U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 2000
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No.
-----------
002-98748-D
FORMULA FOOTWEAR, INC.
-------------------------------------
(Name of Small Business Issuer in its Charter)
UTAH 33-0317292
-------- ------------
(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
FORMULA FOOTWEAR, INC.
-------------
(Former Name or Former Address, if changed since last Report)
311 South State Street, Suite 410
Salt Lake City, Utah 84111
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $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: March 31, 2000 -
$0.
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
March 31, 2000 - $70. There are approximately 70,000 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 $0.001 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:
JUNE 15, 2000
4,267,288
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.
-----------------------------------
Formula Footwear, Inc. (the "Company") was organized under the laws of the
State of Utah on June 3, 1985, to acquire other business entities or
investments, and all matters related or ancillary thereto and to do all things
and engage in all lawfull transactions which a corporation organized under the
laws of the State of Utah might do or engage in, even though not expressly
stated herein.
The Company's initial authorized capital was $50,000.00, consisting of
50,000,000 shares of one mill ($0.001) par value common voting stock.
On October 6, 1999, the Articles of Incorporation were amended to reflect a
533 to 1 reverse split of the Company's issued and outstanding common stock,
while retaining the current authorized capital and par value, with appropriate
adjustments in the stated capital accounts and capital surplus accounts;
provided, however, that no stockholder, computed on a per stock certificate or
record basis on the effective date hereof, currenly owning 100 or more shares
shall be reduced to less than 100 shares as a result of the reverse split and
that no stockholder owning less than 100 shares, on the per stock certificate or
record basis on the effective date hereof, shall be affected by the reverse
split.
Material Changes in Control Since Inception and Related Business History.
-------------------------------------------------------------------------
Business.
---------
The Company distributed on a wholesale basis lines of men's dress and
casual shoes and womes's casual shoes made in Italy and sold in the United
States, under several different labels. The Company had several exclusive
contracts with manufacturers to distribute footwear products for the United
States markets. These operations proved unsuccessful, and the Company 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 as to 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 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 its majority shareholder, 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 Utah. 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 March 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. However, the Company intends to submit for quotations regarding its
common stock on the OTC Bulletin Board of the National Association of Securities
Dealers ("NASD"); however, management does not expect any public market to
develop unless and until the Company completes an acquisition or merger. In any
event, no assurance can be given that any market for the Company's common stock
will develop or be maintained.
Holders
-------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 340.
Dividends
---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
------------------------------------------------------------------------------
On May 27, 1999, the Company issued 300,000 "unregistered" and "restricted"
common shares to Jenson Services, Inc., in consideration of payment of $300 of
expenses incurred on behalf of the Company. These shares were issued at par
value, one mill ($0.001).
On May 27, 1999, the Company issued 220,000 "unregistered" and "restricted"
common shares to each of it's three current officers and directors, for a total
of 660,000 "unregistered" and "restricted" shares. These shares were in
consideration of services rendered and issued at par value, one mill ($0.001).
On November 15, 1999, the Company issued 3,237,570 "unregistered" and
"restricted" common shares to Jenson Services, Inc., in consideration of payment
of $3,237.57 of expenses incurred on behalf of the Company. These shares were
issued at par value, one mill ($0.001).
<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 March 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 restoring and maintaing its good corporate standing in the State
of Utah, compromising and settling its debts and seeking the acquisition of
assets, properties or businesses that may benefit the Company and its
stockholders, the Company has had no material business operations in the two
most recent calendar years.
At March 31, 2000, the Company's had no assets. See the Index to
Financial Statements, Item 7 of this Report.
During the period ended March 31, 2000, the Company had a net loss of
$6,326. The Company has received no revenues in either of its two most recent
calendar years. See the Index to Financial Statements, Item 7 of this Report.
Liquidity.
