalents
outstanding, thus, basic and diluted loss per share calculations
are the same.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company
considers cash on deposit in the bank to be cash. The Company had
$0 cash at March 31, 2000.
6
<PAGE>
Encibar, Inc.
[A Development Stage Company]
Notes to Financial Statements
March 31, 2000
[Continued]
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(e) Use of Estimates in 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 revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company has accumulated losses from Reactivation through
March 31, 2000 amounting to $3,209, and from inception of
$258,086, has no assets, and has a net working capital deficiency
at March 31, 2000. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
Management plans include raising capital to commence business
operations in the snowmobile rental industry(see Note 5). The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty. The Company is
currently negotiating a reorganization plan with another
corporation.
NOTE 3 INCOME TAXES
The current provision for income tax ($1,184) is for state
franchise taxes paid or payable to the State of Utah. Below is a
summary of deferred tax asset calculations on net operating loss
carry forward amounts. Loss carry forward amounts expire at
various times through 2020. A valuation allowance is provided
when it is more likely than not that some portion of the deferred
tax asset will not be realized.
Description NOL Tax Rate
Federal Income Tax $220,005 $69,071 31%
State Income Tax 220,005 11,003 5%
Valuation allowance (80,074)
-------------
Deferred tax asset 3/31/2000 $0
The allowance decreased $11,467 from $91,541 as of March 31, 1999.
7
<PAGE>
Encibar, Inc.
[A Development Stage Company]
Notes to Financial Statements
March 31, 2000
[Continued]
NOTE 4 COMMON STOCK/RELATED PARTY TRANSACTION
On May 12, 1999, the Company's Board of Directors effected a
reverse split of the outstanding common stock on the basis of 745
for one, effective May 15, 1999, while retaining the current
authorized capital and par value. No stockholder shall own less
than 100 post split shares; appropriate adjustments are to be
made to the stated capital accounts and capital surplus accounts.
Additional post split shares of common stock have been issued to
reduce current liabilities of the Company in the following
manner:
Number Dollar
Description of transaction Date of Shares Value
------------------------------------ ------------- ------------- -------------
Issued to shareholder for debt 5/12/1999 171,500 $172
Issued to directors for services 5/12/1999 780,000 780
Issued to shareholder for debt 11/11/1999 816,000 816
------------- -------------
Total shares issued 1,767,500 $1,768
============= =============
A shareholder has paid general and administrative expenses on
behalf of the Company, through March 31, 2000, of $2,329. The
Company has recorded a liability for this amount which has been
reduced by the common shares issued ($172 and $816 above). The
balance ($1,341) is payable on demand and is non-interest
bearing.
NOTE 5 SUBSEQUENT EVENT
On April 26, 2000, the Company authorized and executed a
Debenture agreement to borrow $16,000 from a shareholder of the
Company. The proceeds are to be used to purchase snowmobiles,
with the intent to rent them, and for other startup costs. The
agreement provides that the loan bear interest at 10% per annum
and is due three years from the date of the loan. Interest and
principal are to be paid at maturity. However, the debt can be
converted to common stock of the Company either in part or in
full at any time by either party.
8
