U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended May 31, 1997 Commission File No. 33-17397-D
WHITNEY AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 84-1070022
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12373 E. Cornell Avenue
Aurora, Colorado 80014 (303) 337-3384
(Address of Principal's Executive Offices) (Registrant's Telephone No.
incl. area code)
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 such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days.
Yes No X
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
Yes X No
The registrant's revenues for its most recent fiscal year were $-0-.
The aggregate market value of the common stock of the registrant held by
non-affiliates on May 31, 1997 was not determinable.
At May 31, 1997, a total of 62,515 shares of common stock were
outstanding.
<PAGE>
This report amends the registrant's annual report on Form 10-KSB for the
fiscal year ended May 31, 1997. The text of this report is set forth in its
entirety, including items which have not been changed in any way. Because there
is no change in the financial statements or footnotes, they are omitted from
this amendment but remain a part of this report on Form 10-KSB.
PART I
Item 1. Description of Business.
Background
Whitney American Corporation (the "Company"), was incorporated on June 18,
1987, under the laws of the State of Delaware. The Company's initial activities
were directed towards the raising of capital. Pursuant to an Agreement and Plan
of Reorganization described below, Industrial Waste Processing, Inc., a Nevada
corporation, was merged into the Company which subsequently changed its name to
Industrial Waste Processing, Inc. In February 1997, the Company filed with the
Delaware Secretary of State a Certificate of Amended and Restated Certificate of
Incorporation that among other things, changed the Company's name back to
Whitney American Corporation. The Company has been inactive since early 1989,
and has no significant assets.
On June 30, 1988, the Company and Tri-Bradley Investments, underwriters to
the Company, successfully completed a public offering for the sale of 12,500
units of the Company's common stock at $1.00 per unit. Each unit consisted of
one share of $.00001 par value common stock, one Class A warrant and one Class B
warrant. Each warrant was exercisable for .06 shares of common stock for a
period commencing with the date of the Prospectus and terminating nine months
thereafter at the respective prices of $5.00 per share (Class A warrant) and
$10.00 per share (Class B warrant). The Class A and B warrants expired in
December 1988. The Company received net proceeds from the offering of $462 after
deducting offering expenses of $12,038.
On September 30, 1988 the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with Industrial Waste Processing, Inc., a
Nevada corporation ("IWP"), which provided for the Company's acquisition of IWP,
by the issuance of 200,000 shares of the Company's $.00001 par value common
stock in exchange for all of the issued and outstanding common stock of IWP. The
acquisition of IWP was recorded as a reverse acquisition for accounting
purposes. The 200,000 shares of the Company's common stock issued to IWP
shareholders were subsequently donated back by IWP's parental affiliate, Pacific
Energy and Mining Company ("PEMC") (150,000 shares) and by its President, Marc
A. Wilder (50,000 shares), and were cancelled by the Company on October 21,
1988. PEMC remained the owner of 25,000 shares of the Company's common stock
that it acquired and paid for in private transactions.
IWP was organized for the purpose of treating and neutralizing hazardous
waste from manufactures and landfills through proprietary processes and
recycling of metals and other materials of value, initially through the use of
mobile toxic treatment vans known as Transportable Treatment Units ("TTU's").
IWP, and later the Company, completed the construction of its initial TTU. The
TTU's never became operational because of a lack of funds and because of the
inability of the Company to perfect its technological processes. On April 17,
1989, PEMC reacquired all of the significant assets of the Company and assumed
approximately $542,000 of the Company's outstanding obligations.
On February 12, 1997 the Company's shareholders approved a restructuring of
the Company's authorized and outstanding capital through (1) a 1:100 reverse
stock split, (2) an increase in the Company's authorized capital stock to
50,000,000 shares of common stock and 5,000,000 shares of preferred stock, (3) a
change in par value to $.00001 per share for both the common and preferred stock
of the Company, and (4) a change in the name of the Company from Industrial
Waste Processing, Inc. to its original name, Whitney American Corporation. The
Company's shareholders also approved changes to the Company's Certificate of
Incorporation limiting the liability of directors of the Company under certain
circumstances. All share and share amounts have been restated to reflect this
restructuring.
The Company intends to participate in one or more as yet unidentified
business ventures, which will be chosen by management after reviewing business
opportunities selected for their profit or growth potential. The Company has no
current plans to make a public offering of its securities.
2
<PAGE>
Forward Looking Statements
This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of its management as well
as assumptions made by and information currently available to its management.
When used in this report, the words "anticipate", "believe", "estimate",
"expect", "intend", "plan" and similar expressions, as they relate to the
Company or its management, are intended to identify forward-looking statements.
