<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(mark one)
/X/ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended May 31, 1996
------------------------
or
/ /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
-------------------- ---------------------------
Commission file number 33-2533-LA
----------------------------
WASATCH INTERNATIONAL CORPORATION
- - - -------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
NEVADA 87-0435741
- - - -------------------------- -------------------------------------
State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization Number)
1501 CORPORATE DRIVE, SUITE 260, BOYNTON BEACH, FL 33426
- - - --------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (407) 732-1200
--------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 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. X Yes No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the 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-K. /X/
Issuers revenues for the most recent fiscal year. $0
------
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. X Yes No The number of shares
--- --
of common stock outstanding is 2,979,020 as of July 17, 1996.
Transitional Small Business Disclosure Format (Check one): Yes X ; No
--- ---
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C> <C>
Item 1. Description of Business................................ 1
Item 2. Description of Property................................ 5
Item 3. Legal Proceedings...................................... 5
Item 4. Submission of Matters to a Vote of
Security Holders........................................ 5
Item 5. Market for Common Equity and Related
Stockholder Matters..................................... 6
Item 6. Management's Discussion and Analysis of
Plan of Operations...................................... 7
Item 7. Financial Statements.................................... 9
Item 8. Changes in and Disagreements with Accountants
on accounting and Financial Disclosure.................. 9
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act.................................... 10
Item 10. Executive Compensation................................. 12
Item 11. Security Ownership of Certain Beneficial Owners
and Management......................................... 14
Item 12. Certain Relationships and Related Transactions......... 16
Item 13. Exhibits and Reports on Form 8-K....................... 19
</TABLE>
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business Development
Wasatch International Corporation (the "Company") was organized
under the laws of the State of Nevada on November 4, 1985, under the name
"Java, Inc." The Company was formed for the purpose of engaging in the
business of investing and all other lawful businesses. The Company's initial
authorized capital consisted of 50,000,000 shares of one mill ($0.001) par
value common voting stock.
The Company subsequently sold 1,320,350 shares of its common stock
to the public at a price of $0.10 per share, pursuant to an S-18 Registration
Statement filed with the Securities and Exchange Commission on or about January
10, 1986 and completed on August 20, 1986.
By this reference, the Company's Registration Statement on Form S-18
of the Securities and Exchange Commission and its Prospectus dated April 22,
1986, are incorporated herein. See Item 13 below.
The only business operations conducted by the Company from its
inception to the end of the period covered by this Report were those of
Graffiti, which was in the business of producing a specialized paint removal
agent. These operations have proved to have only limited success. Other than
maintaining its good standing status in the State of Nevada, and seeking
prospective businesses or assets to acquire and the limited operations of its
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subsidiary, the Company has had no business operations.
Mr. Steven D. Moulton was appointed to the Board of Directors, in
June, 1995 and in September 1995, Messrs. Jeffrey R. Page and Kevin O. Boyer
were appointed to serve as directors of the Company. On the same date, the
Board elected Steven D. Moulton as President; Jeffrey R. Page as Vice
President; and Kevin O. Boyer as Secretary/Treasurer and changed the name of
the Company to "Wasatch International Corporation."
Pursuant to applicable provisions of the Nevada Revised Statutes, on
October 4, 1995, the Company's directors unanimously adopted, without a
meeting, an amendment to the Bylaws of the Company to remove the Company from
the application of the Nevada Control Shares Acquisition Act (Sections 78.378
through 78.3793, inclusive, of the Nevada Revised Statutes).
The Company was revived in the State of Nevada on October 11, 1995,
under the name "Wasatch International Corporation." A copy of the Certificate
of Revival effecting these changes is an exhibit to the Form 10KSB for 1995
incorporated herein by reference.
On October 16, 1995, the Board of Directors of the Company resolved
to issue 23,000,000 "unregistered" and "restricted" shares of common stock to
QBC Holding Corporation, doing business as "Wasatch Consulting Group" ("WCG"),
in consideration of services rendered to the Company.
