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 September 30, 2000
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 33-12346-D
-----------
CARDIFF INTERNATIONAL,INC.
-------------------------------------
(Name of Small Business Issuer in its Charter)
COLORADO 84-1044583
-------- -----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 SOUTH 900 EAST, SUITE 110
Salt Lake City, Utah 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
N/A
-----------
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: Common
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:
September 30, 2000 - $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.
January 1, 2001 - 0. There are approximately 110,000 shares of common
voting stock of the Company held by non-affiliates. Because there has been no
"public market" for the Company's common stock during the past three years, and
there is no par value for the Company's common stock, the Company considers the
value of its shares of common stock to be $0. If the Company had a par value for
its common stock, the aforementioned shares would be valued at par.
(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 No
--- ---
None; Not Applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
January 1, 2001
675,290
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.
---------------------
Organization and Charter Amendments.
-----------------------------------
Cardiff International, Inc., formerly United American, Inc., (the
"Company") was incorporated under the laws of the State of Colorado under the
name "Cardiff Financial, Inc.", on October 14, 1986. The purpose for which the
corporation was organized were namely: (1) To engage in the transaction of all
lawful business or pursue any other lawful purpose or purposes for which a
corporation may be organized under the laws of the State of Colorado; (2) To
have, enjoy and exercise all of the rights, powers and privileges conferred upon
corporations organized under the laws of the state of Colorado, whether now or
hereafter in effect, and whether or not herein specifically mentioned.
The Company had an initial authorized capital consisting of 300,000,000
shares of no par value common stock.
Effective April 1989, the Company completed a merger with United American,
Inc., ("United"). United failed to carry out obligations required of it pursuant
to the merger and the merger was cancelled by the Company on a unilateral basis
on July 3, 1989.
Effective December 4, 1989, the Company changed its name from United
American, Inc., to Cardiff International, Inc.
Public Offering.
---------------
The Company originally issued 12,000,000 shares of its no par value common
stock, in exchange for $16,000.
The Company filed a Form S-18 Registration Statement effective on or about
June 1987 to offer and sell to the public 30,000,000 shares of common stock, no
par value, and warrants to purchase 30,000,000 shares of common stock. The
offering generated $300,000 gross from the sale of these units and incurred
offering costs of $49,501 which have been charged against the proceeds of the
offering. The Company also received $100 for the sale of underwriter's warrants
allowing the public offering underwriter the right to acquire 3,000,000 shares
of the Company's stock at $0.02 per share.
Material Changes in Control Since Inception and Related Business History.
-------------------------------------------------------------------------
In April 1989, the Company entered into an agreement with United American,
Inc., a Washington corporation whereby the Company agreed to acquire 100% of the
outstanding shares of common stock of United American, Inc., in exchange for
123,000,000 shares of common stock of the Company. After the closing of this
business combination, the Company rescinded the transaction on July 3, 1989 due
to the inability of United American, Inc., to raise $2,000,000 in funding by the
agreed deadline of July 1, 1989. The 123,000,000 shares of common stock of the
Company were voided and returned to authorized but inissued stock after the
combination was terminated.
On December 30, 1996, the Board of Directors of the Company authorized the
issuance of 156,000,000 shares of the company's common voting stock to Mr. Art
Beroff, a consultant to the Company. The issuance of these shares increased the
total number of shares outstanding from 144,000,000 to 300,000,000.
On April 27, 1998, the Board of Directors and Shareholders holding
201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and
outstanding common voting stock authorized a reverse split of the 300,000,000
shares of the Company's common voting stock on a basis of one for one thousand
(1:1,000), thus, the shares of common voting stock outstanding were reduced from
300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital
and capital surplus accounts of the Company. In addition, the shares authorized
for issuance were reduced from 300,000,000 to 30,000,000.
On December 15, 1998, the Board of Directors of the Company authorized the
issuance of 125,000 post-split shares of the Company's common voting stock to
Charles Calello, President and Director.
