UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities
and Exchange Act of 1934
AQUAMOTION, INC.
(Exact name of registrant as specified in its
charter)
Nevada 88-0333296
(State of organization) (I.R.S. Employer
Identification No.)
5757 West Century Boulevard
Suite 340, Los Angeles, California 90045
(Address of principal executive offices)
Registrant's telephone number, including area code
(310)-665-0221
Registrant's Attorney: Shawn F. Hackman, Esq., 3360
W. Sahara Ave., Suite 200, Las Vegas, NV 89102,
(702) 732-2253
Securities to be registered pursuant to Section
12(b) of the Act: None
Securities to be registered pursuant to Section
12(g) of the Act: Common
ITEM 1. DESCRIPTION OF BUSINESS
Background
Aquamotion, Inc., (the "Company") is a Nevada
corporation formed on March 14, 1995. Its principal
place of business is located at 5757 West Century
Boulevard, Suite 340, Los Angeles, California
90045. The Company operates on the calendar fiscal
year. The Company was organized to engage in any
lawful corporate business, including but not limited
to, participating in mergers with and acquisitions
of other companies. The Company has been in the
developmental stage since inception and has no
operating history other than organizational matters.
The company currently has no operations and, in
accordance with SFAS #7, is considered a development
stage company.
The Company was incorporated by Cort W. Christi.
He no longer holds any position with the Company,
and holds none of the Company's stock. The Company
has never had any operations. Initially, founders
shares were issued to Vincent Van Den Brink, the
company's sole officer and director. All such
transactions took place prior to or during April 29,
1999. All shareholders have held their stock since
that time.
The primary activity of the Company currently
involves seeking a company or companies that it can
acquire or with whom it can merge. The Company has
not selected any company as an acquisition target or
merger partner and does not intend to limit
potential candidates to any particular field or
industry, but does retain the right to limit
candidates, if it so chooses, to a particular field
or industry. The Company's plans are in the
conceptual stage only.
The Board of Directors has elected to begin
implementing the Company's principal business
purpose, described below under "Item 2, Plan of
Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is
to locate and consummate a merger or acquisition
with a private entity.
The proposed business activities described herein
classify the Company as a "blank check" company.
Many states have enacted statutes, rules, and
regulations limiting the sale of securities of
"blank check" companies in their respective
jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop
in the Company's securities until such time as the
Company has successfully implemented its business
plan.
The Company is filing this registration statement on
a voluntary basis, pursuant to section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange
Act"), in order to ensure that public information is
readily accessible to all shareholders and potential
investors, and to increase the Company's access to
financial markets. In the event the Company's
obligation to file periodic reports is suspended
pursuant to the Exchange Act, the Company
anticipates that it will continue to voluntarily
file such reports.
Risk Factors
The Company's business is subject to numerous risk
factors, including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS.
The Company has had no operating history and has
received no revenues or earnings from operations.
The Company has no significant assets or financial
resources. The Company will, in all likelihood,
sustain operating expenses without corresponding
revenues, at least until it completes a business
combination. This may result in the Company
incurring a net operating loss which will increase
continuously until the Company completes a business
combination with a profitable business opportunity.
There is no assurance that the Company will identify
a business opportunity or complete a business
combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS.
The success of the Company's proposed plan of
operation will depend to a great extent on the
operations, financial condition, and management of
the identified business opportunity. While
management intends to seek business combinations
with entities having established operating
histories, it cannot assure that the Company will
successfully locate candidates meeting such
criteria. In the event the Company completes a
business combination, the success of the Company's
operations may be dependent upon management of the
successor firm or venture partner firm together with
numerous other factors beyond the Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS
OPPORTUNITIES AND COMBINATIONS. The Company is, and
will continue to be, an insignificant participant in
the business of seeking mergers and joint ventures
with, and acquisitions of small private entities. A
large number of established and well-financed
entities, including venture capital firms, are
active in mergers and acquisitions of companies
which may also be desirable target candidates for
the Company. Nearly all such entities have
significantly greater financial resources, technical
expertise, and managerial capabilities than the
Company. The Company is, consequently, at a
competitive disadvantage in identifying possible
business opportunities and successfully completing a
business combination. Moreover, the Company will
also compete with numerous other small public
companies in seeking merger or acquisition
candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER
TRANSACTION - NO STANDARDS FOR BUSINESS COMBINATION.
The Company has no arrangement, agreement, or
understanding with respect to engaging in a business
combination with any private entity. There can be no
assurance the Company will successfully identify and
evaluate suitable business opportunities or conclude
a business combination. Management has not
identified any particular industry or specific
business within an industry for evaluations. The
Company has been in the developmental stage since
inception and has no operations to date. Other than
issuing shares to its original shareholders, the
Company never commenced any operational activities.
There is no assurance the Company will be able to
negotiate a business combination on terms favorable
to the Company. The Company has not established a
specific length of operating history or a specified
level of earnings, assets, net worth or other
criteria which it will require a target business
opportunity to have achieved, and without which the
Company would not consider a business combination in
any form with such business opportunity.
Accordingly, the Company may enter into a business
combination with a business opportunity having no
significant operating history, losses, limited or no
potential for earnings, limited assets, negative net
worth, or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME
AVAILABILITY. While seeking a business combination,
management anticipates devoting up to twenty hours
per month to the business of the Company. The
Company's officers have not entered into written
employment agreements with the Company and are not
expected to do so in the foreseeable future. The
Company has not obtained key man life insurance on
its officers or directors. Notwithstanding the
combined limited experience and time commitment of
management, loss of the services of any of these
individuals would adversely affect development of
the Company's business and its likelihood of
continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's
officers and directors participate in other business
ventures which compete directly with the Company.
Additional conflicts of interest and non "arms-
length" transactions may also arise in the event the
Company's officers or directors are involved in the
management of any firm with which the Company
transacts business. The Company's Board of Directors
has adopted a resolution which prohibits the Company
from completing a combination with any entity in
which management serve as officers, directors or
partners, or in which they or their family members
own or hold any ownership interest. Management is
not aware of any circumstances under which this
policy could be changed while current management is
in control of the Company. See "ITEM 5. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS -
CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION. Companies subject to Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act")
must provide certain information about significant
acquisitions, including certified financial
statements for the company acquired, covering one or
two years, depending on the relative size of the
acquisition. The time and additional costs that may
be incurred by some target entities to prepare such
statements may significantly delay or even preclude
the Company from completing an otherwise desirable
acquisition. Acquisition prospects that do not have
or are unable to obtain the required audited
statements may not be appropriate for acquisition so
long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION.