These statements reflect management's current view of the Company with respect
to future events and are subject to certain risks, uncertainties and
assumptions. Should any of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this report as anticipated, estimated or expected. The
Company's realization of its business aims will depend in the near future
principally on the successful completion of its acquisition of operations as
discussed below.
Business of the Company
The Company's sole business subsequent to February 12, 1997 is to seek to
acquire assets of or an interest in a small to medium-size company or venture
actively engaged in a business generating revenues or having immediate prospects
of generating revenues. The Company plans to acquire such assets or business by
exchanging therefor the Company's securities. In view of its business plan, the
Company may be considered a "blank check" company. In order to avoid becoming
subject to regulation under the Investment Company Act of 1940, as amended, the
Company does not intend to enter into any transaction involving the purchase of
another corporation's stock unless the Company can acquire at least a majority
interest in that corporation. The Company has not identified any industry,
segment within an industry or type of business, nor geographic area, in which it
will concentrate its efforts, and any assets or interest acquired may be in any
industry or location, anywhere in the world. The Company will give preference to
profitable companies or ventures with a significant asset base sufficient to
support a listing on a national securities exchange or quotation on the NASDAQ
system. Members of management (all of whom are devoting part time to the
Company's affairs) plan to search for an operating business or venture which the
Company can acquire, thereby becoming an operating company. There is no
assurance that the Company will be successful in this endeavor. The Company has
no operations or source of revenues. Unless the Company succeeds in acquiring a
company or properties which provide cash flow, the Company's ability to survive
is in doubt.
Exchange Act Registration
The Company voluntarily filed with the Securities and Exchange Commission
("SEC") a registration statement on Form 8-A (file no. 0-22907) in order to
register the Company's common stock under Section 12(g) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), which became effective on
September 29, 1997. The Company had previously filed with the SEC certain
annual, quarterly and other reports on a voluntary basis, but pursuant to that
Exchange Act registration the Company now is required to file periodic reports
and other information with the SEC as required by the Exchange Act. Management
determined that Exchange Act registration would make the Company more desirable
to businesses desiring to go public by acquiring control of the Company. In the
event that the Company's reporting duties under the Exchange Act are suspended,
the Company intends that it will voluntarily continue to file quarterly, annual
and other reports under the Exchange Act.
Competition
The Company will be in direct competition with many entities in its efforts
to locate suitable business opportunities. Included in the competition will be
business development companies, venture capital partnerships and corporations,
small business investment companies, venture capital affiliates of industrial
and financial companies, broker-dealers and investment bankers, management and
management consultant firms and private individual investors. Most of these
entities will possess greater financial resources and will be able to assume
greater risks than those which the Company could consider. Many of these
competing entities will also possess significantly greater experience,
managerial abilities and contacts than the Company's management. Moreover, the
Company also will be competing with numerous other public companies available to
engage in business combinations with private entities.
3
<PAGE>
Employees
The Company has no employees other than its officers and no full-time
employees. Its officers expect to devote as much of their time as they deem
necessary to find and acquire assets or interests in one or more other
businesses. It is unlikely that any officer or director will, on the average,
devote more than 15 hours per week to the Company's affairs.
Item 2. Description of Property.
The Company neither owns nor leases any real estate or other properties. The
Company's offices are located at 12373 E. Cornell Avenue, Aurora, Colorado
80014, and are provided by its President. This arrangement will continue until
the Company determines to relocate its offices, which is not now anticipated,
since the current arrangement is entirely adequate for the Company's needs. The
Company does not intend to acquire any properties or additional offices, and
management does not anticipate that the Company will rent office space unless
and until it has acquired a business opportunity, in which case the Company's
offices almost certainly will be the same as those of the business opportunity
acquired.
Item 3. Legal Proceedings.
The Company is not involved in any threatened or pending legal proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
On February 12, 1997 the Company's shareholders approved a restructuring of
the Company's authorized and outstanding capital through (1) a 1:100 reverse
stock split, (2) an increase in the Company's authorized capital stock to
50,000,000 shares of common stock and 5,000,000 shares of preferred stock, (3) a
change in par value to $.00001 per share for both the common and preferred stock
of the Company, and (4) a change in the name of the Company from Industrial
Waste Processing, Inc. to its original name, Whitney American Corporation. The
Company's shareholders also approved changes to the Company's Certificate of
Incorporation limiting the liability of directors of the Company under certain
circumstances.
On February 14, 1997, the Company's shareholders approved the 1997 Employee
Stock Compensation Plan and the 1997 Stock Option Plan, as described under Item
10 below.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Market Information
The Company's outstanding common shares were last publicly quoted or traded
during the fiscal year ended May 31, 1990. The Company's common stock is quoted
"name only" (no price shown) in the over-the-counter market under symbol "WHAM"
on the OTC Electronic Bulletin Board operated by the National Association of
Securities Dealers, Inc. There is no assurance that an active market ever will
arise in the Company's shares.
