FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number: 33-12029-D
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Desert Springs Acquisition Corp
(Exact name of Registrant as specified in its charter)
formerly
Bartel Financial Group, Inc.
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Colorado 84-1043258
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
5160 South Valley View, Suite 106, Las Vegas NV 89118
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 739-6552
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None:
Yes[_] No[x] (Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 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.)
Not[X] (Indicate by check mark whether if disclosure of delinquent filers
(ss.229.405) is not and will not to the best of Registrant's knowledge be
contained herein, in definitive proxy or information statements incorporated
herein by reference or any amendment hereto.)
As of June 30, 1999, the aggregate number of shares held by non-affiliates was
approximately 308,000 shares. Due to the limited market for the Company
securities, no estimate is being supplied herewith of the market value for such
securities.
As of June 30, 1999, the number of shares outstanding of the Registrant's Common
Stock was 2,542,500.
Exhibit Index is found on page 12
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 1
<PAGE>
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PART I
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Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 2
<PAGE>
Item 1. Business.
(a) Organization of the Issuer.
Desert Springs Acquisition Corp. (the "Issuer", the "Company" and sometimes
the "Registrant") is a Colorado corporation (formerly Bartel Financial Group,
Inc) ("BFG Colorado") organized October 3, 1986, as WTS III Capital Corporation
("WTS"). WTS conducted a public offering of its securities pursuant to a
Registration Statement filed with the Denver Regional Office of the Securities
and Exchange Commission ("SEC") which was effective on August 11, 1987, under
the Securities Act of 1933. The offering closed after receipt of the maximum
proceeds of $300,000. On October 7, 1987, WTS acquired 100% of Bartel Financial
Group, Inc. ("BFG Utah"), a Utah Corporation in transaction commonly
characterized as a "reverse acquisition".
On July 11, 1995, pursuant to authority granted by shareholders at the
Special Shareholders Meeting of October 28, 1994, the Board of Directors
resolved as follows: The Officers were empowered and directed to effectuate a
200 for 1 reverse split of the Company's Common Stock; provided that no
shareholder shall be reduced to less than 10 shares as a result thereof.
Following the 200 to 1 reverse split, and as a result thereof, the existing
138,100,000 shares issued and outstanding were reduced to 690,500 shares. The
Officers were further empowered and directed to change the name of the
Corporation to Desert Springs Acquisition Corp.
On September 18, September 28, and October 7, 1995, respectively, the
Issuer entered into certain Financial Service Agreements. Attention is directed
to the Exhibits furnished with Quarterly Report on Form 10-Q dated September 30,
1995, December 31, 1995 and March 31, 1996, all of which are incorporated herein
by this reference as though fully set forth herein, and are attached as Exhibits
28.1, 28.2 and 28.3 thereto. These agreements were the subjects, respectively,
of three successive filings resulting in the Registration of 1,252,000 shares of
common stock on Form S-8, pursuant to the Securities Act of 1933. No change of
control of the issuer resulted from the registration or disposition of the
Securities registered on Form S-8.
As a result of the foregoing transactions, as of the date of this Annual
Report, the Issuer had a single class of securities, namely common equity voting
stock, 500,000,000 shares (of par value $0.0001) authorized; of which 2,542,500
shares were issued and outstanding.
(b) The Business of Registrant and its Subsidiary.
On October 7, 1987, WTS (then the Issuer) acquired 100% of Bartel Financial
Group, Inc. ("BFG Utah"), a Utah Corporation in a reverse acquisition. The
Company and its wholly-owned subsidiary had no employees and conducted business
solely through BFG Publishers, Inc., a related entity, publishing and
distributing investment advisory newsletters to approximately 15,000
subscribers. During fiscal 1991, BFG Utah discontinued operations and the
subsidiary companies were dissolved by the State of Utah. The Issuer therefore
began the development stage on July 1, 1991. On July 11, 1995, the Issuer's name
was changed to Desert Springs Acquisition Corp. and is currently seeking a
business opportunity or combination candidate.
