U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Fiscal Year Ended: July 31, 1999
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 2-91824-D
UNION 69, LTD.
(Name of small business issuer in its charter)
Delaware 84-1398190
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
BOX 8029, La Jolla, CA 92037-8029
(Address of principal executive offices) (Zip code)
Issuer's telephone number (619) 456-7176
Securities registered under Section 12(b) of the Act:
Common Stock Par Value $0.001
(Title of class)
Securities registered under Section 12(g) of the Act: NONE
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
Total pages: 25
Exhibit Index Page: 23
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $ -
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As of October 21, 1999, there were 1,377,647 shares of the Registrant's
common stock, par value $0.001, issued and outstanding. The aggregate market
value of the Registrant's voting stock held by non-affiliates of the Registrant
was approximately $2,932,814 computed by reference to the price at which the
common equity was sold.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE
Transitional Small Business Disclosure Format (check one): Yes ; NO X
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TABLE OF CONTENTS
Item Number and Caption Page
PART I
Item 1. Description of Business.............................................4
Item 2. Description of Property............................................13
Item 3. Legal Proceedings..................................................14
Item 4. Submission of Matters to a Vote of Security Holders................14
PART II
Item 5. Market for Common Equity and Related Stockholder Matters...........14
Item 6. Management's Discussion and Analysis or Plan of Operations.........15
Item 7. Financial Statements...............................................17
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure...............................................17
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act..................17
Item 10. Executive Compensation.............................................19
Item 11. Security Ownership of Certain Beneficial Owners and Management.....21
Item 12. Certain Relationships and Related Transactions.....................22
Item 13. Exhibits and Reports on Form 8-K...................................23
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PART I
ITEM 1 DESCRIPTION OF BUSINESS
General
Plaza Group, Inc., hereafter referred to as the "Company" was incorporated in
the State of Delaware on April 24, 1984 for the purpose of investing in any type
and all types of properties or business.
On November 7, 1984 the United States Securities and Exchange Commission granted
an effective date to a registration statement on Form S-18 filed by the Company
in the Denver office, as Commission File Number 2-91824-D. The registration
statement was for an offering of 800,000 Units at $0.50 per unit. Each unit
consisted of one share of common stock with a par value of $0.001 and one
warrant to purchase one shares of common stock at $2.00 per share, exercisable
any time within two years of the effective date of the offering.
The warrants were detachable from the units following the date of the offering,
November 7, 1984. In April 23,1985, the Company completed a public offering of
800,000 units. An offering price of $0.50 per unit had arbitrarily been
determined by the Company.
Total proceeds of the sale of 800,000 units was $400,000 and offering expenses
amounting to $75,799 were offset against capital in excess of par value March
31, 1987, all the warrants were issued and outstanding. The Company authorized
the issuance of up to 400,000 warrants to purchase an aggregate of 400,000
shares of common stock. The warrants expired January 6, 1988.
The offering filed by the Company was a "blank" check offering and since the
date of incorporation the company has not engaged in any meaningful business and
is considered a development stage company. The company ceased all operating
activities during the period from July 31,1987 to March 24,1996 and was
considered dormant.
On April 2, 1996, the Company obtained a Certificate of renewal from the State
of Delaware. On April 2,1996 the Company obtained a certificate of amendment of
"Plaza Group, Inc.," changing the name from Plaza Group, Inc., to "Union
69,Ltd".
On December 26,1986, the Company's first amendment to the Certificate of
Incorporation of Chicken Hock Inc., "Article I" the corporation name shall be
"Plaza Group, Inc".
The Company is actively seeking acquisition candidates.
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The Company's Articles of Incorporation, as amended, entitle it to transact any
lawful business or businesses for which corporations may be incorporated
pursuant to the Delaware Corporation Code. The Company can be defined as a "low
profile " company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities described herein may classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. In order to comply with these various limitations, management
does not intend to undertake any efforts to sell any additional securities of
the Company, either debt or equity, or cause a market to develop in the
Company's securities until such time as the Company has successfully implemented
its business plan described herein.
General Business Plan
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of a
corporation which reports under Section 13 and 15 of the Securities Exchange Act
of 1934 (the "Exchange Act"). The Company will not restrict its search to any
specific business; industry or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See "Financial
Statements." This lack of diversification should be considered a substantial
risk to shareholders of the Company because it will not permit the Company to
offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service or for other corporate purposes. The Company
may acquire assets and establish wholly owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries
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and at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex.