On May 1, 1999, the Board of Directors authorized the issuance of 250,000
post-split shares of the Company's common voting stock to Jenson Services, Inc.,
consultant to the Company.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name and Address Date Number of Shares Consideration
---------------- ---- ---------------- -------------
<S> <C> <C> <C>
Art Beroff* 12/30/96 156,000 $156
Charles Calello* 12/15/98 125,000 Services
Jenson Services, Inc.* 7/19/96 250,000 Services
</TABLE>
*See Part II, Item 10 and 11 for information regarding executive
compensation and stock ownership.
Business.
---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations since 1992. To the extent that the Company intends to
continue to seek the acquisition of assets, property or business that may
benefit the Company and its stockholders, it is essentially a "blank check"
company. Because the Company has limited assets and conducts no business,
management anticipates that any such acquisition would require it to issue
shares of its common stock as the sole consideration for the acquisition. This
may result in substantial dilution of the shares of current stockholders. The
Company's Board of Directors shall make the final determination whether to
complete any such acquisition; the approval of stockholders will not be sought
unless required by applicable laws, rules and regulations, its Articles of
Incorporation or Bylaws, or contract. The Company makes no assurance that any
future enterprise will be profitable or successful.
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that the number of suitable potential business ventures that may be available to
it may be extremely limited, and may be restricted to entities who desire to
avoid what these entities may deem to be the adverse factors related to an
initial public offering ("IPO"). The most prevalent of these factors include
substantial time requirements, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the lack
of or the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other conditions
or requirements imposed by various federal and state securities laws, rules and
regulations. Any of these types of entities, regardless of their prospects,
would require the Company to issue a substantial number of shares of its common
stock to complete any such acquisition, reorganization or merger, usually
amounting to between 80 and 95 percent of the outstanding shares of the Company
following the completion of any such transaction; accordingly, investments in
any such private entity, if available, would be much more favorable than any
investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as pro
forma financial information consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may actually
participate in any specific business endeavor. The Company anticipates that
proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Current Company policy does
not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. In the event that
such fees are paid, they may become a factor in negotiations regarding any
potential acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.
<PAGE>
Principal Products and Services.
--------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted by
the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
-------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
--------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
--------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company; many
of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a private
entity may have access to the public capital markets. There is no reasonable way
to predict the competitive position of the Company or any other entity in the
strata of these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of any
substantive operations by the Company for the past several years.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
--------------------------------------------------------------------------
None; not applicable.
Dependence on One or a Few Major Customers.
-------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts.
--------------------------------------------------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
---------------------------------------------------------------------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company engages in a merger or acquisition transaction with an
entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on Business.
-------------------------------------------------------------------
The integrated disclosure system for small business issuers adopted by the
Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however, an entity is not a small business issuer if it has a public float (the
aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an interest
in adopting policies that will streamline the registration process and make it
easier for a small business issuer to have access to the public capital markets.
The present laws, rules and regulations designed to promote availability to the
small business issuer of these capital markets and similar laws, rules and
regulations that may be adopted in the future will substantially limit the
demand for "blank check" companies like the Company, and may make the use of
these companies obsolete.
Research and Development.
-------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
-------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
--------------------
None.
Item 2. Description of Property.
-----------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the business office address and
telephone number of a majority shareholder, Jenson Services, Inc., and are
currently provided at no cost. Because the Company currently has no business
operations, its activities will be limited to keeping itself in good standing in
the State of Colorado, seeking out acquisitions, reorganizations or mergers and
preparing and filing the appropriate reports with the Securities and Exchange
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.
----------------------------------------------------
On April 27, 1998, the Board of Directors and Shareholders holding
201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and
outstanding common voting stock authorized a reverse split of the 300,000,000
shares of the Company's common voting stock on a basis of one for one thousand
(1:1,000), thus, the shares of common voting stock outstanding were reduced from
300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital
and capital surplus accounts of the Company. In addition, the shares authorized
for issuance were reduced from 300,000,000 to 30,000,000.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
------------------
The Company's common stock was previously listed on the OTC-BB under the
symbol "UAMI". However, there is currently no market nor has there been a market
for the Company's common stock since June 1996. The Company has recently applied
for a trading symbol with the NASD in order for the Company to obtain a listing
on the OTC-Bulletin Board. The Company is currently in a comment period with the
NASD, however, there is no guarantee a listing will be approved.