(c) Employees and Facilities.
The Company has no employees or facilities, and enjoys the non-exclusive
office services of its President and Majority Shareholder.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 3
<PAGE>
(d) Year 2000.
The Issuer had reviewed its year 2000 compliance issues and determined that
it will not be affected, for the reason that it owns and operates no computers,
or other digital devices, and that it has no customers or suppliers.
Item 2. Facilities.
The Company has no employees or facilities, and enjoys the non-exclusive
office services of its President and Majority Shareholder.
Item 3. Legal Proceedings.
There are no legal or other proceedings pending against the Company, as of
the preparation of this Report, and no facts are known or suspected which would
give rise to any anticipation of any such proceedings in the foreseeable future.
Item 4. Submission of Matters to a Vote of Security Holders.
There have been no matters submitted to a vote of shareholders during the
annual period covered by this report.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 4
<PAGE>
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PART II
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Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 5
<PAGE>
Item 5. Market for Common Equity and Stockholder Matters.
(a) Market Information.
The Registrant Company has one class of securities, Common Voting Equity
Shares ("Common Stock"). As of the date of this Annual Report, the securities of
the Issuer are not traded over the counter or on any trading exchange. It is
foreseeable that the common stock of this issuer may be traded in the
foreseeable future over the counter. If so shareholders and the public would
experience a young, sporadic and potentially volatile trading market for them.
Quotations for, and transactions in the Securities so traded are capable of
rapid fluctuations, resulting from the influence of supply and demand on
relatively thin volume. There may be buyers at a time when there are no sellers,
and sellers when there are no buyers, resulting in significant variations of bid
and ask quotations by market-making dealers, attempting to adjust changes in
demand and supply. A young market is also particularly vulnerable to "short
selling", sell orders by persons owning no shares of stock, but intending to
drive down the market price so as to purchase the shares to be delivered at a
price below the price at which the shares were sold "short". Such future and
foreseeable trading may not occur. There is no assurance of any future trading
in or of the securities of this Issuer.
Of the Company's issued and outstanding 2,542,500 shares of Common Stock as
of June 30, 1999, all shares, subject to an exception for the 1,634,500 shares
owned by affiliates of the Issuer, might be presently sold in compliance with
Rule 144, in brokerage transactions, at such time as there may be trading in the
common stock of this Issuer. Rule 144 provides among other things and subject to
certain limitations that a person holding "Restricted Securities" for a period
of two years, who is not an affiliate of the Issuer, may sell those securities,
free of restriction in brokerage transactions. Further, shares issued pursuant
to 1933 Act Registration, again subject to exceptions for affiliate ownership,
are not "Restricted Securities" and are freely tradeable in brokerage
transaction. Affiliates are permitted by Rule 144 to sell affiliate-owned
securities (Restricted Securities held for more than one year and Registered
Affiliate Control Securities however long held) in limited amounts. Possible or
actual sales of the Company's Common Stock under Rule 144 or otherwise might
have a depressive effect upon the price of the Company's Common Stock, at such
time, if and when the common stock of this Issuer might be tradeable in
brokerage transactions.
(b) Holders.
Management calculates that the approximate number of holders of the
Company's Common Stock, as of June 30, 1999 was 686.
(c) Dividends.
No cash dividends have been paid by the Company on its Common Stock and no
such payment is anticipated in the foreseeable future. No other dividends have
been paid or declared by the Issuer and none are anticipated.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 6
<PAGE>
Item 6. Selected Financial Data.
The following information is provided as of the Date of this Report:
<TABLE>
<CAPTION>
====================================================================================================================================
June 30 1999 1998 1997 1996 1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Total Assets 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Expenses 0 6,000 22,234 25,034 1,314
- ------------------------------------------------------------------------------------------------------------------------------------
Net Earnings or (Loss) 0 (6,000) (22,234) (25,034) (1,314)
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Earnings
or (Loss) (0.00) (0.00) (0.01) (0.02) (0.00)
- ------------------------------------------------------------------------------------------------------------------------------------
Average Common Shares
Outstanding 2,542,500 2,074,500 1,942,500 1,942,500 690,500
====================================================================================================================================
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations .
(a) Results of Operations.
The Issuer has no current business, and has had no operations in the last
fiscal year. During the period covered by this report, the Issuer had no plan of
development or for achieving profitability. A comparison of the financial
statements from 1995 to the present reflect legal and professional expenses
incurred in connection with fundamental corporate maintenance, required
governmental filings, and auditing.
(b) Liquidity and Capital Resources.
The Issuer has no capital resource and no liquidity. (Reference is made to
Auditors Report of June 30, 1999 and 1998, filed herewith.)
(c) Reverse Acquisitions. A reverse acquisition is one in which a private
business is acquired by a public corporation in exchange for a transfer of
control of the public company to the owners of the private targeted acquisition
company. The public company acquires the private company, in form, but the
private company acquires the public company in substance. This corporation, by
its very nature and current status, is a potential participant in one or more
reverse acquisition transactions, at some undetermined future time. There are no
present activities, discussions or negotiations, planned or in progress, with
any entity or interest group, for any direct or reverse acquisitions, or
business combinations, of any kind.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 7
<PAGE>
Item 8. Financial Statements and Supplementary Data.
Reference is made to Auditors Report of June 30, 1999 and 1998 filed
herewith. Those financial statements, attached thereto are incorporated herein
by this reference as though fully set forth herein.
Item 9. Change of Registrant's Auditor.
Todd D. Chisholm, CPA remains the Company's Auditor, having prepared the
previous annual audit of June 30, 1995, 1996, 1997 and 1998. The Company's
previous Audit was conducted by Gandre & Armstrong P.C and dated September 25,
1989. There has been no disagreement or dispute of any kind or sort with any
auditor as to any matter.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 8
<PAGE>
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PART III
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Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 9
<PAGE>
Item 10. Directors and Executive Officers.
The Directors and Executive Officers of the Company are set forth below.
All Officers and Directors shall serve until the next meeting of shareholders or
until their successors be elected or appointed.
JAMES L. BARTEL President/Director
MITCHELL MILGATEN Secretary/Director
James Bartel also serves as a Director of American Premier Financial
Corporation. No Director has resigned or declined to stand for re-election at
any time during the last year because of any disagreement on any matter of any
sort involving any aspect of Registrant's operations, policies or practices.
Item 11. Executive Compensation.
On September 18, 1995, the Issuer entered certain financial services
agreements with Traders Exchange, Inc., Polyandrous Trading Group, Inc., and
James Bartel, whereby these consultants would receive and did receive stock for
various services at a rate of $0.01 per share. During 1996, 1,252,000 shares
were issued, valued in the aggregate at $12,520. During 1996, Mr. Bartel
received 400,000 shares pursuant to these agreements. Except as so disclosed,
none of the Company's Officers or Directors presently receive any compensation,
nor has any plan of compensation been adopted.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
COMMON STOCK
To the best of Registrant's knowledge and belief the following disclosure
presents, as of the date of this report, June 30, 1999, the total beneficial
security ownership of all Directors and Nominees, naming them, and by all
Officers and Directors as a group, without naming them, of Registrant, known to
or discoverable by Registrant, and the total security ownership of all persons,
entities and groups, known to or discoverable by Registrant, to be the
beneficial owner or owners of more than five percent of any voting class of
Registrant's stock. More than one person, entity or group could be beneficially
interested in the same securities, so that the total of all percentages may
accordingly exceed one hundred percent. Registrant has only one class of stock,
namely Common Voting Equity Shares.