The Company has not conducted or received results of
market research indicating that market demand exists
for the transactions contemplated by the Company.
Moreover, the Company does not have, and does not
plan to establish, a marketing organization. If
there is demand for a business combination as
contemplated by the Company, there is no assurance
the Company will successfully complete such
transaction.
LACK OF DIVERSIFICATION. In all likelihood, the
Company's proposed operations, even if successful,
will result in a business combination with only one
entity. Consequently, the resulting activities will
be limited to that entity's business. The Company's
inability to diversify its activities into a number
of areas may subject the Company to economic
fluctuations within a particular business or
industry, thereby increasing the risks associated
with the Company's operations.
REGULATION. Although the Company will be subject to
regulation under the Securities Exchange Act of
1934, management believes the Company will not be
subject to regulation under the Investment Company
Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in
securities. In the event the Company engages in
business combinations which result in the Company
holding passive investment interests in a number of
entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such
event, the Company would be required to register as
an investment company and could be expected to incur
significant registration and compliance costs. The
Company has obtained no formal determination from
the Securities and Exchange Commission as to the
status of the Company under the Investment Company
Act of 1940 and, consequently, any violation of such
Act would subject the Company to material adverse
consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A
business combination involving the issuance of the
Company's common stock will, in all likelihood,
result in shareholders of a private company
obtaining a controlling interest in the Company. Any
such business combination may require management of
the Company to sell or transfer all or a portion of
the Company's common stock held by them, or resign
as members of the Board of Directors of the Company.
The resulting change in control of the Company could
result in removal of one or more present officers
and directors of the Company and a corresponding
reduction in or elimination of their participation
in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING
BUSINESS COMBINATION. The Company's primary plan of
operation is based upon a business combination with
a private concern which, in all likelihood, would
result in the Company issuing securities to
shareholders of such private company. Issuing
previously authorized and unissued common stock of
the Company will reduce the percentage of shares
owned by present and prospective shareholders, and a
change in the Company's control and/or management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company
may enter into a business combination with an entity
that desires to establish a public trading market
for its shares. A target company may attempt to
avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a
business combination with the Company. The perceived
adverse consequences may include, but are not
limited to, time delays of the registration process,
significant expenses to be incurred in such an
offering, loss of voting control to public
shareholders, and the inability or unwillingness to
comply with various federal and state securities
laws enacted for the protection of investors. These
securities laws primarily relate to registering
securities and full disclosure of the Company's
business, management, and financial statements.
TAXATION. Federal and state tax consequences will,
in all likelihood, be major considerations in any
business combination the Company may undertake.
Typically, these transactions may be structured to
result in tax-free treatment to both companies,
pursuant to various federal and state tax
provisions. The Company intends to structure any
business combination so as to minimize the federal
and state tax consequences to both the Company and
the target entity. Management cannot assure that a
business combination will meet the statutory
requirements for a tax-free reorganization, or that
the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the
imposition of both federal and state taxes, which
may have an adverse effect on both parties to the
transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY
DISQUALIFY BUSINESS OPPORTUNITIES. Management
believes that any potential target company must
provide audited financial statements for review, and
for the protection of all parties to the business
combination. One or more attractive business
opportunities may forego a business combination with
the Company, rather than incur the expenses
associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities
registered hereunder have not been registered for
resale under the blue sky laws of any state, and the
Company has no current plans to register or qualify
its shares in any state, holders of these shares and
persons who desire to purchase them in any trading
market that might develop in the future, should be
aware that there may be significant state blue sky
restrictions upon the ability of new investors to
purchase the securities. These restrictions could
reduce the size of any potential market. As a result
of recent changes in federal law, non-issuer trading
or resale of the Company's securities is exempt from
state registration or qualification requirements in
most states. However, some states may continue to
restrict the trading or resale of blind-pool or
"blank-check" securities. Accordingly, investors
should consider any potential secondary market for
the Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING
STATEMENTS
This statement includes projections of future
results and "forward-looking statements" as that
term is defined in Section 27A of the Securities Act
of 1933 as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934
as amended (the "Exchange Act"). All statements that
are included in this Registration Statement, other
than statements of historical fact, are forward-
looking statements. Although Management believes
that the expectations reflected in these forward-
looking statements are reasonable, it can give no
assurance that such expectations will prove to have
been correct. Important factors that could cause
actual results to differ materially from the
expectations are disclosed in this Statement,
including, without limitation, in conjunction with
those forward-looking statements contained in this
Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if
such investigation warrants, acquire an interest in
one or more business opportunities presented to it
by persons or firms desiring the perceived
advantages of a publicly held corporation. At this
time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge
with any specific business or company, and the
Company has not identified any specific business or
company for investigation and evaluation. No member
of Management or any promoter of the Company, or an
affiliate of either, has had any material
discussions with any other company with respect to
any acquisition of that company. The Company will
not restrict its search to any specific business,
industry, or geographical location, and may
participate in business ventures of virtually any
kind or nature. Discussion of the proposed business
under this caption and throughout this Registration
Statement is purposefully general and is not meant
to be restrictive of the Company's virtually
unlimited discretion to search for and enter into
potential business opportunities.
The Company's potential success is heavily dependant
on the Company's management, which will have
virtually unlimited discretion in searching for and
entering into a business opportunity. None of the
officers and directors of the Company has had any
experience in the proposed business of the Company.
Management anticipates that it will only participate
in one potential business venture. This lack of
diversification should be considered a substantial
risk in investing in the Company because it will not
permit the Company to offset potential losses from
one venture against gains from another.
The Company may seek a business combination with a
firm which only recently commenced operations, or a
developing company in need of additional funds to
expand into new products or markets or seeking to
develop a new product or service, or an established
business which may be experiencing financial or
operating difficulties and needs additional capital
which is perceived to be easier to raise by a public
company. In some instances, a business opportunity
may involve acquiring or merging with a corporation
which does not need substantial additional cash but
which desires to establish a public trading market
for its common stock. The Company may purchase
assets and establish wholly-owned subsidiaries in
various businesses or purchase existing businesses
as subsidiaries.
