<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, 1997
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 33-9782LA
-----------
HORTITECH, INC.
--------------
(Name of Small Business Issuer in its Charter)
UTAH 87-04444506
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
Suite 210, 580 Hornby Street
Vancouver, British Columbia, Canada V6C 3B6
-------------------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (604) 687-6991
16935 W. Bernardo Drive, Suite 232
San Diego, CA 92108
-------------------
(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: None
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1997 -
$0.
<PAGE>
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days.
June 30, 1998 - $17,596,170. There are approximately 17,596,170
shares of common voting stock of the Company held by non-affiliates. These
computations are based upon the average of the high and low bid prices for the
common stock of the Company on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. ("NASD") for the quarter ended
June 30, 1998.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
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. Yes X No
---- ----
(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:
July 30, 1998
18,846,170
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.
- ---------------------
Hortitech, Inc. (the "Company") was incorporated under the laws of the
State of Utah on October 24, 1986, for the general purpose of investing in or
acquiring an interest in any business opportunity.
The Company completed a public offering of certain shares of its common
stock in November, 1987, from which it received gross proceeds of $150,000.
On August 31, 1987, the Company acquired all of the outstanding shares of
Western Antenna Research, Inc., a Colorado corporation ("Western"), and
subsequently changed its name to "Western Antenna Corporation," effective on
October 19, 1987. The Company was the successor to the business operations of
Western, which proved unsuccessful within two years of the completion of this
reorganization.
The Company then changed its name to "Hortitech, Inc." and its business
purpose to raise capital and to seek business opportunities believed to have
potential for profit.
Effective July 8, 1996, the Board of Directors of the Company, which was
then comprised of one person, unanimously resolved to effect a reverse split
of its common stock on the basis of one share for 50 shares. Unless otherwise
stated, all references below with respect to shares of common stock of the
Company take into account this reverse split.
On July 15, 1996, the Company authorized the issuance of 18,461,600
"unregistered" and "restricted" shares of its $0.001 par value common stock at
a price of $0.001 per share. 16,000,000 of these shares were issued pursuant
to Regulation S of the Securities and Exchange Commission (the "Commission"),
250,000 of which were issued to Suzanne L. Wood, the Company's President and
one of its directors, who is a resident of Canada; and 1,000,000 of which were
issued to Gallipoli Holdings Ltd., a foreign corporation, which may be deemed
to be an affiliate of Barry D. Russell, the Secretary/Treasurer and a Director
of the Company.
On August 7, 1997, a licensing agreement granted to the Company to
produce planar antenna product expired.
Business.
- ---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
material business operations since it abandoned Western's unsuccessful
business activities. Because the Company has limited assets and conducts no
material business, management anticipates that any such acquisition would
require it to issue shares of its common stock as the sole consideration for
the acquisition. This may result in substantial dilution of the shares of
current stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation or Bylaws, or contract. The
Company makes no assurance that any future enterprise will be profitable or
successful.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80 and 95 percent of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as
pro forma financial information consisting of a pro forma condensed balance
sheet, pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific
objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with directors, executive
officers and key personnel of the entity sponsoring any business opportunity
afforded to the Company, visit and inspect material facilities, obtain
independent analysis or verification of information provided and gathered,
check references of management and key personnel and conduct other reasonably
prudent measures calculated to ensure a reasonably thorough review of any
particular business opportunity; however, due to time constraints of
management, these activities may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business
or company in which the Company's executive officers, directors, beneficial
owners or their affiliates may have an ownership interest. Current Company
policy does not prohibit such transactions. Because no such transaction is
currently contemplated, it is impossible to estimate the potential pecuniary
benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. In the event that such fees are paid, they may become a factor in
negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
Principal Products and Services.
