<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
Commission file number 33-13627
SARKIS CAPITAL, INC.
(Name of small business issuer in its charter)
Delaware 75-2168244
(State or other jurisdiction of (I.R.S. Employer I.D.#)
incorporation or organization)
421 E. Airport Freeway, Irving, Texas 75062
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (972)-255-5533.
Name of each exchange on
Title of each class which registered
________________________________________________________________________________
Securities registered pursuant to Section 12(g) of the Act:
________________________________________________________________________________
(Title of class)
________________________________________________________________________________
(Title of class)
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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X
No _______
State issuer's revenues for its most recent fiscal year $-0-.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and the asked prices of such stock, as of a specified date within the past
60 days. No market for common stock.
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 _______
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 1,500,000
<PAGE>
PART I.
Item 1. Business
Registrant, Sarkis Capital, Inc. (hereinafter referred to as the
"Company'), was incorporated on March 18, 1987 under the laws of the State of
Delaware and is in the development state.
The Company was organized to function initially as an inactive, publicly
held corporation pursuing a business combination with a privately held company
which is believed to have growth and profit potential (irrespective of the
industry in which it is engaged) and/or is engaged either in the research and
development, manufacture and/or distribution of high technology, medical or
computer production or services or in oil and gas or other mineral exploration
and development or other energy-related activities. It is intended that the
Company will not engage in active business operations prior to its combination
with another enterprise.
The Company has no employees, no business operations, and no intention of
engaging in an active business operation prior to its combination with an as yet
unidentified privately held business. The Company presently has no operating
income and at March 31, 1998, no assets other than cash of $127. The Company's
executive offices are located at 421 East Airport Freeway, Irving, Texas 75062,
and its telephone number is (972) 255-5533.
Pre-Combination Activities
The Company was organized to function initially as a "clean public shell",
that is, an inactive, publicly held corporation with nominal assets and
liabilities. With these characteristics, management believes that the Company
is a potentially attractive combination candidate to privately held businesses
which are interested in becoming publicly held without offering their own
securities to the public. If a suitable candidate is found, the Company will
combine with an exiting privately held company believed to have growth and
profit potential, irrespective of the industry in which it is engaged. The
Company may structure a combination as a merger, consolidation, exchange of
the Company's Common stock for stock or assets or any other form which will
result in the combined enterprise being a publicly held corporation.
Pending negotiation and consummation of a combination the Company has
invested its funds in a short-term money market fund. Until it locates a
suitable candidate, the Company will continue to have no business activities
other than managing its investments and will have no source of revenues other
than interest on the funds it invests. The Company will not incur significant
expenses or liabilities other than expenses related to negotiating a combina-
tion. If the Company does not consummate a suitable combination within a
reasonable period, its Board of Directors may consider its liquidation and
dissolution.
If the Company's management pursues one or more combination proposals
beyond the preliminary negotiation stage and those are subsequently terminated,
it is foreseeable that legal fees and other negotiation expenses will exhaust
the Company's financial resources before a successful combination can be
consummated.
-2-
<PAGE>
In that event the Company's Common Stock shareholders may receive a nominal
distribution, if any, upon the Company's liquidation and dissolution.
The Company has reviewed possible business combinations, but has been
unsuccessful in its endeavor to combine with another entity. If and when the
Company combines with another entity, it will file a report on Form 8-K
detailing such combination.
Item 2. Properties
The Company does not own, nor has it invested in any properties.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
None.
-3-
<PAGE>
SARKIS CAPITAL, INC.
(A Development Stage Company)
Balance Sheet
March 31, 1998 and 1997
Assets
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Current assets
Cash $ 127 $ 538
Total Assets $ 127 $ 538
Liabilities and Stockholders' Equity
Advances from affiliated entities
(Note 2) $ 7,350 $ 7,350
Stockholders' equity:
Preferred stock, $.01 par value;
authorized 1,000,000 shares,
issued and outstanding, none
Common stock, $.01 par value;
authorized 20,000,000 shares,
issued and outstanding 1,500,000
shares 15,000 15,000
Additional paid-in capital 9,000 9,000
Deficit accumulated during the
development stage (31,223) (30,812)
_______ ________
$ 127 $ 538
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
SARKIS CAPITAL, INC.