The Company anticipates that the selection of a
business opportunity in which to participate will be
complex and extremely risky. Because of general
economic conditions, rapid technological advances
being made in some industries, and shortages of
available capital, management believes that there
are numerous firms seeking the benefits of a
publicly-traded corporation. Such perceived benefits
of a publicly traded corporation may include
facilitating or improving the terms on which
additional equity financing may be sought, providing
liquidity for the principals of a business, creating
a means for providing incentive stock options or
similar benefits to key employees, providing
liquidity (subject to restrictions of applicable
statues) for all shareholders, and other items.
Potentially available business opportunities may
occur in many different industries and at various
stages of development, all of which will make the
task of comparative investigation and analysis of
such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to
benefit from the use of "leverage" to acquire a
target company. Leveraging a transaction involves
acquiring a business while incurring significant
indebtedness for a large percentage of the purchase
price of that business. Through leveraged
transactions, the Company would be required to use
less of its available funds to acquire a target
company and, therefore, could commit those funds to
the operations of the business, to combinations with
other target companies, or to other activities. The
borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired
business. If that business is not able to generate
sufficient revenues to make payments on the debt
incurred by the Company to acquire that business,
the lender would be able to exercise the remedies
provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that
the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms
or availability of financing for any acquisition by
the Company. During periods when interest rates are
relatively high, the benefits of leveraging are not
as great as during periods of lower interest rates,
because the investment in the business held on a
leveraged basis will only be profitable if it
generates sufficient revenues to cover the related
debt and other costs of the financing. Lenders from
which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the
future borrowing, distribution, and operating
policies of the Company. It is not possible at this
time to predict the restrictions, if any, which
lenders may impose, or the impact thereof on the
Company.
As part of any transactions, the acquired company
may require that Management or other stockholders of
the Company sell all or a portion of their shares to
the acquired Company or the principles of the
acquired company. It is anticipated that the sales
price of such shares will be lower than the current
market price or anticipated market price of the
Company's Common Stock. The Company's funds are not
expected to be used for any stock purchase from
insiders. The Company'' shareholders will not be
provided the opportunity to approve or consent to
such sale. The opportunity to sell all or a portion
of their shares in connection with an acquisition
may influence management's decision to enter into a
specific transaction. However, management believes
that since the anticipated sales price will be less
than the market value, the potential of a stock sale
by management will be a material factor in their
decision to enter a specific transaction.
The above description of potential sales of
management stock is not based upon any corporate
bylaw, shareholder or board resolution, or contract
or agreement. No other payment of cash or property
are expected to be received by Management in
connection with any acquisition.
The Company has insufficient capital with which to
provide the owners of businesses significant cash or
other assets. Management believes the Company will
offer owners of businesses the opportunity to
acquire a controlling ownership interest in a public
company at substantially less cost than is required
to conduct an initial public offering. The owners of
the businesses will, however, incur significant
post-merger or acquisition registration costs in the
event they wish to register a portion of their
shares for subsequent sale. The Company will also
incur significant legal and accounting costs in
connection with the acquisition of a business
opportunity, including the costs of preparing post-
effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the
officers and directors of the Company have not
conducted market research and are not aware of
statistical data which would support the perceived
benefits of a merger or acquisition transaction for
the owners of a businesses. The Company does not
intend to make any loans to any prospective merger
or acquisition candidates or to unaffiliated third
parties.
The Company will not restrict its search for any
specific kind of firms, but may acquire a venture
which is in its preliminary or development stage,
which is already in operation, or in essentially any
stage of its corporate life. It is impossible to
predict at this time the status of any business in
which the Company may become engaged, in that such
business may need to seek additional capital, may
desire to have its shares publicly traded, or may
seek other perceived advantages which the Company
may offer. However, the Company does not intend to
obtain funds in one or more private placements to
finance the operation of any acquired business
opportunity until such time as the Company has
successfully consummated such a merger or
acquisition. The Company also has no plans to
conduct any offerings under Regulation S.
Sources of Opportunities
The Company anticipates that business for possible
acquisition will be referred by various sources,
including its officers and directors, professional
advisors, securities broker-dealers, venture
capitalists, members of the financial community, and
others who may present unsolicited proposals.
The Company will seek a potential business
opportunity from all known sources, but will rely
principally on personal contacts of its officers and
directors as well as indirect associations between
them and other business and professional people. It
is not presently anticipated that the Company will
engage professional firms specializing in business
acquisitions or reorganizations.
The officers and directors of the Company are
currently employed in other positions and will
devote only a portion of their time (not more than
one hour per week) to the business affairs of the
Company, until such time as an acquisition has been
determined to be highly favorable, at which time
they expect to spend full-time investigating and
closing any acquisition for a period of two weeks.
In addition, in the face of competing demands for
their time, the officers and directors may grant
priority to their full-time position rather than to
the Company.
Management, while not especially experienced in
matters relating to the new business of the Company,
will rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's
shareholders, in accomplishing the business purposes
of the Company. It is not anticipated that any
outside consultants or advisors, other than the
Company's legal counsel and accountants, will be
utilized by the Company to effectuate its business
purposes described herein. However, if the Company
does retain such an outside consultant or advisor,
any cash fee earned by such party will need to be
paid by the prospective merger/acquisition
candidate, as the Company has no cash assets with
which to pay such obligation. There have been no
discussions, understandings, contracts or agreements
with any outside consultants and none are
anticipated in the future. In the past, the
Company's management has never used outside
consultants or advisors in connection with a merger
or acquisition.
As is customary in the industry, the Company may pay
a finder's fee for locating an acquisition prospect.
If any such fee is paid, it will be approved by the
Company's Board of Directors and will be in
accordance with the industry standards. Such fees
are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the
amount involved. Such fees are typically in the
range of 5% on a $1,000,000 transaction ratably down
to 1% in a $4,000,000 transaction. Management has
adopted a policy that such a finder's fee or real
estate brokerage fee could, in certain
circumstances, be paid to any employee, officer,
director or 5% shareholder of the Company, if such
person plays a material role in bringing a
transaction to the Company.