On November 12, 1995, the Board of Directors of the Company, acting
without a meeting pursuant to applicable provisions of the Nevada Revised
Statutes, unanimously resolved to: (i) incorporate
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a wholly-owned subsidiary in the State of Utah, to be known as "Graffiti
Removal Systems, Inc." ("Graffiti"); (ii) adopt a written consultant
compensation plan to issue 225,000 post-split shares of common stock to Lane
Clissold, a consultant, as compensation for services rendered to the Company of
a total agreed value of $4,500 and to register such shares on an S-8
registration statement, subject to the Company being current in its reporting
obligations with the Securities and Exchange Commission; and (iii) issue
2,500,000 post-split "unregistered" and "restricted" shares of the Company's
common stock to Steven D. Moulton in consideration of services rendered of a
total agreed value of $5,000.
Graffiti was incorporated on November 8, 1995 and is a wholly-owned
subsidiary of the Company. It was anticipated that Graffiti would engage in
the business of Graffiti removal and consulting but as indicated, no
substantial business ever developed so that on July 17, 1996, the Company
approved, in principle, to either spin off or otherwise dispose of Graffiti by
selling Graffiti to another company or individual. In addition, the Company
approved, in principle to acquire certain rights to develop real property in
the Caribbean. No final agreement has been reached, any agreement will however
be contingent upon the receipt of acceptable title report, appraisal of the
land and financial reports. No assurance can be given that either of these
transactions will be consummated.
On July 19, 1996, Steven Moulton, President and Director of
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the Company resigned as did messrs. Boyer and Page, the two other officers and
directors of the Company. Mr. Wallace Giakas was appointed President and a
Director and Mr. Robert Thomas was elected Secretary and Director of the
Company.
Business
The Company has not engaged in any material business operations
since 1989. Its only activities since that time have consisted of maintaining
its good standing in the State of Nevada and the very limited operations of
Graffiti. The Company has no material tangible property or assets. Management
does not anticipate that Graffiti will engage in any business but will be sold
and, if appropriate, negotiate a transaction which would retain a portion of
ownership in the entity.
The Company intends to continue to seek out the acquisition of
assets, property or business that may be beneficial to it and its stockholders.
The Company intends to concentrate on seeking opportunities in developing
resort / casino hotels or vessels initially on the east coast including
Florida. In considering whether to complete any such acquisition, the Board of
Directors shall make the final determination, and the approval of stockholders
will not be sought unless required by applicable law, the Company's Articles
of Incorporation or Bylaws or contract. The Company can give no assurance that
any such endeavor will be successful or profitable.
The Company's management intends to continue to conduct negotiations
with representatives of the owners of all of the
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businesses regarding possible acquisition or merger transactions with the
Company which may include affiliates of the Company. There are no present
agreements with such persons regarding any acquisitions or mergers involving
the Company.
ITEM 2. DESCRIPTION OF PROPERTIES.
The Company has no property or assets and its principal executive
office is 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 government agency.
Further, to the knowledge of management, no director or executive
officer is party to any action which has an interest adverse to the Company.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS.
On November 4, 1995, a special meeting of the Company's stockholders
was held. A total of 26,435,017 shares, representing a quorum of 54 percent of
the issued and outstanding common stock of the Company, were present at the
meeting in person or by proxy.
At a meeting, Steven D. Moulton, Jeffrey R. Page and Kevin O. Boyer
were elected directors of the Company, to serve for one year, until their
successors are elected and qualified or until their prior resignation or
termination. A total of 26,419,917 shares were voted in favor of the
nominations of Messrs. Page and Boyer, 9,500 shares were voted against and
5,000 shares abstained from
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voting. A total of 26,423,017 shares were voted in favor of the nomination of
Mr. Moulton, with 7,000 shares voted against and 5,000 shares abstaining.