- --------------------------------
The only current activities to be conducted by the Company are to manage
its limited assets and to seek out and investigate the acquisition of any
viable business opportunity by purchase and exchange for securities of the
Company or pursuant to a reorganization or merger through which securities of
the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts,
professionals, securities broker dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of companies
engaged in endeavors similar to those engaged in by the Company; many of these
companies have substantial current assets and cash reserves. Competitors also
include thousands of other publicly-held companies whose business operations
have proven unsuccessful, and whose only viable business opportunity is that
of providing a publicly-held vehicle through which a private entity may have
access to the public capital markets. There is no reasonable way to predict
the competitive position of the Company or any other entity in the strata of
these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of
any substantive operations by the Company for the past several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
- ----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
- ---------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in
the event that the Company engages in a merger or acquisition transaction with
an entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on
Business.
- ---------
The integrated disclosure system for small business issuers adopted by
the Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer;
provided, however, an entity is not a small business issuer if it has a public
float (the aggregate market value of the issuer's outstanding securities held
by non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an
interest in adopting policies that will streamline the registration process
and make it easier for a small business issuer to have access to the public
capital markets. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will
substantially limit the demand for companies like the Company, and may make
the use of these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Description of Property.
------------------------
Other than cash and certain prepaid assets, the Company has
virtually no assets, property or business; its principal executive office
address and telephone number are the business office address and telephone
number of its President, Suzanne L. Wood, and are currently provided at no
cost. Because the Company has had no business, its activities will be limited
to keeping itself in good standing in the State of Utah, seeking out
acquisitions, reorganizations or mergers and preparing and filing the
appropriate reports with the Commission. These activities have consumed an
insubstantial amount of management's time.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or
beneficially of more than five percent of the Company's common stock is a
party adverse to the Company or has a material interest adverse to the Company
in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the calendar year covered by this Report or
during the two previous calendar years.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
There is no "established trading market" for shares of common stock of
the Company. The Company's common stock is quoted on the OTC Bulletin Board
of the NASD under the symbol "HTIC." Regardless, no assurance can be given
that any "established trading market" for the Company's common stock will
develop or be maintained.
The range of high and low bid quotations for the Company's
common stock during each quarter of the year ended December 31, 1997, for
which there were quotations and each quarter through June 30, 1998, is
shown below. Prices are inter-dealer quotations as reported by the NASD and do
not necessarily reflect transactions, retail markups, mark downs or
commissions.
<TABLE>
<CAPTION>
STOCK QUOTATIONS*
BID
Quarter ended: High Low
- -------------- ---- ---
<S> <C> <C>
March 31, 1997 2 0.625
June 30, 1997 0.625 0.625
September 30, 1997 0.36 0.08
December 31, 1997 5.00 0.50
March 31, 1998 4.00 1.00
June 30, 1998 1.375 0.625
</TABLE>
* The future sale of presently outstanding "unregistered" and
"restricted" common stock of the Company by present members of
management and persons who own more than five percent of the
outstanding voting securities of the Company may have an adverse
effect on any "established trading market" that may develop in the
shares of common stock of the Company. See the caption "Business
Development" of Item I, Part I, of this Report.
Holders
- -------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 126.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its
common stock and does not intend to declare dividends in the foreseeable
future. The future dividend policy of the Company cannot be ascertained with
any certainty, and until the Company completes any acquisition, reorganization
or merger, as to which no assurance may be given, no such policy will be
formulated. There are no material restrictions limiting, or that are likely to
limit, the Company's ability to pay dividends on its common stock.
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 calendar years. The Company's
plan of operation for the next 12 months is to continue to seek the
acquisition of assets, properties or businesses that may benefit the Company
and its stockholders. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as the sole
consideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which the Company expects to pay from its limited cash
resources. If additional funds are required during this period, such funds may
be advanced by management or stockholders as loans to the Company. Because
the Company has not identified any such ventures as of the date of this
Report, it is impossible to predict the amount of any such loan. However, any
such loan should not exceed $25,000 and will be on terms no less favorable to
the Company than would be available from a commercial lender in an arm's
length transaction. As of the date of this Report, the Company is not
engaged in any negotiations with any person regarding any such ventures.
Results of Operations.
- ----------------------
Other than restoring and maintaining its good corporate standing in the
State of Utah and seeking the acquisition of assets, properties or businesses
that may benefit the Company and its stockholders, the Company has had no
material business operations in the two most recent calendar years, or since
its abandonment of the unsuccessful business operations of Western.
