<PAGE>
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, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 033-02441-D
DRACO HOLDING CORP.
-------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0638750
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4843 Wallace Lane
Salt Lake City, Utah 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 209-0545
N/A
---
(Former Name or Former Address, if changed since last Report)
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 there is no disclosure of delinquent files 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: December 31, 1999 -
$0.
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.
December 31, 1999 - $934.75. There are approximately 934,750 shares of
common voting stock of the Company held by non-affiliates. During the past
two years there has been no "established public market" for shares of common
voting stock of the Company, so the Company has arbitrarily valued these
shares based on $0.001 par value per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
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
April 1, 2000
2,034,750
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.
- ---------------------
Business.
- ---------
On August 17, 1999, each of the former directors and executive
officers of Draco Corp., a Utah corporation "Draco-Utah" resigned and
appointed Lane Clissold; Steven Moulton; and Diane Reed to serve as directors
in their stead. The new Board of Directors then elected Mr. Clissold to
serve as Draco-Utah's President; Ms. Reed as its Vice President; and Mr.
Moulton as its Secretary/Treasurer.
On the same date, Draco-Utah's new Board of Directors unanimously
voted to authorize Steven Moulton to negotiate with a business associate for
the formation of a wholly-owned subsidiary to operate an equipment rental
business and report back to the Board of Directors.
On August 18, 1999, Draco-Utah's Board of Directors unanimously
voted to issue 5,000,000 "unregistered" and "restricted" shares of Draco-
Utah's common stock each to Steven Moulton and Lane Clissold in consideration
of services rendered to Draco-Utah and each recipient's payment to Draco-Utah
of $25,000.
On September 10, 1999, at the annual meeting of Draco-Utah's
stockholders, the holders of 11,009,375 shares (representing approximately
54%) of Draco-Utah's issued and outstanding common stock voted to: (i) elect
Steven Moulton; Lane Clissold; and Diane Reed to Draco-Utah's Board of
Directors, with each to serve until the next annual meeting of stockholders or
his or her prior death, resignation or termination and the qualification of
his or her successor; (ii) effect a reverse split of Draco-Utah's issued and
outstanding common stock in the ratio of one share for 10, while retaining the
authorized shares at 500,000,000 shares and retaining the par value at one
mill ($0.001) per share, with appropriate adjustments in the stated capital
and additional paid in capital accounts of Draco-Utah; and (iii) change Draco-
Utah's domicile from the State of Utah to the State of Nevada by merging the
Company into its wholly-owned subsidiary, Draco Holding Corporation, a Nevada
corporation that had been formed for the sole purpose of changing Draco-
Utah's domicile from the State of Utah to the State of Nevada (the "Company").
On September 13, 1999, the Boards of Directors of the Company and of
Draco-Utah voted to approve Draco-Utah's merger into the Company, and Articles
of Merger effecting the merger were filed with the Nevada Secretary of State
and the Utah Division of Corporations on September 14, 1999, and September 16,
1999, respectively.
After the merger, the Company became the surviving corporation,
assuming all the assets and obligations of Draco-Utah. The Company is the
surviving entity for legal purposes, and the historical financial information
of Draco-Utah became the Company's financial statements for accounting
purposes.
Draco-Utah filed Articles of Amendment effectuating its reverse
split with the Utah Division of Corporations on September 14, 1999. See Item
6 of this Report.
On October 13, 1999, the Company's Board of Directors unanimously
voted to adopt and ratify a prior forward split of Draco-Utah's common stock
in the ratio of five for one, while retaining the authorized shares at
500,000,000 and the par value at one mill ($0.001).
On March 3, 2000, which is subsequent to the period covered by this
Report, the Company's Board of Directors unanimously voted to purchase 1,000
shares of Jump'n Jax, Inc., a Utah corporation ("Jump'n Jax"), in order to
make Jump'n Jax a wholly-owned subsidiary. Jump'n Jax will operate the
Company's business of leasing inflatable balloon houses for parties and
outdoor activities in Southern Utah. The Board of Directors further resolved
to loan $10,000 to Jump'n Jax to allow it to commence operations, and to elect
Steven Moulton as Jum'n Jax' director, with James Wheeler; Richard Lamb; and
Michelle Wheeler to serve as its President, Vice President and
Secretary/Treasurer, respectively.
Principal Products or Services and their Markets.