The matters were also approved by the Company's stockholders at the
November 4, 1995, meeting: (i) a reverse split of the Company's common stock
in the ratio of one share for every 200 shares issued and outstanding as of
November 4, 1995, with the appropriate adjustments in the Company's additional
paid in capital and stated capital accounts, with the par value to remain at
one mill ($0.001) and the authorized capital to remain at 50,000,000 shares and
with the amount of common stock represented by each stock certificate not to be
reduced below 50 shares as a result of the reverse split (26,417,517 shares
voted in favor; 10,000 shares voted against; 7,500 shares abstained); (ii)
ratification of the appointment of Jones, Jensen & Company, Certified Public
Accountants, to audit the books and records of the Company (26,435,017 shares
voted in favor, 0 shares voted against; 0 shares abstained); and (iii) the
issuance of 23,000,000 pre-split "unregistered" and "restricted" shares of the
Company's common stock to WCG for services rendered (26,409,517 shares voted in
favor; 15,500 shares voted against; 10,000 shares abstained).
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Market Information
There is only a limited established "public market" for shares
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of common stock of the Company. The stock is listed on the OTC Bulletin Board
of the National Association of Securities Dealers ("NASD"). Management does
not expect any expanded public market to develop unless and until the
operations of the Company are likewise expanded, when and if 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.
When a public market 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.
Holders
The number of record holders of the Company's common stock as of the
fiscal years ended May 31, 1994 and 1995 was approximately 260. These numbers
do not include an indeterminate number of stockholders whose shares may be held
by brokers in street name. As of September 1, 1996, there was approximately
310 stockholders.
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 on its common stock, and does
not intend to do so in the foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Plan of Operation
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Since, 1989, other than the extremely limited operations of
Graffiti, its wholly-owned subsidiary, the Company has not engaged in any
material operations. Management has approved in principle the sale and/or
spin-off of Graffiti which may include a sale to its former president.
The Company intends to continue to seek out the acquisition of
assets, property or business that may be beneficial to the Company and its
stockholders. The Company is also negotiating with an affiliate for the right
to develop lands in the Caribbean and has made an offer to acquire a
cruise/casino vessel operating in Florida and the Caribbean from a company
which is reorganizing pursuant to Chapter 11, of the federal bankruptcy code.
No assurance can be given as to the success of these proposed negotiations.
The Company's cash requirements during the next 12 months cannot be
predicted at this time but it is anticipated that substantial funds will be
required to support any operations obtained through an acquisition or merger so
that management anticipates that the Company will have to raise additional
funds in all likelihood substantial funds, during the next 12 months. There is
no assurance that funds will be available on commercially reasonable terms to
consummate any of the above transactions.
Results of Operations
The Company discontinued its active operations in 1989. It received
no revenues and earned no profits in any of the fiscal years ended May 31,
1994, 1995 and 1996. Losses from the Company's
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previously-discontinued operations for the five months ended October 31, 1995
were $32,122. At May 31, 1996, the Company had net operating loss carry
forwards of approximately $900,000.
Liquidity
At May 31, 1994 and 1995, the Company had total assets of $- 0 - and
at May 31, 1996, had cash on hand of $10,969. Management anticipates that
Graffiti, the Company's wholly-owned subsidiary, will not require any working
capital; as that Company's operations are limited.
ITEM 7. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
For the periods ended Page
May 31, 1995 and 1996 Number
<S> <C>
Independent Auditor's Reports . . . . . . . . . . . . . . . . . . . . 23
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . 25
Statements of Stockholders'
Equity (Deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . 28-29
Notes of the Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-31
</TABLE>
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.
The Company's stockholders voted to ratify the appointment of Jones,
Jensen and Company, Certified Public Accountants at a
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special meeting of stockholders held on November 4, 1995, See Items 1 and 4 of
this Report.
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 for the fiscal years ending May 31, 1994, 1995 and
1996, and as of June 30, 1996, and the period or periods during which each such
director or executive officer served in his or her respective positions.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Age Held Designation or Resignation
- - - ---- --- --------- ----------- --------------
<S> <C> <C> <C> <C>
Kevin O. Boyer 25 Director 9/95 7/96
Secretary/ 9/95 7/96
Treasurer
Wallace M. Giakas 41 Director/ 7/96 *
President
Hjalmer L. Hanson Director 10/88 6/95
Steven D. Moulton 34 Director 6/95 7/96
President 6/95 7/96
Jeffrey R. Page 26 Director 9/95 7/96
Vice President 9/95 7/96
Robert G. Thomas 53 Director/ 7/96 *
Secretary
</TABLE>
* These persons presently serve in the capacities indicated opposite their
respective names. Mr. Giakas has indicated his intention to resign as
President and director of the Company and is presently negotiating a
termination of his employment with the Company.