At December 31, 1997, the Company's assets consisted primarily of a note
receivable of $90,317, with total assets being $101,570. See the Index to
Financial Statements, Item 7 of this Report.
During the calendar years ended December 31, 1997 and 1996, the Company
had net losses of ($188,917) and($25,839), respectively, from discontinued
operations. The Company received no revenues in either of its two most recent
calendar years. See the Index to Financial Statements, Item 7 of this Report.
Liquidity.
- ---------
The Company had cash resources of $3,753 and $504, respectively, at
December 31, 1997 and 1996.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
December 31, 1997 and 1996
Independent Auditors' Report
Balance Sheet - December 31, 1997
Statements of Operations for the years ended
December 31, 1997 and 1996 and from inception
on October 24, 1986, through December 31, 1997
Statements of Stockholders' Equity for the
years from inception to December 31, 1997
Statements of Cash Flows for the years ended
December 31, 1997 and 1996 and from inception
on October 24, 1986, through December 31, 1997
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountants in the past two calendar years or as of the date 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 the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Suzanne L. Wood President 4/10/96 *
Director 4/10/96 *
Barry D. Russell Secretary 4/10/96 *
Treasurer 4/10/96 *
Director 4/10/96 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
Suzanne L. Wood is 41 years of age and is an accountant with over 15 years
experience in the financial management of private and public companies. After
graduating from the University of British Columbia, Ms. Wood was employed for
several years with Revenue Canada, Taxation, primarily with its Business Audit
Division. During this period, she enrolled in and completed four levels of
the Certified General Accountants' Program.
She has completed the Canadian Securities Course, and continues
participation in the Professional Development Programme of the Institute of
Chartered Accountants of British Columbia.
Since leaving governmental service and currently, as well as serving on a
number of Boards of Directors of public and private companies, she provides
financial and management services in the areas of Corporate Finance.
Ms. Wood is not a director nor an officer of any company registered with
the Commission under Section 12(g) of the Securities and Exchange Act of 1934,
as amended.
Barry D. Russell is 61 years of age and has served as a director and the
Secretary of Hightec, Inc., a publicly held company since September 5, 1995.
In 1991, he was elected to the Board of Directors and appointed Chairman of
First Entertainment Corporation, a publicly held company listed on the
Vancouver Stock Exchange; in 1992, he assumed the positions of President and
CEO of this company.
From 1988 to 1991, he was President and Chief Executive Officer of Bowne
of Vancouver, Inc., and a director of Bowne of Canada, Inc., which are
wholly-owned subsidiaries of Bowne & Co., a leading international financial
printing company which is listed on the American Stock Exchange.
In 1988, he acquired control of Vancouver's Business Report, a monthly
business magazine published in Vancouver, and he has been a member of the
Typographers International Association located in Washington, D. C., since
1978, and served as a member of the Executive Board of its Western Chapter
from 1980 until 1985.
Mr. Russell is not a director nor an officer of any company registered
with the Commission under Section 12(g) of the Securities and Exchange Act of
1934, as amended.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers,
but who are expected to make a significant contribution to the Company's
business.
Family Relationships.
- ---------------------
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person
of the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy
or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil action),
the 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
- -------------------------------------------------
The Company is not subject to the Section 16 reporting requirements of the
Securities Exchange Act of 1934, as amended.
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
Other ities All
Name and Year or Annual Rest- Under- LTIP Other
Principal Period Salary Bonus Compen-rictedlying Pay- Comp-
Position Ended ($) ($) sat'n Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Suzanne L.
Wood, 12/31/95 0 0 0 0 0 0 0
President, 12/31/96 0 0 0 0 0 0 0
Director 12/31/97 0 0 0 0 0 0 0
Barry D.
Russell, 12/31/95 0 0 0 0 0 0 0
Secretary/ 12/31/96 0 0 0 0 0 0 0
Treasurer, 12/31/97 0 0 0 0 0 0 0
Director
</TABLE>
Patrick M. Flynn and Glennis E. Temme, respectively, the former President
and a director, and the former Secretary and a director, were each paid $2,000
for services rendered during the year ended December 31, 1995.