(A Development Stage Company)
Statements of Operations
For the Years Ended March 31, 1998, 1997, and 1996
and for the Period from March 18, 1987 (Date of Inception)
Through March 31, 1998
<TABLE>
<CAPTION>
March 18, 1987
(Date of Inception)
through
March 31,
1998 1997 1996 1998
<S> <C> <C> <C> <C>
Revenue:
Operations $ -0- $ -0- $ -0- $ -0-
Total revenue -0- -0- -0- -0-
Expenses:
Administrative (376) 143 120 10,082
Advertising 0 0 0 418
Amortization 0 0 0 15,385
Franchise tax 62 2 117 619
Professional fees 725 500 690 5,877
Total expenses 411 645 927 32,381
Other income:
Interest 0 3 15 1,158
Net loss $ (411) $ (642) $( 912) $(31,223)
Net loss per share $ .00 $ .00 $ .00 $ (.02)
(See Note 1)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
SARKIS CAPITAL, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period from March 18, 1987 (Date of Inception)
Through March 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
Number of Par Paid In Development
Shares Value Capital Stage Total
<S> <C> <C> <C> <C> <C>
Balance
March 18, 1987
(date of inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of 1,500,000
shares of common stock
at $.016 per share 15,000 15,000 9,000 0 24,000
Net loss (31,223) (31,223)
Balance
March 31, 1998 1,500,000 $15,000 $ 9,000 $(31,223)$(31,223)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
SARKIS CAPITAL, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Years Ended March 31, 1998, 1997, and 1996 and
the Period from March 18, 1986 (Date of Inception)
Through March 31, 1998
<TABLE>
<CAPTION>
March 18, 1987
(Date of Inception)
through
1998 1997 1996 March 31, 1998
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss $ (411) $ (642) $ (912) $(31,223)
Net cash used in operating $ (411) $ (642) $ (912) $(31,223)
Cash flows from financing
activities:
Issuance of common stock 0 0 0 24,000
Advances from affiliated 0 0 0 7,350
Net cash provided by 0 750 500 31,350
financing activities:
Increase (decrease) in cash (411) 108 (412) 127
Cash, beginning of period 538 430 842 0
Cash, end of period $ 127 $ 538 $ 430 $ 127
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
SARKIS CAPITAL, INC.
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
Sarkis Capital, Inc. (the "Company") was incorporated in March 18, 1987 in
the State of Delaware. The Company was formed as a wholly-owned subsidiary of
Surety Capital Corporation ("Surety") and registered its common shares with the
Securities and Exchange Commission, becoming effective June 26, 1987. The
Company was organized to function initially as a clean public shell corporation
pursuing a business combination with a privately held company.
The Company has no operations and is in the development stage. Development
stage activities have consisted of managing the Company's assets, making
required regulatory filings and pursuing potential business combinations.
Organization costs
Organization costs were carried at cost and were being amortized over five
years using the straight-line method. The costs were totally amortized in 1994
and are only reflected on the company's inception to date statement of
operations.
Net loss per share
Net loss per share is based upon the weighted averaged common shares
outstanding (1,500,000).
Note 2 - Related Party Transactions
For the year ended March 31, 1998, the Company has been in the development
stage and did not receive any operating revenues. During this period, expenses
consisted of investor relations, and combined with interest received on money
market funds, the Company had a net loss of $(31,223). The Company received
operating advances of $1,000 in April, 1992, $1,000 in July, 1992, $1,000 in
March, 1993, $1,000 in October, 1994 and $500 in March, 1996 from Sarkis J.
Kechejian, M.D. The total operating advances are to be repaid when the Company
merges with another company.
Management believes that Sarkis Capital's cash on hand and interest earn-
ings thereon may not be sufficient to meet cash requirements. Additional
operating advances may be required for the coming year.
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters
There presently is no trading market for the Company's common stock.
At March 31, 1998, the approximate number of holders of record of the
Company's Common Stock was 351.
-8-
<PAGE>
The Company has never paid any dividends on the Common Stock and does not
expect to do so in the foreseeable future.
Item 6. Selected Financial Data
Sarkis Capital, Inc.
(A Development Stage Enterprise)
Period from March 18, 1987 (date of inception)
through March 31, 1998
Revenues 1,158
Net Loss 31,223
Cash Dividends Paid 0
Total Assets 367
Working Capital 0
Advance from Affiliates 7,350
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operation
Results of Operation
Development stage revenue (consisting solely of interest income) for the
period from March 18, 1987 (date of operation) through March 31, 1998 amounted
to $1,158. General and administrative charges of $32,381 are attributable to
expenses necessary to maintain the public status of the Company. The Company
does not anticipate a significant change in the results of operations until such
time as the Company combines with another Company.
Item 8. Financial Statement and Supplementary Data
(Item 8 begins on the next page)
Item 9. Disagreements on Accounting and Financial Disclosure
None
-9-
<PAGE>
PART III
Item 10. Director and Executive Officers of the Company
The sole director and executive officers of Sarkis Capital are identified
in the following table. Each has held the indicated positions with Sarkis
Capital since it completed its organization on March 18, 1987, and will serve in
these offices until the first annual meeting of shareholders or until their
successors are elected and qualified. There is no family relationship between
Dr. Kechejian and Ms. Wilson, and neither holds her/his position with Sarkis
Capital pursuant to any special arrangement or understanding.