PLEASE SEE TABLE ON FOLLOWING PAGE
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 10
<PAGE>
SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS AND 5% OWNERS
<TABLE>
<CAPTION>
============================================================================================
Name and Address of Beneficial Owner Amount and Nature Percent
of Ownership of Class
- --------------------------------------------------------------------------------------------
<S> <C> <C>
JAMES L. BARTEL President/Director (1) 782,500 40.28
5160 South Valley View, Suite 106
Las Vegas NV 89118
============================================================================================
All Officers and Directors as a Group 782,500 40.28
============================================================================================
Traders Exchange 395,000 20.33
P.O. Box 65724 / 242 Fall St
Salt Lake City UT 84116
- --------------------------------------------------------------------------------------------
Polyandrous Trading Group 452,000 23.27
3131 Southwest Freeway #46
Houston TX 77098
- --------------------------------------------------------------------------------------------
American Premier Financial Corp.(1) 12,500 0.64
5160 South Valley View, Suite 106
Las Vegas NV 89118
============================================================================================
Total Shares Issued and Outstanding 2,542,500 100.00
============================================================================================
</TABLE>
(1) These shares represent the separate holdings as indicated. James Bartel is
the President of American, but is not American's majority or controlling
shareholder. American is a publicly held corporation.
Item 13. Certain Relationships and Related Transactions.
Mr. Bartel has paid various expenses of the Issuer in the amount of $7,551.
A payable exists to mr. Bartel in this amount. On September 18, 1995, the Issuer
entered certain financial services agreements with Traders Exchange, Inc.,
Polyandrous trading Group, Inc., and James Bartel, whereby these consultants
would receive and did receive stock for various services at a rate of $0.01 per
share. During 1996, 1,252,000 shares were issued, valued in the aggregate at
$12,520. On March 1, 1998, the Company issued 600,000 shares of common stock at
a rate of $0.01 per share in exchange for $6,000 in services.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 11
<PAGE>
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PART IV
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Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 12
<PAGE>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Financial Statements. Reference is made to Auditors Report of June 30,
1999 and 1998, filed with herewith. Those
financial statements, attached as Exhibit "F"
thereto are incorporated herein by this reference
as though fully set forth herein.
(b) Form 8-K Reports. No Reports on Form 8-K were filed during the last
quarter covered by this Annual Report.
(c) Exhibits. Please see Exhibit Index, following.
Exhibit Index
Financial Statements and Documents
Furnished as a part of this Annual Report
Exhibit 1. Articles of Amendment - Bartel Financial Group
Incorporated.
Exhibit 2. Articles of Amendment - Desert Springs Acquisition
Corporation.
Exhibit F. Audited Financial Statements - June 30, 1999, and
1998.
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 13
<PAGE>
---------------
Supplementary Information to be Furnished With
Reports Filed Pursuant to Section 15(d) of the Act by
Registrants which Have Not Registered Securities
Pursuant to Section 12 of the Act.
No annual report or proxy material has been sent to security holders.
---------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the individual capacities and on the date indicated.
June 30, 1999.
Desert Springs Acquisition Corp
A COLORADO CORPORATION
by
/s/ /s/
- ------------------------------ ------------------------------
James L. Bartel Mitchell Milgaten
PRESIDENT/DIRECTOR SECRETARY/TREASURER
Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB Page 14
<PAGE>
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Exhibit 1
Articles of Amendment
Bartel Financial Group, Inc.
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<PAGE>
MAIL TO:
Colorado Secretary of State
Corporation Office
1560 Broadway, Suite 200
Denver, Colorado 80202
(303) 866-2361
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Code, the undersigned
corporation adopts the following of Amendments to its Articles of Incorporation:
FIRST: The name of the corporation is (note 1) WTS III Capital Corporation
SECOND: The following amendment to the Articles of Incorporation was
adopted on November 30 1987, as prescribed by the Colorado Corporation Code, in
the manner marked with an X below:
______ Such amendment was adopted by the board of directors where no
shares have been issued.
XX Such amendment was adopted by a vote of the shareholders. The
------ number of shares voted for the amendment was sufficient for
approval.
1. The name of this corporation, shall be changed from WTS III Capital
Corporation to Bartel Financial Group, Inc;
2. The number of shares of common stock that this corporation is
authorized to issue shall be increased to a total of Five hundred
Million (500,000,000) shares of stock; and
3. The extent to which Directors of this corporation may be held liable
to this corporation or its shareholders for monetary damages for
breach of fiduciaty duties shall be limited to the fullest extent
permitted by the Colorado Corporation Code.
