UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year Ended April 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) FOR THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period From ____________________ to _________________.
Commission File Number: 0-13628
TRIDON ENTERPRISES INCORPORATED
(Exact name of registrant as specified in its charter)
Colorado 13-3183646
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
136 South Palm Drive, Suite 105, Beverly Hills, CA 90212
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(310) 858-7123
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Shares, par value $.001 per share
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by section 12 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
At April 30, 1998, there were 42,275,734 shares outstanding of the Registrant's
common stock, $.001 par value.
<PAGE>
TABLE OF CONTENTS
Item Page
Item 1. Business 3
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
Item 5. Market for the Registrant's Common Stock and Related
Securities Matters 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 8. Financial Statements (sub pages 1-17) 9
Item 9. Disagreements on Accounting and Financial Disclosure 24
Item 10. Directors and Officers of the Registrant 24
Item 11. Executive Compensation 24
Item 12. Security Ownership of Certain Beneficial Owners and Management 24
Item 13. Certain Relationships and Related Transactions 24
Item 14. Exhibits, Financial Statement, Schedules, and Reports on
Form 8K 25
<PAGE>
PART I
ITEM 1. BUSINESS
General Development of Business
On October 10, 1989, a special meeting of the shareholders of Hammer Computer
Systems, Inc. (HCSI), a Colorado Corporation incorporated in 1983, was held to
consider and vote to ratify an Agreement and Plan of Merger, signed on February
22, 1989, to merge HCSI with Tridon Development Corporation, a Missouri
Corporation, organized in 1988. Under the Agreement and Plan of Merger, Tridon
Development Corporation was merged into HCSI, HCSI being the surviving
Corporation. HCSI amended the Articles of Incorporation, changed the name of
HCSI to Tridon Corporation. These propositions were passed by the shareholders
on October 10, 1989.
Pursuant to the Plan of Merger, HCSI exchanged 600 shares of common stock in
HCSI for each of 30,000 shares of common stock of Tridon Development Corporation
outstanding. This increased the outstanding shares of common stock in Tridon
Corporation from 17,270,433 to 35,270,433. Authorized shares of common stock
remained at 100,000,000.
Hammer Computer Systems, Inc. a Colorado Corporation had been inoperative since
August, 1986, at which time it suspended all operations and ceased doing
business due to low sales levels and continuing losses, the Company was unable
to remain in business.
In 1991 Paul Ebeling, the Company's CEO, identified a market for a non-surgical
hair replacement prosthesis to be used by medical doctors to correct
unsuccessful scalp reduction surgery, unsuccessful hair transplant surgery and
the unsuccessful application of prescription drugs. The Company embarked on
developing a process for manufacturing the prosthesis. The management of the
Company estimates that it will require approximately $500,000 in working capital
to successfully start the manufacturing process.
Toward this end, the Board Of Directors on February 10, 1992, authorized the
issuance of convertible promissory notes. The proceeds of the notes were used
to develop suitable reliable marketable product and for operating capital to
fund development and various corporate expenses. The interest is 6% per annum
to be paid only if called by the Company or redeemed by the holder three years
subsequent to issue. Accrued interest on any portion of the loan converted to a
new issue of preferred stock shall be forfeited at the time of conversion.
The principle of the notes is convertible into preferred stock at the rate of
one share of preferred for each $1.00 note purchased. Notes totaling $48,000 in
principle have been issued as of April 30, 1994.
The Company announced on September 21, 1993, the appointment of Harold A.
Lancer, M.D. as Medical Director of its Vertex Hair System. Dr Lancer is a
Fellow of the American Academy of Dermatology. A native of Montreal, Quebec,
Canada, he was educated at Brandeis University, the University of California at
San Diego Medical School, Harvard University Medical School, Tel Hashomen
Hospital, Israel and St. Johns Hospital for Diseases of the Skin, London,
England. Dr. Lancer has international experience in the specialities of
dermatology and cosmetic surgery. Dr. Lancer authored and presented a paper on
the Vertex Hair System to the Pacific Dermatological Society in Monterey,
California on September 10, 1993. Dr. Lancer is a member of the the medical and
scientific team developing Vertex(R) products.
The Company formalized its relationship with California Cybernetics Corporation
for the implementation of its design, engineering, manufacturing and software
applications for its computer-aided flexible manufacturing processes. All
patentable aspects, including software and programming, of California
Cybernetics' work for the Company's Vertex(R) system are the sole property of
Tridon Enterprises Incorporated.
Management, Dr. Lancer and California Cybernetics Corporation are confident that
they can successfully develop Vertex(R).
On January 20, 1994 the stockholders of the Company in a special meeting
approved a $1,000,000 offering of 7% cumulative convertible preferred stock. On
June 7,1994, the Company issued a private placement memorandum for the offering.
Subsequent to July 31, 1995 the Company received $188,000 for the purchase of
the preferred stock. The Company plans to use the proceeds of this placement
for the development of the first flexible manufacturing devise for Vertex(R).
The Vertex does not have a base as used in normal hairpieces, but the hair
appears to be growing directly from the scalp and there is no feeling of an
object on one's head. Vertex(R) has 100% adhesion and can remain on for
approximately one month with no special maintenance, after which it is replaced.
Through Vertex's(R) unique locking system, human hair fibers are attached
directly to synthetic skin. The substrate is virtually invisible. The
synthetic skin is also moisture vapor permeable. It also may reduce the effect
of the sun's damaging ultraviolet rays. Using advancements in computer-aided
flexible manufacturing, Vertex(R) can be made consistently and less expensively
than competitive products. With programmed information about a person's skin,
natural hair, age and body chemistry, robotics manufacturing allows an
individual to obtain the Vertex(R) on short notice, from anywhere in the world.
Prototypes were completed in the summer of 1994. Initial clinical tests were
completed and the professional paper written by Dr. Lancer later in the year.
Development is continuing. In February 1997 the Company began an 18-month
testing project in preperation for a market roll out of Vertex Hair for Men. On
Februrary 25, 1997 the company incorporated Vertex Corporation, a Neveda
corporation, as a wholly-owned subidiary.
On June 6, 1993, Tridon issued 2,000,000 shares of its common stock in exchange
for 100% of the common shares (10,000,000) of Polaris Pictures Corporation
(Polaris), a California Corporation, pursuant to a Memorandum of Agreement dated
June 1, 1992. The assets of Polaris included six screen plays which suitable
for television or motion pictures and an interest in a pleasure yacht. On April
29, 1995 Tridon irrevocably transferred to a trust 100% of its shares of
Polaris.