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ending December 31, 1997, 1996, or 1995, or the period ending on the
date of this Report.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed calendar year
for any service provided as director.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
- -------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any
director or executive officer of the Company which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of employment with the Company or any subsidiary, any change
in control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of
the date of this Report, with the computations being based upon 18,846,170
shares of common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Suzanne L. Wood 250,000 1.3%
#210 - 580 Hornby Street
Vancouver, B.C.
Canada V6C 3B6
Gallipoli Holdings 1,000,000 5.3%
Ltd. *
3-1234 West 7th Ave.
Vancouver, B.C.
Canada V6H 1B6
CDC Consulting 1,000,000 5.3%
Commerce Distribution
Glockengasse 4
Postfach 1220
4001 Basel
Switzerland
Partner Marketing 1,500,000 8.0%
AG
Habsburgerstrasse 20
6002 Luzern
Switzerland
Margaret Ranlinson 1,000,000 5.3%
1480-885 West Georgia St.
Vancouver, B.C.
Canada V6C 3E8
Shangrila Investments 1,250,000 6.6%
Ltd.
Oakbridge House
6, West Hill Street
P. O. Box N8195
Nassau, Bahamas
Tradewinds Investments 1,500,000 8.0%
Ltd.
Charlotte House,
Charlotte Street
P. O. box N7755
Nassau, Bahamas
------- ----
7,250,000 38.5%
</TABLE>
* Barry D. Russell, the Secretary/Treasurer and a Director of the
Company may be deemed to be the beneficial owner of all of the shares of
the Company held in the name of Gallipolli Holdings, Ltd.
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
- ---------------- ------------------------- --------
<S> <C> <C>
Suzanne L. Wood 250,000 1.3%
#210 - 580 Hornby Street
Vancouver, B.C.
Canada V6C 3B6
Barry D. Russell 1,000,000 5.3%
3-1234 West 7th Ave.
Vancouver, B.C.
Canada V6H 1B6
------- -----
1,250,000 6.6%
</TABLE>
* Barry D. Russell, the Secretary/Treasurer and a Director of the
Company may be deemed to be the beneficial owner of all of the shares of
the Company held in the name of Gallipolli Holdings, Ltd.
See Item 9 of this Report for information concerning the offices or other
capacities in which the foregoing persons serve with the Company.
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.
- ----------------------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, 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.
Certain Business Relationships.
- -------------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, 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.
Indebtedness of Management.
- ---------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, 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.
Parents of the Issuer.
- ----------------------
The Company has no parents.
Transactions with Promoters.
- ----------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, 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.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
- -------------------
None.
Exhibits
- --------
Exhibit
Number Description
- ------ -----------
27 Financial Data Schedule
DOCUMENTS INCORPORATED BY REFERENCE
None.
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.
HORTITECH, INC.
Date: Aug 4/98 /s/Suzanne L. Wood
------------- -------------------
Suzanne L. Wood
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
HORTITECH, INC.
Date: Aug 4/98 /s/Suzanne L. Wood
------------- -------------------
Suzanne L. Wood
President and Director
Date: Aug 11/98 /s/Barry D. Russell
------------- --------------------
Barry D. Russell
Secretary/Treasurer and Director
<PAGE>
HORTITECH, INC.
(A Development Stage Company)
Financial Statements
December 31, 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Hortitech, Inc.