Holders
The Company's common stock is held of record by approximately 120 persons,
which does not include shares held in nominee or "street" name.
Dividends
The Company does not expect to pay a cash dividend upon its capital stock in
the foreseeable future. Payment of dividends in the future will depend on the
Company's earnings (if any) and its cash requirements at that time.
4
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
Background
The Company has not had active business operations or significant revenues
since April 1989, as described in detail under Item 1 above.
Liquidity
As of May 31, 1997, the Company has an accumulated deficit of $92,705. The
Company has no assets and is completely illiquid. Management is actively seeking
to make one or more acquisitions of privately held companies, properties or
interests as described above, but has not yet entered into any understanding,
agreement or arrangement with any person respecting such an acquisition. Whether
the Company continues as a going concern depends upon its success in finding and
acquiring a suitable private business and the success of that acquired business.
The independent auditors' report contains an explanatory paragraph concerning
the Company's ability to continue as a going concern. The Company has no
long-term liabilities but does have significant short-term liabilities. The
Company pays no salaries or rent. Assets and cash available to the Company from
its management and shareholders may not be sufficient for the Company to carry
out its business plan. Problems relating to capital resources are more fully
discussed in the paragraph below.
Results of Operations
During the fiscal year ended May 31, 1997, the Company incurred a net loss
of $57,819 as compared to a net loss of $1,680 for the year ended May 31, 1996.
Expenses in fiscal 1997 and 1996 related primarily to accounting fees, legal
fees and other costs incurred with bringing the Company current in its SEC
filings.
Capital Resources
The Company has no commitment for any capital expenditure and foresees none.
However, the Company will incur routine fees and expenses incident to its
reporting duties as a public company, and it will incur fees and expenses in the
event it makes or attempts to make an acquisition. As a practical matter, the
Company expects no significant operating costs other than professional fees
payable to attorneys and accountants. In regard to a proposed acquisition, the
Company intends to require the target company to deposit with the Company a
retainer which the Company can use to defray such professional fees and costs.
In this way, the Company could avoid the need to raise funds for such expenses
or becoming indebted to such professionals. Moreover, investigation of business
ventures for potential acquisition will involve some costs, including travel,
lodging, postage and long-distance telephone charges. Management hopes, once a
candidate business venture is deemed to be appealing, to likewise secure a
deposit from the business venture to defray expenses of further investigation,
such as air travel and lodging expenses. An otherwise desirable business venture
may, however, decline to post such a deposit. In this event, such expenses can
only be covered if affiliates of the Company loan or contribute the necessary
capital to the Company (which is not assured) or if the Company is otherwise
able to raise funds from third parties.
The Company has no current intention of making a public offering of its
securities but will investigate the feasibility of raising capital in one or
more private transactions, if needed. The Company cannot assess the likelihood
of raising any such capital or of obtaining loans. No source of funding or
capital has been identified, and the Company has no credit or means to obtain a
loan.
Plan of Operation
BUSINESS. The following discussion sets forth management's plan of operation
for the Company over the next twelve months from the date of this report, and
thereafter, if no acquisition is made within twelve months.
5
<PAGE>
The Company is a "blank check" company which intends to seek, evaluate and
(if warranted) acquire one or more properties or private companies or
businesses. Such an acquisition may be made by purchase, merger, exchange of
stock or otherwise, and may encompass assets or a business entity such as a
corporation, partnership or joint venture. Since the Company has no capital, it
is unlikely that the Company will be able to take advantage of more than one
such opportunity. Management intends to seek acquisitions demonstrating the
potential for long-term growth in real value.
The Company is not restricted in its search for business opportunities to
any particular geographical area, industry or business within an industry and
may engage in any line of business, including service, finance, mining,
manufacturing, real estate, oil and gas, distribution, transportation, medical,
communications, high technology, biotechnology or any other. It is possible that
management may later determine to concentrate its search for business
opportunities to a particular industry, segment of an industry, or a particular
line of business, or to a defined geographical area. To date, however, no such
determination has been discussed. Management's discretion is, as a practical
matter, unlimited in the choice of a business venture or ventures. The Company's
search generally will be directed toward smallish to medium-sized companies.
Management anticipates that any business opportunity seriously considered for
acquisition will be out of the development stage, and have revenues and
earnings. The Company has no current plans to advertise or publish notices
concerning its quest to make such an acquisition.
Management does not intend to pursue any potential acquisition or
combination beyond the preliminary negotiation stage with any business venture
which does not have and cannot furnish the Company acceptable audited financial
statements for at least its two most recent fiscal years and unaudited interim
financial statements for any periods subsequent to its most recently completed
fiscal year.