Holders of Common Stock
-------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 694.
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 cash resources. As of
September 30, 2000, it had no cash or cash equivalents. 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 venture 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 venture.
Results of Operations.
----------------------
Other than restoring and maintaining its good corporate standing in the
State of Colorado, compromising and settling its debts 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 before 1992.
At September 30, 2000, the Company had no assets.
During the fiscal year ended September 30, 2000, the Company had a net loss
of $4,492. The Company has received no revenues in either of its two most recent
fiscal years.
Liquidity.
---------
During the fiscal years ended September 30, 2000 and 1999, a shareholder
and consultant paid general and administrative expenses on behalf of the Company
totaling $4,492 and $8,217, respectively. The unsecured loan bears no interest
and is due on demand.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
September 30, 2000 and 1999
Independent Auditors' Report
Balance Sheet - September 30, 2000
Balance Sheet - September 30, 1999
Statements of Operations for the years ended
September 30, 2000 and 1999
Statements of changes in Stockholders' (Deficit) from
September 30, 1998 through Septemer 30, 2000
Statements of Cash Flows for the years ended
September 30, 2000 and 1999
Notes to the Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
CARDIFF INTERNATIONAL, INC.
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
September 30, 2000 and 1999
<S> <C>
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheets F-3 & F-4
Statements of Operations F-5
Statement of Changes in Stockholders' (Deficit) F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Cardiff International, Inc.
Salt Lake City, UT 84117
We have audited the accompanying balance sheets of Cardiff International,
Inc. as of September 30, 2000 and 1999, and the related statements of
operations, stockholders' (deficit) and cash flows for the years then ended.
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 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 Cardiff International, Inc.
as of September 30, 2000 and 1999, and the results of its operations, changes in
its stockholders' (deficit) and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
The accompanying balance sheets have been prepared assuming that the
Company will continue as a going concern. As described in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubts about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, Colorado 80211
December 11, 2000
F-2
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
BALANCE SHEET
September 30, 2000
ASSETS
------
<S> <C>
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 2,275
Accounts payable, stockhor 17,687
----------
Total Current Liabilit 19,962
----------
TOTAL LIABILITIES 19,962
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
300,000 shares issued and outstanding 320,314
Additional paid-in capital 225,345
Accumulated (deficit) (556,621)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (19,962)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
BALANCE SHEET
September 30, 1999
ASSETS
<S> <C>
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 1,000
Accounts payable, stockholders 14,470
----------
Total Current Liabilities 15,470
----------
TOTAL LIABILITIES 15,470
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
675,000 shares issued and outstanding 320,314
Additional paid-in capital 225,345
Accumulated (deficit) (561,129)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (15,470)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
CARDIFFF INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
Years Ended
September 30,
2000 1999
<S> <C> <C>
Revenue ................................ $ -- $ --
---------- ----------
Expenses:
Stock issued for services ....... - 375
Other ........................... 4,429 7,842
---------- ----------
Total .......................... 4,429 8,217
---------- ----------
Net (Loss) ............................. $ (4,429) $ (8,217)
========== ==========
(Loss) Per Share ....................... $ (.01) $ (.01)
Weighted Average Shares Outstanding .... 675,000 675,000
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL , INC
STATEMENT OF CHANGES OF STOCKHOLDERS' (DEFICT)
From September 30, 1998 through September 30, 2000
Common Stock Additional Paid-In Accumulated
No./Shares Amount Capital Deficit Total
---------- ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at
September 30,
1998 300,000 $ 319,939 $225,345 $(552,227) $ (6,943)
Common Stock
Issued 375,000 375 - - 375
Net (Loss)
For the year
Ended
September 30,
1999 - - - (8,217) (8,217)
------- ------- ------- ------- -------
Balance at
September 30,
1999 675,000 320,314 225,345 (561,129) (15,470)
Net Loss for
The year
ended
September 30,
2000 - - - (4,492) (4,492)
------- ------- ------- -------
Balance at
September 30,
1999
675,000 $ 320,314 $ 225,345 $(565,621) $ (19,962)
======= ========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
Years Ended September 30,
<S> <C> <C>
2000 1999
---- ----
Cash Flows Operating Activities:
Net (loss) $ (4,492) $ (8,217)
Stock issued for services - 375
Increase (decrease) in accounts payable 1,275 (628)
--------- ---------
Net Cash (used in) Operating Activities (3,217) (8,470)
--------- ---------
Cash Flows from Investing Activities - -
--------- ---------
Cash Flows from Financing Activity: - -
--------- ---------
Increase in Cash
- -
Cash, Beginning of Year -
Cash, Beginning of Year - -
--------- ---------
Cash End of Year $ - $ -
========= =========
Interest Paid $ - $ -
========= =========
Income Taxes Paid $ - $ -
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
CARDIFF INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000 and 1999
(1) Summary of Accounting Policies
------------------------------
This summary of significant accounting policies of Cardiff
International, Inc. (Company) is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
(a) Organization and principles of Consolidation
--------------------------------------------
Cardiff International, Inc. (Company) was incorporated under the
laws of Colorado on October 14, 1986. The Company is an inactive
entity other than it is looking for a business combination candidate.