The Company has, and will continue to have, no capital with which to provide the
owners of business opportunities with any significant cash or other assets.
However, management believes that the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the business
opportunities will, however, incur significant legal and accounting costs in
connection with the acquisition of a business opportunity including the costs of
preparing forms 8-K, 10Q, or agreements and related reports and documents. The
Exchange Act specifically requires that any merger or acquisition candidate
comply with all applicable reporting requirements, which include providing
audited financial statements to be included within the numerous filings relevant
to complying with the Exchange Act.
Nevertheless, the officers and directors of the Company have not conducted
market research and are not aware of statistical data, which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity. The analysis of new business opportunities will be
undertaken by, or under the supervision of, the officers and directors of the
Company have not conducted market research and are not aware of statistical data
which would support the perceived benefits of a merger or acquisition
transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company, none of who is a
professional business analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities, which may be brought to its
attention through present associations of the Company's officers and directors,
or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition or acceptance of products, services or trades;
name identification; and other relevant factors. Officers and directors of the
Company will meet personally with management and key personnel of the business
opportunity as part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained within a reasonable period of
time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters relating
to the new business of the Company, shall rely upon their own efforts and, to a
much lesser extent, the efforts of the Company's shareholders, in accomplishing
the business purposes of the Company. It is not
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anticipated that any outside consultants or advisors, other than the Company's
legal counsel and accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does retain such an
outside consultant or advisor, any cash fee earned by such party will need to be
paid by the prospective merger/acquisition candidate, as the Company has no cash
assets with which to pay such obligation. There have been no contracts or
agreements with any outside consultants and none are anticipated in the future.
The Company will not restrict its search to any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation or which is in essentially any stage of its corporate life.
It is impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded or may seek other
perceived advantages which the Company may offer.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company. However, the only opportunity which management has to have these
loans repaid will be from a prospective merger or acquisition candidate.
Management has agreed among them selves that the repayment of any loans made on
behalf of the Company will not impede, or be made conditional in any manner, on
consummation of a proposed transaction.
Acquisition Opportunities
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign and be replaced
by new directors without a vote of the Company's shareholders or may sell their
stock in the Company. Any and all such sales will only be made in compliance
with the securities laws of the United States and any applicable state.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the Company is no longer
considered a "shell" company. Until such time as this occurs, the Company will
not attempt to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market which may
develop in the
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Company's securities may have a depressive effect on the value of the Company's
securities in the future, if such a market develops, of which there is no
assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel and take
other reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise. The manner in which the Company
participates in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the management of
the opportunity and the relative negotiation strength of the Company and such
other management.
With respect to any merger or acquisition, negotiations with target company
management are expected to focus on the percentage of the Company, which target
company shareholders would acquire in exchange for all of their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage ownership may be subject to significant
reduction in the event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held by the
Company's then-shareholders. If required to so do under relevant law, management
of the Company will seek shareholder approval of a proposed merger or
acquisition via a Proxy Statement. However, such approval would be assured where
management supports such a business transaction because management presently
controls sufficient shares of the Company to effectuate a positive vote on the
proposed transaction. Further, a prospective transaction may be structured so
that shareholder approval is not required, and the Board of Directors without
shareholder approval may effectuate such a transaction.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and
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accountants, will set forth remedies on default and will include miscellaneous
other terms.
As stated herein above, the Company will not acquire or merge with any entity
which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the Exchange Act.
Included in these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to be filed
with the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included in
its annual report on Form 10-KSB (or 10-K, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the
Exchange Act, or if the audited financial statements provided do not conform to
the representations made by the candidate to be acquired in the closing
documents, the closing documents will provide that the proposed transaction will
be void able, at the discretion of the present management of the Company. If
such transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for all costs
associated with the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms, which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
Employees
The Company has no full time employees. The Company's president, treasurer and
secretary have agreed to allocate a portion of their time to the activities of
the Company, without compensation. These officers anticipate that the business
plan of the Company can be implemented by their devoting approximately one
hundred hours per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officers. See Item 9, "Directors, Executive Officers,
Promoters and Control Persons; Compliance with Section 16(a) of the Exchange
Act."