---------
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 March 31, 2000 and 1999
Independent Auditors' Report
Balance Sheets - March 31, 2000
Statements of Operations for the years ended
March 31, 2000 and 1999
Statements of Stockholders' Equity for the
years ended March 31, 2000 and 1999
Statements of Cash Flows for the years ended
Mrach 31, 2000 and 1999
Notes to the Financial Statements
<PAGE>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 2000
<PAGE>
<TABLE>
<CAPTION>
C O N T E N T S
<S> <C>
Independent Auditors' Report............................................................... 3
Balance Sheet.............................................................................. 4
Statements of Operations................................................................... 5
Statements of Stockholders' Equity (Deficit)............................................... 6
Statements of Cash Flows................................................................... 7
Notes to the Financial Statements.......................................................... 8
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Formula Footwear, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Formula Footwear, Inc. (a
development stage company) as of March 31, 2000, and the related statements of
operations, stockholders' equity (deficit) and cash flows for the years ended
March 31, 2000 and 1999 and from the beginning of the development stage on April
1, 1989 through March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts an 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 Formula Footwear, Inc. (a
development stage company) as of March 31, 2000, and the results of its
operations and its cash flows for the years ended March 31, 2000 and 1999 and
from the beginning of the development stage on April 1, 1989 through March 31,
2000, 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 is a development stage company with no
significant operating results to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans with 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/ HJ & ASSOCIATES
HJ & Associates, LLC
Salt Lake City, Utah
June 14, 2000
<PAGE>
<TABLE>
<CAPTION>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
March 31,
2000
CURRENT ASSETS
<S> <C>
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,304
Shareholder loan (Note 4) 1,250
Total Current Liabilities 2,554
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized; 50,000,000 common shares
at $0.001 par value; 4,267,288 shares issued and outstanding 4,268
Capital in excess of par value 351,753
Accumulated deficit prior to April 1, 1989 (351,823)
Deficit accumulated during the development stage (6,752)
Total Stockholders' Equity (Deficit) (2,554)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
The accompanying notes are an integral part of these financial statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Statements of Operations
From the
Beginning of
Development
Stage on
For the April 1, 1989
Years Ended through
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES 6,326 426 6,752
NET LOSS $ (6,326)$ (426) $ (6,752)
BASIC LOSS PER SHARE $ (0.00)$ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,213,661 49,928
The accompanying notes are an integral part of these financial statements.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
<S> <C> <C> <C> <C>
Balance, March 31, 1989 49,928 $ 50 $ 351,773 $ (351,823)
Net loss for the years ended
March 31, 1990 - 1998 - - - -
Balance, March 31, 1998 49,928 50 351,773 (351,823)
Net loss for the year ended
March 31, 1999 - - - (426)
Balance, March 31, 1999 49,928 50 351,773 (352,249)
May 30, 1999, shares issued for
services valued at $0.001 per share 660,000 660 - -
May 30, 1999, shares issued for
cash valued at $0.001 per share 300,000 300 - -
October 31, 1999, shares issued
for cash valued at $0.001 per share 3,237,570 3,238 - -
Fractional shares issued in stock split 19,790 20 (20) -
Net loss for the year ended
March 31, 2000 - - - (6,326)
Balance, March 31, 2000 4,267,288 $ 4,268 $ 351,753 $ (358,575)
The accompanying notes are an integral part of these financial statements.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Statements of Cash Flows
From the
Beginning of
Development
Stage on
For the April 1, 1989
Years Ended Years Ended Through
March 31, March 31,
2000 1999 2000
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (6,326)$ (426) $ (6,752)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Common stock issued for services 660 - 660
Changes in operating asset and liability accounts:
Increase (decrease) in accounts payable 878 426 1,304
Increase (decrease) in shareholder loan 1,250 - 1,250
Net Cash (Used) by Operating Activities (3,538) - (3,538)
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash 3,538 - 3,538
Net Cash Provided by Financing Activities 3,538 - 3,538
NET INCREASE IN CASH - - -
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
Cash Payments for:
Income taxes $ - $ - $ -
Interest $ - $ - $ -
SCHEDULE OF NON CASH FINANCING ACTIVITIES
Common stock issued for services $ 660 $ - $ 660
The accompanying notes are an integral part of these financial statements.
7
</TABLE>
<PAGE>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Formula Footwear, Inc. ("Company") (formerly Arrakis, Inc.)
("Arrakis") is a successor by merger to California Sea Leather, Inc.
("California") which was formed on June 1, 1987 originally as a
general partnership and subsequently incorporated in California on
September 17, 1987. The Company engages principally in the business of
importing leather footwear and specialty products for resale to major
retailing chains and department stores. Pursuant to the merger,
Arrakis, Inc. changed its name to Formula Footwear, Inc. The Company
entered the development stage on April 1, 1989 and is considered a
development stage company per SFAS No. 7.
b. Account Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has adopted a March 31 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of shares issued and outstanding at the
date of the financial statements.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statement and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
f. Provision for Taxes
At March 31, 2000, the Company had net operating loss carryforwards of
approximately $360,000 that may be offset against future taxable
income through 2019. No tax benefit has been reported in the financial
statements, because the potential tax benefits of the net operating
loss carryforwards are offset by a valuation allowance of the same
amount.
8
<PAGE>
FORMULA FOOTWEAR, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and 1999
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of
the Company to seek a merger with an existing, operating company. In
the interim, shareholders of the Company have committed to meeting its
minimal operating expenses.
NOTE 3 - COMMON STOCK
The Company amended its Articles of Incorporation to effect a reverse
split of its outstanding voting securities on a basis of one for 533
shares, effective May 30, 1999. Any references to common stock have
been retroactively restated.
Jenson Services, Inc. was issued 300,000 post-split shares of
"unregistered" and "restricted" common stock as reimbursement for
their incurred expenses valued at $300.
The Corporation's officers were issued 660,000 post-split
"unregistered" and "restricted" shares of the Company's common stock
in compensation for performing services for the Company valued at
$660.
On October 31, 1999, the Company issued Jenson Services 3,237,570
post-split shares of "unregistered" and "restricted" common stock of
the Company in full satisfaction of payment of $3,238.
