SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended: December 31, 1989
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 33-14707-NY
FREEDOM FUNDING, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1047159
(State or other jurisdiction of (I.R.S. employer
incorporation Or organization) identification number)
331 Kenilworth Circle, Stone Mountain, Georgia 30083
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404)296-4347
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d)of the 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. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Rule
405 of Regulation S-K is not contained herein and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.[ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be 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 60 days prior to
the date of filing: There has never been a market for the voting stock of
registrant.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date: As of March 5,
1997, there were approximately 8,301,300 shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the documents incorporated by reference and the Part of this
Form 10-KSB into which the document is incorporated: None.
PART I
Item 1. Description of Business
Freedom Funding, Inc. (the "Company"), was incorporated under the laws of
Delaware on September 18, 1986. The Company initially provided for its
operations from the sale of 800,000 shares of its "restricted," $.0001 par
value per share common stock from inception through the period ended
September 30, 1987. This initial capitalization provided the Company with
$7,000 in cash and services valued at $1,000.
The funds raised from the initial capitalization were expended in the
conduct of an initial public offering which was conducted during the second
and third quarters of 1987. The securities offered to the public by the
Company were units of one share of common stock and four separate classes
of warrants denominated A, B, C and D Warrants. The public offering closed
on September 30, 1987, raising gross proceeds of $40,000. This offering
resulted in the issuance of 800,000 common shares and a like number of each
class of warrant. During 1988, 654,500 A Warrants were exercised, raising
$65,450 in gross proceeds, and 46,800 B warrants were exercised, raising
$11,690 in gross proceeds, a total of $77,140 in gross proceeds. The
foregoing warrant exercises resulted in the issuance of 701,300 common
shares of the Company. All of the unexercised warrants have expired.
In the fourth quarter of 1987, the Company began its investigation of
business opportunities in which to engage. During 1988, the Company began
discussions with a group of individuals for the purpose of beginning a
business using the corporate structure of the Company for the business and
the outstanding warrants of the Company to raise capital for the new
business.. These efforts were unsuccessful, although the situs of the
incorporation of the Company was changed to Colorado as a result. As of
the date of this report, the Company had not fulfilled its business plan.
In 1996, Mr. Roger F. Tompkins was appointed a director of the Company, and
all other directors resigned. Mr. Tompkins is now the sole director of the
Company and acts as its Chief Executive, Financial and Accounting Officer,
President and Treasurer.
On February 13, 1997, the Company entered into an arrangement with an
unaffiliated third party, Mr. Mark S. Pierce, whereby he agreed to extend
up to $100,000 in cash and services in exchange for the commitment of the
Company to forthwith issue to him 6,000,000 common shares of the Company.
Mr. Pierce committed to bring the Company current in its reports with the
Securities and Exchange Commission, including obtaining audits for the
Company since 1987 and filing tax returns for these periods.
Item 2. Description of Properties
The principal executive offices of the Company are presently located at 331
Kenilworth Circle, Stone Mountain, Georgia 30083. The telephone number at
this address is (404) 296-4347. The Company is receiving the use of these
offices free of charge from Mr. Tompkins.
Item 3. Litigation
No material legal proceedings to which the Company (or any officer or
director of the Company, or any affiliate or owner of record or
beneficially of more than five percent of the Common Stock, to management's
knowledge) is a party or to which the property of the Company is subject
is pending and no such material proceeding is known by management of the
Company to be contemplated.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period covered by
this report.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company effected its initial capitalization in late 1986 and early 1987
through the issuance of 800,000 shares of its $.0001 par value per share
common stock to various individuals in exchange for $7,000 in cash and
$1,000 in services. Subsequently, on September 30, 1987, the Company
raised an additional $40,000 in cash through the issuance and sale of
800,000 units in a public offering. The units consisted of one share of
common stock and four separate warrants. During 1988, 654,500 A Warrants
were exercised, raising $65,450 in gross proceeds, and 46,800 B warrants
were exercised, raising $11,690 in gross proceeds, a total of $77,140 in
gross proceeds. The foregoing warrant exercises resulted in the issuance
of 701,300 common shares of the Company.
No market for the common stock of the Company has ever developed; thus,
there has never been any market quotations.