The Company's plan of business may involve changes in its capital structure,
management, control and business, especially if it consummates reorganization as
discussed above. Each of these areas is regulated by the Investment Act, which
regulation has the purported purpose of protecting purchasers of investment
company securities. Since the Company will not register as an investment
company, its shareholders will not be afforded these purported protections.
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The Company intends to vigorously resist classification as an investment company
and to take advantage of any exemptions or exceptions from application of the
Investment Act, which allows an entity a one-time option during any three-year
period to claim an exemption as a "transient" investment company. The necessity
of asserting any such resistance, or making any claim of exemption, could be
time-consuming and costly, or even prohibitive, given the Company's limited
resources.
Certain Risks
The Company's business is subject to numerous risk factors, including the
following:
No Operating History or Revenue and Minimal Assets. The Company has had no
operating history nor any revenues or earnings from operations. The Company has
no significant assets or financial resources. The Company will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in the Company
incurring a net operating loss, which will increase continuously until the
Company can consummate a business combination with a profitable business
opportunity. There is no assurance that the Company can identify such a business
opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be no
assurance, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
Scarcity of and Competition for Business Opportunities and Combinations. The
Company is and will continue to be an insignificant participant in the business
of seeking mergers with, joint ventures with and acquisitions of small private
and public entities. A large number of established and well-financed entities,
including venture capital firms, are active in mergers and acquisitions of
companies, which may be desirable target candidates for the Company. Nearly all
such entities have significantly greater financial resources, technical
expertise and managerial capabilities than the Company and, consequently, the
Company will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination. Moreover, the
Company will also compete in seeking merger or acquisition candidates with
numerous other small public companies.
No Agreement for Business Combination or Other Transaction; No Standards for
Business Combination. The Company has no arrangement, agreement or understanding
with respect to engaging in a merger with, joint venture with or acquisition of,
a private or public entity. There can be no assurance that the Company will be
successful in identifying and evaluating suitable business
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opportunities or in concluding a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company will be able
to negotiate a business combination on terms favorable to the Company. The
Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it will
require a target business opportunity to have achieved, and without which the
Company would not consider a business combination in any form with such business
opportunity. Accordingly, the Company may enter into a business combination with
a business opportunity having no significant operating history, losses, limited
or no potential for earnings, limited assets, negative net worth or other
negative characteristics.
Continued Management Control; Limited Time Availability. While seeking a
business combination, management anticipates devoting up to 20 hours per month
to the business of the Company. None of the Company's officers has entered into
a written employment agreement with the Company and none is expected to do so in
the foreseeable future. The Company has not obtained key man life insurance on
any of its officers or directors. Notwithstanding the combined limited
experience and time commitment of management, loss of the services of any of
these individuals would adversely affect development of the Company's business
and its likelihood of continuing operations. See Item 9, "Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
Exchange Act."
Conflicts of Interest - General. Certain of the officers and directors of the
Company are directors and/or principal shareholders of other blank check
companies and, therefore, could face conflicts of interest with respect to
potential acquisitions. In addition, officers and directors of the Company may
in the future participate in business ventures, which could be deemed to compete
directly with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the Company
transacts business. The Company's Board of Directors has adopted a policy that
the Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers or directors, or in which they or their family
members own or hold a controlling ownership interest. Although the Board of
Directors could elect to change this policy, the Board of Directors has no
present intention to do so. In addition, if the Company and other blank check
companies with which the Company's officers and directors are affiliated both
desire to take advantage of a potential business opportunity, then the Board of
Directors has agreed that said opportunity should be available to each such
company in the order in which such companies registered or became current in the
filing of annual reports under the Exchange Act subsequent to January 1, 1997.
See Item 9, "Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act - Conflicts of Interest."
Reporting Requirements May Delay or Preclude Acquisition. Sections 13 and 15(d)
of the Exchange Act require companies subject thereto to provide certain
information about significant acquisitions, including certified financial
statements for the company acquired, covering one, two or three years, depending
on the relative size of the acquisition. The time and additional costs that may
be incurred by some target entities to prepare such statements may significantly
delay or essentially preclude
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consummation of an otherwise desirable acquisition by the Company. Acquisition
prospects that do not have or are unable to obtain the required audited
statements may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
Lack of Market Research or Marketing Organization. The Company has neither
conducted, nor have others made available to it, results of market research
indicating that market demand exists for the transactions contemplated by the
Company. Moreover, the Company does not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by the Company, there is no assurance the Company will
be successful in completing any such business combination.