- -------------------------------------------------
The principal service offered by the Company is childhood
entertainment. The Company currently owns and operates three 15' x 15' bounce
houses: Castle Disney, and interchangeable Winnie the Pooh and Sports
Superheroes houses. The primary market for these services is young people.
Within Washington County, in Southern Utah, over 36% of the 80,000 person
population is under age 18. It is expected that the majority of these
children will have birthday parties, and we hope to continue to draw our
greatest customer base from this. However, we also participate in fairs,
carnivals and other events where children are present.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Currently, the Company runs four yellow page adds in Southern Utah,
a weekly newspaper spot and a spot on the local cable channel; however word of
mouth will be and is the number one source of customers.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competition.
- ------------
The city of St. George has two bounce house services. Hoo-ray
Bouncers and A to Z Kids offer the same type of service for about $80 for 3
hours. Their units are about six years old and in need of repair or
replacement, while our three units are all under one year old and much safer
and cleaner. Our rates are also $15 cheaper than our competition on the week
days. A to Z has an advantage in that one of their bounce houses is larger
for larger events; however, they are now located in Kanab, Utah, which is
almost 80 miles away from St. George.
Sources and Availability of Raw Materials.
- ------------------------------------------
The bounce houses are readily available through All American
Inflatables of Sacramento, California; Cutting Edge Creations, Inc., of
Burnsville, Minnesota; and HEC Services Inc., of Orlando, Florida.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts.
- ----------------
None; not applicable.
Governmental Approval of Principal Products or Services.
- --------------------------------------------------------
None; not applicable.
Effects of Existing or Probable Governmental Regulations.
- ---------------------------------------------------------
Other than maintaining its good standing in the State of Nevada;
complying with applicable local business licensing requirements; preparing its
periodic reports under the Securities Exchange Act of 1934, as amended (the
"1934 Act"); and complying with other applicable securities laws, rules and
regulations as set forth above, the Company does not believe that existing or
probable governmental regulations will have a material effect on its
operations.
Cost and Effect of Compliance with Environmental Laws.
- ------------------------------------------------------
None; not applicable.
Research and Development Expenses.
- ----------------------------------
None; not applicable.
Number of Employees.
- --------------------
The Company has two employees, who are both officers and directors
of the Company.
Item 2. Description of Property.
------------------------
The Company uses space inside Joker Joker, a party supply store in
St. George, Utah. This space is available at no cost to the Company because
Joker Joker sees it as being beneficial for business.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. 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.
----------------------------------------------------
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this Report.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
There has never been any established "public market" for
shares of common stock of the Company. There have been no quotations for
common stock of the Company according to The National Quotations Bureau, LLC
("NQB") for at least five years. The Company intends to submit for quotations
of its common stock on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. ("NASD"); however, management does not expect any
public market to develop unless and until its operations are successful. In
any event, no assurance can be given that any market for the Company's common
stock will develop or be maintained. If a public market 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 members of
management or others may have a substantial adverse impact on any such public
market; and all of these persons have satisfied the "holding period" under
Rule 144. See the headings "Recent Sales of Unregistered Securities," and
"Security Ownership of Certain Beneficial Owners and Management."
Holders.
- --------
The number of record holders of the Company's securities as of the
date of this Report is approximately 36.
Dividends.
- ----------
The Company has not declared any cash dividends with respect to its
common stock or its preferred stock, and does not intend to declare dividends
in the foreseeable future. There are no material restrictions limiting, or
that are likely to limit, the Company's ability to pay dividends on its
securities.
Recent Sales of Unregistered Securities.
- ----------------------------------------
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
Steven D. Moulton 8/18/99 5,000,000(1) $25,000 and
Services
Lane Clissold 8/18/99 5,000,000(1) $25,000 and
Services
Excel Properties * 8/18/99 1,000,000(1) Services
L.L.C.
* These shares are controlled by Steven Moulton, The Company's Secretary and
Treasurer.
(1) These shares were valued at par value of $0.001 per
share.
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 operating its bounce houses
in Southern Utah.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing;
making the requisite filings with the Securities and Exchange Commission, and
funding operations for its bounce houses. The Company believes that cash on
hand will be enough for the next twelve months.
Results of Operations.
- ----------------------
Revenues for the fiscal years ended December 31, 1999 and December
31, 1998 were $0 and $0 respectively.