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Term of Office
The term of office of the current directors shall continue until the
annual meeting of stockholders. The annual meeting of the Board of Directors
immediately follows the annual meeting of stockholders, at which officers for
the coming year are elected. Following the sale of the shares held by Mr.
Steven D. Moulton to the LaSalle Group, Ltd. said persons resigned and Messrs.
Wallace M. Giakas and Robert Thomas became the sole directors and officers of
the Company.
Business Experience
WALLACE M. GIAKAS has been a president and owner of several
successful investment banking firms whose clients were both public and private,
domestic and international companies. He is chairman of the Board of Planet
Entertainment Corporation, a Music production Company.
ROBERT T. THOMAS is an attorney licensed in the State of New York
and former Assistant Counsel to the New York State Banking Department. Mr.
Thomas has been the chief financial officer of an investment and securities
brokerage firm while also on the Board of Directors, Executive Committee and
Audit Committee of Tokyo Trust Company.
Family Relationships
No family relationship exists between any director, executive
officer or person nominated to become such.
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Compliance with Section 16(a) of the Exchange Act
No securities of the Company are registered pursuant to Section
12(g) of 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.
No officer or director has received any material compensation in the
previous three fiscal years.
- THIS SPACE INTENTIONALLY LEFT BLANK -
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Cash Compensation
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Years $ $ Other Re- Option/ LTIP All
and or Salary Bonus Annual strict- SAR's Payouts Other
Prin- Periods Com- ed (#) ($) Compen-
cipal Ended pen- Stock sation
Posi- 1996 sation Awards ($)
tion ($) ($)
- - - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wallace -0- -0- -0- -0- -0- -0- -0-
Giakas,
Pres. &
Director
John -0- -0- -0- -0- -0- -0- -0-
Thomas,
Director
and Vice-
President
</TABLE>
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
fiscal years ending May 31, 1996, and 1995, 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 table relating to such
items have been included within this Item. See the Summary Compensation table
of this Item.
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Compensation of Directors
There are no arrangements pursuant to which the Company's directors
are compensated for any services provided as director and no additional amounts
are payable to the Company's directors for committee participation or special
assignments.
The Company's directors were not compensated during the Company's
last completed fiscal year or the previous two fiscal years for any services
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 to 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 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 own more than five percent (5%) of the Company's common stock as of August
31, 1996.
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<TABLE>
<CAPTION>
Number and Percentage
of Shares Beneficially Owned
----------------------------
Name and Address
- - - ----------------
<S> <C>
LaSalle Group 2,450,000 Shares of Common Stock
1501 Corporate Drive representing 82.24% of the
Suite 260 Company's outstanding Common
Boynton Beach, Florida 33426 Stock
</TABLE>
Security Ownership of Management
The following table sets forth the shareholdings of the Company's
directors and executive officers as of May 31, 1994, 1995 and 1996. All
directors and officers resigned effective 7/17/96.
<TABLE>
<CAPTION>
Number and Percentage
of Shares Beneficially Owned
Name and Address 5/31/93 5/31/94 5/31/95 12/18/95
- - - ---------------- ------- ------- ------- --------
<S> <C> <C> <C> <C>
Kevin O. Boyer -0- -0- -0- -0-
4848 S. Highland Dr.
Salt Lake City,
Utah 84117
Hjalmer L. Hanson 1,461,800-5.3% 1,461,800-5.3% 1,461,800-5.3% 7,309-0.3%
3012 W. Route 120
McHenry, Illinois
60050
Steven D. Moulton 260,600-0.9% 260,600-0.9% 260,600-0.9% 2,501,303-90.8%
2200 Arbor Lane
Salt Lake City,
Utah 84117
Jeffrey R. Page -0- -0- -0- -0-
392 W. 400 North
Utah 84010
</TABLE>
These figures take into account the Company's one share of 200
reverse split. See Item 1 of this Report.
A total of 1,316,600 (6,583 as of December 18, 1995) of these shares
are held jointly in the names of Mr. Hanson and his wife, Maureen
Hanson.