In February 1997 the Company began a 18 month testing project in preperation for
a market roll out of Vertex Hair for Men. On Februrary 25, 1997 the company
incorporated Vertex Corporation, a Nevada corporation, as a wholly owned
subidiary.
In September 1997 mamagement recognized the need for a separate hair enhancement
prostesis for women and began development of the products and a marketing plan
around the direct responce method. During the year the product was designed,
protypted and test samples . Manufacturing arrangements are being negociated
with suppliers in Asia. A trademark was applied for Hollywood Hair and it's
various products. A thirty minute infomercial show was produced. Test
marketing is being planned in selected markets in the 4th quarter of 1998 for a
Spring 1999 roll out.
ITEM 2. PROPERTIES
On August 15, 1993, the registrant leased office space from Palm Plaza
Associates, for space located 136 South Palm Drive, Beverly Hills, California
for $1600 per month. The aforementioned lease expired on August 14, 1994 and
continued on a month to month basis at the rate of $1,550 per month through
April 30, 1996. The Company now rents office space from Paul Ebeling at the
same location for $600.00 per month on a month to month basis.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
As explained in ITEM 1, on October 10, 1989 the shareholders approved a merger
of Tridon Development Corporation into HCSI with HCSI changing its name to
Tridon Corporation.
On January 20, 1994 the shareholders approved an amendment to the Articles of
Incorporation to permit the Company to divide and issue 20,000,000 shares of
preferred shares in series.
On February 22, 1996 the stockholders of the Company approved an amendment to
its Articles of Incorporation: that officers and directors of the Company
liability be limited to the full extent as provided for in the Colorado
Corporations Code, Section 7, Article 9, as amended. The stockholders also
voted to amend the Articles of Incorporation to change the name of the
Corporation to Tridon Enterprises Incorporated and to split the shares of the
company one for ten. The stockholders also voted to authorize the Board of
Directors to place its Vertex(R) technology in a wholly-owned subsidiary
Corporation. On February 25, 1997, the Company incorporated Vertex Corporation,
a Nevada corporation, as a wholly-owned subsidiary.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Registrant's common stock is traded in the over-the counter market. The
symbol for this stock is TEIM. The stock had a high bid of $.10 and a low bid
of $.02 per share during the past fiscal year. Such over-the-counter market
quotations reflect inter-dealer prices without retail mark-up, mark-down, or
commission, and may not necessarily represent actual transactions.
The Registrant has not in the past, nor does it currently intend to pay cash
dividends on its common stock.
ITEM 6. SELECTED FINANCIAL DATA
Balance Sheet Data:
April 30, April 30, April 30, April 30, April 30,
1994 1995 1996 1997 1998
Total Assets 66,011 36,647 59,641 256,672 184,399
Working
Capital
(deficit) (162,297) (121,963) 55,277 18,936 682
Long-term
obligations 3,598,805 3,874,927 0 0 0
Stockholder's
equity
(deficit) (184,006) (4,090,090) (85,326) 174,961 1,257
Cash
dividends per
common share 00.00 00.00 00.00 00.00 00.00
Tangible Book
Value per share 00.001 00.001 00.001 00.001 00.001
Statement of Operations Data:
Year end Year end Year end Year ended Year end
April 30, April 30, April 30, April 30, April 30,
1994 1995 1996 1997 1998
Revenues 00.00 00.00 00.00 00.00 00.00
Income
(loss) (276,654) (625,399) 3,666,424 (2,072,867) (1,857,604)
Income (loss)/
share (0.02) (0.02) 0.42 (0.08) (0.05)
ITEM 7. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company discontinued its operations in August of 1986 because of significant
operation losses. The Company is developing its Vertex hair replacement
prostesis for introduction to the market. It identified the market and believes
its products are viable for that market. The Company management believes that
with the appointment of Dr. Harold Lancer as Medical Director and with the
establishment of a working relationship with California Cybernetics Corporation,
that the Vertex(R) development project will be successful.
Up until April 30, 1994, the Company issued $48,000 in principle of convertible
notes payable. The Company's management estimates that it will require
approximately $500,000 to develop Vertex(R).
A summary of selected operating expenses for the years ended April 30, are:
1998 1997
Officers' salaries (see Note 1) 540,000 409,023
Legal and professional 0 0
Interest 0 0
Liquidity and Capital Resources
As a result of the discontinued operations, the Company has no revenues and
expenses related only to administration and product development. In the opinion
of management the Company's continued existence is dependent upon the completion
of a successful merger with and/or acquisition by an operating company or be
successful in raising sufficient capital to develop and market Vertex(R).
President, CEO and director, Paul Ebeling, Chairman of the Board and CEO,
advanced the Company $16,627 in funds during fiscal 1996 to pay for operating
and administrative expenses while the Company seeks additional capital.
Capital Resources
On June 7, 1994, the Company offered $1,000,000 of 7% cumulative preferred stock
in a private placement memorandum. The Company has received $188,000 from the
offering. The offering is closed.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS
TRIDON ENTERPRISES INCORPORATED
INDEX TO FINANCIAL STATEMENTS
Page
AUDITORS' REPORT 10 (sub pg 1)
OTHER AUDITOR' REPORT 11 (sub pg 2)
BALANCE SHEETS 12 (sub pg 3)
STATEMENT OF OPERATIONS 13-14 (sub pgs 4-5)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) 15-17 (sub pgs 6-8)
STATEMENTS OF CASH FLOWS 18 (sub pgs 9-10)
NOTES TO FINANCIAL STATEMENTS 19-24 (sub pgs 11-17)
<PAGE>
TRIDON ENTERPRISES, INCORPORATED
(A COMPANY IN THE DEVELOPMENT STAGE)
FINANCIAL STATEMENTS
APRIL 30, 1998 AND 1997
<PAGE>
Table of Contents
Page
Independent Auditors' Report 1
Prior Independent Auditors' Report 2
Balance Sheets 3
Statements of Operations 4-5
Statements of Changes in Stockholders' Equity (Deficit) 6-8
Statements of Cash Flows 9-10
Notes to Financial Statements 11-17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Tridon Enterprises Incorporated
We have audited the accompanying consolidated balance sheet of Tridon
Enterprises Incorporated and subsidiary (Companies in the development stage) as
of April 30, 1998 and the balance sheet of Tridon Enterprises Incorporated (a
Company in the development stage) as of April 30, 1997, and the related
statements of operations, changes in stockholders' equity (deficit), and cash
flows for the years ended April 30, 1998, 1997 and 1996. 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 did not audit the financial statements of Vertex Corporation, a
wholly owned subsidiary, which statements reflect total assets of $121 as of
April 30, 1998, and total revenues of $0 for the year ended April 30, 1998.