The Company had a net loss of $12,406 (a loss of $0.01 per share)
during the fiscal year ended December 31, 1999, and a net loss of $150 (a loss
of $0.00 per share), for the fiscal year ended December 31, 1998.
Liquidity.
- ----------
As of December 31, 1999, the Company had cash on hand of $42,344.
The Independent Auditors' Report, dated October 14, 2000, accompanying the
Company's audited financial statements for the period ended December 31, 1999
and 1998, expresses substantial doubt as to the Company's ability to continue
as a going concern. This is due to the fact that the Company is a development
stage company with no significant operating results to date.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
December 31, 1999, and 1998
Independent Auditors' Report
Balance Sheet - December 31, 1999
Statements of Operations for the Years Ended
December 31, 1999 and 1998, and from Inception
on December 17, 1985, through December 31, 1999
Statements of Stockholders' Equity (Deficit),
from Inception on December 17, 1985, through
December 31, 1999
Statements of Cash Flows for the Years Ended
December 31, 1999 and 1998, and from Inception
on December 17, 1985, through December 31, 1999
Notes to Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
None; not applicable.
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 (held in September of each year) 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>
Lane Clissold President/ 8/99 *
Director
Diane Reed Vice President/ 8/99 *
Director
Steven D. Moulton Secretary/ 8/99 *
Treasurer
Director
</TABLE>
* These persons presently serve in the capacities
indicated.
Business Experience.
- --------------------
Steven D. Moulton, Director and Secretary. Mr. Moulton is
38 years of age. He graduated from Olympus High School in Salt Lake City,
Utah in 1980. From 1984 to 1990, he served as a director and executive
officer of several publicly-held development stage companies including Safron,
Inc. (director and Vice President); Sagitta Ventures (director and President);
Jasmine Investments (director and President); Java, Inc. (Secretary/Treasurer
and director); and Onyx Holdings Corporation (director and President). From
1991 to 1994, Mr. Moulton was a director and President of Omni International
Corporation, which is currently known as "Beachport Entertainment
Corporation." From 1987 until 1991 he was President and director of Icon
Systems, Inc. and served as Secretary/Treasurer of the same company until his
resignation on December 24, 1998. From 1995 to July 1996, he served as
director and Vice President of Wasatch International Corporation, formerly
Java, Inc. From February 1996 until November, 1999 he served as the President
and director of InsiderStreet.com, formerly Sierra Holding Group, Inc. Since
December, 1997, Mr. Moulton has been associated with Rocky Mountain Fudge
Company, Inc. (director and Vice President), a public candy company, and Bear
Lake Recreation, Inc (director and President), a public snowmobile rental
company. Also, from December 1997 to the present, Mr Moulton has been a
director and President of XEBec International, Inc., a shell company looking
for a merger or acquisition. With the exception of Sagitta Ventures, Omni
International Corporation, Wasatch International, Icon Systems, Inc. and
InsiderStreet.com, formerly, Sierra Holding Group, Inc, none of these
companies was subject to the reporting requirements of the commission. Mr.
Moulton owned and operated a Chem-Dry carpet cleaning franchise from 1991 to
1995. Mr. Moulton is the brother of the Company's Vice President/director,
Diane Reed.
Diane Reed, Director and Vice President. Ms. Reed graduated from
Olympus High School in Salt Lake City, Utah in 1989. From 1998 to the
present, she has worked for Utah Cleaning and Maid Service, and from 1997 to
the present, she has also worked as a private day care provider, also in Salt
Lake City. From 1996 to 1997, Ms. Reed was the manager of Red's Frozen Yogurt
in Salt Lake City, and from 1994 to 1996, she worked as a travel agent for
Morris Travel, also in Salt Lake City. From 1992 to 1994, Ms. Reed was a
receptionist for Continental Airlines. From October 1995 to September 1996,
Ms. Reed was a Director and Vice President of Icon Systems, Inc., and from
December, 1997 to the present, she has been a Director and Secretary/Treasurer
of XEBec International, Inc., a shell company looking for a merger or
acquisition. Ms. Reed is the sister of the Company's President, Steven D.
Moulton.
Lane Clissold, Director and President. Mr Clissold is 48 years old.
