U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 2000
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No.
-----------
000-13822
RESCON TECHNOLOGY CORP.
-------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 83-0210455
-------- ------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 SOUTH 900 EAST, SUITE 110 Salt Lake City,
Utah 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
(Former Name or Former Address, if changed since last Report)
NONE
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $0.001 par value
common stock
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: August 31, 2000 - $0.
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
August 31, 2000 - $577. There are approximately 57,720 shares of common
voting stock of the Company not held by affiliates. Because there has been no
"public market" for the Company's common stock during the past five years, the
Company has arbitrarily valued these shares at par value of $0.01 per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None, Not applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
OCTOBER 24, 2000
3,861,084
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
Organization and Charter Amendments.
-----------------------------------
Rescon Technology Corp., (the "Company") was incorporated under the laws of
the State of Wyoming on December 9, 1968, under the name "Platte River
Construction Company, Inc." The purposes for which the corporation was organized
was to engage in and to do any lawful act concerning any or all lawful
businesses for which corporations may be organized.
The Company had an initial authorized capital of $49,500 consisting of
49,500 shares of $1.00 par value common stock.
The Company amended its Articles of Incorporation on February 1, 1985, to
change its name from "Platte River Construction Company, Inc." to "Rescon
Technology Corporation" Also, the Articles were amended to increase the total
number of shares authorized from 49,500 to 770,000,000 and to change the par
value from $1.00 per share to $.0001 per share.
On April 1, 1985, the Company amended its Articles of Incorporation to
change the total number of shares authorized from 770,000,000 to 1,000,000 with
the par value remaining $.0001 per share.
On or about May 21, 1985, the Company filed an S-18 Registration Statement
with the Securities and Exchange Commission.
On December 13, 1999, the Company completed a merger with Rescon Technology
Corp., a Nevada Corp., with the Nevada corporation being the surviving
corporation. In connection with said merger, the shareholders of the Wyoming
corporation received 1 share of the Nevada corporation for every 7,000 shares of
the Wyoming corporation; provided, that no stockholder, computed on a per stock
certficate or record basis, owning 10 or more shares was reduced to less than 10
shares as a result of the reverse split and that no stockholder owning less than
10 shares, on a per stock certificate of record basis, was affected by the
reverse split.
Public Offering.
---------------
The Company made a registered public offering, on Form S-18, of its $.001
par value common stock. The public offering was completed on August 9, 1985,
when the Company sold 221,311,500 units consisting of one share of common stock
and a warrant. Each unit was sold for $.01. Two warrants entitled a holder to
purchase one share of common stock for $.015 per share.
<PAGE>
Material Changes in Control Since Inception and Related Business History.
-------------------------------------------------------------------------
Business.
---------
The Company manufactured and sold chemicals and related products for the
permanent repair and protection on concrete and steel structures. The Company
developed its own formulas, and researched and tested these formulas for
commercial applications.The Company's products have been used in projects by the
Federal Highway Administration in conjunction with individual states such as
Virginia, Oregon, New York, Minnesota and Nebraska. Private industry projects
utilizing the Company's products have included parking ramps in Minnesota, Ohio,
West Virginia and Kansas. It ceased such operations over ten years ago.
Other than the above-referenced matters and seeking and investigating
potential assets, property or businesses to acquire, the Company has had no
material business operations for over ten years. The Company may begin the
search for the acquisition of assets, property or business that may benefit the
Company and its stockholders, once the Board of Directors sets guidelines of
industries in which the Company may have an interest.
The Company is unable to predict the time when and if it may actually
participate in any specific business endeavor, and will be unable to do so until
it determines the particular industries to the Company.
Risk Factors.
------------
In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained until a potential acquisition,
reorganization or merger candidate has been identified; however, at a minimum,
the Company's present and proposed business operations will be highly
speculative and will be subject to the same types of risks inherent in any new
or unproven venture, and will include those types of risk factors outlined
below.