Those statements were audited by other auditors whose report has been furnished
to us, and our opinion, insofar as it relates to the amounts included for Vertex
Corporation, is based solely on the report of the other auditors. We did not
audit the Tridon Enterprises Incorporated statements of operations, changes in
stockholders' equity (deficit), and cash flows for the period from the inception
of the development stage to April 30, 1994. Those financial statements were
audited by another auditor, whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts from the inception of the
development stage to April 30, 1994, is based solely on the report of the other
auditor.
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 and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Tridon Enterprises Incorporated and subsidiary
(Companies in the development stage) as of April 30, 1998 and of Tridon
Enterprises Incorporated (a Company in the development stage) as of April 30,
1997, and the results of their operations and their cash flows for the years
ended April 30, 1998, 1997 and 1996 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 10 to the
financial statements, there is substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of that uncertainty.
The other auditor's report on the April 30, 1998 financial statements of Vertex
Corporation included an explanatory paragraph describing conditions that raised
substantial doubt about its ability to continue as a going concern, as discussed
in Note 10 to the financial statements.
As discussed in Note 1 to the financial statements, the amounts for April 30,
1998 include Tridon Enterprises Incorporated and its wholly owned subsidiary,
Vertex Corporation. The amounts shown for April 30, 1997 and April 30, 1996 are
for Tridon Enterprises Incorporated only.
CALDWELL, BECKER, DERVIN, PETRICK & CO., L.L.P.
September 21, 1998
<PAGE>
TRIDON ENTERPRISES INCORPORATED
(COMPANIES IN THE DEVELOPMENT STAGE)
BALANCE SHEETS
<TABLE>
<S> <C> <C>
(Consolidated)
April 30, 1998 April 30, 1997
Assets
Current Assets:
Cash $ 682 $ 18,936
Advances to officers (Note 3) 30,000 121,555
Notes receivable and
interest receivable (Note 5) 275,000 266,667
Less allowance for uncollectible amounts (275,000) (266,667)
Inventory (Note 1) 5,325 0
Prepaid advertising costs 29,253 0
------- -------
Total Current Assets 65,260 140,491
Furniture and Equipment - at Cost 17,993 7,576
Accumulated Depreciation (6,305) (4,846)
------- -------
Net Furniture and Equipment (Note 2) 11,688 2,730
------- -------
Marketable equity securities (Note 4) 107,451 107,451
Note Receivable - Related Party (Note 6) 0 6,000
------- -------
Total Assets $ 184,399 $ 256,672
------- -------
Liabilities And Stockholders' Equity
Current Liabilities:
Accounts Payable and Accrued Expenses $ 129,297 $ 76,711
Advances from Officer (Note 3) 48,845 0
Advances from Shareholder (Note 3) 5,000 5,000
------- -------
Total Current Liabilities 183,142 81,711
COMMITMENTS AND CONTINGENCIES (Note 13) - -
------- -------
Total Liabilities 183,142 81,711
Stockholders' Equity:
Common Stock, $.001 Par Value, 100,000,000
Shares Authorized, 42,275,734 and
31,625,734 Shares Issued And
Outstanding, Respectively 42,276 31,626
Preferred Stock, 7% Cumulative Convertible,
Par Value $.001, 20,000,000 Shares
Authorized, 83,300 Shares Issued
And Outstanding (Note 8) 83 83
Additional Paid-In Capital 9,270,566 7,318,316
Common Stock Subscribed (225,000) (225,000)
Common Stock Subscribed -
Unearned Compensation (Note 13) (279,000) 0
Deficit Accumulated During
Development Stage (8,807,668) (6,950,064)
--------- ---------
Total Stockholders' Equity 1,257 174,961
--------- ---------
Total Liabilities And
Stockholders' Equity $ 184,399 $ 256,672
--------- ---------
</TABLE>
See Accompanying Notes to the Financial Statements
See Accompanying Auditors' Reports
<PAGE>
<TABLE>
TRIDON ENTERPRISES INCORPORATED AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
STATEMENTS OF OPERATIONS
<S> <C> <C> <C> <C>
Twelve Twelve Twelve
Inception Months Months Months
To Ended Ended Ended
April 30, April 30, April 30, April 30,
1998 1998 1997 1996
REVENUE:
Net Sales $ 151,729 $ 0 $ 0 $ 0
Cost of Sales 182,581 0 0 49,960
---------- --------- --------- ---------
Gross Loss (30,852) 0 0
---------- --------- --------- ---------
OPERATING EXPENSES:
General and Administrative 4,113,215 841,314 375,065 269,902
Research and Development 132,697 0 3,117 0
Computer Software Development Costs 630,066 0 0 0
Interest 869,166 0 0 0
---------- --------- --------- ---------
Total Operating Expenses 5,745,144 841,314 378,182 269,902
---------- --------- --------- ---------
Net Loss from Operations (5,775,996) (841,314) (378,182) (269,902)
---------- --------- --------- ---------
OTHER INCOME (EXPENSES):
Consulting Fees Related to
Common Stock Issued (Note 1) (810,000) 0 (810,000) 0
Officer's Salary Related to
Common Stock Issued (Note 1) (409,023) 0 (409,023) 0
Interest 94,099 8,333 16,695 0
Casualty Loss - Boat (3,000,000) 0 0 0
Gain on Settlement (Note 12) 411,495 0 0 93,750
Forgiveness of Interest 8,901 0 0 6,412
Forgiveness of Debt 123,994 0 0 0
Gain (Loss) on Disposition of
Marketable Securities (48,655) 3,677 (47,585) 0
Loss on Permanent Impairment
of Securities (Note 4) (1,120,050) (1,027,500) (92,550) 0
Miscellaneous 3,420 0 0 0
Bad Debt Expense (Note 5) (351,422) 0 (351,422) 0
---------- --------- --------- ---------
Total Other Income (Loss) (5,097,241) (1,015,490) (1,693,885) 100,162
---------- --------- --------- ---------
(Loss) from Continuing Operations
Before Income Tax Benefit (Expense) (10,873,237) (1,865,804) (2,072,067) (169,740)
Income Tax Benefit (Expense) 82,605 (800) (800) (800)
---------- --------- --------- ---------
(Loss) from Continuing Operations (10,790,632) (1,857,604) (2,072,867) (170,540)
Gain on Disposal of Segment (Note 9) 3,836,964 0 0 3,836,964
(Loss) on Discontinued Operations (1,854,000) 0 0 0
---------- --------- --------- ---------
