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 December 31, 1997
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 2-99110-NY
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A.X.R. DEVELOPMENT CORPORATION, INC.
---------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 11-2751537
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
9005 Cobble Canyon Lane
Sandy, Utah 84093
---------------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act: None.
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes No X
Check if there is no 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 Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1997 -
$0
For the Exhibit Index see Item 13 of this Report.
State the aggregate market value of the common 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.
October 6, 1998 - $1,150. There are approximately 1,150,000 shares of
common voting stock of the Registrant held by non-affiliates. During the past
five years, there has been no "public market" for shares of common stock of
the Registrant, so the Registrant has arbitrarily valued these shares on the
basis of par value per share or $0.001.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not Applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
October 6, 1998
13,000,000
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 ___
PART I
Item 1. Description of Business.
-----------------------
Business Development.
- --------------------
There were no material developments regarding the Company during the
year ended December 31, 1997.
For historical information regarding material developments, see the
Company's 10-KSB Annual Report the year ended December 31, 1996, which has
been previously filed with the Securities and Exchange Commission and is
incorporated herein by reference. See Item 13 of this Report.
Business.
- --------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations for the past five calendar years. To the extent that the
Company intends to continue to seek the acquisition of assets, property or
business that may benefit the Company and its stockholders, it is essentially
a "blank check" company. Because the Company has limited assets and conducts
no business, management anticipates that any such acquisition would require it
to issue shares of its common stock as the sole consideration for the
acquisition. This may result in substantial dilution of the shares of current
stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation or Bylaws, or contract. The
Company makes no assurance that any future enterprise will be profitable or
successful.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80 and 95 percent of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as
pro forma financial information consisting of a pro forma condensed balance
sheet, pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific
objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
Although the Company has not identified any potential acquisition
target, the possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest. Current
Company policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. In the event that such fees are paid, they may become a factor in
negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
Principal Products and Services.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted
by the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or
merger through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts,
professionals, securities broker dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company;
many of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a
private entity may have access to the public capital markets. There is no
reasonable way to predict the competitive position of the Company or any other
entity in the strata of these endeavors; however, the Company, having limited
assets and cash reserves, will no doubt be at a competitive disadvantage in
competing with entities which have recently completed IPO's, have significant
cash resources and have recent operating histories when compared with the
complete lack of any substantive operations by the Company for the past
several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
- -----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
- ---------
Because the Company currently produces no products or services, it is
not presently subject to any governmental regulation in this regard. However,
in the event that the Company engages in a merger or acquisition transaction
with an entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on
Business.
- ---------
The integrated disclosure system for small business issuers adopted by
the Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer;
provided, however, an entity is not a small business issuer if it has a public
float (the aggregate market value of the issuer's outstanding securities held
by non-affiliates) of $25 million or more.
The 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. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will
substantially limit the demand for "blank check" companies like the Company,
and may make the use of these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Description of Property.
- --------------------------------
The Company has no property or assets; its principal executive office
address and telephone number are the business office address and telephone
number of David C. Merrell, its President, which are provided at no cost.
Item 3. Legal Proceedings.
- --------------------------
The Company is not the subject of any pending legal proceedings; and to
the knowledge of management, no proceedings are presently contemplated against
the Company by any federal, state or local governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
No matter was submitted to a vote of the Company's security
holders during the fourth quarter of the period covered by this Report or
during the previous two fiscal years; further, since the cessation of business
operations in 1989, no matter has been submitted to a vote of the Company's
security holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
- -----------------------------------------------------------------
Market Information
- ------------------
The Company had a "public market" for shares of common stock from
December 1985 through December 1986; these shares were quoted in the "Pink
Sheets" of the National Quotation Bureau, Inc. In any event, no assurance can
be given that any "established trading market" for the Company's common stock
will develop or be maintained. If one ever develops in the future, the sale
of "unregistered" and "restricted" shares of common stock pursuant to Rule 144
of the Securities and Exchange Commission by present or former members of
management or others may have a substantial adverse impact on any such public
market. Once all of the Company's reports have ben brought current with the
Securities and Exchange Commission, it is the intention of the Company to file
for quotations of its shares of common stock on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc. ("NASD").