Lack of Diversification. The Company's proposed operations, even if successful,
will in all likelihood result in the Company engaging in a business combination
with a business opportunity. Consequently, the Company's activities may be
limited to those engaged in by the business opportunity or opportunities which
the Company merges with or acquires. The Company's inability to diversify its
activities into a number of areas may subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.
Regulation. Although the Company will be subject to regulation under the
Exchange Act, management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In the event the
Company engages in business combinations, which result in the Company holding
passive investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company and could be
expected to incur significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange Commission as
to the status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the Company to material
adverse consequences.
Probable Change in Control and Management. A business combination involving the
issuance of the Company's Common Stock will, in all likelihood, result in
shareholders of a private company obtaining a controlling interest in the
Company. Any such business combination may require management of the Company to
sell or transfer all or a portion of the Company's Common Stock held by them, or
resign as members of the Board of Directors of the Company. The resulting change
in control of the Company could result in removal of one or more present
officers and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business Combination. The
Company's primary plan of operation is based upon a business combination with a
private concern which, in all likelihood, would result in the Company issuing
securities to shareholders of any such private
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company. The issuance of previously authorized and unissued shares of Common
Stock of the Company would result in a reduction in the percentage of shares
owned by present and prospective shareholders of the Company and may result in a
change in control or management of the Company.
Disadvantages of Blank Check Offering. The Company may enter into a business
combination with an entity that desires to establish a public trading market for
its shares. A business opportunity may attempt to avoid what it deems to be
adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
and the inability or unwillingness to comply with various federal and state laws
enacted for the protection of investors.
Taxation. Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination the Company may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the target entity;
however, there can be no assurance that such business combination will meet the
statutory requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes, which may have an adverse effect on both parties to the
transaction.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
ITEM 2 DESCRIPTION OF PROPERTY
The Company maintains a corporate office at P.O. Box 8029, CasteJon
Drive, La Jolla, California. The company owns no real property. As of July 31,
1999, all activities of the Company have been conducted by corporate officers
from either their homes or business offices. Currently, there are no outstanding
debts owed by the company for the use of these facilities and there are no
commitments for future use of the facilities.
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ITEM 3 LEGAL PROCEEDINGS
The Company is not engaged in any legal proceedings.
ITEM 4 SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
No matters were subject to a vote of security holders during the
fiscal year 1999, through the solicitation of proxies.
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
As of the date of this report, management knows of no trading or
quotation of the Company's common stock. The range of high and low bid
quotations for each fiscal quarter since the last report, as reported by the
National Quotation Bureau Incorporated, was as follows:
1999 High Low
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
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1998 High Low
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
* No quotations reported
The above quotations reflect inter-dealer prices, without retail mark-up,
markdown, or commission and may not necessarily represent actual
transactions.
** As of July 31, 1999 there were approximately 310 record holders of the
Company's common Stock.
The Company has not declared or paid any cash dividends on its common stock
and does not anticipate paying dividends for the foreseeable future.
ITEM 6 MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS
Results of Operations - Since March 24, 1996, the Company is in the development
stage, and has not commenced planned principal operations. No operations were
conducted and no revenues were generated in the fiscal year. The Company at
year-end had no capital and only minimal cash, and no other assets whatsoever.
During the fiscal year ended July 31, 1999, the Company incurred general and
administrative expenses and consulting fees.
Liquidity and Capital Resources - The Company requires working capital
principally to fund its current operating expenses for which the Company has
relied on short-term borrowings and/or the issuance of restricted common stock.
There are no formal commitments from banks or other lending sources for lines of
credit or similar short-term borrowings, but the Company has been
15
<PAGE>
able to borrow any additional working capital that has been required. From time
to time in the past, required short-term borrowings have been obtained from a
principal shareholder or other related entities.