He graduated from Skyline High School in Salt Lake City, Utah in 1969. From
1969 until 1979, Mr. Clissold worked for The Utah Department of Transportation
in the construction engineering and safety departments. During that period of
time, Mr Clissold attended Utah State University, The University of Utah and
Brigham Young University. Mr. Clissold graduated in 1976 with a degree in
engineering. In 1977, Mr. Clissold bought Alpine Auto Renovations and is
still President and co-owner. Mr. Clissold has been a Officer and Director of
a few publicly held developmental stage companies including Sound Industries,
(Director and President from January of 1995 until May of 1997); Rotunela Oil
and Mining, (Director and President from November 1995 to November of 1998),
and currently a Director and Secretary/Treasurer of Treasure Mountain.
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. It
is expected that current members of management and the Board of Directors will
be the only persons whose activities will be material to the Company's
operations. Members of management are the only persons who may be deemed to
be promoters of the Company.
Family Relationships.
- ---------------------
Ms. Reed is Mr. Moulton's sister. There are no other family
relationships between any directors or executive officers of the Company,
either by blood or by marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer 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
- -------------------------------------------------
Mr. Clissold, Ms. Reed and Mr. Moulton will file a Form 3 Initial
Statement of Beneficial Ownership of Securities with the Commission on or
about the date that this Report is filed.
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:
<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 rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven D.
Moulton 12/31/97 0 0 0 0 0 0 0
Secretary/ 12/31/98 0 0 0 0 0 0 0
Treasurer 12/31/99 0 0 0 600,000 0 0 0
Director (1) (2)
Diane Reed 12/31/97 0 0 0 0 0 0 0
V.President 12/31/98 0 0 0 0 0 0 0
Director 12/31/99 0 0 0 0 0 0 0
Lane
Clissold 12/31/97 0 0 0 0 0 0 0
President 12/31/98 0 0 0 0 0 0 0
Director 12/31/99 0 0 0 500,000(2)0 0 0
(1) 100,000 of these shares were issued to Excel Properties, LLC. which are
controlled by Mr. Moulton, for services rendered. These shares are reflected
as "restricted".
(2) 500,000 of these shares were issued for a combination of services rendered
and $25,000 cash.
</TABLE>
Except as stated below, no cash compensation, deferred compensation
or long-term incentive plan awards were issued or granted to the Company's
management during the fiscal years ended October 31, 1999 and 1998. 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.
There are no plans whereby the Company would issue any of its
securities to management, promoters, their affiliates or associates in
consideration of services rendered or otherwise.
Compensation of Directors.
- --------------------------
None
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 its
subsidiaries, any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Nor are there any agreements or understandings for any director or
executive officer to resign at the request of another person; none of the
Company's directors or executive officers is acting on behalf of or will act
at the direction of any other person.
Bonuses and Deferred Compensation
- ---------------------------------
None.
Compensation Pursuant to Plans
- ------------------------------
None.
Pension Table
- -------------
None; not applicable.
Other Compensation
- ------------------
None.
Termination of Employment and Change of Control Arrangements
- ------------------------------------------------------------
None.
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, 1999. Each of these persons has sole investment and sole voting power
over the shares indicated.
<TABLE>
<CAPTION>
Number Percentage
Name and Address of Shares Beneficially Owned of Class
- ---------------- ---------------------------- --------
<S> <C> <C>
Steven D. Moulton *602,500 25.1%
4848 S. Highland Dr., #353
Salt Lake City, Utah 84117
Lane Clissold 500,000 24.5%
135 West 900 South
Salt Lake City, Utah 84101
Fidenas International Bank, LTD 379,000 18.6%
Bolam House George St.
Nassau Bahamas
Cam-Pak International, LTD 195,845 0.9%
--------- -----
TOTALS 1,677,345 83%
</TABLE>
* 100,000 of these shares were issued to Excel Properties LLC, which is
controlled by Mr. Moulton, for services rendered. These shares are reflected
as "restricted".
Security Ownership of Management.
- ---------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of December 31, 1999. Each of these
persons has sole investment and sole voting power over the shares indicated.
<TABLE>
<CAPTION>
Number Percentage
Name and Address of Shares Beneficially Owned of Class
- ---------------- ---------------------------- ----------
<S> <C> <C>
Steven D. Moulton 602,500 25.1%
4848 S. Highland Dr., #353
Salt Lake City, Utah 84117
Lane Clissold 500,000 24.5%
135 West 900 South
Salt Lake City, Utah 84101
Diane Reed -0- -0-
4596 Russel St.
Salt Lake City, Utah 84117 ----------- ---------
All directors and executive
officers as a group (3) 1,102,500 49.6%
</TABLE>
Changes in Control.