Holders
- -------
The number of record holders of the Company's common stock as of
the years ended December 31, 1997 and 1996 was approximately 129; these
numbers do not include an indeterminate number of stockholders whose shares
may be held by brokers in street name. As of October 5, 1998, there were
approximately 129 stockholders. See Part III, Item 11, for information
regarding these holdings.
Dividends
- ---------
There are no present material restrictions that limit the ability
of the Company to pay dividends on common stock or that are likely to do so in
the future. The Company has not paid any dividends with respect to its common
stock, and does not intend to pay dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------
Plan of Operation
- -----------------
The Company has not engaged in any material business operations since
1989. Its only activities since that time have consisted of restoring and
maintaining its good standing in the State of Nevada. The Company has no
material tangible property or assets.
Results of Operations
- ---------------------
The Company discontinued its active operations in 1989, and has
had no revenues since. On January 1, 1996, it recommenced its developmental
stage, and incurred a net loss in the amount of ($3,167) and ($740),
respectively, for the years ended December 31, 1997 and 1996.
Liquidity
- ---------
The Company had no material assets during the years ended December 31,
1996 and 1997, and liabilities of $1,418 for the year ended December 31, 1997.
$1,749 was contributed to capital, by David C. Merrell, the Company's
President during the year ended December 31, 1997.
Item 7. Financial Statements.
- -----------------------------
For the periods ended December 31, 1997 and 1996
Independent Auditors' Report
Balance Sheet for the year ended December 31, 1997
Statements of Operations for the years ended
December 31, 1997 and 1996
Statements of Stockholders' Equity (Deficit)
From December 31, 1994 through December 31, 1997
Statements of Cash Flows for the years ended
December 31, 1997 and 1996
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- --------------------
No independent accountant of the Company has resigned, declined to
stand for re-election or was dismissed during the Company's two most recent
fiscal years or any interim period.
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, in alphabetical order, the names
and the nature of all positions and offices held by all directors and
executive officers of the Company during 1997, and the period or periods
during which each such director or executive officer served in his or her
respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
Corie Merrell Director 9/96 *
Secretary/ 9/96 *
Treasurer
David C. Merrell Director 9/96 *
President 9/96 *
Term of Office
- --------------
The term of office of the current directors shall continue until
the annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in December of each year. The annual meeting of the
Board of Directors immediately follows the annual meeting of stockholders, at
which officers for the coming year are elected.
Business Experience
- -------------------
David C. Merrell, Director and President. Since 1989, he has been
the owner of DCM Finance, a Salt Lake City based finance company that makes
and brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Corie Merrell, Director and Secretary/Treasurer. Since 1989, she
has been part owner of DCM Finance and is currently a part time student at
Westminster College majoring in Psychology.
Family Relationships
- --------------------
David C. Merrell and Corie Merrell are husband and wife.
Involvement in Certain Legal Proceedings
- ----------------------------------------
Except as indicated below and to the knowledge of management,
during the past five years, no present or former 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
by or against which any bankruptcy petition was filed,
whether at the time of such filing or two years prior
thereto;
(2) Was convicted in a criminal proceeding or named the subject
of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant,
associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or
employee of any investment company, bank, savings and
loan association or insurance company, or engaging in
or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or
in connection with any violation of federal or
state securities laws or federal commodities
laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in
any activity described above under this Item, or to be
associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities
and Exchange Commission has not been subsequently reversed,
suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to
have violated any federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed,
suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
No securities of the Company are registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, and the Company files reports
under Section 15(d) of the Securities Exchange Act of 1934; accordingly,
directors, executive officers and 10 percent stockholders are not required to
make filings under Section 16 of the Securities Exchange Act of 1934.