NET INCOME (LOSS) $ (8,807,668) $ (1,857,604) $ (2,072,867) 3,666,424
---------- --------- --------- ---------
Primary (Loss) From Continuing Operations Per Share $ (.05) $ (.08) $ (.02)
Primary Gain From Disposal of Segment Per Share $ 0 0 .46
--------- --------- ---------
PRIMARY EARNINGS (LOSS) PER SHARE $ (.05) $ (.08) $ .44
--------- --------- ---------
Fully Diluted (Loss) From Continuing Operations
Per Share $ (.05) $ (.08) $ (.02)
Fully Diluted Gain on Disposal of Segment Per Share $ 0 0 .44
--------- --------- ---------
FULLY DILUTED EARNINGS (LOSS) PER SHARE $ (.05) $ (.08) $ .42
--------- --------- ---------
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD (Note 1)
PRIMARY 35,115,734 25,941,648 8,356,671
--------- --------- ---------
FULLY DILUTED 35,115,734 25,941,648 8,689,871
--------- --------- ---------
</TABLE>
See Accompanying Notes to the Financial Statements
See Accompanying Auditors' Reports
<PAGE>
TRIDON ENTERPRISES INCORPORATED
(COMPANIES IN THE DEVELOPMENT STAGE)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED APRIL 30, 1988 TO 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Common Preferred
Paid Paid
Par In Par In
Shares Value Capital Shares Value Capital
Balance at inception
Common stock issued 1,727,043 $1,727 $4,168,828
Net losses from inception
to April 30, 1988 0 0 0
--------- ------- ---------
Balances at April 30, 1988 1,727,043 1,727 4,166,828
Net loss for the year
April 30, 1989 0 0 0
--------- ------- ---------
Balances at April 30, 1989 1,727,043 1,727 4,166,828
Merger on October 10, 1989
with Tridon Development
Corporation 1,800,000 1,800 (4,964)
Net income for the year
April 30, 1990 0 0 0
--------- ------- ---------
Balances at April 30, 1990 3,527,043 3,527 4,161,864
Net loss for the year
April 30, 1991 0 0 0
--------- ------- ---------
Balances at April 30, 1991 3,527,043 3,527 4,161,864
Net loss for the year
April 30, 1992 0 0 0
--------- ------- ---------
Balances at April 30, 1992 3,527,043 3,527 4,161,864
Net loss for the year
April 30, 1993 0 0 0
--------- ------- ---------
Balances at April 30, 1993 3,527,043 3,527 4,161,864
Acquisition of Polaris
Pictures Corporation
on June 6, 1993 200,000 200 39,800
Stock bonuses 330,000 330 65,670
Net loss for the year
April 30, 1994 0 0 0
--------- ------- ---------
Balances at April 30, 1994 -
consolidated 4,057,043 4,057 4,267,334
Common stock issued 160,000 160 242,840
Preferred stock issued 33,000 $ 33 $ 163,288
Common stock subscribed
Net loss for the year
April 30, 1995 0 0 0
--------- ------- --------- --------- ------- ---------
Balances at April 30, 1995 -
combined 4,217,043 4,217 4,510,174 33,000 33 163,288
Common stock issued 5,782,991 5,783 122,876
Preferred stock issued 50,300 50 210,450
Net income for the year
April 30, 1996 0 0 0
--------- ------- --------- --------- ------- ---------
Balances at
April 30, 1996 10,000,034 10,000 4,633,050 83,300 83 373,738
Common stock issued 4,641,333 4,641 438,809
Common stock issued in
exchange for Madera
International, Inc.
stock (Note 1) 2,000,000 2,000 375,200
Common stock issued in
exchange for services
rendered 1,436,667 1,437 156,597
Common stock issued in
exchange for services
rendered (Note 1) 9,000,000 9,000 891,000
Common stock issued for
increase in advances
to officers (Note 1) 4,547,700 4,548 449,922
Net loss for the year
April 30, 1997 0 0 0
--------- ------- --------- --------- ------- ---------
Balances at
April 30, 1997 31,625,734 $31,626 $6,944,578 83,300 $ 83 $ 73,738
Common stock issued 983,333 983 64,250
Common stock issued in
exchange for services
rendered 6,566,667 6,567 584,600
Common stock issued in
exchange for future
compensation (Note 13) 3,100,000 3,100 275,900
Paid in capital -
non-reciprocal transfer
(Note 4) 1,027,500
Consolidated net (loss) for
the year April 30, 1998 0 0 0
Consolidated balances at
April 30,1998 42,275,734 42,276 8,896,828 83,300 $ 83 373,738
--------- ------- --------- --------- ------- ---------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
(Deficit) Common Total
During the Stock Stockholders'
Development Stage Subscribed Equity (Deficit)
Balance at inception $ 0
Common stock issued $4,168,555
Net losses from inception
to April 30, 1988 (4,267,549) (4,267,549)
---------------- --------- ---------------
Balances at April 30, 1988 (4,267,549) $ (98,994)
Net loss for the year
April 30, 1989 0 0
---------------- --------- ---------------
Balances at April 30, 1989 (4,267,549) (98,994)
Merger on October 10, 1989
with Tridon Development
Corporation 0 (3,164)
Net income for the year
April 30, 1990 127,339 127,339
---------------- --------- ---------------
Balances at April 30, 1990 (4,140,210) 25,181
Net loss for the year
April 30, 1991 (181) (181)
---------------- --------- ---------------
Balances at April 30, 1991 (4,140,391) 25,000
Net loss for the year
April 30, 1992 (14,546) (14,546)
---------------- --------- ---------------
Balances at April 30, 1992 (4,154,937) 10,454
Net loss for the year
April 30, 1993 (3,180,791) (3,180,791)
---------------- --------- ---------------
Balances at April 30, 1993 (7,335,728) (3,170,337)
Acquisition of Polaris
Pictures Corporation
on June 6, 1993 40,000
Stock bonuses 66,000
Net loss for the year
April 30, 1994 (582,494) (582,494)
---------------- --------- ---------------
Balances at April 30, 1994 -
consolidated (7,918,222) (3,646,831)
Common stock issued 243,000
Preferred stock issued 163,321
Common stock subscribed $(225,000) (225,000)
Net loss for the year
April 30, 1995 (625,399) (625,399)
---------------- --------- ---------------
Balances at April 30, 1995 -
combined (8,543,621) (225,000) (4,090,909)
Common stock issued 128,659
Preferred stock issued 210,500
Net income for the year
April 30, 1996 3,666,424 3,666,424
---------------- --------- ---------------
Balances at
April 30, 1996 (4,877,197) (225,000) (85,326)
Common stock issued 443,450
Common stock issued in
exchange for Madera
International, Inc.