In order to complete any acquisition, the Company may be required to
supplement its available cash and other liquid assets with proceeds from
borrowings, the sale of additional securities, including the private placement
of restricted stock and/or a public offering, or other sources. There can be no
assurance that any such required additional funding will be available or
favorable to the Company.
Because management controls 93.47 % of voting rights, management may
actively negotiate or otherwise consent to the purchase of any portion of their
stock as a condition to or in connection with a proposed merger or acquisition.
Furthermore, management could consent or approve any particular stock buy-out
transaction without shareholder approval. In the event that an appropriate
merger candidate is located, the Company may need to pay cash finder's fees or
may issue securities (debt or equity) as a finders's fee. Finder's fees or other
acquisition related compensation may be paid to officers, directors, promoters
or their affiliates. Any such finder's fee paid to an officer, director,
promoter, or affiliate may present a conflict of interest because of the
non-arms length nature of such transaction. There are no such negotiations in
progress or contemplated.
There are no arrangements or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the Company's
affairs.
The management of the Company does not believe that inflation has had any
material effect on the Company during the year ended July 31, 1999.
Year 2000 issues- "Year 2000 problems" result primarily from the inability of
some computer software to properly store, recall or use data after December 31,
1999. The Company is engaged primarily in organizational and fund raising
activities and accordingly, does not rely on information technology ("IT")
systems. Accordingly, the Company does not believe that it will be materially
affected by Year 2000 problems. The Company relies on non-IT systems that may
suffer from Year 2000 problems including telephone systems, facsimile and other
office machines. Moreover, the Company relies on third parties that may suffer
from Year 2000 problems that could affect the Company's minimal operations; the
Company does not believe that such non-IT systems or third-party Year 2000
problems will affect the Company in a manner that is different or more
substantial than such problems affect other similarly situated companies.
Consequently, the Company does not currently intend to conduct a readiness
assessment of Year 2000 problems or develop a detained contingency plan with
respect to Year 2000 problems that may affect the Company or third parties.
The foregoing is a "Year 2000 Readiness Disclosure" within the meaning of the
Year 2000 Information and Readiness Disclosure Act of 1998.
16
<PAGE>
ITEM 7 FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data are
included beginning immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company
and its accountants on any matter of accounting principles, practices or
financial statements disclosure.
PART III
ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Executive Officers and Directors
The following table sets forth the name, age, and position of each
executive officer and director of the Company:
Director's Name Age Office Term of Office
- --------------------------------------------------------------------------------
Michael Johnson 33 President/V.P./Director March 24, 1996 to Present
Barbara Tersptra 60 Secretary/Treasurer/Director March 24, 1996 to Present
17
<PAGE>
Director's Name Age Office Term of Office
- --------------------------------------------------------------------------------
Erma Johnson 80 Director March 24, 1996 to Present
The term of office of each director and executive officer ends at or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been employed is an affiliate, parent or subsidiary of the Company.
Business Experience
Michael Johnson has served the Company as Director since March 24, 1996 and
President/Vice President/Director since June 10, 1997 to present and has served
as Director of Voyager Group, Ltd. since July 21, 1996 to present. Mr. Johnson
graduated from Lake Forest College, Lake Forest, Illinois, in 1988 with a B.S.
degree in Business Administration. Mr Johnson was arb officer, commex
commodities with Mel Schnell and Company, World Trade Center New York from 1988
to 1991. Mr Johnson was founder, chief executive officer and principle owner of
JNSN a nymex commodities trading firm World Trade Center New York from 1991
until it was acquired by York Commodities in 1993. In 1998 Mr. Johnson traded on
the NASDAQ and NYSE with spear leads ready system through July 1999. Mr. Johnson
is presently managing and seeking merger partner for Union 69.
Barbara Tersptra has served the Company as Director since March 24, 1996 and
Secretary Treasurer since June 10, 1997 to present. Mrs. Tersptra is a graduate
of the University of Utah. Mrs. Tersptra is the founder, CEO and principal owner
of JC Technical Institute from 1962 to 1987. From 1987 to 1991 Mrs. Teresptra
was co-chairman Ballet West finance committee soliciting contributions in and
around Salt Lake City, Utah. Mrs. Teresptra retired 1991.
Erma Johnson has served the Company as Director since March 24, 1996 to present.