In addition, WCG, which may be deemed to the controlled by Mr.
Moulton, beneficially owns post-split shares of the Company's common
stock, or approximately 4.2% of its outstanding voting securities.
15
<PAGE> 18
As of December 18, 1995, the Company's directors and executive
officers as a group (3) beneficially owned a total of 2,501,303 post-split
shares of the Company's common stock, or approximately 90.8% of the outstanding
voting securities of the Company. All of these shares were sold by Mr. Steven
Moulton to the LaSalle Group. Ltd.
Changes in Control
To the knowledge of management, there are no present arrangements or
pledges of the Company's securities which may result in a change in its control
except that on July 17, 1996, Steven Moulton transferred all of his shares of
common stock to the LaSalle Group, Ltd., a Cayman Island corporation.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
Except as indicated below, there were no material transactions, or
series of similar transactions, during the Company's last three fiscal years,
or any currently proposed transaction, 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, executive
officer or any security holder who is known to the Company to own of record or
beneficially more than five percent of any class of the Company's common stock,
or any member of the immediate family of any of the foregoing persons, had an
interest.
16
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On October 16, 1995, the Company's Board of Directors resolved to
issue 23,000,000 pre-split "Unregistered" and "registered" shares of common
stock to QBC Holding Corporation, doing business as "Wasatch Consulting Group,"
("WCG") in consideration of services rendered to the Company. Because Steven
Moulton, the Company's President, director and majority stockholder, was the
President, a director and nine percent stockholder of WCG, Mr. Moulton
abstained from voting on this matter. On November 12, 1995, a majority of the
Company's stockholders voted to approve the issuance of these shares. Further,
on November 12, 1995, the Company's Board of Directors unanimously resolved to
issue 2,500,000 post pre-split shares of "unregistered" and "registered" common
stock to Mr. Moulton in consideration of services rendered of a value of
$5,000.
On July 17, 1996, Steven Moulton sold of all of stock in the Company
to the LaSalle Group Ltd. in consideration for $125,000.
Certain Business Relationships
Except as indicated under the heading "Transactions with Management
and Others" above, there were no material transactions, or series of similar
transaction, during the Company's last three calendar years, or any currently
proposed transactions, or series of similar transactions, to which it 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, executive officers or any security holder
who is known to the Company to own of record or beneficially more than five
percent of any class of its common stock, or any member of the immediate family
of any of the foregoing persons, had
17
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an interest. All of these Shares of Common Stock owned by Mr. Steven Moulton
were sold and transferred by him to the LaSalle Group Ltd.
Indebtedness of Management
Except as indicated under the heading "Transaction with Management
and Others" above, there were no material transactions, or series of similar
transactions, during the Company's last three fiscal years or any currently
proposed transactions, or series of similar transaction, to which it 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, executive officer or any security
holder who is known to the Company to own of record or beneficially more than
five percent of any class of its common stock, to any member of the immediate
family or any of the foregoing persons, had an interest.
Transactions with Promoters
Except as indicated under the heading "Transactions with management
and Others" above, there were no material transactions, or series of similar
transactions, during the Company's last three fiscal years, or any currently
proposed transactions, or series of similar transactions, to which it 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 an interest.
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ITEM 13. EXHIBITS AND REPORT ON FORM 8-K
Reports on Form 8-K
None.
<TABLE>
<CAPTION>
Where Incorporated Page
In This Report Number
-------------- ------
<S> <C> <C>
Registration Statement
on Form S-18 Part I *
Prospectus dated
April 22, 1986 Part I *
Current Report on Form
8-K filed on or about
December 1, 1986. Part I *
</TABLE>
* These documents and related exhibits have previously been
filed with the Securities and Exchange Commission and are
incorporated herein by this reference.
- THIS SPACE INTENTIONALLY LEFT BLANK -
19
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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.