- -------------------
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.
- ----------------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, two of the current
directors and executive officers have received "unregistered" and "restricted"
shares of the Company's common stock in consideration of services rendered.
Steven D. Moulton and Lane Clissold have each received an aggregate of 500,000
"unregistered" and "restricted" post-split shares in consideration of services
rendered and $25,000 cash. See the caption "Executive Compensation" of this
Report.
Certain Business Relationships.
- -------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, see the caption
"Transactions with Management and Others" of this Report.
Indebtedness of Management.
- ---------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, see the caption
"Transactions with Management and Others" of this Report.
Parents of the Issuer.
- ----------------------
The Company has no parents, except to the extent that Messrs.
Moulton and Clissold may be deemed to be parents by virtue of their stock
holdings. See the caption "Security Ownership of Certain Beneficial Owners
and Management" of this Report.
Transactions with Promoters.
- ----------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
promoter or founder, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, see the caption
"Transactions with Management and Others" of this Report.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
None during the past two years.
Exhibits
- --------
Exhibit
Number Description
- ------ -----------
27 Financial Data Schedule
* Summaries of all exhibits contained within this
Report are modified in their entirety by reference
to these Exhibits.
** These documents and related exhibits have been
previously filed with the Securities and Exchange
Commission and are incorporated herein by reference.
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.
Draco Holding Corp.
Date: 4-14-00 By /s/ Lane Clisssold
-------------- --------------------------------------
Lane Clissold, Director and
President
Date: 4-14-00 By /s/ Steven D. Moulton
-------------- -------------------------------------
Steven D. Moulton, Director and
Secretary/Treasurer
<PAGE>
Draco Holding Corp.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Draco Holding Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Draco Holding Corporation (a
development stage company) as of December 31, 1999, and the related statements
of operations, stockholders' equity, and cash flows for the years ended
December
31, 1999 and 1998. 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 Draco Holding Corporation (a
development stage company) as of December 31, 1999 and the results of its
operations and its cash flows for the years ended December 31, 1999 and 1998
in
conformity with generally accepted accounting principles.
The accounting 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 revenues to date, 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 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
January 14, 2000
DRACO HOLDING CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Draco Holding Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Draco Holding Corporation
(a development stage company) as of December 31, 1999, and the related
statements
of operations, stockholders' equity, and cash flows for the years
ended December 31, 1999 and 1998. 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 Draco Holding Corporation
(a
development stage company) as of December 31, 1999 and the results of its
operations and its cash flows for the years ended December 31, 1999 and 1998
in
conformity with generally accepted accounting principles.
The accounting 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 revenues to date, 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 2. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
January 14, 2000
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
December 31,
1999
<S> <C>
CURRENT ASSETS
Cash $ 42,344
Total Current Assets 42,344
TOTAL ASSETS $ 42,344
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -
Total Liabilities -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value 500,000,000 shares
authorized; 2,034,750 shares issued and outstanding 2,035
Additional paid-in capital 133,795
Deficit accumulated during the development stage (93,486)
Total Stockholders' Equity 42,344
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 42,344
</TABLE>
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
December 17,
For the Years Ended 1985 Through
December 31, December 31,
1999 1998 1999
(Unaudited)
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 12,406 150 93,486
Total Expenses 12,406 150 93,486
LOSS FROM OPERATIONS (12,406) (150) (93,486)
NET LOSS $ (12,406) $ (150) $ (93,486)
BASIC LOSS PER SHARE $ (0.01) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,341,599 934,750
</TABLE>
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on December 17, 1985 Through December 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance at inception on
December 17, 1985 - $ - $ - $ -
common stock issued for
cash at $0.02 400,000 400 7,600 -
Common stock issued for
cash at $0.20 per share 534,750 535 106,415 -
Stock offering costs - - (34,220) -
Net loss from inception on
December 17, 1985 through
December 31, 1996 - - - (80,830)
Balance, December 31, 1996 934,750 935 79,795 (80,830)
Contributed capital for
expenses - - 100 -
Net loss for the year ended
December 31, 1997 - - - (100