stock (Note 1) 377,200
Common stock issued in
exchange for services
rendered 158,034
Common stock issued in
exchange for services
rendered (Note 1) 900,000
Common stock issued for
increase in advances
to officers (Note 1) 454,470
Net loss for the year
April 30, 1997 (2,072,867) (2,072,867)
---------------- --------- ---------------
Balances at
April 30, 1997 $(6,950,064) (225,000) $ 174,961
---------------- --------- ---------------
Common stock issued 65,233
Common stock issued in
exchange for services
rendered 591,167
Common stock issued in
exchange for future
compensation (Note 13) (279,000) 0
Paid in capital -
non-reciprocal transfer
(Note 4) 1,027,500
Consolidated net (loss) for
the year April 30, 1998 (1,857,604) (1,857,604)
---------------- --------- ---------------
Consolidated balances at
April 30, 1998 $(8,807,668) $(504,000) $ 1,257
</TABLE>
See Accompanying Notes to the Financial Statements
See Accompanying Auditors' Reports
<PAGE>
TRIDON ENTERPRISES INCORPORATED
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C>
Combined
Twelve Twelve Twelve
Inception Months Months Months
to Ended Ended Ended
April 30, April 30, April 30, April 30,
1998 1998 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(8,807,668) $(1,857,604) $(2,072,867) $3,666,424
Adjustments to reconcile net
(loss) to net cash used by operations:
(Loss) on disposal of segment (3,836,964) 0 0 (3,836,964)
Loss on permanent impairment
of marketable securities 1,120,050 1,027,500 92,550 0
(Gain) Loss on sale of
marketable securities 43,908 (3,677) 47,585 0
Write down of investment 25,000 0 0 25,000
Depreciation 6,470 1,459 1,634 1,520
Increase in allowance for
uncollectible amounts 370,638 8,333 351,422 7,883
Professional fees 12,885 0 0 12,885
Outside services paid by
issuance of common stock 317,202 51,167 248,034 0
Officer's salary related to
common stock issued (Note 1) 949,023 540,000 409,023 0
Loan fees related to common
stock issued (Note 1) 810,000 0 810,000 0
Write-down of screenplays 49,860 0 0 49,860
Loss on fixed asset disposal 1,253 0 0 1,253
Research and development 88,000 0 0 88,000
Interest expense 349,745 0 0 349,745
Forgiveness of interest (8,901) 0 (6,412) (2,489)
Maritime loss 3,462,825 0 0 0
Forgiveness of debt (123,994) 0 0 0
(Increase) decrease in:
Inventory (5,325) (5,325) 0 0
Prepaid expenses (19,253) (19,253) 0 800
Notes receivable (3,000) 0 0 0
Interest receivable (25,000) (8,333) (16,667) 0
Increase (decrease) in:
Accounts payable and
accrued expenses 249,019 94,500 49,902 121,679
Income tax payable 0 0 0 (1,600)
Preferred stock subscription 10,000 0 0 0
Accrued payroll 0 0 (93,750)
Estimated future cost of
discontinued operations 3,125 0 0 0
Accounts payable-Vintage
Group Inc. 45,574 0 0 0
------------ ---------- --------- ---------
Net Cash (Used) by
Operating Activities (4,816,523) (72,228) (179,188) (102,535)
------------ ---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans made (340,757) 0 (340,757) 0
Investment in marketable equity
securities (238,550) 0 (200,000) 0
Proceeds from sale of securities 333,292 3,677 329,615 0
Sale of common stock 13,550 0 0 0
Investment in screenplays (40,000) 0 0 0
Purchase of furniture and equipment (19,412) (10,417) 0 (1,998)
Advances to related party (91,627) (10,519) (76,108) 0
Investment in production (1,925) 0 0 (1,925)
Repayment of notes receivable 6,000 6,000 0 0
------------ ---------- --------- ---------
Net Cash (Used) by
Investing Activities (379,429) (11,259) (287,250) (1,998)
------------ ---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock 4,785,703 65,233 443,450 667
Proceeds from issuance of
convertible preferred stock 135,003 0 0 3
Increase in paid-in capital 99,866 0 0 104,830
Proceeds from issuance of
convertible notes payable 59,025 0 0 0
Advances from officer 158,735 0 0 63,223
Repayments of advances from officer (41,702) 0 (13,353) (8,949)
Net Cash Provided by
Financing Activities 5,196,630 65,233 430,097 159,774
------------ ---------- --------- ---------
NET INCREASE (DECREASE) IN CASH 678 (18,254) (36,341) 55,241
CASH AT BEGINNING OF PERIOD 4 18,936 55,277 36
------------ ---------- --------- ---------
CASH AT END OF PERIOD $ 682 $ 682 $ 18,936 $ 55,277
------------ ---------- --------- ---------
NON CASH INVESTING AND FINANCING
TRANSACTIONS:
Common stock issued for advances
to officers (Note 1) $ 45,447 $ 0 $ 45,447 $ 0
------------ ---------- --------- ---------
Common stock issued in exchange
for Madera International, Inc.
stock (Note 1) $ 377,200 $ 0 $ 377,200 $ 0
------------ ---------- --------- ---------
Increase in additional paid-in
capital - non-reciprocal
transfer (Note 4) $ 1,027,500 $ 1,027,500 $ 0 $ 0
------------ ---------- --------- ---------
Payments by officer on behalf of
Company reducing accounts
payable $ 41,914 $ 41,914 $ 0 $ 0
------------ ---------- --------- ---------
Payments by officer on behalf of
Company increasing prepaid
expense $ 10,000 $ 10,000 $ 0 $ 0
------------ ---------- --------- ---------
Issuance of common stock for
future services $ 279,000 $ 279,000 $ 0 $ 0
------------ ---------- --------- ---------
CASH PAID FOR:
Income taxes $ 4,800 $ 0 $ 800 $ 800
------------ ---------- --------- ---------
Interest $ 0 $ 0 $ 0 $ 0
------------ ---------- --------- ---------
</TABLE>
See Accompanying Notes to the Financial Statements
See Accompanying Auditors' Reports
<PAGE>
TRIDON ENTERPRISES INCORPORATED AND SUBSIDIARY
(COMPANIES IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Organization
Tridon Enterprises Incorporated (the Company) was incorporated in the state of
Colorado on October 7, 1983 as Turco Computer Systems, Inc. The Company changed
its name to Hammer Computer Systems, Inc. on September 27, 1984.
In October 1989, Hammer Computer Systems, Inc. (HCSI) and Tridon Development
Corporation merged, with HCSI being the surviving corporation. The Company then
changed its name to Tridon Corporation.
In June 1993, the Company acquired 100% of the outstanding common stock of
Polaris Pictures Corporation in exchange for 2,000,000 shares of its common
stock.