NAME AGE POSITION
Sarkis J. Kechejian, M.D. 60 Director, President and
and Treasurer
Sharilyn J. Bruntz Wilson 47 Vice President and
Secretary
Dr. Kechejian is also president and sole owner of S. J. Kechejian, M.D.,
P.A. dba Doctor's Clinic which consists of nineteen clinics doing primarily
physiotherapy and treatment of industrial work-related injuries.
Dr. Kechejian is considered a "promoter" of Sarkis Capital under the
regulations of the Securities and Exchange Commission.
Ms. Wilson, Secretary and Vice President, is Chief Financial Officer of S.
J. Kechejian, M.D., P.A. and was Secretary/Treasurer of K Med Centers, Inc. from
September 1986 through January, 1992. Prior to that time, she was, for over
five years, a legal assistant with several law firms.
Item 11. Management Remuneration and Transactions
The Company has no standard agreements to compensate its director for
services in that capacity. The Board of Directors has not authorized the
issuance of any shares of the Company's stock either in the form of a direct
purchase or as compensation to any individual. The Company has no salaried
employees nor does it anticipate hiring any.
Item 12. Security Ownership of Certain Beneficial Owners and Managers
The following information is submitted as of March 31, 1998 with respect
to the Company's voting securities owned beneficially by each person known by
the Company who owns more than 5% of the Common Stock of the Company, this
being the only class of voting securities now outstanding and by all
directors and officers of the Company individually and as a group.
Name and Address of Amount Bene- Approximate
Beneficial Owner ficially owned Percent of Class
Sarkis J. Kechejian, M.D. 1,149,364 77%
421 E. Airport Freeway
Irving, Texas 75062
The director and all officers 1,151,864 77%
of Sarkis Capital as a group
(2 persons)
-10-
<PAGE>
Item 13. Certain Relationships and Related Transactions
On approximately March 16, 1987, Messrs. Kechejian and Goodnight and K Med
Centers, Inc. loaned Surety Capital Corporation $24,000. This money was then
paid to the Company for 1,500,000 shares of Common Stock of the company.
Immediately thereafter, Surety Capital Corporation transferred 750,000 shares of
the Company's Common Stock to Messrs. Kechejian and Goodnight and K Med Centers,
Inc. (250,000 shares each) in consideration of their cancellation of their said
$24,000 loan. The purpose of these transactions was to fund the formation of
the Company and to enable Surety Capital to acquire the subject Company
shares of Common Stock for distribution as a dividend to its shareholders.
K Med Centers, Inc. purchased the 250,000 shares from both Dr. Kechejian and
Mr. Goodnight for their original investment amount of $8,000 each. K Med
Centers, Inc. sold its 953,250 shares in November 1991 to a non-affiliated
party, who subsequently sold their stock to Sarkis J. Kechejian, M.D.
The company neither owns nor leases any personal (other than cash) or real
property. The Company utilizes the address, without charge, of its President,
Dr. Kechejian.
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.
(a) 1. and 2. Financial Statements and Schedules
See Item 8 hereof for the Index to Financial Statements.
3. Exhibits
The Articles of Incorporation and Bylaws of the Company incorporated
herein by reference from the Company's Registration Statement on Form S-1, File
No. 33-13627, filed with the Securities and Exchange Commission on April 28,
1987.
(b) Reports on Form 8-K
No reports were filed on Form 8-K for this year.
(c) Additional Exhibits
Same as (a) 3 of this Item 14.
(d) Additional Financial Statements
Not applicable.
-11-
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
SARKIS CAPITAL, INC.
DATED: By: Sarkis J. Kechejian, M.D.
Sarkis J. Kechejian, M.D.
President, Treasurer, and Director
(Chief Executive Officer and
Principal Financial Officer)
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the registrant and in the capacity and on the
date indicated.
DATED: By: Sarkis J. Kechejian, M.D.
Sarkis J. Kechejian, M.D.
President, Treasurer, and Director
(Chief Executive Officer and
Principal Financial Officer)
-12-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> MAR-31-1998 MAR-31-1997
<PERIOD-START> APR-01-1997 APR-01-1996
<PERIOD-END> MAR-31-1998 MAR-31-1997
<CASH> 127 538
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 127 538
<CURRENT-LIABILITIES> 7,350 7,350
<BONDS> 0 0
0 0
0 0
<COMMON> 15,000 15,000
<OTHER-SE> (22,223) (21,812)
<TOTAL-LIABILITY-AND-EQUITY> 127 538
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 411 642
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 411 642
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (411) (642)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