No arrangements, agreements or understandings exist between non-management
shareholders and management under which the non-management shareholders may
participate in or influence the management of the Company's affairs. Of
non-management shareholders, Mr. Brasher has indicated that management holds his
confidence and that he currently intends to vote for the sole incumbent
director, Mr. Siedow, in the next election of directors.
FORM OF ACQUISITION. It is impossible to predict the manner in which the
Company may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs and desires of
the Company and the promoters of the opportunity and, upon the basis of that
review and the relative negotiating strength of the Company and such promoters,
the legal structure or method deemed by management to be suitable will be
selected. In addition, the current management and shareholders of the Company
most likely will not have control of a majority of the voting shares of the
Company following an acquisition transaction. As part of such a transaction, all
or a majority of the Company's directors may resign, and new directors may be
appointed without any vote by shareholders.
An acquisition or business combination may occur in one of several ways,
such as statutory merger or consolidation, asset purchase, or "reverse merger,"
in which the Company acquires all of the private company's outstanding common
stock in exchange for the issuance of unregistered shares of the Company's
common stock. Because the Company will have virtually no cash or other assets,
it will be foreclosed from purchasing for cash the assets or outstanding voting
stock of a viable business venture and can expect to make such an acquisition
only by issuing additional shares of its common stock.
Management anticipates that the acquisition will be structured so as to
avoid creating a taxable event under federal tax laws and probably will be
structured as a tax-free reorganization under Sections 351 or 368(a) of the
Internal Revenue Code of 1986, as amended. It is anticipated that the value of
any private company acquired no doubt will greatly exceed that of the Company.
Thus it is all but certain that, following the acquisition, the current
shareholders of the Company will in the aggregate own 10% or less of the common
stock of the Company.
The Company will participate in a business venture only after the
negotiation and execution of a written agreement. Although the terms of such an
agreement cannot be predicted, such agreements generally provide for
representations and warranties by the various parties thereto, conditions of
closing, post-closing covenants and restrictions, reciprocal indemnities,
remedies upon default and other terms. As a general matter, the Company
anticipates that it will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity. Such a letter of
6
<PAGE>
intent will set forth the terms of the proposed acquisition but will not bind
the Company to consummate it. Execution of such a letter of intent will by no
means indicate that consummation of an acquisition is probable.
The Company will not be bound unless and until it executes a definitive
agreement concerning the acquisition, as described in the foregoing paragraph,
and then only if the Company has no contractual right to terminate the agreement
on specified grounds. The investigation of specific opportunities and the
negotiation, drafting and execution of agreements and other documents will
require substantial costs for attorneys, accountants and others, probably
amounting to several thousand dollars for each acquisition attempted. The
Company does not have and may not be able to obtain the needed funds. If a
decision is made not to participate in a specific business venture, or if a
negotiated agreement is not consummated, the costs to the Company (which could
be substantial in light of the Company's lack of cash) may not be recoverable.
Management has not formulated any firm policy in this regard, but does not
intend to proceed further than the drafting of a non-binding letter of intent in
connection with any proposed acquisition unless and until (i) the Company has
determined that the company to be acquired has or can obtain the financial
statements required by applicable regulations of the Securities and Exchange
Commission, and (ii) the company to be acquired has posted a deposit with the
Company to be used for paying the Company's attorneys and accountants. Such a
precaution will enable management to limit the Company's financial exposure as
to any acquisition which cannot be completed for any reason.
Any attempted acquisition can be expected to absorb several weeks at the
least, and perhaps longer. Moreover, any acquisition may involve substantial
time delays, which can be caused for several reasons, including delays caused by
complying with requirements of state law.
ANALYSIS AND INVESTIGATION OF OPPORTUNITIES. The selection of a business
venture or ventures in which the Company is to participate will be entirely
subjective. The Company's lack of funds and full-time management will make it
impossible to conduct complete investigations and analyses of individual
business opportunities before making a decision. Participation may be based in
large part on the perceived quality of a private company's management and
personnel, properties or proprietary rights, products, services, marketing
concepts, level of technology, or other factors which are often difficult to
analyze with complete objectivity. Management's decisions may be made without
the benefit of detailed feasibility studies, independent analysis, market
surveys and similar professional studies which would be desirable if the Company
had more funds available to it. In many instances, it is anticipated that the
historical operations of a specific firm may not necessarily be indicative of
its potential for the future because of the possible need to shift marketing
approaches substantially, expand significantly, change product emphasis, change
or substantially augment management, or make other changes. Because of the lack
of training and experience of management, the Company will be heavily dependent
upon the owners of a business opportunity to identify such problems and to
implement, or be primarily responsible for the implementation of, required
changes. Because the Company may participate in a business opportunity with a
newly organized firm or with a firm which is entering a new phase of growth, it
should be emphasized that the Company will incur further risks, because
management in many instances will not have proved its abilities or
effectiveness, the eventual market for such company's products or services will
likely not be established, and such company may not be profitable when acquired.