Extremely Limited Assets; No Source of Revenue. The Company has virtually
no assets and has had no revenue for over the past ten years or to the date
hereof. Nor will the Company receive any revenues until it completes an
acquisition, reorganization or merger, at the earliest. The Company can provide
no assurance that any acquired business will produce any material revenues for
the Company or its stockholders or that any such business will operate on a
profitable basis. Although management intends to apply any proceeds it may
receive through the issuance of stock or debt to a suitable acquisition, subject
to the criteria identified above, such proceeds will not otherwise be designated
for any more specific purpose. The Company can provide no assurance that any use
or allocation of such proceeds will allow it to achieve its business objectives.
<PAGE>
Absence of Substantive Disclosure Relating to Prospective Acquisitions.
Because the Company has not yet identified any assets, property or business that
it may acquire, potential investors in the Company will have virtually no
substantive information upon which to base a decision whether to invest in the
Company. Potential investors would have access to significantly more information
if the Company had already identified a potential acquisition or if the
acquisition target had made an offering of its securities directly to the
public. The Company can provide no assurance that any investment in the Company
will not ultimately prove to be less favorable than such a direct investment.
Unspecified Industry and Acquired Business; Unascertainable Risks. To date,
the Company has not identified any particular industry or business in which to
concentrate its acquisition efforts. Accordingly, prospective investors
currently have no basis to evaluate the comparative risks and merits of
investing in the industry or business in which the Company may acquire. To the
extent that the Company may acquire a business in a high risk industry, the
Company will become subject to those risks. Similarly, if the Company acquires a
financially unstable business or a business that is in the early stages of
development, the Company will become subject to the numerous risks to which such
businesses are subject. Although management intends to consider the risks
inherent in any industry and business in which it may become involved, there can
be no assurance that it will correctly assess such risks.
Uncertain Structure of Acquisition. Management has had no preliminary
contact or discussions regarding, and there are no present plans, proposals or
arrangements to acquire any specific assets, property or business. Accordingly,
it is unclear whether such an acquisition would take the form of an exchange of
capital stock, a merger or an asset acquisition.
Risks of "Penny Stock." The Company's common stock may be deemed to be
"penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ-listed stocks must still meet requirement (i) above);
or (iv) in issuers with net tangible assets less than $2,000,000 (if the issuer
has been in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than $6,000,000 for the last three years.
There has been no "established public market" for the Company's common
stock during the last five years. At such time as the Company completes a merger
or acquisition transaction, if at all, it may attempt to qualify for quotation
on either NASDAQ or a national securities exchange. However, at least initially,
any trading in its common stock will most likely be conducted in the
over-the-counter market in the "pink sheets" or the OTC Bulletin Board of the
NASD. Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock." Moreover, Reg.
Section 240.15g-9 of the Securities and Exchange Commission requires
broker-dealers in penny stocks to approve the account of any investor for
transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
<PAGE>
Principal Products or Services and their Markets.
-------------------------------------------------
None; not applicable
Competition.
------------
None; not applicable
Sources and Availability of Raw Materials and Names of Principal Suppliers.
---------------------------------------------------------------------------
None; not applicable
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements of
Labor Contracts.
-----------------------------------------------------------------------------
None; not applicable
Need for any Governmental Approval of Principal Products of Services.
---------------------------------------------------------------------
None; not applicable
Effect of Existing or Probable Governmental Regulations on Business.
--------------------------------------------------------------------
The integrated disclosure system for small business issuers adopted by the
Securities and Exchange Commission in Release No. 34-30968 and effective as of
August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer, is not an
investment company, and if a majority-owned subsidiary, the parent is also a
small business issuer, provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more. The
Company is deemed to be a "small business issuer."
The Securities and Exchange Commission, state securities commissions and
the North American Securities Administrators Association, Inc. ("NASAA") have
expressed an interest in adopting policies that will streamline the registration
process and make it easier for a small business issuer to have access to the
public capital markets.
Research and Development.
------------------------
None; not applicable
Cost and Effects of Compliance with Environmental Laws.
------------------------------------------------------
None; not applicable
Number of Employees.
-------------------
None; not applicable
Item 2. Description of Property.
-----------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the business office address and
telephone number of Duane S. Jenson, and are currently provided at no cost.
Because the Company has had no business, its activities have been limited to
keeping itself in good standing in the State of Nevada. These activities have
consumed an insignificant amount of management's time; accordingly, the costs to
Mr. Jenson of providing the use of his office and telephone have been minimal.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
During the fourth quarter of the year ended August 31, 2000, no matter was
submitted to a vote of the Company's securities holders, whether through the
solicitation of proxies or otherwise.