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: N/A
FOURTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follow: N/A
WTS III, Capital Corporation
-------------------------------------(Note 1)
By James Bartel
-------------------------------------
and --------------------------------- (Note 2)
------------------------------------- (Note 3)
Notes: 1. Exact corporate name of corporation adopting the Articles of
Amendments. ( If this is a change of name amendment the name
before this amendment is filed)
2. Signatures and titles of policers signing for the
corporation.
3. Where no shares have been issued, signature of director
<PAGE>
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Exhibit 2
Articles of Amendment
Desert Springs Acquisition Corp.
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<PAGE>
ARICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
Bartel Financial Group, Inc.
Pursuant to the provisions of the Colorado Corporation Code, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
First: The name of the Corporation is Bartel Financial Group, Inc.
Second: The following amendment to the Articles of Incorporation was
adopted on July 11, 1995, as prescribed by the Colorado Corporation Code, in the
following manner:
[x] Such Amendment was adopted by vote of the shareholders. The number of shares
voted for the amendment was sufficient for approval.
1. The Name of the Corporation is Desert Springs Acquisition Corp
Third: In all other respects, the Articles as originally filed remain in
full force and effect as stated.
We, the undersigned, being the Presiedent and Secretary this Corporation do
make and file these Articles of Amendment, for the purpose of Amending the
Articles of Incorporation as originally filed pursuant the Colorado Corporation
Code, and accordingly have set our hand hereunto this Day in certification
thereof: August 31, 1995.
James Bartel Mitchel Milgaten
PRESIDENT SECRETARY
<PAGE>
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Exhibit F
Audited Financial Statements
June 30, 1999 and 1998
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<PAGE>
Desert Springs Acquisition Corporation
( a Development Stage Company)
Financial Statements
June 30, 1999 and 1998
<PAGE>
C O N T E N T S
Accountants' Report ......................................................... 3
Balance Sheets 4
Statements of Operations .................................................... 5
Statements of Stockholders' Equity........................................... 6
Statements of Cash Flows .................................................... 7
Notes to the Financial Statements ........................................... 8
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Desert Springs Acquisition Corporation
We have audited the accompanying balance sheets of Desert Springs Acquisition
Corporation (a development stage company) as of June 30, 1999 and 1998 and the
related statements of operations, stockholders' equity and cash flows for the
years ended June 30, 1999, 1998 and 1997 and from inception of the development
stage on July 1, 1991 through June 30, 1999. 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. The financial
statement for the period October 3, 1986 (inception) through June 30, 1989 were
audited by other accountants, who gave an unqualified opinion on their report
dated September 25, 1989.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 Desert Springs Acquisition
Corporation (a development stage company) as of June 30, 1999 and 1998 and the
results of its operations and cash flows for the years ended June 30, 1999, 1998
and 1997 and from inception of the development stage on July 1, 1991 through
June 30, 1999 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, the Company=s
recurring losses and lack of working capital raise substantial doubt about its
ability to continue as a going concern. Management=s plans in regard to those
matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Salt Lake City, Utah
September 21, 1999
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Balance Sheets
ASSETS
June 30
---------------------------------
1999 1998
----------- -----------
ASSETS $ -- $ --
----------- -----------
TOTAL Assets $ -- $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 27,301 $ 27,301
Accounts payable - related party (Note 6) 7,551 7,551
--------- ---------
Total Liabilities 34,852 34,852
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value;
500,000,000 shares authorized;
2,542,500 shares issued and
outstanding respectively 254 254
Additional paid-in capital 425,981 425,981
Retained Deficit (461,087) (461,087)
--------- ---------
Total Stockholders' Equity (34,852) (34,852)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements
-4-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Statements of Operations
From
Inception of the
Development Stage