It is emphasized that management may effect transactions having a
potentially adverse impact upon its shareholders pursuant to the authority and
discretion of the Company's current directors to complete acquisitions without
submitting any proposal to the shareholders for their consideration. In some
instances, however, the proposed participation in a business opportunity may be
submitted to the shareholders for their consideration, either voluntarily by the
directors to seek the shareholders' advice and consent or because state law so
requires.
The analysis of any business opportunity will be undertaken by or under the
supervision of management, none of whom is a professional business analyst or
has any previous training or significant experience in business analysis. In
selecting business ventures, management anticipates that it will consider the
following factors related to each business venture examined, among other
possible factors: (1) total and net assets and shareholders' equity, in light of
current and long-term liabilities; (2) total revenues and earnings, both current
and over the prior three fiscal years; (3) potential for revenue and earnings
growth; (4) existing and potential competition; (5) proprietary technology and
know-how, as well as patents and trademarks, if any; (6) capabilities and
experience of current management and management prospects already recruited; (7)
capital requirements; (8) availability of new capital and debt financing
sources, as well as relationships with existing lenders; (9) the cost and form
7
<PAGE>
of participation by the Company; (10) special risks associated with the venture
and its industry or industry segment; and (11) perceived desirability of the
venture to investors in the public capital markets.
It is anticipated that potential opportunities will become available to the
Company from many sources, primarily its management, but also including
attorneys and accountants, securities broker-dealers, venture capitalists,
members of the financial community, consultants, entrepreneurs and others who
may present unsolicited proposals. However, as of this date, management does not
intend paying a cash "finder's fee" to any person who presents a business
opportunity to the Company. The Company may compensate a person who brings a
business opportunity to the Company which subsequently is acquired, but any such
compensation would be in the form of common stock (or options or other
securities of the Company). Any such issuance of the Company's securities would
be made on an ad hoc basis, and the amount or type of securities cannot at this
time be predicted.
INSIDER SALES OF STOCK. No officer, director or affiliate of the Company
currently has any intention of selling shares owned by them in the Company to
any person in connection with any business opportunity acquired by the Company.
However, no law, rule or regulation, and no bylaw or charter provision prevents
any such persons from thus actively negotiating or consummating such a sale of
their shares. Company shareholders will not be afforded any opportunity to
review or approve any buyout of shares held by an officer, director or other
affiliate, should such a buyout occur.
USE OF CONSULTANTS. The Company has had no discussions, and has entered into
no agreements or understandings, with any consultant. The Company's officers and
directors have not in the past used any particular consultant(s) on a regular
basis and have no plan to recommend that any particular consultant(s) be engaged
by the Company on any basis. No particular criteria regarding experience,
services, term of service, or the like has been considered or developed
regarding the engagement of consultant(s). However, the Company currently has no
plan to hire or engage consultant(s) and management believes that a desirable
business opportunity can be located and acquired by management.
ACQUISITION-RELATED COMPENSATION. It is possible that compensation in the
form of common stock, options, warrants or other securities of the Company, cash
or any combination thereof, may be paid to various persons in connection with an
acquisition by the Company. Such persons may include officers, directors and
promoters of the Company and any of their respective affiliates, finders or
other persons. Any payments of cash would be made by the business acquired or
persons affiliated or associated with it, since the Company has no cash. It is
possible that the payment of such compensation may become a factor in any
negotiations for the Company's acquisition of a business opportunity. Any such
negotiations and compensation may present conflicts of interest between the
interests of persons seeking compensation and those of the Company's
shareholders, and there is no assurance that any such conflicts will be resolved
in favor of the Company's shareholders.
STATE SECURITIES LAWS CONSIDERATIONS. Section 18 of the Securities Act of
1933, as amended in 1996, provides that no law, rule, regulation, order or
administrative action of any state may require registration or qualification of
securities or securities transactions with respect to a "covered security." The
term "covered security" is defined in Section 18 to include, among other things,
transactions which are exempt from registration under the Securities Act of 1933
pursuant to Section 4(1), which exempts transactions by "any person not an
issuer, underwriter or dealer," (that is, secondary resales, such as market
trades) provided the issuer of the security files reports with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. In other words, Section 18
defines a covered security to include market trades and other secondary
transactions by shareholders in outstanding securities, even if the issuer is a
"blank check" company, provided the issuer is a reporting company.