Outstanding Shares and Shareholders
As of March 5, 1997, the transfer ledgers maintained by the Company's stock
transfer agent indicated that there were 8,301,300 shares of common stock
issued and outstanding, of which approximately 6,845,000 were "restricted."
The Company estimates that there were approximately 98 shareholders on that
date. There were no shares of preferred stock outstanding on March 5,
1997.
Dividends
The Company has not declared or paid any dividends on the common stock from
inception to the date of this report, although there are no restrictions
on the payment of dividends. Further, no dividends are contemplated at any
time in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following should be reviewed in connection with the financial
statements and management's comments thereon set forth under this and Item
7, below.
Years Ended December 31,
1989 1988 1987
Statement of Operations:
Revenues $ - $ - $ -
Operating Expenses $ - $103,499 $ 21,141
Net Profit (Loss) $(250) $(103,499) $(21,141)
Profit (Loss) Per Share - * *
Balance Sheet Data:
Assets: $250 $ 500 $26,959
Liabilities: $ - $ - $ 100
Stockholder's Equity (Deficit): $250 $ 500 $26,859
*Negligible in amount.
Liquidity
The Company has not generated any cash flows from operating or investing
activities since inception. Operating capital was primarily provided from
inception through 1987 from the proceeds of an initial funding prior to a
public offering and then from the public offering itself. The proceeds of
these efforts resulted in approximate gross proceeds of $47,000 in cash and
services valued at $1,000. An additional $77,140 in operating capital
was provided through the exercise of warrants in 1988, all of which was
expended in 1988.
Results of Operations
The Company had no operations, other than its search for a business
opportunity, from inception through 1988. In 1989, these efforts ceased
due to lack of working capital. In 1997, this business plan was again
implemented due to an agreement with Mr. Pierce to infuse working capital
and services as needed up to the amount of $100,000.
Item 7. Financial Statements
The audited financial statements and supporting schedules required under
this item are set forth in the immediately following pages.
[INTENTIONALLY LEFT BLANK]<PAGE>
HALLIBURTON, HUNTER & ASSOCIATES, P.C.
Certified Public Accountants
To the Board of Directors and Shareholders
FREEDOM FUNDING, INC.
We have audited the accompanying balance sheets of FREEDOM FUNDING, INC.
(a development stage company) as of December 31, 1989, and December 31,
1988, and the related statements of operations, stockholders' equity, 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 audit.
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, based on our audit, the financial statements referred to
above present fairly, in all material respects, the financial position of
FREEDOM FUNDING, INC. (a development stage company), as of December 31,
1989, and December 31, 1988, and the results of its operations and cash
flows for the years then ended 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 3 to the
financial statements, the Company has suffered recurring losses from
operations that raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters
are described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Halliburton, Hunter & Associates, P.C.
Littleton, Colorado
February 19, 1997<PAGE>
FREEDOM FUNDING, INC.
(a development stage company)
BALANCE SHEETS
December 31,
1989 1988 1987
Assets
Current Assets
Cash $ - $ - $26,209
Organizational Expenses 250 500 750
Total Assets $250 $ 500 $26,959
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable - - 100
Total Liabilities - - 100
Stockholders' Equity:
Preferred stock, par value $.001
per share. Authorized 100,000,000
shares; none issued - - -
Common stock, par value $.0001
per share. Authorized 500,000,000
shares; issued 2,301,300 230 230 160
Additional paid-in capital 124,910 124,910 47,840
Accumulated deficit during
development stage (124,890)(124,640) (21,141)
Total stockholders'
equity (deficit) - - 26,859
Total Liabilities and
Stockholders' Equity $250 $ 500 $26,959
See accompanying Notes to Financial Statements
FREEDOM FUNDING, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
Years ended December 31,
1989 1988 1987
Revenues $ - $ - $ -
Operating Expenses 250 103,499 21,141
Net Profit (Loss) $(250)(103,499) (21,141)
Loss per share * * *
(* negligible in amount)
See accompanying Notes to Financial Statements
FREEDOM FUNDING, INC.