The Company will not have sufficient funds to
undertake any significant development, marketing,
and manufacturing of any products which may be
acquired. Accordingly, if it acquires the rights to
a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt
or equity financing or obtain funding from third
parties, in exchange for which the Company would
probably be required to give up a substantial
portion of its interest in any acquired product.
There is no assurance that the Company will be able
either to obtain additional financing or to interest
third parties in providing funding for the further
development, marketing and manufacturing of any
products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be
undertaken by or under the supervision of the
officers and directors of the Company (see
"Management"). Management intends to concentrate on
identifying prospective business opportunities which
may be brought to its attention through present
associations with management. In analyzing
prospective business opportunities, management will
consider, among other factors, such matters as; the
available technical, financial and managerial
resources working capital and other financial
requirements history of operation, if any prospects
for the future present and expected competition the
quality and experience of management services which
may be available and the depth of that management
the potential for further research, development or
exploration specific risk factors not now
foreseeable but which then may be anticipated to
impact the proposed activities of the Company the
potential for growth or expansion the potential for
profit the perceived public recognition or
acceptance of products, services or trades name
identification
Management will meet personally with management and
key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the
extent possible, the Company intends to utilize
written reports and personal investigation to
evaluate the above factors. The Company will not
acquire or merge with any company for which audited
financial statements cannot be obtained.
It may be anticipated that any opportunity in which
the Company participates will present certain risks.
Many of these risks cannot be adequately identified
prior to selection of the specific opportunity, and
the Company's shareholders must, therefore, depend
on the ability of management to identify and
evaluate such risk. In the case of some of the
opportunities available to the company, it may be
anticipated that the promoters thereof have been
unable to develop a going concern or that such
business is in its development state in that it has
not generated significant revenues from its
principal business activities prior to the Company's
participation. There is a risk, even after the
Company's participation in the activity and the
related expenditure of the Company's funds, that the
combined enterprises will still be able to become a
going concern or advance beyond the development
stage. Many of the opportunities may involve new
and untested product, processes, or market
strategies which may not succeed. Such risks will
be assumed by the Company and, therefore, its
shareholders.
The Company will not restrict its search for any
specific kind of business, but may acquire a venture
which is in its preliminary or development stage,
which is already in operation, or in essentially any
stage of its corporate life. It is currently
impossible to predict the status of any business in
which the Company may become engaged, in that such
business may need additional capital, may merely
desire to have its shares publicly traded, or may
seek other perceived advantages which the Company
may offer.
The Company will not have sufficient funds to
undertake any significant development, marketing and
manufacturing of any products which may be acquired.
Accordingly, following the acquisition of any such
product, the Company will, in all likelihood, be
required to either seek debt or equity financing or
obtain funding from third parties, in exchange for
which the Company would probably be required to give
up a substantial portion of its interest in any
acquired product. There is no assurance that the
Company will be able either to obtain additional
financing or interest third parties in providing
funding for the further development, marketing and
manufacturing of any products acquired.
It is anticipated that the investigation of specific
business opportunities and the negotiation, drafting
and execution of relevant agreements, disclosure
documents and other instruments will require
substantial management time and attention and
substantial costs for accountants, attorneys and
others. If a decision is made not to participate in
a specific business opportunity the cost therefore
incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is
reached for the participation in a specific business
opportunity, the failure to consummate that
transaction may result in the loss of the Company of
the related costs incurred. Opportunities in which
the Company participates will present certain risks,
many of which cannot be identified adequately prior
to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management
to identify and evaluate such risks. Promoters of
some opportunities may have been unable to develop a
going concern or may present a business in its
development stage (in that it has not generated
significant revenues from its principal business
activities prior to the Company's participation.)
Even after the Company's participation, there is a
risk that the combined enterprise may not become a
going concern or advance beyond the development
stage. Other opportunities may involve new and
untested products, processes, or market strategies
which may not succeed. Such risks will be assumed by
the Company and, therefore, its shareholders.
The investigation of specific business opportunities
and the negotiation, drafting, and execution of
relevant agreements, disclosure documents, and other
instruments will require substantial management time
and attention as well as substantial costs for
accountants, attorneys, and others. If a decision is
made not to participate in a specific business
opportunity the costs incurred in the related
investigation would not be recoverable. Furthermore,
even if an agreement is reached for the
participation in a specific business opportunity,
the failure to consummate that transaction may
result in the loss by the Company of the related
costs incurred.
There is the additional risk that the Company will
not find a suitable target. Management does not
believe the Company will generate revenue without
finding and completing a transaction with a suitable
target company. If no such target is found,
therefore, no return on an investment in the Company
will be realized, and there will not, most likely,
be a market for the Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular
business acquisition, the Company may become a party
to a merger, consolidation, reorganization, joint
venture, franchise, or licensing agreement with
another corporation or entity. It may also purchase
stock or assets of an existing business. Once a
transaction is complete, it is possible that the
present management and shareholders of the Company
will not be in control of the Company. In addition,
a majority or all of the Company's officers and
directors may, as part of the terms of the
transaction, resign and be replaced by new officers
and directors without a vote of the Company's
shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on
exemptions from registration under applicable
Federal and state securities laws. In some
circumstances, however, as a negotiated element of
this transaction, the Company may agree to register
such securities either at the time the transaction
is consummated, under certain conditions, or at
specified time thereafter. The issuance of
substantial additional securities and their
potential sale into any trading market which may
develop in the Company's Common Stock may have a
depressive effect on such market.
While the actual terms of a transaction to which the
Company may be a party cannot be predicted, it may
be expected that the parties to the business
transaction will find it desirable to avoid the
creation of a taxable event and thereby structure
the acquisition in a so called "tax free"
reorganization under Sections 368(a)(1) or 351 of
the Internal Revenue Code of 1986, as amended (the
"Code"). In order to obtain tax free treatment under
the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting
stock of the surviving entity. In such event, the
shareholders of the Company, including investors in
this offering, would retain less than 20% of the
issued and outstanding shares of the surviving
entity, which could result in significant dilution
in the equity of such shareholders.
As part of the Company's investigation, officers and
directors of the Company will meet personally with
management and key personnel, may visit and inspect
material facilities, obtain independent analysis or
verification of certain information provided, check
references of management and key personnel, and take
other reasonable investigative measures, to the
extent of the Company's limited financial resources
and management expertise.