While subparagraph (c) of Section 18 as amended preserves the authority of
the states to require certain limited notice filings and to collect fees as to
certain categories of covered securities (including Section 4(1) secondary
transactions in the securities of reporting companies), a state may not
"directly or indirectly prohibit, limit, or impose conditions based on the
merits of such offering or issuer, upon the offer or sale of any (covered)
security." This provision prohibits state registration or qualification
requirements, other than requiring certain limited notice filings, of trading in
the securities of blank check companies which are SEC reporting companies. The
Company will comply with any such state limited notice filings, but is currently
not aware of any such filing requirements for market trading.
8
<PAGE>
Item 7. Financial Statements.
See index to financial statements at page 11. The financial statements begin
following that index. No supplementary financial data is required or included.
Item 8. Changes in and Disagreements with Accountants or Accounting and
Financial Disclosure.
On May 5, 1997, the Company engaged Gelfond Hochstadt Pangburn & Co. as its
independent auditors and business consultant. The Company had no independent
accountant engaged at any time during either of the fiscal years ended May 31,
1996 or 1997.
PART III
Item 9 Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers
Directors are elected for one-year terms or until the next annual meeting of
shareholders and until their successors are duly elected and qualified. Officers
hold office at the pleasure of the Board of Directors. The table below sets
forth the name, age, position and tenure of each director and executive officer.
Mr. Brasher, as Secretary, is not considered an "executive" officer.
Name Age Position Held and Tenure
---- --- ------------------------
Stephen M. Siedow 47 President, Director from February 1997
John D. Brasher Jr. 45 Secretary from September 1988 until present;
Director from inception until February 1997
There are no family relationships among the officers and directors. There is
no arrangement or understanding between the Company (or any of its directors or
officers) and any other person pursuant to which such person was or is to be
selected as a director or officer. The directors and officers are expected to
devote their time to the Company's affairs on an "as needed" basis, but are not
required to make any specific portion of their time available to the Company. It
is anticipated that officers and director will, on the average, devote no more
more than 15 hours per week to the Company's affairs. There is no agreement or
understanding in existence under which any officer or director will resign at
the request of another person, and no officer or director is acting or will act
on behalf of or at the direction of any other person.
Biographical Information
Stephen M. Siedow. Mr. Siedow is president and sole shareholder of Stephen
M. Siedow, P.C., a professional accounting firm providing auditing, management
consulting, tax services and write-up services to corporations, partnerships and
individuals since 1982. Mr. Siedow specializes in public and SEC accounting and
has experience in industries including mining (gold and coal), oil and gas,
construction and mergers/acquisitions/liquidations. Prior to that, he was with
the audit department of Ernst & Whitney, Certified Public Accountants in Denver,
Colorado, for eight years. Mr. Siedow is a member of the American Institute of
Certified Public Accountants and the Colorado Society of Certified Public
Accountants. He also is Chairman, CEO and President of MNS Eagle Equity Group,
Inc., a non-SEC reporting Nevada corporation with a business plan similar to
that of the Company.
John D. Brasher Jr. Mr. Brasher is an attorney engaged since February 1988
in the practice of law in Denver, Colorado, as proprietor of Brasher & Company
and concentrates in the fields of corporate and securities law. From February
1987 to February 1988 he practiced law as a profit-sharing partner in the firm
of Pred and Miller, Denver, Colorado, concentrating in corporate and securities
law. From August 1982 until February 1987, Mr. Brasher practiced corporate and
9
<PAGE>
securities law as an associate and later as a partner of Broadhurst, Brook,
Mangham and Hardy, of Lafayette, Louisiana. Mr. Brasher received a B.A. degree
in English in 1979, and in 1982 received a law degree (J.D.), both from
Louisiana State University. He is admitted to practice in the States of Colorado
and Louisiana and is a member of the bar of the United States Supreme Court. Mr.
Brasher is Chairman, CEO and President of Cerx Entertainment Corporation, a
Denver-based Nevada corporation in the development stage. He also is a director,
CEO and President of Rising Sun Capital, Ltd., a non-SEC reporting Colorado
corporation and a director of MNS Eagle Equity Group, Inc., a Nevada
corporation, both with a business plan similar to that of the Company.
Management Experience With Previous Blank Check Companies
Stephen M. Siedow, the President and CEO of the Company, has not been
involved with any previous "blank check" offerings. John Brasher, Secretary and
counsel to the Company, was instrumental in forming the Company in 1987 and
formerly was its president. The Company in 1988 completed a small public
offering as a "blank check" company and eventually acquired Industrial Waste
Processing, Inc., a Nevada corporation, all as described in detail under Item 1
(Description of Business) above.
Mr. Brasher also is the President and CEO of Cerx Entertainment Corporation,
a Nevada corporation organized in 1989 under the name Chelsea Atwater, Inc.