On April 29, 1995, the Company irrevocably transferred in trust all shares of
the stock of Polaris Pictures Corporation to a trust (see Note 9).
On March 15, 1996, the Company changed its name from Tridon Corporation to
Tridon Enterprises Incorporated.
Vertex Corporation (a wholly-owned subsidiary) was incorporated under the laws
of the state of Nevada on February 25, 1997 with an authorized capital of
25,000 shares of no par value common stock. The Company is engaged in the
research, development, manufacture, and the sale and licensing for sale of
nonsurgical hair replacement products and any and all products related to such
business, establishing international hair replacement enterprises; and providing
customers and/or licensees with all services and support available with regard
to the management of said hair replacement enterprises. On January 9, 1998,
Tridon Enterprises Incorporated invested $20,100 in exchange for 25,000 shares
of no par value common stock (100% of the stock) of Vertex Corporation. For the
period from February 25, 1997 to April 30, 1997, there was no activity in Vertex
Corporation, and for the period from May 1, 1997 to January 8, 1998, the
activity was immaterial. Therefore, the amounts from Vertex Corporation for the
entire year ended April 30, 1998 have been consolidated with Tridon Enterprise
Incorporated.
Basis of Consolidation and Combination
For the year ended April 30, 1994, and all prior periods, the statements of
loss, changes in shareholders' equity, and cash flows of Tridon Corporation and
Polaris Pictures Corporation are consolidated. All significant intercompany
transactions have been eliminated from the financial statements. See Note 9 for
disposition of wholly-owned subsidiary. The consolidated financial statements
for April 30, 1998 include the accounts of Tridon Enterprises Incorporated and
its wholly-owned subsidiary, Vertex Corporation. Significant intercompany
accounts and transactions have been eliminated in consolidation (see Note 1 -
Organization). The financial statements for April 30, 1997 and 1996 are for
Tridon Enterprises Incorporated only.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
See Accompanying Auditors' Reports
Inventory
Inventory is valued at lower of cost (first-in, first-out) or market. Inventory
consists of samples of finished products.
Basis of Presentation
The Companies have not generated significant revenues since inception.
Consequently, the financial statement presentation for development stage
enterprises is followed in accordance with Financial Accounting Standards Board
Statement 7.
Cash and Cash Equivalents
The Companies consider all highly liquid investments purchased with a maturity
of three months or less to be cash equivalents.
Statements of Cash Flows
For the current year ended April 30, 1998, the Company entered into several non-
monetary transactions as described below:
The Company issued 3,100,000 shares of common stock for future services to be
performed for the Company for $279,000 at $.09 per share (see Note 13).
The Company received 20,550,000 shares of stock valued at $1,027,500 ($.05 per
share) in a non-reciprocal transfer (see Note 4).
The president of the Company made payments on behalf of Tridon Enterprises
Incorporated of $10,000 as a prepaid expense and $41,914 to reduce accounts
payable.
Revaluation of Common Stock
It was determined that all common stock issued during the fiscal year ended
April 30, 1997 should be valued at an estimated fair market value. A fair
market value was determined based on what an independent outside party would be
willing to pay for a share of the Company's common stock. The stock issued in
exchange for consulting services and as an increase to advances to officers was
valued based on an estimated fair market value of $.10 per share. The 9,000,000
shares of common stock issued in exchange for consulting services of $90,000 was
revalued to $900,000 by an increase of $810,000 to additional paid in capital
and an increase to loan fee expense. The 4,547,700 shares of common stock
issued for advances to officers in exchange for $45,447, was revalued to
$454,470 by an increase of $409,023 to additional paid in capital and an
increase to officer's salary.
Property and Equipment
Property and equipment are carried at cost, less accumulated depreciation.
Depreciation is computed under the straight-line and double-declining balance
methods using a five year life. When assets are retired or otherwise disposed
of, the cost and accumulated depreciation are removed from the accounts and any
resulting gain or loss is reflected in income for the period. The cost of
maintenance and repairs is charged to expense as incurred, whereas significant
renewals or betterments are capitalized. For the years ended April 30, 1998,
1997 and 1996, included in the consolidated statements of operations are
provisions for depreciation of $1,459, $1,634 and $1,520, respectively.
See Accompanying Auditors' Reports
Income Taxes
The Company computes deferred income taxes in accordance with Financial
Accounting Standards Board Statement No. 109 (SFAS No. 109), "Accounting for
Income Taxes". Deferred taxes are computed based on the tax liability or
benefit in future years of the reversal of temporary differences in the
recognition of income or deduction of expenses between financial and tax
reporting purposes. As of April 30, 1998, 1997 and 1996, all items of deferred
tax, after application of valuation allowances, were immaterial.
For tax purposes, Tridon Enterprises Incorporated and its wholly-owned
subsidiary, Vertex Corporation, have fiscal year-ends of April 30.
Marketable Equity Securities
The Company has adopted the Financial Accounting Standards Board Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities (FAS 115).
Under the provisions of FAS 115, marketable securities considered available for
sale are recorded at fair market value.
Earnings per Common Share
Primary earnings (loss) per share is computed using the weighted average number
of common shares outstanding during the period. Fully diluted earnings (loss)
per share reflects the dilutive effects of increased shares that would result
from the conversion of debt and equity securities which are not treated as
common stock equivalents. The common shares outstanding for all periods
presented reflect the 10 to 1 reverse stock split declared on March 15, 1996.
Research and Development
Research and development costs are expensed as incurred.
Note 2 - Property and Equipment
Property and equipment are recorded at cost and consist of the following:
April 30,
1998 1997
Computers $ 10,259 $ 3,821
Furniture and fixtures 4,821 1,706
Equipment 2,913 2,049
------ ------
17,993 7,576
Less: Accumulated Depreciation 6,305 4,846
------ ------
$ 11,688 $ 2,730
See Accompanying Auditors' Reports
Note 3 - Related Party Transactions
During the year ended April 30, 1998, net non-interest bearing funds were
advanced from Paul Ebeling, an officer of the Company, to Tridon Enterprises
Incorporated. Advances to the Company by Mr. Ebeling as of April 30, 1998 were
$48,845.
Advances to Kevin Welch, another officer of the Company, as of April 30, 1998
were $30,000.
As of April 30, 1997, advances to Mr. Ebeling and Mr. Welch were $91,555 and
$30,000, respectively.
Advances from Steve Antebi as of April 30, 1998 and 1997 were $5,000.
There are no signed notes for any of these transactions. For additional related
party transactions, see Note 1 - Revaluation of Common Stock and Note 6.
See also Note 9 - Disposition of Wholly-Owned Subsidiary.