The manner in which the Company participates in an
opportunity with a target company will depend on the
nature of the opportunity, the respective needs and
desires of the Company and other parties, the
management of the opportunity, and the relative
negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions,
negotiations with target company management will be
expected to focus on the percentage of the Company
which the target company's shareholders would
acquire in exchange for their shareholdings in the
target company. Depending upon, among other things,
the target company's assets and liabilities, the
Company's shareholders will, in all likelihood, hold
a lesser percentage ownership interest in the
Company following any merger or acquisition. The
percentage ownership may be subject to significant
reduction in the event the Company acquires a target
company with substantial assets. Any merger or
acquisition effected by the Company can be expected
to have a significant dilutive effect on the
percentage of shares held by the Company's then
shareholders, including purchasers in this offering.
Management has advanced, and will continue to
advance, funds which shall be used by the Company in
identifying and pursuing agreements with target
companies. Management anticipates that these funds
will be repaid from the proceeds of any agreement
with the target company, and that any such agreement
may, in fact, be contingent upon the repayment of
those funds.
Competition
The Company is an insignificant participant among
firms which engage in business combinations with, or
financing of, development-stage enterprises. There
are many established management and financial
consulting companies and venture capital firms which
have significantly greater financial and personal
resources, technical expertise and experience than
the Company. In view of the Company's limited
financial resources and management availability, the
Company will continue to be at significant
competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with
the programming code in existing computer systems as
the year 2000 approaches. The Company has assessed
these issues as they relate to the Company, and
since the Company currently has no operating
business and does not use any computers, and since
it has no customers, suppliers or other
constituents, it does not believe that there are any
material year 2000 issues to disclose in this Form
10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an
"investment company" as an issuer which is or holds
itself out as being engaged primarily in the
business of investing, reinvesting or trading
securities. While the Company does not intend to
engage in such activities, the Company may, through
business combinations, obtain and hold a minority
interest in a number of development stage
enterprises. The Company could be expected to incur
significant registration and compliance costs if
required to register under the Investment Company
Act of 1940. Accordingly, management will continue
to review the Company's activities from time to time
with a view toward reducing the likelihood the
Company could be classified as an "investment
company".
The Company intends to structure a merger or
acquisition in such manner as to minimize Federal
and state tax consequences to the Company and to any
target company.
Employees
The Company's only employees at the present time are
its officers and directors, who will devote as much
time as the Board of Directors determine is
necessary to carry out the affairs of the Company.
(See "Management").
The Company's only employees at the present time are
its officers and directors, who will devote as much
time as the Board of Directors determine is
necessary to carry out the affairs of the Company.
(See "Management").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company at present has no interest in any real
property. The Company neither owns nor leases any
real property. Office services are provided without
charge by a director. Such costs are immaterial to
the financial statements, and accordingly, have not
been reflected therein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.
The following table sets forth each person known to
the Company, as of June 30, 1999, to be a beneficial
owner of five percent (5%) or more of the Company's
common stock, by the Company's directors
individually, and by all of the Company's directors
and executive officers as a group. Except as noted,
each person has sole voting and investment power
with respect to the shares shown. (Note: the only
such beneficial holder is also a member of
management. Therefore, only one table is included.)
Title of
Class
Name/Address
of Owner
Shares
Beneficially
Owned
Percentage
Ownership
Title of
Class
Name and Address
of Owner
Shares
Beneficially
Owned
Percentage
Ownership
Common
Angela Tzortzatos
31-29 79 Street
Jackson Heights, NY
11370
2,200
22%
Common
Kelly J. Ryan
8033 Sunset Blvd. #396
Los Angeles, CA 90040
2,200
22%
Common
Emily Tzortzatos
31-29 79th Street
Jackson Heights, NY
11370
2,200
22%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL
PERSONS
The members of the Board of Directors of the
Company serve until the next annual meeting of the
stockholders, or until their successors have been
elected. The officers serve at the pleasure of the
Board of Directors.
There are no agreements for any officer or director
to resign at the request of any other person, and
none of the officers or directors named below are
acting on behalf of, or at the direction of, any
other person.
The Company's officers and directors will devote
their time to the business on an "as-needed" basis,
which is expected to require 5-10 hours per month.
Information as to the directors and executive
officers of the Company is as follows:
Name/Address
Age
Position
Emily Tzortzatos
3129 79th Street
Jackson Heights, NY 11370
President
Angela Tzortzatos
3129 79th Street
Jackson Heights, NY 11370
Vice President
Kelly J. Ryan
8033 Sunset Boulevard
Number 396
Los Angeles, CA 90040
Secretary and
Director
Emily Tzortzatos; President
Emily Tzortzatos is the president and a director of
the company. From 1992 to 1995, Ms. Tzortzatos was
engaged in retail sales. From November of 1995 to
the present, in addition to being a merchandiser for
MaidenForm Worldwide Products in New York, New York,
she is the President of Ultimate Wrestling
Federation, Inc., a professional wrestling
organization and merchandising company.
Angela Tzortzatos; Vice President
Angela Tzortzatos is the vice president and a
director of the company. From 1992 to present, ms.
Tzortzatos has been engaged in retail sales,
management and merchandising in the jewelry
industry.
Kelly J. Ryan
Kelly J. Rayn is the secretary and director of the
Issuer. From 1992 to 1995, Ms. Ryan has been an
actress in the entertainment industry. From 1995 to
present, Ms. Ryan has been and administrator with
Hoffman Travel Management Company of Los Angeles,
California.
Blank Check Experience
None of the above officers and directors has had any
previous blank check experience.
There is no family relationship between any of the
officers and directors of the Company. The Company's
Board of Directors has not established any
committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in
other business activities, management anticipates it
will devote only a minor amount of time to the
Company's affairs. The officers and directors of the
Company may in the future become shareholders,
officers or directors of other companies which may
be formed for the purpose of engaging in business
activities similar to those conducted by the
Company. The Company does not currently have a right
of first refusal pertaining to opportunities that
come to management's attention insofar as such
opportunities may relate to the Company's proposed
business operations.