("Cerx"). The business purpose of Cerx was to create subsidiary corporations
which would act as "blank check" companies and then register the stock held in
each subsidiary under the Securities Act of 1933 for distribution to Cerx
shareholders. In 1989, Cerx filed a registration statement on Form S-18 to
register the offer and sale of a minimum of 12,500 and a maximum of 50,000 units
at the price of $6.00 per unit. Each unit consisted of 60 shares of common stock
and 60 common stock purchase warrants, each warrant being exercisable for a
period of eighteen months to purchase two (2) common shares at the price of $.15
per share. The registration never became effective, and no units or other
securities were offered and sold. That offering was abandoned in 1991. Cerx is
no longer a "blank check" company and is attempting to raise capital to initiate
a new line of business.
General Conflicts of Interest
Certain conflicts of interest now exist and will continue to exist between
the Company and its officers and directors due to the fact that each has other
employment or business interests to which he devotes his primary attention. Each
officer and director is expected to continue to do so, not withstanding the fact
that management time should be devoted to the Company's affairs. The Company has
not established policies or procedures for the resolution of current or
potential conflicts of interest between the Company and its management. There
can be no assurance that members of management will resolve all conflicts of
interest in the Company's favor. The officers and directors are accountable to
the Company as fiduciaries, which means that they are legally obligated to
exercise good faith and integrity in handling the Company's affairs. Failure by
them to conduct the Company's business in its best interests may result in
liability to them.
Significant Employees
None, other than officers of the Company listed above.
Item 10. Executive Compensation.
Cash Compensation
For the fiscal year ended May 31, 1997, no executive officer received cash
compensation.
Compensation Pursuant to Plans
No compensation was paid to executive officers pursuant to any plan during
the fiscal year just ended, and the Company has no agreement or understanding,
express or implied, with any officer or director concerning employment or cash
compensation for services. No plan or agreement exists pursuant to which any
10
<PAGE>
officer will receive compensation resulting from the officer's resignation,
retirement or any other termination of employment with the Company, from a
change in control of the Company, or a change in the officer's responsibilities
following any change in control of the Company.
The Company has adopted and the Company's shareholders have approved the
1997 Employee Stock Compensation Plan and the 1997 Stock Option Plan, both
discussed below. Otherwise, the Company does not have in force any pension,
profit-sharing, stock appreciation or other benefit plans, although such plans
may be adopted in the future.
1997 EMPLOYEE STOCK COMPENSATION PLAN. The Company's shareholders have
approved an Employee Stock Compensation Plan for employees, officers, directors
of the Company and advisors to the Company (the "ESC Plan"). The Company has
reserved a maximum of 1,500,000 common shares to be issued upon the grant of
awards under the ESC Plan. Employees will recognize taxable income upon the
grant of common stock equal to the fair market value of the common stock on the
date of the grant and the Company will recognize a compensating deduction at
such time. The ESC Plan will be administered by the Board of Directors. No stock
has been awarded under the ESC Plan to date.
1997 STOCK OPTION PLAN. The Company's shareholders have approved the 1997
Stock Option Plan for officers, key employees, potential key employees,
non-employee directors and advisors (the "CSO Plan"). The Company has reserved a
maximum of 2,000,000 common shares to be issued upon the exercise of options
granted under the CSO Plan. The CSO Plan will not qualify as an "incentive stock
option" plan under Section 422 of the Internal Revenue Code of 1986, as amended.
Options will be granted under the CSO Plan at exercise prices to be determined
by the Board of Directors or other CSO Plan administrator. With respect to
options granted pursuant to the CSO Plan, optionees will not recognize taxable
income upon the grant of options, but will realize income (or capital loss) at
the time the options are exercised to purchase common stock. The amount of
income will be equal to the difference between the exercise price and the fair
market value of the common stock on the date of exercise. The Company will be
entitled to a compensating deduction in an amount equal to the taxable income
realized by an optionee as a result of exercising the option. The CSO Plan will
be administered by the Board of Directors or a committee of directors. No
options have been granted under the CSO Plan to date.
Other Compensation.
None.
Compensation of Directors.
None.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of May 31, 1997, the stock ownership of
each officer and director of the Company, of all officers and directors of the
Company as a group, and of each person known by the Company to be a beneficial
owner of 5% or more of its common stock. Except as otherwise noted, each person
listed below is the sole beneficial owner of the shares and has sole investment
and voting power as such shares. No person listed below has any option, warrant
or other right to acquire additional securities of the Company, except as may be
otherwise noted.