(a development stage company)
STATEMENTS OF STOCKHOLDER'S EQUITY
Additional Retained
Paid-In Earnings
Shares Amount Capital (Deficit)
Balance at inception
September 19, 1986 - $0 $ - $ -
Issuance of stock for cash
November 18, 1986
$.0001 per share 600,000 60 5,940 -
Issuance of stock for cash and services on
January 15, 1987
$.0001 per share 200,000 20 1,980 -
Issuance of stock for cash on
September 30, 1987 800,000 80 39,920 -
Net loss for period ended
December 31, 1987 - - - (21,141)
Balance at December 31, 1987 - - - (21,141)
Issuance of stock for cash from exercise
of warrants 701,300 70 77,070 -
Net loss for year ended
December 31, 1988 - - - (103,499)
Balance at December 31, 1988 - - - (124,640)
Net Loss for year ended
December 31, 1989 (250)
Balance at December 31, 1989 (124,890)
See accompanying Notes to Financial Statements
FREEDOM FUNDING, INC.
(a development stage company)
STATEMENTS OF CASH FLOW
Years Ended December 31,
1989 1988 1987
Operations:
Net (loss) $(250) $(103,499) $(21,141)
Items not requiring
working capital:
(Increase) decrease in
organization costs 250 250 250
Increase (decrease) in
accounts payable - (100) 100
Net cash from operations - (103,349) (20,791)
Financing:
Sale of common stock
Net cash from financing - 77,140 47,000
Net increase (decrease) in cash - (26,209) (20,791)
Cash at beginning of period - 26,209 47,000
Cash at end of period - - 26,209
See accompanying Notes to Financial Statements
FREEDOM FUNDING, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1989
1. Organization and Nature of Business:
Freedom Funding, Inc., a Colorado corporation, was incorporated September
18, 1986, under the laws of the State of Delaware, and changed its situs
to Colorado in 1989. Since inception, the Company has been in the
development stage. The Company's primary intended activity is to engage
in all aspects of review and evaluation of private companies, partnerships
or sole proprietorships for the purpose of completing mergers or
acquisitions with the Company, and to engage in mergers and acquisitions
with any or all varieties of private entities.
Organization costs are amortized over a period of 60 months.
The Company's fiscal year ends on December 31.
2. Results of Operations:
The Company had no operations during the period from inception through
December 31, 1996, other than its search for a business opportunity in
which to engage.
3. Going Concern:
Due to a lack of operating experience, a lack of working capital and a lack
of a selected merger or acquisition candidate, as well as recurring
operating losses, there is substantial doubt of the Company's ability to
establish itself as a going concern and its success is dependent upon the
Company obtaining sufficient financial capital to continue its development
activities and, ultimately, to achieve profitable operations through a
merger or acquisition.
4. Change in Control:
In the fourth quarter of 1987, the Company began its investigation of
business opportunities in which to engage. In 1996, Mr. Roger F. Tompkins
was appointed a director of the Company, and all other directors resigned.
Mr. Tompkins is now the sole director of the Company and acts as its Chief
Executive, Financial and Accounting Officer, President and Treasurer.
Further, on February 13, 1997, the Company entered into an arrangement with
an unaffiliated third party, Mr. Mark S. Pierce, whereby he agreed to
extend up to $100,000 in cash and services in exchange for the commitment
of the Company to issue to him 6,000,000 common shares of the Company. Mr.
Pierce committed to bring the Company current in its reports with the
Securities and Exchange Commission, including obtaining audits for the
Company since 1987 and filing tax returns for these periods.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company has had no disagreement with its accountant on any matter of
accounting principal or practice, financial statement disclosure or
auditing scope or procedure which would have caused the accountant to make
reference in its report upon the subject matter of the disagreement.
Further, the principal accountant's report In the financial statements does
not contain an adverse opinion or a disclaimer of opinion or qualification
as to audit scope or accounting principle. The Company has had the same
auditor since 1988, its former principal accountant having ceased the
practice.
PART III
Item 9. Directors and Executive Officers of the Company
The following table sets forth all current directors and executive officers
of the Company, as well as their ages:
NAME AGE POSITION WITH COMPANY*
Roger F. Tompkins 52 Director, Chief Executive, Financial and
Accounting Officer, President and
Treasurer
* No current director has any arrangement or understanding whereby they
are or will be selected as a director or nominee.