For the Years Ended on July 1, 1991
June 30, Through
----------------------------------------- June 30
1999 1998 1997 1999
------------ ----------- ----------- -----------------
REVENUES $ -- $ -- $ -- $ --
------------ ----------- ----------- -----------
EXPENSES
GENERAL
& ADMINISTRATIVE -- 6,000 22,234 56,454
------------ ----------- ----------- -----------
NET LOSS FROM
OPERATIONS -- (6,000) (22,234) (56,454)
NET LOSS FROM
DISCONTINUED
OPERATIONS -- -- -- (404,633)
------------ ----------- ----------- -----------
NET LOSS $ -- $ (6,000) $ (22,234) $ (461,087)
============ =========== =========== ===========
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.01) $ (0.33)
============ =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING 2,542,500 2,074,500 1,942,500 1,396,081
============ =========== =========== ===========
The accompanying notes are an integral part of these financial statements
-5-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception, of the Development Stage On July 1,1991
through June 30, 1999
<TABLE>
<CAPTION>
Common Stock Additional
------------------------- Paid-in Accumulated
Shares Amount Capital Deficit
------ ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance on June 30, 1991 690,500 $ 69 $ 404,564 $(404,633)
Contributions from
shareholders -- -- 624 --
Net loss for the year
ended June 30, 1992 -- -- -- (624)
Contributions from
shareholders -- -- 624 --
Net loss for the year
ended June 30, 1993 -- -- -- (624)
--------- --------- --------- ---------
Balance on June 30, 1993 690,500 69 405,812 (405,881)
Contributions from
shareholders -- -- 624 --
Net loss for the year
ended June 30, 1994 -- -- -- (624)
--------- --------- --------- ---------
Balance on June 30, 1994 690,500 69 406,436 (406,505)
Contributions from
shareholders -- -- 1,210 --
Net loss for the year
ended June 30,1995 -- -- -- (1,314)
--------- --------- --------- ---------
Balance on June 30, 1995 690,500 69 407,646 (407,819)
Stock issued for services (Note 3) 1,252,000 125 12,395 --
Net loss for the year ended
June 30, 1996 -- -- -- (25,034)
--------- --------- --------- ---------
Balance on June 30, 1996 1,942,500 194 420,041 (432,853)
Net loss for the year ended
June 30, 1997 -- -- -- (22,234)
--------- --------- --------- ---------
Balance on June 30, 1997 1,942,500 194 420,041 (455,087)
Stock issued for services (Note 3) 600,000 60 5,940 --
Net loss for the year ended
June 30, 1998 -- -- -- (6,000)
--------- --------- --------- ---------
Balance on June 30, 1998 2,542,500 254 425,981 (461,087)
Net loss for the year ended
June 30, 1999 -- -- -- --
--------- --------- --------- ---------
Balance on June 30, 1999 2,542,500 $ 254 $ 425,981 $(461,087)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
-6-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception of the
For the Years Ended development stage
June 30 on July 1, 1991
----------------------------- Through
1999 1998 1997 June 30, 1999
----------- ----------- ------------ -----------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net lncome/ (loss) $ -- $ (6,000) $ (22,234) $(56,454)
Less non-cash items:
Stock issued for services -- 6,000 -- 18,520
Increase in accounts payable -- -- 22,234 34,852
----------- ----------- ------------ --------
Net Cash Provided (Used) by
Operating Activities -- -- -- (3,082)
----------- ----------- ------------ --------
Cash Flows from Investing Activities
Net Cash Provided (Used) by
Investing Activities -- -- -- --
----------- ----------- ------------ --------
Cash Flows from Financing Activities
Contributions by Shareholders -- -- -- 3,082
----------- ----------- ------------ --------
Net Cash Provided (Used) by
Financing Activities -- -- -- 3,082
----------- ----------- ------------ --------
Net Change in Cash -- -- -- --
----------- ----------- ------------ --------
Cash and Cash Equivalents at
Beginning of Period -- -- -- --
----------- ----------- ------------ --------
Cash and Cash Equivalents at
End of Period $ -- $ -- $ -- $ --
=========== =========== ============ ========
Supplemental Cash Flow Information:
Cash Paid For:
Interest $ -- $ -- $ -- $ --
=========== =========== ============ ========
Income Taxes $ -- $ -- $ -- $ --
=========== =========== ============ ========
</TABLE>
The accompanying notes are an integral part of these financial statements
-7-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization
Desert Springs Acquisition Corporation (the Company), is a
Colorado Corporation organized October 3, 1986, as successor to WTS
III Capital Corporation (WTS). WTS was organized as a "Blank Check"
company and conducted a public offering of its securities pursuant to
a Registration statement on Form S-18 filed with the Denver Regional
Office of the Securities and Exchange Commission which was effective
on August 11, 1987. The offering closed after receipt of the maximum
proceeds of $300,000.