Mrs Johnson received her B.A. degree in business Administration at the
University of Utah. In 1943 Mrs Johnson was National Vice Chairman - Committee
to Elect harry Truman President of the United States. During 1972 Mrs. Johnson
served as Utah Chairman to Elect Orrin Hatch, as a United States Senator. During
1980 Mrs. Johnson served on the committee to Elect Ronald Regan, president of
the United States. From 1984 to 1987 Mrs. Johnson served as a Director of Utah
Bank and Trust which was later acquired by First Security Bank. Mrs. Johnson
volunteered for the finance committee Ballet West from 1989 to 1990.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4, and 5 and amendments
thereto, furnished to the Company during or respecting its last fiscal year, no
director, officer, beneficial owner of more than 10% of any class of equity
securities of the Company or any other person known to be subject to
18
<PAGE>
Section 16 of the Exchange Act of 1934, as amended, failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act for the last fiscal
year.
ITEM 10 EXECUTIVE COMPENSATION
There has been no executive compensation.
The Company accrued a total of $0.00 in compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the 1999 fiscal year. No one executive officer received, or has accrued
for his benefit, in excess of $0.00. No cash bonuses were or are to be paid to
such persons. No compensation was deferred.
The Company does not have any employee incentive stock option plans.
There are no plans pursuant to which cash or non-cash compensation
was paid or distributed during the last fiscal year, or is proposed to be paid
or distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.
<TABLE>
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
<CAPTION>
Name and Year Salary ($) Bonus($) Other Restricted Securities
Principal Annual Stock Underlying
Position Compensatio Award(s) ($) Options/
n ($) SARs (#)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael
Johnson
President 1999 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
Vice 1999 0 0 0 0 0
President
- -------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Name and Year Salary ($) Bonus($) Other Restricted Securities
Principal Annual Stock Underlying
Position Compensatio Award(s) ($) Options/
n ($) SARs (#)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Barbara
Tersptra
Secretary 1999 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
Treasure 1999 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
<TABLE>
Cash Compensation Security Grants
<CAPTION>
Name Annual Meeting Consulting Number Number of Securities
Retainer Fees ($) Fees/Other of Underlying
Fees ($) Fees ($) Shares Options/SARs(#)
(#)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Director 0 0 0 0* 0
Erma Johnson
- ---------------------------------------------------------------------------------------------------
B. Director 0 0 0 0* 0
Michael Johnson
- ---------------------------------------------------------------------------------------------------
C. Director 0 0 0 0* 0
Barbara Tersptra
- ---------------------------------------------------------------------------------------------------
* See "Compensation Table of Executives"
</TABLE>
20
<PAGE>
ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
AND MANAGEMENT
Principal Shareholders
The following tables set forth information, as of July 31, 1999, with respect to
the beneficial ownership of the Company's $0.001 par value common and $0.001 par
value preferred stock by each person known by the Company to be the beneficial
owner of more than five percent of the outstanding common stock, and by the
Company's management.
Stock Names and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- --------------------------------------------------------------------------------
Common Michael Johnson 0 0%
President/Vice President
Director
6388 Castejon.
La Jolla, Ca 92037
Common Barbara Tersptra 0 0%
Director
Secretary
Treasure
Zion's
241 N.Vine
#509 E.T
SLC, Utah 84103
Common Erma Johnson 0 0%
Director
Zion's
241 N. Vine
# 406 W.T
21
<PAGE>
SLC Utah
Officers and Directors as a group 0 0%
# of
Name and Address Nature of Shares
of Beneficial Owners Ownership Owned Percent
- --------------------------------------------------------------------------------
Directors
Erma Johnson Preferred Stock 657 100.00%
All Executive Officers
and Directors as a Group
(5 persons) Preferred Stock 657 100.00%
Ms. Johnson owns 100% of the Convertible Preferred Series C 1996 stock. The
stock is convertible into 19,710,000 shares of the Company's Common Stock and
voting rights equal to19,710,000 votes (93.47%). There have been no common
shares issued to any of the directors of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of July 31, 1999 all activities of the Company have been conducted by
corporate officers from either their homes or business offices. Currently, there
are no outstanding debts owed by the Company for the use of these facilities and
there are no commitments for future use of the facilities.