Mr. Tompkins will hold office until the next annual meeting of shareholders
and until his successor has been duly elected and qualified. The officers
are elected by the Board of Directors at its annual meeting immediately
following the shareholders' annual meeting and hold office until their
death or until they earlier resign or are removed from office. There are
no written or other contracts providing for the election of directors or
term of employment of executive officers, all of whom serve on an "at will"
basis.
The Board of Directors currently consists of one member, Mr. Tompkins. The
Company does not have any standing audit, nominating or compensation
committees, or any committees performing similar functions. The board will
meet periodically throughout the year as necessity dictates. During the
years of 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995 and
1996, and to the date of this report, the board held various meetings and
acted by unanimous consent as necessity dictated.
Executive Profiles
Roger Tompkins has served as a director and executive officer of the
Company since 1996. From November, 1985, until January, 1996, Mr. Tompkins
was a director and the sole executive officer of Power Capital Corporation,
a consulting firm which, through a wholly-owned subsidiary, Concepts
Associates, Inc., was, during Mr. Tompkins' tenure, specializing in
mergers, acquisitions, corporate finance and public relations. Power
Capital is publicly-held, and acquired in January of 1996 a business in
China which is developing a Sheraton Hotel and adjoining commercial complex
in the Beijing metropolitan area. Mr. Tompkins resigned as an officer and
as a director of Power Capital after this acquisition. Since August, 1980,
Mr. Tompkins has been a director and an executive officer of Concepts
Associates, Inc., which, until January of 1996, was a wholly-owned
subsidiary of Power Capital. Mr. Tompkins purchased Concepts Associates
from Power Capital in January of 1996 and is now conducting the previous
business of Power Capital through Concepts Associates. From its inception
in February, 1988, until May, 1992, Mr. Tompkins served as Chairman of the
Board of Directors and Chief Executive Officer of Stone Mountain
Industries, Inc., a publicly-held corporation with a class of equity
securities registered under Section 12(g) of the Exchange Act which is now
known as Star Casinos International, Inc., and is now engaged in the
development of gambling casinos in Colorado and off the coast of Florida.
From 1995 through 1996, Mr. Tompkins also served as a director of America's
Coffee Cup, Inc., a publicly-held corporation with a class of equity
securities registered under Section 12 of the Exchange Act, which is now
engaged in the shipping business. During 1961 and 1962, Mr. Tompkins
attended Farleigh Dickenson University but did not receive a degree.
Item 10. Executive Compensation
No compensation has been paid since inception to the Board of Directors or
executive officers of the Company in their capacities as such, and none is
anticipated to be paid at any time in the immediate future.
Item 11. Security Ownership of Management and Certain Others
Based upon information which has been made available to the Company by its
stock transfer agent, the following table sets forth, as of March 5, 1997,
the shares of common stock owned by each current director, by directors
and executive officers as a group and by each person known by the Company
to own more than 5% of the outstanding Common Stock:
Name and Address of Number
Title of Class Beneficial Owner of Shares Percent of Class (1)
Common Stock Roger F. Tompkins 6,000,000 72.30%
Directors and Executive
Officers as a Group
(one in number): 0 0%
(1) Based on 8,301,300 shares of common stock issued and outstanding on
March 5, 1997.
Item 12. Certain Transactions
On February 13, 1997, the Company entered into an agreement with Mr. Pierce
whereby he agreed to advance cash and services to the Company of up to
$100,000 in amount. In exchange for entering into this obligation, Mr.
Pierce will receive 6,000,000 shares of the "restricted" common shares of
the Company.
PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
The following documents and reports have been filed as a part of this
report:
1. Financial Statements:
(a) Report of Independent Certified Public Accountants;
(b) Balance Sheets
(c) Statements of Operations
(d) Statements of Stockholders' Equity
(e) Statements of Cash Flows
(f) Notes to Financial Statements
2. Financial Statement Schedules: None.
3. Exhibits required by Item 601: None.
4. Reports on Form 8-K: None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
FREEDOM FUNDING, INC.
Date: March 5, 1997 By: /s/Roger F. Tompkins
Roger F. Tompkins, President,
Chief Executive, Financial
and Accounting Officer,
Treasurer
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 capacities and on the dates indicated.
Date: March 5, 1997 By: /s/Roger F. Tompkins
Roger F. Tompkins, Director
* * * * * * * * * *
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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