Date: 8/30/96 By: /s/ WALLACE M. GIAKAS
---------------------- ----------------------------------
Wallace M. Giakas, Director and President
Date: 8/30/96 By: /s/ ROBERT G. THOMAS
---------------------- ----------------------------------
Robert G. Thomas, Director and Secretary
<PAGE> 23
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Financial Statements
May 31, 1996 and 1995
<PAGE> 24
C O N T E N T S
<TABLE>
<S> <C>
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . 6
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . 8
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 25
[JONES, JENSEN & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors
Wasatch International Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying consolidated balance sheet of Wasatch
International Corporation (a development stage company) as of May 31, 1996, and
the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for the years ended May 31, 1996 and 1995 and from
inception on November 4, 1985 through May 31, 1996. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion the consolidated financial statements referred to above present
fairly, in all material respects the consolidated financial position of Wasatch
International Corporation (a development stage company) as of May 31, 1996, and
the consolidated results of their operations and their cash flows for the years
ended May 31, 1996 and 1995 and from inception on November 4, 1985 through May
31, 1996 in conformity with generally accepted accounting principles.
The accompanying consolidated 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 capital, accordingly, there is substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ JONES, JENSEN, & COMPANY
- - - ------------------------------
Jones, Jensen, & Company
July 16, 1996
23
<PAGE> 26
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
ASSETS
------
May 31,
1996
----------------
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ 10,969
Notes receivable and accrued interest, net (Note 1) 10,011
----------------
Total Current Assets 20,980
----------------
FIXED ASSETS
Vehicle, net of accumulated depreciation of $2,528 35,397
----------------
TOTAL ASSETS $ 56,377
================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,915
Related party payables (Note 4) 28,000
Current portion of capital lease payable (Note 6) 4,524
----------------
Total Current Liabilities 34,439
----------------
LONG-TERM DEBT
Capital lease payable (Note 6) 25,271
----------------
Total Liabilities 59,710
----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 50,000,000
shares authorized, 2,979,020 shares issued
and outstanding 2,979
Additional paid-in capital 981,179
Deficit accumulated during the development stage (987,491 )
----------------
Total Stockholders' Equity (Deficit) (3,333 )
----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 56,377
================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4 24
<PAGE> 27
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the November 4,
Years Ended May 31, 1985 Through
-------------------------------- May 31,
1996 1995 1996
-------------- -------------- ---------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
EXPENSES - - -
NET INCOME
(LOSS) FROM
OPERATIONS - - -
GAIN (LOSS) ON
DISCONTINUED
OPERATIONS (36,258 ) - (987,491 )
-------------- -------------- ---------------
NET INCOME
(LOSS) $ (36,258 ) $ - $ (987,491 )
============== ============== ===============
INCOME (LOSS)
PER SHARE $ (0.02 ) $ (0.00 )
============== ==============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5 25
<PAGE> 28
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
From Inception on November 4, 1985 through May 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Additional During the
---------------------------- Paid-in Development
Shares Stock Capital Stage
------------- ------------ ------------- -----------------
<S> <C> <C> <C> <C>
Inception, November 4, 1985 - $ - $ - $ -
Common stock issued for
cash at $1.92 per share 6,250 6 11,994 -
Common stock issued to public
for cash at $20.00 per share 6,602 7 132,028 -
Cost of public offering - - (38,791 ) -
Common stock issued to acquire
Quazon Communications, Inc.