(A Development Stage Company)
Vancouver, BC, Canada
We have audited the accompanying balance sheet of Hortitech, Inc. (a
development stage company) as of December 31, 1997, and the related statements
of operations, stockholders' equity (deficit), and cash flows for the years
ended December 31, 1997 and 1996, and from inception on October 24, 1986
through December 31, 1997. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hortitech, Inc. (a
development stage company) as of December 31, 1997, and the results of its
operations and its cash flows for the years ended December 31, 1997 and 1996,
and from inception on October 24, 1986 through December 31, 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has limited operating capital and has had no
operations that together raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in the 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
Salt Lake City, Utah
July 2, 1998
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Balance Sheet
<CAPTION>
ASSETS
December 31,
1997
<S> <C>
CURRENT ASSETS
Cash $ 3,753
Prepaid expenses 7,500
Total Current Assets 11,253
OTHER ASSETS
Note receivable (Note 4) 90,317
Total Other Assets 90,317
TOTAL ASSETS $ 101,570
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 34,912
Accounts payable - related parties 40,762
Advances payable (Note 5) 65,000
Total Current Liabilities 140,674
STOCKHOLDERS EQUITY (DEFICIT)
Common stock, $0.001 par value;
authorized 200,000,000 shares;
18,846,170 shares issued and outstanding 18,846
Additional paid-in capital 387,119
Deficit accumulated during the development stage (445,069)
Total Stockholders Equity (Deficit) (39,104)
TOTAL STOCKHOLDERS EQUITY (DEFICIT) $ 101,570
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
Inception on
October 24,
For the Years Ended 1986 Through
December 31, December 31,
1997 1996 1997
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES - - -
LOSS FROM DISCONTINUED
OPERATIONS (188,917) (25,839) (445,069)
NET LOSS $(188,917) $(25,839) $(445,069)
NET LOSS PER SHARE $ (0.01) $ (0.00)
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance, October 24, 1986 - $ - $ - $ -
Issue of common stock to
officers and directors at
$5.00 per share 1,000 1 4,999 -
Net loss for the year ended
December 31, 1986 - - - -
Balance, December 31, 1986 1,000 1 4,999 -
Issue of common stock to
public at $250 per share 600 1 149,999 -
Less stock offering cost - - (19,880) -
Issue of common stock in
exchange for subsidiary 270 - 500 -
Issue of common stock for
services rendered at
approximately
$5.00 per share 505 - 2,527 -
Issue of common stock in private
placement at approximately
$12.50 per share 6,045 6 75,557 -
Net loss for the year ended
December 31, 1987 - - - (176,716)
Balance, December 31, 1987 8,420 8 213,702 (176,716)
Net loss for the year ended
December 31, 1988 - - - (36,504)
Balance, December 31, 1988 8,420 8 213,702 (213,220)
Net loss for the year ended
December 31, 1989 - - - (490)
Balance, December 31, 1989 8,420 8 213,702 (213,710)
Contribution of capital - - 35 -
Net loss for the year ended
December 31, 1990 - - - (727)
Balance, December 31, 1990 8,420 8 213,737 (214,437)
Net loss for the year ended
December 31, 1991 - - - (224)
Balance, December 31, 1991 8,420 8 213,737 (214,661)
Net loss for the year ended
December 31, 1992 - - - (236)
Balance, December 31, 1992 8,420 8 213,737 (214,897)
Net loss for the year ended
December 31, 1993 - - - (235)
Balance, December 31, 1993 8,420 8 213,737 (215,132)
Common stock issued for cash
and services at approximately
$0.43 per share 14,134 14 5,986 -
Net loss for the year ended
December 31, 1994 - - - (9,162)
Balance, December 31, 1994 22,554 22 219,723 (224,294)
Common stock issued for cash
at $5.00 per share 2,000 2 9,998 -
Forgiveness of debt - - 4,759 -
Net loss for the year ended
December 31, 1995 - - - (6,019)
Balance, December 31, 1995 24,554 24 234,480 (230,313)
Common stock issued for cash
at $0.05 per share 360,000 360 17,640 -
Common stock issued for cash
at an average of $ 0.01 per
share 18,461,600 18,461 135,000 -
Stock split adjustment 16 1 (1) -
Net loss for the year ended
December 31, 1996 - - - (25,839)
Balance, December 31, 1996 18,846,170 18,846 387,119 (256,152)
Net loss for the year ended
December 31, 1997 - - - (188,917)
Balance, December 31,1997 18,846,170 18,846 387,119 (445,069)
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
Inception on
October 24,
For the Years Ended 1986 Through
December 31, December 31,
1997 1996 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $(188,917) $ (25,839) $ (445,069)
Adjustments to reconcile net
(loss) to net cash provided by
operating activities:
Forgiveness of debt - - 4,759
Stock issued for services - - 1,000
Increase in accounts payable -
related parties 40,762 - 40,762
Amortization of discount on note