The officers and directors are, so long as they are
officers or directors of the Company, subject to the
restriction that all opportunities contemplated by
the Company's plan of operation which come to their
attention, either in the performance of their duties
or in any other manner, will be considered
opportunities of, and be made available to the
Company and the companies that they are affiliated
with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph,
if a situation arises in which more than one company
desires to merge with or acquire that target company
and the principals of the proposed target company
have no preference as to which company will merge or
acquire such target company, the company of which
the President first became an officer and director
will be entitled to proceed with the transaction.
Except as set forth above, the Company has not
adopted any other conflict of interest policy with
respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation
under the Securities Act of 1933 and the Securities
Exchange Act of 1934, management believes the
Company will not be subject to regulation under the
Investment Company Act of 1940 insofar as the
Company will not be engaged in the business of
investing or trading in securities. In the event the
Company engages in business combinations which
result in the Company holding passive investment
interests in a number of entities, the Company could
be subject to regulation under the Investment
Company Act of 1940. In such event, the Company
would be required to register as an investment
company and could be expected to incur significant
registration and compliance costs. The Company has
obtained no formal determination from the Securities
and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940
and, consequently, any violation of such Act would
subject the Company to material adverse
consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors
receive any compensation for their respective
services rendered to the Company, nor have they
received such compensation in the past. They both
have agreed to act without compensation until
authorized by the Board of Directors, which is not
expected to occur until the Registrant has generated
revenues from operations after consummating a merger
or acquisition. As of the date of this registration
statement, the Company has no funds available to pay
directors. Further, none of the directors are
accruing any compensation pursuant to any agreement
with the Company.
It is possible that, after the Company successfully
consummates a merger or acquisition with an
unaffiliated entity, that entity may desire to
employ or retain one or more members of the
Company's management for the purposes of providing
services to the surviving entity, or otherwise
provide other compensation to such persons. However,
the Company has adopted a policy whereby the offer
of any post-transaction remuneration to members of
management will not be a consideration in the
Company's decision to undertake any proposed
transaction. Each member of management has agreed to
disclose to the Company's Board of Directors any
discussions concerning possible compensation to be
paid to them by any entity which proposes to
undertake a transaction with the Company and
further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of
the Company's Board of Directors is offered
compensation in any form from any prospective merger
or acquisition candidate, the proposed transaction
will not be approved by the Company's Board of
Directors as a result of the inability of the Board
to affirmatively approve such a transaction.
It is possible that persons associated with
management may refer a prospective merger or
acquisition candidate to the Company. In the event
the Company consummates a transaction with any
entity referred by associates of management, it is
possible that such an associate will be compensated
for their referral in the form of a finder's fee. It
is anticipated that this fee will be either in the
form of restricted common stock issued by the
Company as part of the terms of the proposed
transaction, or will be in the form of cash
consideration. However, if such compensation is in
the form of cash, such payment will be tendered by
the acquisition or merger candidate, because the
Company has insufficient cash available. The amount
of such finder's fee cannot be determined as of the
date of this registration statement, but is expected
to be comparable to consideration normally paid in
like transactions. No member of management of the
Company will receive any finders fee, either
directly or indirectly, as a result of their
respective efforts to implement the Company's
business plan outlined herein. Persons "associated"
with management is meant to refer to persons with
whom management may have had other business
dealings, but who are not affiliated with or
relatives of management.
No retirement, pension, profit sharing, stock option
or insurance programs or other similar programs have
been adopted by the Registrant for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The Board of Directors has passed a resolution which
contains a policy that the Company will not seek an
acquisition or merger with any entity in which any
of the Company's Officers, Directors, principal
shareholders or their affiliates or associates serve
as officer or director or hold any ownership
interest. Management is not aware of any
circumstances under which this policy may be changed
through their own initiative.
The proposed business activities described herein
classify the Company as a "blank check" company.
Many states have enacted statutes, rules and
regulations limiting the sale of securities of
"blank check" companies in their respective
jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop
in the Company's securities until such time as the
Company has successfully implemented its business
plan described herein.
There are no relationships or transaction to be
reported.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending
legal proceedings and, to the best of its knowledge,
no such action by or against the Company has been
threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER
MATTERS.
The Company's common stock is not quoted on the
over-the-counter market in the United States.
Management has not undertaken any discussions,
preliminary or otherwise, with any prospective
market maker concerning the participation of such
market maker in the after-market for the Company's
securities and management does not intend to
initiate any such discussions until such time as the
Company has consummated a merger or acquisition.
There is no assurance that a trading market will
ever develop or, if such a market does develop, that
it will continue.
After a merger or acquisition has been completed,
one or both of the Company's officers and directors
will most likely be the persons to contact
prospective market makers. It is also possible that
persons associated with the entity that merges with
or is acquired by the Company will contact
prospective market makers. The Company does not
intend to use consultants to contact market makers.
Market Price
The Registrant's Common Stock is not quoted at the
present time. Effective August 11, 1993, the
Securities and Exchange Commission adopted Rule 15g-
9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any
equity security that has a market price of less than
$5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or
dealer approve a person's account for transactions
in penny stocks; and (ii) the broker or dealer
receive from the investor a written agreement to the
transaction, setting forth the identity and quantity
of the penny stock to be purchased. In order to
approve a person's account for transactions in penny
stocks, the broker or dealer must (i) obtain
financial information and investment experience and
objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks
are suitable for that person and that person has
sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer
must also deliver, prior to any transaction in a
penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market,
which, in highlight form, (i) sets forth the basis
on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer
received a signed, written agreement from the
investor prior to the transaction. Disclosure also
has to be made about the risks of investing in penny
stocks in both public offerings and in secondary
trading, and about commissions payable to both the
broker-dealer and the registered representative,
current quotations for the securities and the rights
and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price
information for the penny stock held in the account
and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc.
(the "NASD"), which administers NASDAQ, has recently
made changes in the criteria for initial listing on
the NASDAQ Small Cap market and for continued
listing. For initial listing, a company must have
net tangible assets of $4 million, market
capitalization of $50 million or net income of
$750,000 in the most recently completed fiscal year
or in two of the last three fiscal years. For
initial listing, the common stock must also have a
minimum bid price of $4 per share. In order to
continue to be included on NASDAQ, a company must
maintain $2,000,000 in net tangible assets and a
$1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion
requires two market-makers and a minimum bid price
of $1.00 per share.