Balance, December 31, 1997 934,750 935 79,895 (80,930)
Net loss for the year ended
December 31, 1998 - - - (150)
Balance, December 31, 1998 934,750 935 79,895 (81,080)
Common stock issued for
cash at $0.05 per share 1,000,000 1,000 49,000 -
Common stock issued for
services at $0.05 per
share 100,000 100 4,900 -
Net loss for the year ended
December 31, 1999 - - - (12,406)
Balance, December 31, 1999 2,034,750 $ 2,035 $ 133,795 $ (93,486)
</TABLE>
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
December 17,
For the Years Ended 1985 Through
December 31, December 31,
1999 1998 1999
(Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (12,406) $ (150) $(93,486)
Adjustments to reconcile net loss to
net cash used by operating activities:
Contributed capital for expenses - - 100
Common stock issued for services 5,000 - 5,000
Changes in operating assets and
liabilities:
Increase (decrease) in accounts
payable (250) 150 -
Net Cash Used by Operating
Activities (7,656) - (88,386)
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Stock offering costs - - (34,220)
Proceeds from issuance of common
stock 50,000 - 164,950
Net Cash Provided by Financing
Activities 50,000 - 130,730
INCREASE (DECREASE) IN CASH 42,344 - 42,344
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ 42,344 $ - $ 42,344
</TABLE>
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
Inception on
December 17,
For the Years Ended 1985 Through
December 31, December 31,
1999 1998 1999
(Unaudited)
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for:
Taxes $ - $ - $ -
Interest $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $ 5,000 $ - $ 5,000
</TABLE>
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Draco Holding Corporation (the Company) was organized August 20, 1999
under the laws of the State of Nevada for the purpose of engaging in
any lawful activity. On September 13, 1999, Draco Holding Corporation
filed articles of merger whereby Draco Corporation (a Utah corporation
formed on December 17, 1985) (Draco-Utah) merged into Draco Holding
Corporation (the Company). The Company became the surviving
corporation, assuming all the assets and obligations of Draco-Utah. At
the time of merger, each outstanding share of common stock of
Draco-Utah was converted into one share of common stock of the Company,
and all fractional shares were rounded to the nearest whole share. The
Company has had no significant operations since inception and is
considered a development stage company in accordance with Statement of
Financial Accounting Standards No. 7. The Company is the surviving
entity for legal purposes and the historical financial statements of
Draco-Utah became the Company's financial statements for accounting
purposes.
b. Provision for Taxes
At December 31, 1999, the Company had net operating loss carry forwards
of approximately $12,500 that may be offset against future taxable
income through 2019. No tax benefit has been reported in the
financial
statements, because the Company believes there is a 50% or greater
chance the carry forwards will expire unused. Accordingly, the
potential tax benefits of the net operating loss carry forwards are
offset by a valuation allowance of the same amount.
c. Accounting Method
The financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
d. 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 statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
e. Cash and Cash Equivalents
The Company considers all highly liquid investment with a maturity of
three months or less when purchased to be cash equivalents.
f. Revenue Recognition Policy
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
<PAGE>
DRACO HOLDING CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. Basic Loss Per Share
For the Year Ended
December 31, 1999
Loss Shares Per Share
(Numerator) (Denominator) Amount
Net loss $ (12,406) 1,341,599 $ (0.01)
For the Year Ended
December 31, 1998
Loss Shares Per Share
(Numerator) (Denominator) Amount
Net loss $ (150) 934,750 $ (0.00)
The computations of basic loss per share of common stock are based on
the weighted average number of shares of common stock outstanding
during the period of the financial statements.
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. 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 minimal operating expenses.
NOTE 3 - STOCK TRANSACTIONS
On August 18, 1999, the Company issued 1,000,000 unrestricted shares of
common voting stock for cash consideration of $50,000 and 100,000
shares of common voting stock for services rendered valued at $5,000.
On September 13, 1999, the Company effected a reverse split of the
issued and outstanding common stock on the basis of one share for 10,
while retaining the authorized shares at 500,000,000 shares and
retaining the par value of one mill ($0.001) per share. The reverse
stock split has been applied retroactively to the financial statements
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000787251
<NAME> Draco Holding Corp.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 42344
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42344
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 42344
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2035
<OTHER-SE> 40309
<TOTAL-LIABILITY-AND-EQUITY> 42344
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12406
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12406)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12406)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12406)
<EPS-BASIC> (0.01)
<EPS-DILUTED> 0
</TABLE>