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
------------------
There has been no "public market" for shares of common stock of the Company
for the past two years. The Company intends to submit for quotations regarding
its common stock on the OTC Bulletin Board of the National Association of
Securities Dealers ("NASD"); however, management does not expect any public
market to develop unless and until the Company completes an acquisition or
merger. In any event, no assurance can be given that any market for the
Company's common stock will develop or be maintained.
Holders
-------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 1,988.
Dividends
---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
------------------------------------------------------------------------------
On August 9, 1999, the Company issued 715 "unregistered" and "restricted"
common shares to both Ryan Seare, the Company's Vice President, and Nicholl
Heieren, the Company's Secretary. These shares were in consideration of services
rendered and issued at a value of $0.005 per share.
On December 20, 1999, the Company issued 569,820 "unregistered" and
"restricted" common shares to Jenson Services, Inc., in consideration of payment
of $2,849.10 of expenses incurred on behalf of the Company. These shares were
issued at a value of $0.005 per share.
On December 20, 1999, the Company issued 1,012,466 "unregistered" and
"restricted" common shares to Calamitous, L.C.; 1,012,466 such common shares to
Kelly Trimble, and 1,012,468 such common shares to Maven Strategic Partners,
Inc. The Company issued these three entities these shares in full satisfaction
of payment of $15,187 based on a value of $.005 per share.
On January 1, 2000, the Company issued 237,570 "unregistered" and
"restricted" common shares to James Doolin. These shares were issued in
consideration of services rendered and issued at a value of $.005 per share.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two fiscal years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, properties or businesses that may benefit the Company and its
stockholders. Management anticipates that to achieve any such acquisition, the
Company will issue shares of its common stock as the sole consideration for such
acquisition.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing or the payment of
expenses associated with reviewing or investigating any potential business
venture. As of August 31, 2000, it had no cash or cash equivalents. If
additional funds are required during this period, such funds may be advanced by
management or stockholders as loans to the Company. Because the Company has not
identified any such venture as of the date of this Report, it is impossible to
predict the amount of any such loan. However, any such loan should not exceed
$25,000 and will be on terms no less favorable to the Company than would be
available from a commercial lender in an arm's length transaction. As of the
date of this Report, the Company is not engaged in any negotiations with any
person regarding any such venture.
Results of Operations.
----------------------
Other than maintaing its good corporate standing in the State of Nevada,
compromising and settling its debts and seeking the acquisition of assets,
properties or businesses that may benefit the Company and its stockholders, the
Company has had no material business operations in the two most recent fiscal
years.
At August 31, 2000, the Company's had no assets. During the period ended
August 31, 2000, the Company had a net loss of $18,749. The Company has received
no revenues in either of its two most recent fiscal years. See the Index to
Financial Statements, Item 7 of this Report.
Liquidity.
---------
The Company has no cash or cash equivalents on hand. If additional funds
are required, such funds may be advanced by management or stockholders as loans
to the Company. Because the Company has not identified any acquisition or
venture, it is impossible to predict the amount of any such loan.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended August 31, 2000 and 1999
Independent Auditors' Report
Balance Sheets - August 31, 2000
Statements of Operations for the years ended
August 31, 2000 and 1999
Statements of Stockholders' Equity for the
years ended August 31, 2000 and 1999
Statements of Cash Flows for the years ended
August 31, 2000 and 1999
Notes to the Financial Statements
<PAGE>
ResCon Technology Corporation
[A Development Stage Company]
Financial Statements and Independent Auditors' Report