The Company has selected the last day of September as its year end.
(b) Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
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
revenue and expenses during the reporting period. Actual results could
differ from those estimates.
(2) Basis of Presentation - Going Concern
-------------------------------------
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
sustained operating losses since its inception and has a net capital
deficiency. These matters raise substantial doubt about the Company's
ability to continue as going concern. Management is attempting to locate a
business combination candidate.
In view of these matters, continuing as a going concern is dependent
upon the Company's ability to meet its financing requirements, raise
additional capital, and the success of its future operations or completion
of a successful business combination. Management believes that actions
planned and presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the Company to continue
as a going concern.
(3) Common Stock Issued
-------------------
During the year ended September 30, 1999, the Company issued 375,000
shares of its restricted common stock for services, of which 125,000 were
issued to a stockholder/officer of the Company. The shares and services
were recorded in the financial statements at $.001 per share par value.
F-8
<PAGE>
CARDIFF INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000 and 1999
(4) Income Taxes
------------
The Company has net operating loss carryovers of approximately
$561,000 but due to the change in ownership of the Company, the loss
carryovers have been, in all material respects, eliminated.
(5) Stock Split
-----------
During the year ended September 30, 1998 the Company effected a one
for 1000 reverse stock split. All references to common stock have been
retroactively changed to give effect to the reverse stock split.
(6) Related Party Transactions
--------------------------
As of September 30, 1999 the Company had outstanding accounts payable
to stockholders totaling $17,687. The balance payable is uncollateralized,
bears no interest and has no written repayment terms.
F-9
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------
None; Not Applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
On or about December 8, 1999 the current directors, executive officers,
and/or 10% holders of the Company's common stock filed Form 3, Initial Statement
of Beneficial Ownership of Securities, in accordance 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>
Charles Calello President 07/89 *
Director 10/86 *
Kathleen L. Morrison Secretary 03/99 *
Director 03/99 *
Clay Calello Secretary 07/89 03/99
Vice President 07/89 *
Director 07/89 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
--------------------
Charles Calello. President and Director. Mr. Calello has served as a
Director and Chairman of the Board of Directors of the Company since January,
1987. Mr. Calello has been directly involved in the music business since 1962.
He has been self-employed or President of privately held companies such as
Charles Calello Productions, Space Cowboy Music, and Calello Music. Mr. Calello
has published, arranged, produced, co-produced, composed, or orchestrated music,
scores, songs, or albums for groups and individuals such as Gladys Knight, Bill
Medley, Juice Newton, Eddie Rabbit, Deborah Allen, Barbara Streisand, Englebert
Humperdinck, Barry Manilow, Glen Campbell, Bruce Springsteen, Neil Diamond, Lou
Christie, The Four Seasons, and Frank Sinatra.
Clay Calello, Director and Vice President. Mrs. Calello has served as a
Director and Vice President since July 1989. Mrs Calello is the wife of Mr.