Note 4 - Marketable Equity Securities
The Company has adopted the Financial Accounting Standards Board Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities (FAS 115).
Under the provisions of FAS 115, marketable securities considered available for
sale are recorded at fair market value if they have a readily determinable fair
value. The corresponding unrealized gain or loss in the fair market value in
relation to cost is accounted for as a separate item in the shareholders' equity
section of the balance sheet, unless there is a permanent impairment to the
marketable security, in which case it is recorded as a loss in the income
statement. Management is treating its investment in marketable securities as an
investment that is available for sale for the years ended April 30, 1998 and
1997.
During the year ended April 30, 1997, the Company purchased 1 million shares of
International Forest Industries, Inc. stock with an initial cost of $200,000.
At April 30, 1997, the stock was worth $531,250. Subsequent to the year end,
International Forest Industries changed its name to Fluor City International.
Subsequent to the balance sheet date, but prior to issuance of the April 30,
1997 report, the stock had several reverse splits and eventually was sold in May
1998 for $107,451. Due to this permanent impairment, the net unrealized holding
loss in the amount of $92,550 has been shown as a loss in the statements of
operations for the year ended April 30, 1997.
In April 1998, Tridon Enterprises Incorporated received 20,550,000 shares of
North American Exploration Corporation. The shares were received from Paul
Ebeling, president of Tridon Enterprises Incorporated, in a non-reciprocal
transfer. The shares were valued at the date of the transfer at $.05 per share,
or $1,027,500. Subsequent to the year end, North American Exploration
Corporation issued a statement relating to the cancellation of the 20,550,000
shares issued to Tridon Enterprises Incorporated, as nominee for Paul Ebeling.
As of the date of this report, the outcome of this transaction has not been
determined. The shares cannot be canceled without an order of a court judgment,
and as of the date of this report, there is no judgment. Due to the potential
permanent impairment of this asset, the entire amount of $1,027,500 has been
reserved for in the current year, pending the outcome.
See Accompanying Auditors' Reports
Note 5 - Note Receivable
Madera International, Inc., unsecured, receivable interest only,
quarterly,beginning December 31, 1996 at 10% per annum. All unpaid interest and
principal
due September 3, 1997. At April 30, 1998 unpaid interest was $25,000. As of
the date of the April 30, 1997 report, this receivable and related interest was
past due, and therefore, at April 30, 1997 this receivable and accrued interest
was reserved for and included in bad debt expense on the statements of
operations. As of the date of this report, the condition of this receivable and
accrued interest was unchanged $250,000
Note 6 - Note Receivable - Related Party
The Company had an unsecured, non-interest bearing loan for $6,000, which was
due on demand. The loan was paid during the current year ended April 30, 1998.
The loan was to a family member of Steve Antebi.
Note 7 - Income Taxes
The provision for income taxes consists of:
April 30,
1998 1997 1996
Federal $ 0 $ 0 $ 0
State 800 800 800
---- ---- ----
800 800 800
Deferred Taxes 0 0 0
---- ---- ----
Provision for Income Taxes $ 800 $ 800 $ 800
---- ---- ----
Loss Carryforwards
Tridon Enterprises Incorporated has net operating loss carryforwards which are
from HCSI prior to its merger with Tridon Enterprises Incorporated. The amounts
which the Company may ultimately apply to future taxable income may be limited
by application of tax law. Tentative expiration dates of these losses are as
follows:
Total
1998 $ 119,000
1999 918,000
2000 475,000
2001 1,401,000
2002 1,001,000
----------
Totals $ 3,914,000
The full amount of the deferred tax asset resulting from the loss carryforwards
is offset by a valuation allowance due to the uncertainty of the Company to
continue as a going concern.
Subsequent to the merger of HCSI and Tridon Development Corporation, the Company
has accumulated a tax loss carryforward of approximately $1,999,124 for federal
tax purposes and a $961,525 tax loss carryforward for California franchise tax
purposes. Federal net operating losses (NOL's) are carried forward 15 years and
expire between 1999 and 2013. State NOL's are carried forward 5 years and
expire between 1999 and 2003. In addition, Polaris Pictures Corporation
(Polaris) had accumulated a tax loss carryforward of approximately $265,000 for
federal tax purposes and a $132,000 loss carryforward for California franchise
tax purposes, whose net operating loss carryforwards expire in 2009 and 1999,
respectively.
Vertex Corporation has a net operating loss of approximately $19,000 which
expires in 2013, if not utilized.
All loss carryforward amounts are subject to review and revision by tax
authorities.
Note 8 - Offering of Cumulative Convertible Preferred Stock
In June 1994, the Company offered $1,000,000 of 7% cumulative convertible
preferred stock at $10 per share in a private placement memorandum. The
preferred stock is convertible to 4,000,000 shares of common stock one year
after issuance and may be called by the Company two years after the issue date.
During the year ended April 30, 1996, $150,000 of advances from an officer were
converted to 15,000 cumulative convertible preferred shares. As of April 30,
1998, 83,300 cumulative convertible preferred shares were issued and
outstanding. Dividends in arrears on the cumulative preferred stock were
$86,282, $60,291 and $34,300 for the years ended April 30, 1998, 1997 and 1996,
respectively.
For the years ended April 30, 1998, 1997 and 1996, no dividends were declared or
paid.
Note 9 - Disposition of Wholly-Owned Subsidiary
On April 29, 1995, the Board of Directors of Tridon Enterprises Incorporated
irrevocably transferred in trust 100% of the stock of Polaris Pictures
Corporation to be held for the benefit of the creditors of Polaris.
On April 29, 1996, Paul Ebeling resigned as an officer/director of Polaris
Pictures Corporation. Consequently, Tridon and Polaris are not under common
control.
The financial statements reflect the disposition of Polaris as a discontinued
operation in accordance with generally accepted accounting principles. A gain
of $3,836,964 is recognized in the statement of operations from the disposal of
Polaris as of April 30, 1996 (see Note 1).
See Accompanying Auditors' Reports
Note 10 - Uncertainty of Ability to Continue as a Going Concern
Tridon Enterprises Incorporated has suffered substantial losses since inception.
In order for the Company to continue as a going concern, Tridon Enterprises
Incorporated is dependent upon its ability to raise capital from various
sources, including loans from shareholders and others as well as the development
of an ongoing source of revenue.
The financial statements of Vertex Corporation have also been prepared on the
basis of accounting principles applicable to a going concern. The continuation
of the Company as a going concern, is dependent upon the Company's ability to
establish itself as a profitable business. It is the Company's belief that it
will continue to incur losses during the coming year and possibly require
additional funds. The additional funding will be accomplished by seeking
additional funds from private or public equity investments, and possible future
collaborative agreements to meet such needs, in order that the Company will be a
viable entity. The Company's ability to achieve these objectives cannot be
determined at this time.