August 31, 2000
<TABLE>
<CAPTION>
ResCon Technology Corporation
[A Development Stage Company]
TABLE OF CONTENTS
Page
<S> <C>
Independent Auditors' Report 1
Balance Sheet -- August 31, 2000 2
Statement of Operations for the periods ended August 31, 2000 and 1999 and for the
period from Reactivation [July 14, 1999] through August 31, 2000 3
Statement of Stockholders' Equity for the periods ended August 31, 2000 and 1999,
and for the period from Reactivation [July 14, 1999] through August 31, 2000 4
Statement of Cash Flows for the periods ended August 31, 2000 and 1999, and for the
period from Reactivation [July 14, 1999] through August 31, 2000 5
Notes to Financial Statements 6 -- 8
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
ResCon Technology Corporation [a development stage company]
We have audited the accompanying balance sheet of ResCon Technology Corporation
[a development stage company] as of August 31, 2000, and the related statements
of operations, stockholders' Equity, and cash flows for the periods ending
August 31, 2000 and 1999, and for the period from Reactivation [July 14, 1999]
through August 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ResCon Technology Corporation
[a development stage company] as of August 31, 2000, and the results of
operations and cash flows for the periods ended August 31, 2000 and 1999, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has accumulated losses from operations,
minimal assets, and a net working capital deficiency that raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/S/ MANTYLA MCREYNOLDS
Mantyla McReynolds
Salt Lake City, Utah
September 29, 2000
<PAGE>
<TABLE>
<CAPTION>
ResCon Technology Corporation
[A Development Stage Company]
Balance Sheet
August 31, 2000
ASSETS
Assets
<S> <C>
Total Assets $ 0
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Total Liabilities 0
Stockholders' Equity:
Common Stock - 1,000,000,000 shares authorized
having a par value of $.0001 per share; 3,859,656
shares issued and outstanding 386
Additional Paid-in Capital 4,486,972
Accumulated Deficit (4,487,358)
------------------
Total Stockholders' Equity 0
------------------
Total Liabilities and Stockholders' Equity $ 0
==================
See accompanying notes to financial statements.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ResCon Technology Corporation
[A Development Stage Company]
Statement of Operations
For the Period from Reactivation [July 14, 1999] through August 31, 2000
Twelve Reactivation Reactivation
months (July 14, (July 14,
ended 1999) through 1999) through
August 31, August 31, August 31,
2000 1999 2000
--------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0-
General & Administrative Expenses 18,749 1,000 19,749
Operating Income (18,749) (1,000) (19,749)
Net Income Before Income Taxes (18,749) (1,000) (19,749)
Current Year Provision for Income Taxes -0- -0- -0-
--------------- ---------------- ----------------
Net Income $ (18,749) $ (1,000) $ (19,749)
=============== ================ ================
Income Per Share $ (0.01) $ (0.01) $ (0.01)
=============== ================ ===============
Weighted Average Shares Outstanding 3,578,994 109,878 2,578,994
=============== ================ ===============
See accompanying notes to financial statements.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ResCon Technology Corporation
[A Development Stage Company]
Statement of Stockholders' Equity
For the Period from Reactivation [July 14, 1999] through August 31, 2000
Additional Net
Common Common Paid-in Accumulated Stockholders'
Shares Stock Capital Equity Equity
------------- ---------- ----------- ------------- -------------
Balance at reactivation, [July 14,
<S> <C> <C> <C> <C> <C>
1999] 696,686,507 69,669 4,397,940 (4,467,609) 0
Issued shares to officers for
services at par 10,000,000 1,000 1,000
Merge with Nevada corporation
trade stock 1 for 7000 (706,576,629) (70,658) 70,658 0
Net loss for the period July 14,
1999 through August 31, 2000 (1,000) (1,000)
------------- ---------- ----------- ------------- -------------
Balance, August 31, 1999 109,878 $ 11 $ 4,468,598 $ (4,468,609) $ 0
------------- ---------- ----------- ------------- -------------
Issued shares for services and
expenses 3,749,778 375 18,374 18,749
(18,749) (18,749)
------------- ---------- ----------- ------------- -------------
Balance, August 31, 2000 3,859,656 386 4,486,972 (4,487,358) 0
============= ========== =========== ============= =============
See accompanying notes to financial statements.