Item 10. Executive Compensation.
- -------------------------------
Cash Compensation
- -----------------
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
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 rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
[S] [C] [C] [C] [C] [C] [C] [C] [C]
David
Merrell, 12/31/96 0 0 0 0 0 0 0
President, 12/31/97 0 0 0 0 0 0 0
Director
Corie
Merrell 12/31/96 0 0 0 0 0 0 0
Secretary/ 12/31/97 0 0 0 0 0 0 0
Treasurer,
Director
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
calendar years ended December 31, 1997, or 1996, or the period ending on
the date of this Report. Further, no member of the Company's management has
been granted any option or stock appreciation right; accordingly, no tables
relating to such items have been included within this Item. See the Summary
Compensation Table of this Item.
Compensation of Directors
- -------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed fiscal year or
the previous two fiscal years for any service provided as director. See the
Summary Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement
- -----------------------------------------------------------
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person named in
the Summary Compensation Table set out above which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of such person's employment with the Company or its
subsidiaries, or 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 share holdings of those persons
who own more than five percent of the Company's common stock as of December
31, 1996 and 1997, and to the date hereof:
Number and Percentage
of Shares Beneficially Owned
Name and Address Then and Now
David C. Merrell 11,850,000 - 91%
9005 Cobble Canyon Lane
Sandy, Utah 84093
TOTALS 11,850,000 - 91%
Security Ownership of Management.
The following table sets forth the shareholdings of the Company's
directors and executive officers as of December 31, 1996 and 1997, and to the
date hereof:
Number and Percentage
of Shares Beneficially Owned
Name and Address Then and Now
David C. Merrell 11,850,000 - 91%
9005 Cobble Canyon Lane
Sandy, Utah 84093
Corie Merrell -0-
9005 Cobble Canyon Lane
Sandy, Utah 84093
TOTALS 11,850,000 - 91%
As of April 27, 1998, the Company's directors and executive
officers as a group (2) beneficially owned a total of 11,850,000 shares of the
Company's common stock, or approximately 91% of the outstanding voting
securities of the Company.
Changes in Control
- ------------------
On August 18, 1997, David C. Merrell foreclosed certain Promissory Notes
dated September 24, 1996, signed by Messrs. Kelly, Mattar and Drummond, which
were collateralized by 11,850,000 shares of common stock of the Company
collectively held by these persons. Mr. Merrell acquired 11,850,000 shares of
the Company from these individuals through this foreclosure.
Item 12. Certain Relationships and Related Transactions.
- -------------------------------------------------------
Transactions with Management and Others.
- ---------------------------------------
Except as indicated under the heading "Changes in Control" of Part III,
Item 11, there have been no material transactions between any director,
executive officer, five percent stockholder, or promoter of the Company.
Item 13. Exhibits and Reports on Form 8-K.
- -----------------------------------------
Reports on Form 8-K
- -------------------
None.
Exhibit
Exhibits* Number
(i)
Financial Data Schedule 27
(ii) Where Incorporated
In This Report
10-KSB Annual Report for the year Item I **
ended December 31, 1996
S-18 Registration Statement Item I **
Prospectus Item I **
* A summary of any Exhibit is modified in its entirety by reference
to the actual Exhibit.