payable (11,008) (5,222) (16,230)
Changes in operating assets and
liabilities:
Increase in advances payable 65,000 - 65,000
(Increase) decrease in refundable
deposits - 3,500 -
Increase in prepaid expenses (7,500) - (7,500)
Increase(decrease) in accounts payable 34,912 (23) 34,912
Net Cash Used by Operating
Activities (66,751) (27,584) (322,366)
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) in note receivable 70,000 (144,087) (74,087)
Net Cash Used by Investing
Activities 70,000 (144,087) (74,087)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash contributed to additional
paid-in capital - - 243,607
Stock offering cost - - (19,880)
Issuance of common stock - 171,461 176,479
Net Cash Used by Financing
Activities - 171,461 400,206
Increase (Decrease) in Cash 3,249 (210) 3,753
CASH AT BEGINNING OF PERIOD 504 714 -
CASH AT END OF PERIOD $ 3,753 $ 504 $ 3,753
SUPPLEMENTAL CASH FLOWS
INFORMATION:
Interest $ - $ - $ -
Taxes - - -
NON CASH FINANCING ACTIVITIES:
Stock issued for services $ - $ - $ 1,000
</TABLE>
HORTITECH, INC.
(A Development Stage Company)
December 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Hortitech, Inc. (a
development stage company). The Company was incorporated under the laws of
the State of Utah on October 24, 1986. The Company completed a public
offering of its common stock in November 1987. The gross proceeds received by
the Company were $150,000. On August 31, 1987, the Company completed the
acquisition of all the outstanding common shares of Western Antenna Research,
Inc., a Colorado corporation. The Company's name was subsequently changed to
Western Antenna Corporation. After two years of unsuccessful operations, the
name of the Company was changed to Hortitech, Inc. on November 29, 1989. The
Company was incorporated for the purpose of providing a vehicle which could be
used to raise capital and seek business opportunities believed to hold a
potential for profit.
b. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has adopted a calendar year end.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Provision for Taxes
At December 31, 1997, the Company has net operating loss carryforwards
of approximately $440,000 that may be offset against future taxable income
through 2012. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the carryforward
will expire unused. Accordingly, the potential tax benefits of the loss
carryforward have been offset by a valuation allowance of the same amount.
e. 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.
f. Fair Value of Receivables
The Company's note receivable is discounted at 8% per annum to
approximate its estimated fair value.
g. Significant Accounting Policies
Additional accounting policies will be determined when principal
operations begin.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the 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 has no current source of
revenue. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. It is management's plan to seek
additional capital through a merger with an existing operating company. In
the interim, shareholders of the Company have committed to meeting its minimal
operating expenses.
NOTE 3 - COMMON STOCK
On July 5, 1996, the Company issued 360,000 shares of common stock for
cash at approximately $0.05 per share.
On July 8, 1996, the Board of Directors approved a 1 for 50 reverse
stock split. The reverse stock split is reflected in these financial
statements on a retroactive basis. The Company then issued 18,461,600 shares
of post split common stock for gross proceeds of $153,461.
NOTE 4 - NOTE RECEIVABLE
The Company loaned $164,299 to an individual in 1996. The note is
discounted at 8% per annum and is due on May 20, 1998. The Company holds
100,000 shares of The Beverage Store, Inc. restricted common stock as
collateral. On August 12, 1997, the Company received $70,000 as a partial
payment. The balance at December 31, 1997 was $90,317.
NOTE 5 - ADVANCES PAYABLE
The Company was advanced $1,015,000 to aid in the acquisition of The
Indian Motorcycle Trademark. The acquisition did not take place, and the
Company returned $950,000 to the lender. There is a balance of $65,000 which
the Company still owes. The advance is non-interest bearing, and is due on
demand.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 3753
<SECURITIES> 0
<RECEIVABLES> 90317
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11253
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 101570
<CURRENT-LIABILITIES> 140674
<BONDS> 0
0
0
<COMMON> 18846
<OTHER-SE> (20258)
<TOTAL-LIABILITY-AND-EQUITY> 101570
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (188917)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (188917)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (188917)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