Management intends to strongly consider undertaking
a transaction with any merger or acquisition
candidate which will allow the Company's securities
to be traded without the aforesaid limitations.
However, there can be no assurances that, upon a
successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some
other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its
securities or to meet the relevant maintenance
criteria after such qualification in the future may
result in the discontinuance of the inclusion of the
Company's securities on a national exchange. In such
events, trading, if any, in the Company's securities
may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's
securities.
Holders
There is one shareholder of the Company's Common
Stock. All shares were issued initially to the
founder of the Company. All of the issued and
outstanding shares of the Company's Common Stock
were issued in accordance with the exemption from
registration afforded by Section 4(2) of the
Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date,
and has no plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
There are no recent sales of unregistartd securities
to be reported.
With respect to the sales made, the Registrant
relied on Section 4(2) of the Securities Act of
1933, as amended. No transfers of stock have
occurred since 3/20/99. No advertising or general
solicitation was employed in offering the shares.
The securities were offered for investment only and
not for the purpose of resale or distribution, and
the transfer thereof was appropriately restricted.
Upon closing of a business combination, certain of
the shareholders will be restricted from selling
their shares. Of the 1,000,000 shares currently
issued and outstanding, the shares held by
management, totaling 1,000,000 shares, are
restricted and may be sold in accordance with Rule
144. In general, under Rule 144, a person (or
persons whose shares are aggregated) who has
satisfied a one year holding period, under certain
circumstances, may sell within any three-month
period a number of shares which does not exceed the
greater of one percent of the then outstanding
Common Stock or the average weekly trading volume
during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances,
the sale of shares without any quantity limitation
by a person who has satisfied a two-year holding
period and who is not, and has not been for the
preceding three months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorized
the issuance of Twenty Five Million (25,000,000)
shares, consisting of Twenty Five Million
(25,000,000) shares of Common Stock, $0.0027 par
value of which 10,000 Common Shares were issued and
are now outstanding. The shares are non-assessable,
without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares
are entitled to one vote for each share on all
matters to be voted on by the stockholders. The
shares are fully paid, non-assessable, without pre-
emptive rights, and do not carry cumulative voting
rights. Holders of common shares are entitled to
share ratably in dividends, if any, as may be
declared by the Company from time-to-time, from
funds legally available. In the event of a
liquidation, dissolution, or winding up of the
Company, the holders of shares of common stock are
entitled to share on a pro-rata basis all assets
remaining after payment in full of all liabilities.
Management is not aware of any circumstances in
which additional shares of any class or series of
the Company's stock would be issued to management or
promoters, or affiliates or associates of either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to
its shareholders for errors in judgment or other
acts or omissions not amounting to intentional
misconduct, fraud, or a knowing violation of the
law, since provisions have been made in the Articles
of incorporation and By-laws limiting such
liability. The Articles of Incorporation and By-laws
also provide for indemnification of the officers and
directors of the Company in most cases for any
liability suffered by them or arising from their
activities as officers and directors of the Company
if they were not engaged in intentional misconduct,
fraud, or a knowing violation of the law. Therefore,
purchasers of these securities may have a more
limited right of action than they would have except
for this limitation in the Articles of Incorporation
and By-laws.
The officers and directors of the Company are
accountable to the Company as fiduciaries, which
means such officers and directors are required to
exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to
institute legal action on behalf of himself and all
others similarly stated shareholders to recover
damages where the Company has failed or refused to
observe the law.
Shareholders may, subject to applicable rules of
civil procedure, be able to bring a class action or
derivative suit to enforce their rights, including
rights under certain federal and state securities
laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of
their interest in the Company in connection with
such sale or purchase, including the misapplication
by any such officer or director of the proceeds from
the sale of these securities, may be able to recover
such losses from the Company.
Insofar as indemnification for liabilities arising
under the federal securities laws may be permitted
to directors and controlling persons of the Company,
the Company has been advised that in the opinion of
the Securities and Exchange Commission such
indemnification is against public policy as
expressed in the law and is, therefor,
unenforceable. In the event a demand for
indemnification is made, the Company will, unless in
the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether
such indemnification by it is against public policy
as expressed in the law and will be governed by the
final adjudication of such issue.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data
required by this Item 13 follow the index of
financial statements appearing at Item 15 of this
Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its
formation, and Management has had no disagreements
with the findings of its accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Kurt D. Saliger,
dated May 1, 1999.
Balance Sheet as of April 30, 1999.
Statement of Operation for the period ended April
30, 1999.
Statement of Stockholders Equity.
Statement of Cash Flows for the period ended April
30, 1999
Notes to Financial Statements
AQUAMOTION, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT
1
FINANCIAL STATEMENTS
BALANCE SHEET
2
STATEMENT OF OPERATIONS
3
STATEMENT OF STOCKHOLDERS'
EQUITY
4
STATEMENT OF CASH FLOWS
5
NOTES TO FINANCIAL STATEMENTS
6-7
KURT D. SALIGER
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors
AQUAMOTION, INC.
Las Vegas, Nevada
I have audited the accompanying balance sheet of
AQUAMOTION, INC. (a development stage company), as
of May 31, 1999, December 31, 1998 and 1997; and the
related statements of operations, stockholders'
equity and cash flows for the period ended May 31,
1999. These financial statements are the
responsibility of the Company's management. My
responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally
accepted auditing standards. Those standards require
that I plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement
presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of AQUAMOTION, INC. (a
development stage company) at May 31, 1999 the
results of its operations and its cash flows for the
periods then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been
prepared assuming the company will continue as a
going concern. As discussed in Note 3 to the
financial statements, the Company has had no
operations and no established source of revenue.
This raises substantial doubt about its ability to
continue as a going concern. Management's plan in
regard to these matters are also described in Note
3. The financial statements do not include any
adjustments that might result from the outcome of
this uncertainty.
Kurt D. Saliger C.P.A.
June 14, 1999
/
/S/ Kurt D. Saliger
Kurt D. Saliger
Certified Public Accountant
AQUAMOTION, INC.