Charles Calello. Mrs. Calello has been involved in the fashion industry since
1974, first as clothing designer in Chicago and later as a fashion
consultant/trouble shooter in Beverly Hills California. In 1981, Mrs. Calello
started the music company, Shem Production, Inc. The company specialized in
producing music packages for television commercials, television shows and
records. Her company produced the music for such products as Coors Beer,
McDonald's, Coca Cola, Nescafe and Oldsmobile. Her Company provided music for
the hit TV series Crime Story as well as 9 top ten records. Since 1992, Mrs.
Calello has been involved in various cultural and non profit organizations
including Boca Pops and the Florida Atlantic University.
Kathleen L. Morrison, Director and Secretary. Mrs. Morrison is 41 years
old. For the past 6 years, she has been the office manager for two persons, one
of which is Jenson Services, Inc., which is a consultant to and a majority
stockholder of the Company. For seven years, she was the editor of "Super Group"
a vertical market computer magazine targeting HP3000 users. Mrs. Morrison
received a B.A. degree from Colorado State University in 1978.
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.
---------------------
Charles Calello, President and Director and Clay Calello, Vice President
and Director are husband and wife. Other than the aforementioned, there are no
additional family relationships between the officers and directors.
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 Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Management is informed and believed that certain former directors,
executive officers, and/or 10% holders of the company's stock may not have
timely filed the forms required by section 16(a) of the Exchange Act. However,
present management is unable to determine what forms should have been filed and
when.
On or about December 8, 1999 the current directors, executive officers,
and/or 10% holders of the Company's common stock filed form 3's in accordance
with Section 16(a) of the Exchange Act.
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-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles J.
Calello 9/30/00 0 0 0 0 0 0 0
President, 9/30/99 0 0 0 0 0 0 0
Director 9/30/98 0 0 0 125,000* 0 0 0
Kathleen L.
Morrison 9/30/00 0 0 0 0 0 0 0
Secretary, 9/30/99 0 0 0 0 0 0 0
Director 9/30/98 0 0 0 0 0 0 0
Clay Calello 9/30/00 0 0 0 0 0 0 0
Vice President 9/30/99 0 0 0 0 0 0 0
and Director 9/30/98 0 0 0 0 0 0 0
Director
</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 September 30, 2000, 1999, or 1998, or the period ending on the date
of this Report. Mr. Charles Calello, President and Director was issued 125,000
shares of the Company's "Restricted" common stock on December 15, 1998.
*Mrs Calello may be deemed beneficial owner of these shares due to her
relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
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 675,290 shares of
common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
---------------- ------------------ --------
<S> <C> <C>
Art Beroff 156,000 23.1%
156-34 88th Street
Howard Beach, NY 11414
Jenson Services, Inc. 250,000 37.0%
5525 S. 900 E. #110
Salt Lake City, UT
84117
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
------- ----
562,625 83.3%
</TABLE>
*Clay Calello may be deemed beneficial owner of these shares due to her
relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
<PAGE>
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>
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
Clay Calello 0 0
23368 Mirabello Circle
Boca Raton, FL 33433
Kathleen Morrison 0 0
9352 Sterling Dr.
Sandy, UT 84093
------- ------
All directors and executive
officers as a group 156,625 23.2%%
(3 persons)
</TABLE>
*Mrs. Clay Calello may be deemed beneficial owner of these shares due to
her relationship with Charles Calello. Mrs. Calello is the wife of Charles
Calello.
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.
----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of "Unregistered" and "Restricted" Securities over the past three years"
of Item I.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
-------------------
None; Not Applicable.
Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
None; Not Applicable.
*Summaries of all exhibits contained in this Report are modiified in their
entirety by reference to these Exhibits.
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.
CARDIFF INTERNATIONAL, INC.
Date: 1-6-00 By/S/Charles Calello
Charles Calello
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:
CARDIFF INTERNATIONAL, INC.
Date: 1-6-00 By/S/Charles Calello
Charles Calello
President and Director
Date: 1-4-00 By/S/Kathleen Morrison
Kathleen Morrison
Secretary and Director
<PAGE>
<PAGE>