ResCon Technology Corporation
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[A Development Stage Company]
Statement of Cash Flows
For the Period from Reactivation [July 14, 1999] through August 31, 2000
Reactivation
Twelve (July 14, Reactivation
months 1999) (July 14,
ended through 1999) through
August 31, August 31, August 31,
2000 1999 2000
------------- ------------- ---------------
Cash Flows Provided by/(Used for) Operating Activities
<S> <C> <C> <C>
Net Loss $ (18,749) $ (1,000) $ (19,749)
Adjustments to reconcile net income to net cash provided
by operating activities:
Issued common stock for service or expenses 18,749 1,000 19,749
------------- ------------- ---------------
Net Cash Used for Operating Activities -0- -0- -0-
Net Increase/(Decrease) in Cash -0- -0- -0-
Beginning Cash Balance -0- -0- -0-
------------- ------------- ---------------
Ending Cash Balance $ -0- $ -0- $ -0-
============= ============= ===============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ -0- $ -0- $ -0-
Cash paid during the year for income taxes $ -0- $ -0- $ -0-
See accompanying notes to financial statements.
5
</TABLE>
<PAGE>
ResCon Technology Corporation
[A Development Stage Company]
Notes to Financial Statements
August 31, 2000
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
ResCon Technology Corporation was organized as a Wyoming
corporation and spent many years (since 1976) in the business of
manufacturing and selling chemicals and related products for the
permanent repair and protection of concrete and steel structures.
However, the Company liquidated all assets prior to 1994 and has
had no business activity since. In July of 1999, the Company
merged with and into Rescon Technology Corporation, a Nevada
corporation, and wholly owned subsidiary. The merger was effected
for the purpose of changing the corporate domicile to Nevada, and
to provide for the exchange of 1 share of the Nevada corporation
to the stockholders for each 7,000 shares of the Wyoming
corporation(see Note 4).
The Company is currently in the development stage and is seeking
new business opportunities.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies:
(b) Income Taxes
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for
Income Taxes. The Statement requires an asset and liability
approach for financial accounting and reporting for income taxes,
and the recognition of deferred tax assets and liabilities for
the temporary differences between the financial reporting bases
and tax bases of the Company's assets and liabilities at enacted
tax rates expected to be in effect when such amounts are realized
or settled. Prior years' consolidated financial statements have
not been restated to apply the provisions of the Statement. The
cumulative effect of this change in accounting for income taxes
as of August 31, 2000 is $0 due to the valuation allowance
established as described in Note 3.
(c) Net Loss Per Common Share
In accordance with Financial Accounting Standards No. 128,
"Earnings Per Share," basic loss per common share is computed
using the weighted average number of common shares outstanding.
Diluted earnings per share is computed using weighted average
number of common shares plus dilutive common share equivalents
outstanding during the period using the treasury stock method.
There are no common stock equivalents as of August 31, 2000.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company
considers cash on deposit in the bank to be cash. The Company had
$0 cash at August 31, 2000.
6
<PAGE>
ResCon Technology Corporation
[A Development Stage Company]
Notes to Financial Statements
August 31, 2000
[Continued]
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(e) Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company has accumulated significant losses since inception,
has no assets, and has no operations as of August 31, 2000. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
Management plans include finding a well-capitalized merger
candidate to recommence its operations. The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE 3 INCOME TAXES
Below is a summary of deferred tax asset calculations on net
operating loss carry forward amounts. Loss carry forward amounts
expire at various times through 2020. A valuation allowance is
provided when it is more likely than not that some portion of the
deferred tax asset will not be realized.
Estimated
Description NOL Tax Rate
Federal Income Tax $2,898,692 $985,555 34%
Valuation allowance (985,555)
-------------
Deferred tax asset 12/31/1999 $0
The valuation allowance has increased $6,374, from $979,181 at
August 31, 1999.
7
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
------------------------------------------------------------------------
For material documentation respecting the change in the Company's auditors,
see item 13 of the Company's Current Report on Form 8-K, filed October 23, 2000.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers
--------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
<S> <C> <C> <C>
Stephen Nagel President 02/85 *
Director 01/77 *
Ryan Seare Vice President 05/99 *
Director 05/99 *
Nicholl Heieren Secretary 05/99 *
Director 05/99 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
--------------------
Stephen R. Nagel, President and a director is 49 years of age. Mr. Nagel
has an MBA from Arizona State University and a JD from the University of
Wyoming. Mr. Nagel was the founding CEO of Selectronics, a consumer electronics
and software publisher from 1983 to 1991, and Mr. Nagel is also President and a
director of Kolorfusion International, Inc., both public companies.
Ryan Seare, Vice President and a director is 25 years of age. Mr. Seare
currently manages Lemco Floor Coverings of Salt Lake City, Utah. Mr. Seare
graduated from University of Utah, in Salt Lake City, Utah, with a degree in
communications in December 1999.