NOTE 4 - SHAREHOLDER LOAN
A shareholder of the Company has loaned $1,250 to the Company. This
amount is unsecured, and due on demand. No interest has been imputed
because of the short term nature of the loan.
<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, as filed August 30,
1999.
<PAGE>
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>
James Doolin President 12/98 *
Director 12/98 *
Harold Jenson Vice President 03/99 *
Director 03/99 *
Jason Jenson Secretary 03/99 *
Director 03/99 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
--------------------
James P. Doolin, President and a director is 23 years of age. Mr. Doolin
received a bachelors degree from the University of Utah in Business in June
1998. Mr. Doolin has managed Hillside Tire & Service, in Salt Lake City, Utah,
for the past four years and worked with Jenson Services since 1998.
Harold Jenson, Vice President and a director is 31 years of age. Mr. Jenson
is currently a partner and contract foreman with Jenson Orton Construction. Mr.
Jenson graduated from Montana State University, in Billings, Montana.
Jason Jenson, Secretary and a director is 24 years of age. Mr. Jenson has
owned an independent contractor's business in Salt Lake City, Utah, since 1994.
Mr. Jenson graduated from the University of Utah in Business Administration in
1994.
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.
---------------------
Both Jason Jenson & Harold Jenson, the Company's Secretary and Vice
President, respectively, are cousins with each other and are both nephews to
Duane Jenson, the beneficial owner of Jenson Services, Inc., which currently
controls 83% of the Company's common stock.
<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; 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>
James
Doolin, 03/31/00 0 0 0 220,000 0 0 0
President, 03/31/99 0 0 0 0 0 0 0
Director 03/31/98 0 0 0 0 0 0 0
Harold
Jenson 03/31/00 0 0 0 220,000 0 0 0
Vice Pres./ 03/31/99 0 0 0 0 0 0 0
Director 03/31/98 0 0 0 0 0 0 0
Jason 03/31/00 0 0 0 220,000 0 0 0
Jenson, 03/31/99 0 0 0 0 0 0 0
Secretary 03/31/98 0 0 0 0 0 0 0
Director
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ending March 31, 2000, 1999, or 1998, or the period ending on the date
of this Report.
Compensation of Directors.
--------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
<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 June 15, 2000, with the computations being based upon 4,267,288
shares of common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name Beneficially Owned of Class (1)
---------------- ------------------ --------
<S> <C> <C>
Jenson Services, Inc.* 3,537,570 83%
James Doolin 220,000 5%
Harold Jenson 220,000 5%
Jason Jenson 220,000 5%
------- -----
4,197,570 98%
* 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>
James Doolin 220,000 5%
5525 South 900 East #110
SLC, UT 84117
Harold Jenson 220,000 5%
900 West Bitner Road #F16
Park City, UT 84098
Jason Jenson 220,000 5%
1769 Bryan Ave.
SLC, UT 84106
------- ------
All directors and
executive officers 660,000 15%
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
-------------------
See the Company's Current Report on Form 8-K as filed on August 30, 1999,
for information relating to the change in the Company's auditor.
Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
3.3 Amendment to the Articles of Incorporation
with respect to a reverse split on a basis
of 533-1 stock 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.
FORMULA FOOTWEAR, INC.
Date:8/7/00 /S/JAMES DOOLIN
James Doolin
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:
FORMULA FOOTWEAR, INC.
Date:8/7/00 /S/JAMES DOOLIN
James Doolin
President and Director
Date:7/25/00 /S/HAROLD JENSON
Harold Jenson
Vice President and Director
<PAGE>
EX-3
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
FORMULA FOOTWEAR, INC.
Pursuant to the provisions of the Utah Business Corporation Act, the
undersigned Corporation hereby, adopts the following Articles of Amendment to
its Articles of Incorporation. I
The name of the Corporation is:
Formula Footwear, Inc.
II
The following amendments to the Articles of Incorporation were adopted by
the Board of Directors of the Corporation:
FIRST: Article IV shall be amended as follows, to-wit:
Resolved, to effect a reverse split of the issued and outstanding voting
securities of the Corporation's one mil ($0.001) par value common stock (the
"Common Stock") on a basis of one for five hundred thirty three (1:533), while
retaining the current authorized capital and par value, with appropriate
adjustments in the stated capital accounts and capital surplus account, 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 owing 100 or more shares shall be
reduced to less than 100 shares as a result of the reverse split and that no
stockholder owning less than 100 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 100 shares shall be
conveyed to the Company by Jenson Services, Inc.; and provided, further, the
reverse split will become effective as of the filing date of the Certificate of
Amendment with the State of Utah; and that all shares required for rounding be
issued by the Company.
SECOND: Shareholder approval is not required.
IN WITNESS WHEREOF, Formula Footwear, Inc. has caused this Certificate to
be signed by James Doolin, the company's President. This 12th day of August,
1999.
By:/S/ JAMES DOOLIN
James Doolin, President
<PAGE>