On October 7, 1987 WTS acquired 100% of Bartel Financial Group,
Inc. (BFG, Utah), a Utah corporation in a reverse acquisition.
The Company and its wholly-owned subsidiary BFG (Utah), had no
employees and conducted business solely through BFG Publishers, Inc.,
a Utah corporation, which is the wholly-owned subsidiary of BFG
(Utah). Through BFG Publishers, Inc., the Company was engaged in
publishing and distributing investment advisory newsletters to
approximately 15,000 subscribers. During the fiscal year June 30, 1991
the subsidiary companies discontinued their operations and eventually
were dissolved by the State of Utah. The Company, therefore began the
development stage on July 1, 1991. On July 11, 1995, the Board of
Directors changed the name of the Company to Desert Springs
Acquisition Corporation and is currently seeking a business
opportunity or merger candidate.
b. Fiscal Year End
The Company has elected a fiscal year closing of June 30.
c. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
d. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on
the weighted average number of shares outstanding at the date of
the financial statements.
-8-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 1 - Summary of Significant Accounting Policies (Continued)
e. Provision for Income Taxes
No provision for income taxes have been recorded due to net
operating loss carryforwards totaling approximately $461,087 that will
be offset against future taxable income. These NOL carryforwards begin
to expire in the year 2001. 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, Per
FASB 109 the potential tax benefits of the loss carryforward are
offset by the valuation of the same amount.
f. Cash and Cash Equivalents
The company considers all highly liquid investments with
maturities of three months or less to be cash equivalents.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has no
assets and has had recurring operating losses for the past several
years and is dependent upon financing to continue operations.
Management's plan is to find a viable business to merge with in order
to provide working capital as needed. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
NOTE 3 - Stockholders' Equity
Beginning in 1992, the stock transfer fees have been paid by
shareholders. The shareholders do not expect repayment, and thereby,
they have contributed the amounts to the Company.
On July 11, 1995, the Board authorized a reverse stock split of 1
for 200. These financial statements have been retroactively restated
to reflect the split.
On September 18, 1995, the Company entered a financial service
agreement with Traders Exchange, Inc., James Bartel and Polyandrous
Trading Group, Inc. whereby these consultants will provide various
services for stock at a rate of $.01 per share. 1,252,000 shares were
issued during 1996 valued at $12,520.
On March 1, 1998, the Company issued 600,000 shares of common
stock at a rate of $.01 per share in exchange for $6,000 in services.
-9-
<PAGE>
Desert Springs Acquisition Corporation
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and 1998
NOTE 4 - Development Stage Company
The Company is a development stage company as defined in
Financial Accounting Standards Board Statement No. 7. It is
concentrating substantially all of its efforts in raising capital and
searching for a business operation with which to merge or assets to
acquire, in order to generate significant operations.
NOTE 5 - Related Party Transactions
James Bartel, an officer of the Company, has paid for various
expenses of the Company in the amount of $7,551. A payable currently
exists to Mr. Bartel in the same amount.
As described in Note 3, James Bartel, an officer and major
shareholder has entered into a financial service agreement with the
Company. During 1996, Mr. Bartel received 400,000 shares for the
services provided under this agreement.
-10-
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<PERIOD-END> JUN-30-1999
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0
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