22
<PAGE>
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements Page
Report of Robison, Hill & Co., Independent Certified Public Accountants F-1
Balance Sheets as of July 31, 1999, and 1998 F-2
Statements of Operations for the years ended
July 31, 1999, and 1998 F-3
Statement of Stockholders' Equity for the years ended
July 31, 1999, and 1998 F-4
Statements of Cash Flows for the years ended
July 31, 1999, and 1998 F-5
Notes to Financial Statements F-7
2. Financial Statement Schedules
The following financial statement schedules required by Regulation S-X are
included herein.
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
23
<PAGE>
3. Exhibits
The following exhibits are included as part of this report:
Exhibit
Number Title of Document
3.1 Articles of Incorporation(1)
3.2 By-laws(1)
3.3 Plan of Reorganization and Agreement with Plaza Group Corp.(1)
3.4 Acquisition of assets Agreement with Flyfaire International Inc.(1)
4.1 Series C 1996 Rights, Power, Preferred, Qualification, Limitation and
Restriction By Designation(1)
23.1 Consent of experts and counsel(1)
27.1 Financial Data Schedule
(1) Incorporated by reference.
(b) No reports on Form 8-K were filed during the three months ended July
31, 1999.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
UNION 69, LTD.
Dated: November 12, 1999 By /S/ Michael Johnson
--------------------------------------
Michael Johnson
President, V.P., & 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 Registrant and in the capacities indicated on this 12th day of November,
1999.
Signatures Title
/S/ Michael Johnson
Michael Johnson President, V.P., & Director
(Principal Executive, Financial
and Accounting Officer)
/S/ Barbara Tersptra
Barbara Tersptra Secretary, Treasurer & Director
/S/ Erma Johnson
Erma Johnson Director
25
<PAGE>
INDEPENDENT AUDITOR'S REPORT
UNION 69, LTD.
(A Development Stage Company)
We have audited the accompanying balance sheets of Union 69, LTD. (a
development stage company) as of July 31,1999 and 1998, and the related
statements of operations, stockholders' 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 Union 69, LTD. (a
development stage company) as of July 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Respectfully submitted
/S/ ROBISON, HILL & CO.
________________________________
Certified Public Accountants
Salt Lake City, Utah
October 21, 1999
F - 1
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
BALANCE SHEETS
July 31,
----------------------------
1999 1998
----------- -----------
Assets: ...................................... $ -- $ --
=========== ===========
Liabilities - Accounts Payable ............... $ 1,230 $ 627
Shareholder Advances ......................... 2,827 --
----------- -----------
Total Liabilities ....................... 4,057 627
Stockholders' Equity:
Convertible Preferred Stock,
Par value $.001,
Authorized 5,000,000,
Issued 657 shares issued at
July 31, 1999 and July 31, 1998 .......... 1 1
Common Stock Authorized
Par value $.001,
Authorized 50,000,000,
Issued 1,377,647 shares issued at
July 31, 1999 and July 31, 1998 .......... 1,378 1,378
Paid-In Capital ............................ 2,935,436 2,935,436
Retained Deficit ........................... (2,933,986) (2,933,986)
Deficit Accumulated During the
Development Stage ........................ (6,886) (3,456)
----------- -----------
Total Stockholders' Equity .............. (4,057) (627)
----------- -----------
Total Liabilities and
Stockholders' Equity .................. $ -- $ --
=========== ===========
The accompanying notes are an integral part of these financial statements.
F - 2
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
Since
Inception
For the year ended of
July 31, Development
---------------------
1999 1998 Stage
------- ------- -------
Revenues: ............................ $ -- $ -- $ --
Expenses: ............................ 3,430 275 6,886
------- ------- -------
Net Loss ........................ $(3,430) $ (275) $(6,886)
------- ------- -------
Basic & Diluted loss per share ....... $ -- $ --
======= =======
The accompanying notes are an integral part of these financial statements.