** These documents and related exhibits have previously been filed
with the Securities and Exchange Commission and are incorporated
herein by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
A.X.R. DEVELOPMENT CORPORATION
Date: 10/7/98 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/98 By/s/Corie Merrell
Corie Merrell
Secretary/Treasurer 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 Registrant and in the capacities and on the dates indicated:
A.X.R. DEVELOPMENT CORPORATION
Date: 10/7/98 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/98 By/s/Corie Merrell
Corie Merrell
Secretary/Treasurer and Director
<PAGE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1997
<PAGE>
INDEPENDENT AUDITORS REPORT
The Board of Directors
A.X.R. Development Corporation, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of A.X.R. Development
Corporation, Inc. (a development stage company) as of December 31, 1997 and
the related statements of operations, stockholders equity (deficit) and cash
flows for the years ended December 31, 1997 and 1996 and from inception on
July 10, 1985 through December 31,1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of A.X.R. Development
Corporation, Inc. (a development stage company) as of December 31, 1997 and
the results of its operations and its cash flows for the years ended December
31, 1997 and 1996 and from inception on July 10, 1985 through December 31,
1997 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company is a development stage company with no operating
capital which raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
April 16, 1998
<PAGE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Balance Sheet
<CAPTION>
ASSETS
December 31,
1997
<S> <C>
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Accounts payable $ 1,418
Total Current Liabilities 1,418
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock $0.001 par value; authorized
100,000,000 shares; 13,000,000 shares issued
and outstanding 13,000
Additional paid-in capital 61,879
Deficit accumulated during the development stage (76,297)
Total Stockholders' Equity (Deficit) (1,418)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
Inception on
For the July 10, 1985
Years Ended Through
December 31, December 31,
1997 1996 1997
<S> <C> <C> <C>
REVENUES $ - $ - $ -
LOSS FROM DISCONTINUED
OPERATIONS (Note 4) (3,167) (740) (76,297)
NET LOSS $ (3,167) $ (740) $ (76,297)
NET LOSS PER SHARE $ (0.00) $ (0.00)
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
At inception on July 10, 1985 - $ - $ - $ -
Common stock issued for cash at
an average of $0.006 per share 13,000,000 13,000 59,390 -
Net loss from inception through
December 31, 1994 - - - (72,390)
Balance, December 31, 1994 13,000,000 13,000 59,390 (72,390)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 13,000,000 13,000 59,390 (72,390)
Contributed capital for expenses - - 740 -
Net loss for the year ended
December 31, 1996 - - - (740)
Balance, December 31, 1996 13,000,000 13,000 60,130 (73,130)
Contributed capital for expenses - - 1,749 -
Net loss for the year ended
December 31, 1997 - - - (3,167)
Balance, December 31, 1997 13,000,000 $13,000 $ 61,879 $(76,297)
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
<CAPTION>
From
Inception on
For the July 10, 1985
Years Ended Through
December 31, December 31,
1997 1996 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Income (loss) from operations $ (3,167) $ (740) $ (76,297)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Increase in accounts payable 1,418 - 1,418
Contributed capital for expenses 1,749 740 2,489
Net Cash Provided (Used) by
Operating Activities - - (72,390)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net Cash Provided (Used) by
Investing Activities - - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock for cash - - 73,390
Stock offering costs - - (1,000)
Net Cash Provided (Used) by
Financing Activities $ - $ - $ 72,390
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ - $ - $ -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - - -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ - $ - $ -
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1997
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
A.X.R. Development Corporation, Inc. was organized under the laws of
the State of Nevada on July 10, 1985. Since then, there has been no
active operations. In 1996, the Company changed its management and is
seeking a business opportunity. The Company has selected a calendar
year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
b. Provision for Taxes
The Company has a $4,000 net operating loss carryover as of December
31, 1997 which expires in 2012. The potential tax benefit has been
offset by a valuation allowance for the same amount.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
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 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 3 - 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. The Company has not established
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. Management intends to seek a merger with
an existing, operating company. In the interim, it has committed to
meeting the Company's minimal operating expenses.
NOTE 4 - DISCONTINUED OPERATIONS
In 1987, the Company discontinued operations and was reclassified as
a development stage company. All revenues generated by the Company
have been netted against the expenses and are grouped into the
discontinued operations line on the statements of operations.
NOTE 5 - RELATED PARTY TRANSACTIONS
The president of the Company contributed $1,749 for expenses on behalf
of the Company in 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1418
<BONDS> 0
0
0
<COMMON> 13000
<OTHER-SE> (14418)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3167
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3167)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (3167)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3167)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