at $7.31 per share 115,666 116 845,873 -
Net loss from inception on
November 4, 1985 through
May 31, 1993 - - - (951,233)
--------- --------- ---------- ---------------
Balance, May 31, 1993 128,518 129 951,104 (951,233)
Net loss for the year ended
May 31, 1994 - - - -
--------- --------- ---------- ---------------
Balance, May 31, 1994 128,518 129 951,104 (951,233)
Net loss for the year ended
May 31, 1995 - - - -
--------- --------- ---------- ---------------
Balance, May 31, 1995 128,518 $ 129 $ 951,104 $ (951,233)
--------- --------- ---------- ---------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6 26
<PAGE> 29
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
From Inception on November 4, 1985 through May 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Additional During the
---------------------------- Paid-in Development
Shares Stock Capital Stage
------------- ------------ ------------- -----------------
<S> <C> <C> <C> <C>
Balance, May 31, 1995 128,518 $ 129 $ 951,104 $ (951,233)
Common stock issued to officers
for services provided at $0.20
per share (Note 3) 117,125 117 23,308 -
Common stock issued to officer
for services provided at $0.002
per share 2,500,000 2,500 2,500 -
Fractional shares issued in
reverse split 8,377 8 (8 ) -
Common stock issued pursuant to
a Form S-8 at $0.02 per share 225,000 225 4,275 -
Net loss for the year ended
May 31, 1996 - - - (36,258)
------------- ------------ ------------- -----------------
Balance, May 31, 1996 2,979,020 $ 2,979 $ 981,179 $ (987,491)
============= ============ ============= =================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
27
7
<PAGE> 30
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the November 4,
Years Ended May 31, 1985 Through
--------------------------------- May 31,
1996 1995 1996
-------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Income (loss) from discontinued
operations $ (36,258 ) $ - $ (987,491 )
Adjustments to reconcile net
income to net cash provided
by operating activities:
Common stock issued for services
provided 32,925 - 32,925
Common stock issued to acquire
subsidiary - - 845,989
Depreciation 2,528 - 2,528
Allowance for bad debts 1,000 - 1,000
(Increase) decrease in note
receivable and accrued interest (11,011 ) - (11,011 )
Increase (decrease) in accounts
payable 1,915 - 1,915
------------ ------------- -------------
Net Cash (Used)
by Operating Activities (8,901 ) - (114,145 )
------------ ------------- -------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of fixed assets (8,130 ) - (8,130 )
------------ ------------- -------------
Net Cash (Used)
by Investing Activities (8,130 ) - (8,130 )
------------ ------------- -------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Loan from related parties 28,000 - 28,000
Issuance of common stock for cash - - 105,244
------------ ------------- -------------
Net Cash Provided
by Financing Activities $ 28,000 $ - $ 133,244
------------ ------------- -------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
8 28
<PAGE> 31
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
Inception on
For the November 4,
Years Ended May 31, 1985 Through
------------------------------ May 31,
1996 1995 1996
-------------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 10,969 $ - $ 10,969
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
-------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 10,969 $ - $ 10,969
============== ============= =============
Cash Paid For:
Interest $ 69 $ - $ 69
Income taxes $ - $ - $ -
Non Cash Financing Activities:
Issuance of common stock
for subsidiary $ - $ - $ -
Issuance of common stock
for services provided $ 32,925 $ - $ 32,925
Purchase of vehicle under
a capital lease $ 30,926 $ - $ 30,926
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
9
<PAGE> 32
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Notes to the Consolidated Financial Statements
May 31, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Wasatch International Corporation (the Company), was incorporated
under the laws of the State of Nevada on November 4, 1985 as Java,
Inc. The Company changed its name to Wasatch International
Corporation on September 27, 1995. The Company is considered a
development stage company whose principal business activity will be
to seek potential business ventures and assets which may warrant
involvement or purchase by the Company.
On November 7, 1986, shares of the Company's outstanding common
stock were issued to acquire Quazon Communications, Inc. However,
the Company subsequently ceased its operations (and those of its
subsidiary, Quazon Communications, Inc.) in 1989.
On November 12, 1995, the Company acquired 10,000 shares of
Graffiti Removal Systems, (a newly formed corporation), thereby
making Graffiti Removal Systems, a wholly-owned subsidiary of the
Company.
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has selected a May 31, year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Provision for Taxes
At May 31, 1996, the Company had net operating loss carryforwards
of approximately $950,000 that may be offset against future taxable
income through 2010. No tax benefit has been reported in the
financial statements as the Company believes there is a 50% or
greater chance the net operating loss carrryforwards will expire
unused. Accordingly, the potential tax benefits of the net
operating loss carryforwards are offset by a valuation allowance of
the same amount.
d. Loss per Share
The computations of loss per share of common stock are based on the
weighted average number of shares outstanding at the date of the
financial statements.
e. Principles of Consolidation
The consolidated financial statements include those of Wasatch
International Corporation (the Company) and its wholly-owned
subsidiary, Graffiti Removal Systems. All significant
inter-company transactions have been eliminated.