F - 3
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Preferred Stock Common Stock Paid-In Retained Development
Shares Par Value Shares Par Value Capital Deficit Stage
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
<S> <C> <C> <C> <C> <C> <C> <C>
July 31, 1998 ......... 690 $ 1 387,647 $ 388 $ 2,936,426 $(2,933,986) $ --
January 21, 1998
Conversion of
Preferred Stock ....... (33) -- 990,000 990 (990) -- --
Net Loss ................ -- -- -- -- -- -- (275)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
July 31, 1998 .......... 657 1 1,377,647 1,378 2,935,436 2,933,986 (3,456)
Net Loss ................ -- -- -- -- -- -- (3,430)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
July 31, 1999 .......... 657 $ 1 1,377,647 $ 1,378 $ 2,935,436 $ 2,933,986 $ (6,886)
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 4
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
Since
Inception
For the years ended of
July 31, Development
-------------------
1999 1998 Stage
------- ------- -------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss ................................... $(3,430) $ (275) $(6,886)
Increase (Decrease) in Accounts Payable .... 603 275 (239)
------- ------- -------
Net Cash Used in operating activities .... (2,827) -- (7,125)
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities ..................... -- -- --
------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds From Shareholder Advances ......... 2,827 -- 2,827
Proceeds From Capital Stock Issued ......... -- -- 4,295
------- ------- -------
Net Cash Provided by
Financing Activities ..................... 2,827 -- 7,125
------- ------- -------
Net (Decrease) Increase in
Cash and Cash Equivalents ................ -- -- --
Cash and Cash Equivalents
at Beginning of Period ................... -- -- --
------- ------- -------
Cash and Cash Equivalents
at End of Period ......................... $ -- $ -- $ --
======= ======= =======
F - 5
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Continued)
Cumulative
Since
Inception
For the years ended of
July 31, Development
-------------------
1999 1998 Stage
------- ------- -------
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ................................. $ -- $ -- $ --
Franchise and income taxes ............... 90 -- 1,586
SUPPLEMENTAL DISCLOSURE OF NON-
CASH INVESTING AND FINANCING
ACTIVITIES:
None
The accompanying notes are an integral part of these financial statements.
F - 6
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Union 69, LTD. is presented to
assist in understanding the Company's financial statements. The accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Delaware on
April 24, 1984. The Company ceased all operating activities during the period
from July 31, 1987 to March 23 1996 and was considered dormant. On March 24,
1996, the company issued 700 shares of Preferred Stock (Convertible to
21,000,000 shares Common). On April 2, 1996, the Company obtained a Certificate
of renewal from the State of Delaware. Since March 24, 1996, the Company is in
the development stage, and has not commenced planned principal operations.
Nature of Business
The Company intends to acquire interests in various business
opportunities, which in the opinion of management will provide a profit to the
Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
F - 7
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 1999 AND 1998
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
For the year ended July 31, 1999
Basic Loss per Share
Loss to common shareholders ................ $(3,430) 1,377,647 $ --
======= ======= =======
For the year ended July 31, 1998
Basic Loss per Share
Loss to common shareholders ................ $ (275) 1,377,647 $ --
======= ======= =======
The effect of outstanding common stock equivalents would be
anti-dilutive for 1999 and 1998 and are thus not considered.
NOTE 2 - CONVERTIBLE PREFERRED STOCK
The convertible preferred stock is convertible into common stock at the
option of the shareholder at any time after issuance of the convertible
preferred shares. The conversion ratio is one share of convertible preferred
stock for 30,000 shares of common stock. The holders of convertible preferred
stock shall be entitled to vote on all matters at the ratio of one vote per
share of common stock that it is convertible into as if the shares had been
converted. In the event of any voluntary or involuntary liquidations (whether
complete or partial), dissolution, or winding up of the corporation, the holders
of the convertible preferred stock shall be entitled to be paid an amount in
cash equal to the net book value of the corporation on the date of liquidation,
plus all unpaid dividends, whether or not previously declared, accrued thereon
to the date of final distribution.
F - 8
<PAGE>
UNION 69, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED July 31, 1999 AND 1998
(Continued)
NOTE 3 - INCOME TAXES
As of July 31, 1999, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $2,900,000. Current tax laws
limit the amount of loss available to be offset against future taxable income
when a substantial change in ownership occurs. Therefore, the amount available
to offset future taxable income may be limited.
NOTE 4 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 5 - COMMITMENTS
As of July 31, 1999 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
F - 9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE OF UNION 69, LTD. AS OF JULY 31, 1999 AND THE RELATED STATEMENTS OF
OPERATIONS AND CASH FLOWS FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 4
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 3
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