As of May 31, 1997
------------------
Title Name and Address Amount of Percent of
of of Beneficial Common Stock Owned Common
Class Owner Beneficially Stock Outstanding
----- ----- ------------ -----------------
Common *Stephen M. Siedow 23,000 36.8%
Stock 12373 E. Cornell Avenue
Aurora, Colorado 80014
11
<PAGE>
SAME *John D. Brasher Jr. 14,800 23.7%
90 Madison Street, Suite 707
Denver, Colorado 80206
SAME Robert A. Prange 9,938 15.9%
10305 Amy Lynn Court
Louisville, Kentucky 40233
SAME CEDE & Company 7,132 11.4%
Box 222 Bowling Green Station
New York, New York 10274
SAME Robert W. Hershey 4,000 6.4%
1761 S. Niagara Way
Denver, Colorado 80224
*All directors and officers 37,800 60.5%
(one person)
Changes in Control
A change of control undoubtedly will occur when and if the Company acquires
a business opportunity. Although the extent of the change of control cannot be
predicted at this time, it is unlikely that the existing shareholders will own
more than 10% of the Company (or combined entity) following an acquisition.
Item 12. Certain Relationships and Related Transactions.
On February 12, 1997, Mr. Stephen M. Siedow, the Company's president
purchased from Pacific Energy and Mining Company 23,000 shares of the Company's
common stock in a private transaction for $2,500 cash.
The Company owes its President $53,860 for accounting services and costs
advanced. The Company also owes Mr. Brasher, the Company's Secretary and legal
counsel, $15,119 for legal services and costs advanced. These fees and costs
advanced were incurred in bringing the Company current in its SEC filings. The
Company lacks any funds with which to pay such debts, and it is likely that such
debts will either be paid in cash by the business acquired (or persons
affiliated or associated with the business) or by the issuance of additional
shares of the Company. In the event that the business acquired or related
persons must pay such debts, the payment would be in effect a condition to be
considered in the acquisition.
The Company has no understandings with its officers or directors, or other
shareholders, pursuant to which such persons have agreed to contribute capital
to the Company or otherwise provide funds to the Company. There are no other
reportable transactions involving promoters, executive officers, or directors of
the Company as required by Item 404 of Regulation S-B.
Otherwise, there were no transactions, or series of transactions, for the
fiscal year ended May 31, 1997 nor are there any currently proposed
transactions, or series of transactions, to which the Company is a party, in
which the amount exceeds $60,000, and in which to the knowledge of the Company
any director, executive officer, nominee, five percent or greater shareholder,
or any member of the immediate family of any of the foregoing persons, have or
will have any direct or indirect material interest.
12
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibits are filed with this report, except
those indicated as having previously been filed with the Securities and Exchange
Commission and are incorporated by reference to another report, registration
statement or form. References to the "Company" mean Whitney American
Corporation.
3.0 Certificate of Incorporation (incorporated by reference to
Exhibit 3.0 to Registration Statement No. 33-17397-D, effective
March 7, 1988) ......................................................*
3.05 Certificate of Amended and Restated Certificate of Incorporation
of the Company incorporated by reference to Exhibit 3.1 to Form 8-K
dated February 12, 1997) ............................................*
3.1 Bylaws of the Company (incorporated by reference to Exhibit 3.1 to
Registration Statement No. 33-17397-D, effective March 7, 1988) .....*
3.2 Amendment to Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to Registration Statement No. 33-17397-D, effective
March 7, 1988) ......................................................*
3.3 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to Form 8-K dated February 12, 1997) ....................*
4.0 Specimen Stock Certificate (incorporated by reference to Registration
Statement No. 33-17397-D effective March 7, 1988) ...................*
10.2 1997 Stock Option Plan (incorporated by reference to Exhibit 10.1 to
Form 8-K dated February 12, 1997)....................................*
10.3 1997 Employee Stock Compensation Plan (incorporated by reference to
Exhibit 10.2 to Form 8-K dated February 12, 1997)....................*
* - Incorporated by reference to another registration statement,
report or document.
1 - Includes Exhibits filed as part of this Report.
(b) Reports on Form 8-K. The Company filed a report on Form 8-K dated
February 12, 1997, regarding matters approved by shareholders, such as election
of new management and other things.
(c) Financial statements and supplementary data.
Index to Financial Statements
Independent Auditors' Report............................................ F-1
Balance Sheet as of May 31, 1997........................................ F-2
Statements of Operations for the years ended
May 31, 1997 and 1996 .............................................. F-3
Statements of Shareholders' Deficit for the years ended
May 31, 1997 and 1996............................................... F-4
Statements of Cash Flows for the years ended May 31, 1997 and 1996 ......F-5
Notes to Financial Statements............................................F-6
13
<PAGE>
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this Report on Form 10-KSB to be signed on its
behalf by the undersigned, thereto duly authorized individual.
Date: November 3, 1997
WHITNEY AMERICAN CORPORATION
/s/ Stephen M. Siedow
By..................................
Stephen M. Siedow, President
In accordance with 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.
Name Title Date
---- ----- ----
/s/ Stephen M. Siedow
..................... President and Director November 3, 1997
Stephen M. Siedow
14