Note 11 - Commitments and Contingencies
Currently, the Company is leasing its premises on a month-to-month basis. Rent
expense relative to this lease was charged to operations, and for the years
ended April 30, 1998, 1997 and 1996 was $14,400, $0, and $18,600, respectively.
Rent expense for the fiscal years ended April 30, 1998 and 1997 of $7,200 was
paid by the president of the Company. The Company plans to repay this expense
when funds are available. This expense has been included in the amount due
officer.
The Company leases a vehicle on a month-to month basis. Rent expense relative
to this lease was charged to operations, and for the years ended April 30, 1998,
1997 and 1996 was $5,400, $0, and $6,593, respectively. Auto expense for the
fiscal year ended April 30, 1998 and 1997 of approximately $2,700 was paid
directly by the president of the Company. The Company plans to repay this
expense when funds are available. This expense has been included in the amount
due officer.
Note 12 - Gain on Settlement
The Company had previously entered into an employment agreement with a key
employee, Gilbert Van Nieulande. Subsequent to April 30, 1995, the contract was
terminated.
During the year ended April 30, 1996, the Company settled certain claims with
Gilbert Van Nieulande. The Company forgave loans to Mr. Van Nieulande totaling
$14,575. The Company had reserved against this note at April 30, 1995. Mr. Van
Nieulande returned 550,000 shares of common stock to the Company. Mr. Van
Nieulande relinquished any claim to approximately $93,750, which had been
accrued as compensation on his behalf.
Note 13 - Common Stock Subscribed - Unearned Compensation
During the fiscal year ended April 30, 1998, 3,100,000 shares of common stock
were issued for future services to be rendered, valued at $279,000. Subsequent
to the balance sheet date, the shares were to be canceled. As of the date of
this report, these shares have not been received back, and the outcome of this
transaction cannot be determined, however, stop transfers have been placed on
the shares.
See Accompanying Auditors' Reports
<PAGE>
ITEM 9. Disagreements on Accounting and Financial Disclosures
During the 12 months ended April 30, 1998 the Company had no disagreement with
accountants on any matter of accounting principles or practices of financial
statement disclosure.
PART III
ITEM 10. Directors and Officers of the Registrant
Officers and Directors of the Company as of April 30, 1998 are as follows:
Name Age Position
Paul Ebeling 59 Chief Executive Officer and Director
Kevin Welch 37 Secretary/Treasurer and Director
Nicolas Weider, M.D. 40 Director
Each director holds office until the next annual meeting of shareholders and
until their successor has been elected and qualified. Each officer holds office
at the pleasure of the Board of Directors and until their successor has been
elected and qualified.
Paul Ebeling joined Tridon Enterprises Incorporated in December of 1988. From
1982 to the 1988, Mr. Ebeling was President and Chairman of UHB Corporation
which specialized in planned community development and finance. Mr. Ebeling
directs the activities of the company.
Kevin Welch joined Tridon Enterprises Incorporated on February 22, 1996 and
serves as Secretary/Treasurer and a director of the company.
Nicolas Weider joined Tridon Enterprises Incorporated on June 1, 1997 and serves
a a director of the company.
ITEM 11. Executive Compensation
The following is a summary of executive compensation for the year ended April
30, 1998: (See Note 1)
Paul Ebeling $ ----
Kevin Welch $ ----
Nicolas Weider, MD $ ----
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth in the beneficial ownership of the Company's
common stock be each person known to he Company to be the beneficial owner of
more than five percent of the outstanding common stock of the Company and by
directors and executive officers of the Company, both individually and as a
group.
Beneficial Owner Shares Beneficially Owned Percentage of Class
Antebi Children's Insurance
Trust of 1995
345 North Maple Drive
Beverly Hills, CA 90210 11,988,444 28.36%
Paul Ebeling
PO Box 16244
Beverly Hills, CA 90209 9,424,236 22.30%
Kevin Welch
PO Box 16244
Beverly Hills, CA 90209 3,000,000 7.0%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Vintage Group inc., as a condition set forth in the Agreement and Plan of
Merger, canceled and forgave all indebtedness and any other obligations owed to
Vintage by Hammer computer Systems, Inc. (HCSI). The Company advanced $5000 to
Vintage Group, Inc. during the quarter ending October 31, 1994.
President, CEO and director Paul Ebeling has made cash advances to the
Corporation for administrative expenses. The amount owed to Mr. Ebeling at
April 30, 1997 and 1998 is $91,555 and $48,845 respectively (see Note 3).
The son of Paul A. Ebeling, Nicholas Ebeling, purchased $2,500 of convertible
notes from the Company in March of 1992. In addition another family member
bought $3,000 of convertible notes. During the year ending April 30, 1996 the
notes were converted to 2,500 and 3,000 shares of cumulative convertible
preferred shares respectively.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following documents are filed as a part of this report:
1. Financial Statements: included in Item 8, Part II of this report.
2. Exhibits required to be filed by this report:
Exhibit
Number Description
(3) Articles of Incorporation and Bylaws
(a) Certificate of Amendment to Articles of Incorporation dated
October 7, 1983 and Articles of Incorporation dated
October 7, 1983.
(b) Certificate of Amendment to Articles of Incorporation dated
August 30, 1984 and Articles of Incorporation dated
September 27, 1984
(c) Bylaws
(d) Certificate of Amendment to Articles of Incorporation dated
January 20, 1994.
(e) Certificate of Amendment to Articles of Incorporation dated
April 24, 1996.
(24) Consents of Experts and Counsel.
Incorporated by reference from Form S-18 filed with the Securities and Exchange
Commission, Commission File No. 0-13628, filed for fiscal year ended April 30,
1985.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf and on the
dates indicated by the undersigned thereunto duly authorized.
Date: October 27, 1998 By: /s/ Paul Ebeling
President/CEO
Date: October 27, 1998 By: /s/ Kevin Welch
Kevin Welch, Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> APR-30-1998
<CASH> 682
<SECURITIES> 107451
<RECEIVABLES> 275000
<ALLOWANCES> 275000
<INVENTORY> 5325
<CURRENT-ASSETS> 65260
<PP&E> 17993
<DEPRECIATION> 6305
<TOTAL-ASSETS> 184399
<CURRENT-LIABILITIES> 183142
<BONDS> 0
0
83
<COMMON> 42276
<OTHER-SE> 9270566
<TOTAL-LIABILITY-AND-EQUITY> 184399
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 5
<TOTAL-COSTS> 5
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