Nicholl Heieren, Secretary and a director is 23 years of age. Ms. Heieren
is currently involved in the film industry, and is currently completing an
independent film project. Ms. Heieren graduated from the University of Utah with
a degree in Family and Consumer Studies in December 1999.
Significant Employees.
----------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business.
Family Relationships.
---------------------
None; not applicable.
<PAGE>
Involvement in Certain Legal Proceedings.
-----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Each of the Company's directors has filed a Form 3, Statement of Beneficial
Ownership, with the Securities and Exchange Commission on or around November 6,
2000; there have been no changes in their beneficial ownership of shares of
common stock of the Company since the filing of their Form 3.
<PAGE>
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricte dlying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen
Nagel, 08/31/00 0 0 0 0 0 0 0
President, 08/31/99 0 0 0 0 0 0 0
Director 08/31/98 0 0 0 0 0 0 0
Ryan
Seare 08/31/00 0 0 0 715* 0 0 0
Vice Pres./ 08/31/99 0 0 0 0 0 0 0
Director 08/31/98 0 0 0 0 0 0 0
Nicholl 08/31/00 0 0 0 715* 0 0 0
Heieren, 08/31/99 0 0 0 0 0 0 0
Secretary 08/31/98 0 0 0 0 0 0 0
Director
* For further information relating to these issuances see "Recent Sales of
"unregistered" and "restricted" securities."
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the fiscal
years ending August 31, 2000, 1999, or 1998, or the period ending on the date of
this Report.
Compensation of Directors.
--------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
<PAGE>
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
-------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of October 20, 2000, with the computations being based upon 3,861,084
shares of common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name Beneficially Owned of Class (1)
---------------- ------------------ --------
<S> <C> <C>
Jenson Services, Inc.* 569,820 15%
Calamitous, L.C. 1,012,466 26%
Kelly Trimble 1,012,466 26%
Maven Strategic
Partners, Inc. 1,012,468 26%
------- -----
3,607,220 93%
* Duane Jenson is the President of Jenson Services, Inc., and may
be deemed the beneficial owner of Jenson Services, Inc.
</TABLE>
<PAGE>
Security Ownership of Management.
---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
---------------- ------------------------- --------
<S> <C> <C>
Stephen Nagel 49,239 1%
14510 East Fremont Avenue
Englewood, CO 80112
Ryan Seare 714 0%
2226 East Arbor Land
Holladay, UT 84117
Nicholl Heieren 714 0%
6 Parkside Lane
Sandy, UT 84092
----------- ------
All directors and
executive officers 50,667 1%
as a group (3 persons)
</TABLE>
Changes in Control.
-------------------
To the knowledge of the Company's management, there are no present
arrangements or pledges of the Company's securities which may result in a change
in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of "Unregistered" and "Restricted" Securities Over the Past Three Years"
of Item I.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
-------------------
*Current Reports on Form 8-K/A as filed on October 23, 2000.
* This document has previously been filed with the Securities and Exchange
Commission and is incorporated herein by this reference.
Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
3.3 Articles of Merger
with respect to a change
of domicile from Wyoming to
Nevada, and a reverse split
on a basis of 7,000-1 stock reverse split
27 Financial Data Schedule
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RESCON TECHNOLOGY CORPORATION
Date:12/10/00 /S/STEPHEN NAGEL
Stephen Nagel
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
RESCON TECHNOLOGY CORPORATION
Date: 12/10/00 /S/STEPHEN NAGEL
Stephen Nagel
President and Director
Date:12/10/00 /S/RYAN SEARE
Ryan Seare
Vice President and Director
<PAGE>
EX-3
ARTICLES OF MERGER OF
RESCON TECHNOLOGY CORPORATION
(a Wyoming corporation)
WITH AND INTO
RESCON TECHNOLOGY CORPORATION
(a Nevada corporation)
Rescon Technology Corporation, a corporation formed under the laws of the State
of Wyoming, desiring to merge with Rescon Technology Corporation, a corporation
formed under the laws of the State of Nevada, and which also desires such
merger, all pursuant to the provisions of the Nevada Revised Statutes, DO HEREBY
CERTIFY as follows:
FIRST: That the names and states of incorporation of each constituent
corporation are:
NAME STATE OF INCORPORATION
Rescon Technology Corporation Wyoming
Rescon Technology Corporation Nevada
SECOND: That Rescon Technology Corporation, Wyoming owns all of the
outstanding shares of Rescon Technology Corporation,. Nevada.