(A Development Stage Company)
BALANCE SHEET
May 31,
1999
Decembe
r 31,
1998
Decembe
r 31,
1997
ASSETS
CURRENT ASSETS:
Cash
$0
$0
$0
Accounts Receivable
$0
$0
$0
TOTAL CURRENT ASSETS
$0
$0
$0
Property and Equipment, Net
$0
$0
$0
Other Assets
$0
$0
$0
TOTAL ASSETS
$0
$0
$0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable
$0
$0
$0
Accrued Liabilities
$0
$0
$0
Current Portion, Long Term Debt
$0
$0
$0
TOTAL CURRENT LIABILITIES
$0
$0
$0
LONG-TERM DEBT
$0
$0
$0
STOCKHOLDERS' EQUITY:
Preferred stock, par value, $.0027
authorized 25,000,000 shares issued and
outstanding 1,000,000 shares
$2,700
$2,700
$2,700
Additional paid in Capital
$0
$0
$0
Deficit Accumulated During Development
Stage
($2,700)
($2,700
)
($2,700
)
TOTAL STOCKHOLDERS' EQUITY
$0
$0
$0
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$0
$0
$0
See accompanying notes to financial statements &
audit report
AQUAMOTION, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the
five
months
May 31,
1999
For the
years
ended
December
31, 1998 &
1997
March 14,
1995
(inceptio
n) to May
31, 1999
REVENUES
$0
$0
$0
COST OF REVENUES
$0
$0
$0
GROSS PROFIT
$0
$0
$0
OPERATING EXPENSES
Selling, general and
administrative
$0
$0
$2,700
Amortization and
depreciation
$0
$0
$0
TOTAL OPERATING
EXPENSES
$0
$0
$2,700
INCOME (LOSS) FROM
OPERATIONS
$0
$0
($2,700)
OTHER INCOME
(EXPENSES)
Gain on sale of
assets
$0
$0
$0
Interest expenses
$0
$0
$0
INCOME (LOSS) BEFORE
INCOME TAXES
$0
$0
($2,700)
Income Taxes
$0
$0
$0
NET PROFIT (LOSS)
$0
$0
($2,700)
NET PROFIT (LOSS) PER
SHARE
$0.0000
$0.0000
($0.0027)
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING
1,000,000
1,000,000
1,000,000
See accompanying notes to financial statements &
audit report
AQUAMOTION, INC.
( (A Development Stage Company)
May 31, 1999
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common
Shares
Stock
Amount
Addition
al paid-
in
capital
Accumulat
ed
Deficit
March 14, 1995
issued for cash (Note 3)
10,000
$2,700
$0
Net (Loss), )03-14-95
(inception) to 12-31-95
($2,700)
Balance, December 31,
1995
10,000,00
0
$2,700
$0
($2,700)
Net (Loss), 12-31-96
$0
Balance, Dec. 31, 1996
10,000
$2,700
$0
($2,700)
September 28, 1997
Forward Stock Split 100:1
990,000
Net (Loss), 12-31-97
$0
Balance, Dec. 31, 1997
1,000,000
$2,700
$0
($2,700)
Net (Loss), 12-31-98
$0
Balance, Dec. 31, 1998
1,000,000
$2,700
$0
($2,700)
Net (Loss), 05-31-99
$0
Balance May 31, 1999
1,000,000
$2,700
$0
($2,700)
See accompanying notes to financial statements &
audit report
AQUAMOTION, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Jan. 1,
1999 to
May 31,
1999
Jan.1,to
December
31, 1997
and 1998
March 14,
1995
inception
to May
31, 1999
Cash Flows from Operating
Activities:
Net Loss
$0
$0
($2,700)
Amortization and depreciation
$0
$0
$0
Accounts Payable
$0
$0
$0
Cash flows from operating
activities
$0
$0
($2,700)
Issue common stock
$0
$0
$2,700
Treasury Stock
$0
$0
$0
Net increase (decrease) in
cash
$0
$0
$0
Cash, Beginning of Period
$0
$0
$0
Cash, Ending of Period
$0
$0
$0
See accompanying notes to financial statements &
audit report
AQUAMOTION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized March 14, 1995, under laws
of the State of Nevada, under the name Aquamotion,
Inc. The company currently has no operations and,
in accordance SFAS #7, is considered a development
stage company.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting Method
The Company records income and expenses on the
accrual method of accounting.
Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of
assets and liabilities, disclosures of contingent
assets and liabilities, and the reported amounts of
revenue and expenses during the reporting period.
Actual results could differ from those estimates.
For the statements of cash flows, all highly liquid
investments with a maturity of three months or less
are considered to be cash equivalents. There were
no cash equivalents as of December 31, 1997 and
December 31, 1998 and May 31, 1999.
Fixed assets
The Company does not maintain or control any fixed
assets.
Income taxes
Income taxes are provided for using the liability
method of accounting in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS #109)
"Accounting for Income Taxes." A deferred tax asset
or liability is recorded for all temporary
differences between financial and tax reporting.
Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and
liabilities.
Loss Per Share
Net loss per share is provided in accordance with
Statement of Financial Accounting Standards No. 128
(SFAS #128) "Earnings Per Share." Basic loss per
share is computed by dividing losses available to
common stockholders by the weighted average number
of common shares outstanding during the period.
Diluted loss per share reflects per share mounts
that would be resulted if dilutive common stock
equivalents had been converted to common stock. As
of December 31, 1997 and 1998 and May 31, 1999, the
Company had no dilutive common stock equivalents
such as stock options.
NOTE 3-STOCKHOLDER'S EQUITY
The authorized common stock of Aquamotion, Inc.
consists of 25,000,000 share with a par value of
$0.0027 per share. On March 14, 1995, the Company
issued 10,000 shares of its common stock for $2,700
cash.
On September 28, 1997, the Company declared to
increase the authorized number of shares of common
stock to 25,000,000 shares with a stated par value
of $0.0027 per share. The Company also declared a
forward stock split of 100:1 for issued and
outstanding common stock shares resulting in
1,000,000 common shares of stock outstanding.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared
using the generally accepted accounting principles
applicable to a going concern, which contemplates
the realization of assets and liquidation of
liabilities in the normal course of business.
However, the Company has no current source of
revenue. Without realization of additional capital,
it would be unlikely for the Company to continue as
a going concern.
SIGNATURES
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the Registrant has
duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly
authorized.
Aquamotion, Inc.
By:
Emily Tzortzatos, President
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