10 30
<PAGE> 33
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Notes to the Consolidated Financial Statements
May 31, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Allowance for Doubtful Accounts
The Company has recorded an allowance for doubtful accounts of
$1,000 as of May 31, 1996.
g. 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.
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 or 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 the Company's minimal operating expenses.
NOTE 3 - STOCK TRANSACTIONS
During October of 1995, the board of directors resolved to issue
117,125 shares of the Company's common stock to certain officers
for services provided. The shares were valued at $23,425.
On November 7, 1986, the board of directors resolved to increase
the authorized capital of the Company from 50,000,000 to
100,000,000 common shares at $0.001 par value. An amendment
effecting the change was never filed with the State of Nevada,
therefore, on October 2, 1995, it was resolved by the board of
directors to keep the authorized capital of the Company at
50,000,000 common shares (as originally stated in the Articles of
Incorporation).
On November 12, 1995, it was resolved by the board of directors to
issue 2,500,000 shares (valued at $5,000) of the Company's common
stock for services provided by an officer of the Company. An
additional 225,000 shares of the Company's common stock (valued at
$4,500) was authorized for issuance, and were issued on January 23,
1996.
11 31
<PAGE> 34
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Notes to the Consolidated Financial Statements
May 31, 1996 and 1995
NOTE 4 - RELATED PARTY TRANSACTIONS
For the years ended May 31, 1996 and 1995, certain officers,
directors and shareholders provided services and cash to the
Company which have been accounted for as related party payables in
the amounts of $28,000 and $-0-, respectively.
NOTE 5 - REVERSE STOCK SPLIT
On November 4, 1995, the shareholders of the Company approved a
1-for-200 reverse stock split. This change has been applied to the
financial statements on a retroactive basis to the beginning of the
periods presented. The Company provided that no shareholder would
be reduced below 50 shares, accordingly, 8,377 fractional shares
were issued.
NOTE 6 - CAPITAL LEASE PAYABLE
The Company has purchased a vehicle under a capital lease. Future
minimum lease payments required under the capital lease as follows:
<TABLE>
<S> <C>
1996 $ 3,016
1997 4,524
1998 4,524
1999 4,524
2000 4,524
2001 4,524
2002 13,482
--------------
Total minimum lease payments 39,118
Less amount representing interest (at 16%) (9,323 )
--------------
Present value of net minimum lease payments 29,795
Less current portion (4,524 )
--------------
Total $ 25,271
==============
</TABLE>
As of May 31, 1996, the Company has a vehicle purchased under
noncancelable capital leases with a cost of $37,926 and accumulated
depreciation of $2,528.
NOTE 7- SUBSEQUENT EVENT
On July 17, 1996, the LaSalle Group, Ltd, a Cayman Island Corporation
purchased all of the common stock held by Steven D. Moulton,
representing the majority of all shares outstanding, in consideration
for $125,000.
32
<PAGE> 35
WASATCH INTERNATIONAL CORPORATION
(A Development Stage Company)
Notes to the Consolidated Financial Statements
May 31, 1996 and 1995
NOTE 7 - SUBSEQUENT EVENT (Continued)
Earnest negotiations are ongoing with respect to acquiring interest
and rights to jointly develop property in the Caribbean Islands. Any
agreement will be contingent upon the receipt of a title report,
appraisals of the property and fairness opinion acceptable to Wasatch.
The Company has agreed, in principle, to sell its wholly owned
subsidiary, Graffiti Removal Systems, to its former affiliate and if
appropriate to secure ownership for the Company's present
stockholders. The proposed sale or possible spin-off of Graffiti is
subject to regulatory approvals from all state and federal entities
exercising jurisdiction over the matter.
33
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WASATCH
INTERNATIONAL CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED FINANCIAL
STATEMENTS MAY 31, 1996 AND 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 10,969
<SECURITIES> 0
<RECEIVABLES> 10,011
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,980
<PP&E> 37,925
<DEPRECIATION> 2,528
<TOTAL-ASSETS> 56,377
<CURRENT-LIABILITIES> 34,439
<BONDS> 25,271
2,979
0
<COMMON> 0
<OTHER-SE> (6,312)
<TOTAL-LIABILITY-AND-EQUITY> 56,377
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 36,258
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,258)
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