THIRD: That an Agreement of Merger has been approved, adopted,
certified, executed and acknowledged by each constituent corporation
in accordance with laws of the State of Wyoming and laws of the State
of Nevada.
FOURTH: That the name of the Surviving Corporation is Rescon
Technology Corporation, the Nevada corporation.
FIFTH: That on the 14th day of July, 1999, the Board of Directors of
Rescon Technology Corporation, Wyoming authorized the following
resolution. "RESOLVED, that the directors and officers of the Wyoming
Corporation and the Nevada Corporation adopt an Agreement of Merger
and Joint Corporate Resolutions regarding the Agreement of Merger,
subject to the respective laws of the States of Wyoming and Nevada, to
effect such change of domicile providing for the exchange of 1 share
of the Nevada Corporation to the stockholders for each 7,000 shares of
the Wyoming Corporation on the surrender of any certificate thereof;
while retaining the current authorized capital and par value, with
appropriate in the stated capital accounts and capital surplus
accounts, with all fractional shares being rounded up to the nearest
whole share provided, however, that no stockholder, computed on a per
stock certificate of record basis on the effective date hereof,
currently owning 10 or more shares shall be reduced to less than 10
shares as a result of the reverse split and that no stockholder owning
less than 10 shares, on the per stock certificate of record basis on
the effective date hereof, shall be affected by the reverse split;
such additional shares required to provide the minimum of 10 shares to
be conveyed to the shareholders will be issued by the Company; and
provided, further, that all fractional shares shall be rounded up to
the nearest whole share, and that these shares shall be provided by
the Company. The Company will issue up to 30,000 shares to DTC for
these purposes."
<PAGE>
SIXTH: On September 18, 1999, the merger and share exchange between
Rescon Technology Corporation., Wyoming and Rescon Technology
Corporation, Nevada was approved at a Special Meeting of the
Shareholders of Rescon Technology Corporation, Wyoming, by a majority
vote of the shareholders in accordance with Wyoming and Nevada law.
The number of shares of common stock outstanding and eligible to vote
on the merger were 706,686,507.
354,343,254 shares voted in favor
40,000 shares voted against
0 shares abstained
The number of shares voting in favor or the merger was sufficient to
approve it.
SEVENTH: That the Certificate of Incorporation of Rescon Technology
Corporation, the Nevada Corporation, as now in force and effect, shall
continue to be the Certificate of Incorporation of the Surviving
Corporation until amended and changed pursuant to the provisions of
the laws of the State of Nevada.
EIGHTH: That an executed copy of the Agreement of Merger is on file at
the registered office of the surviving corporation, Kelly L. Turner,
Esq., 245 East Liberty Street, Suite 200, Reno, NV 89501, and at the
office of the corporation located at 5525 South 900 Ease, Suite 110,
SLC, UT 84117, and at the office of Leonard W. Burningham, Esq.,
counsel for the surviving corporation 455 East 500 South, Suite 200,
SLC, UT 84111, and that a copy of the Articles of Merger will be
furnished by the surviving corporation, on request and without cost,
to any stockholder of either constituent corporation.
NINTH: That the date that the State of Nevada receives the Articles of
Merger will be the effective date of the merger.
IN WITNESS WHEREOF, said Rescon Technology Corporation, a Wyoming
corporation and Rescon Technology Corporation, a Nevada corporation,
have caused this Certificate to be executed by its officers thereunto
duly authorized this 26th day of October, 1999.
Attest: Rescon Technology Corporation
(a Wyoming corporation)
/S/ RYAN SEARE
Ryan Seare, Vice President
/S/ NICHOLL HEIEREN
Nicholl Heieren, Secretary
Rescon Technology Corporation
(a Nevada corporation)
/S/ RYAN SEARE
Ryan Seare, Vice President
/S/ NICHOLL HEIEREN
Nicholl Heieren, Secretary
