<PAGE> 1
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 33-19980-D
GEMSTAR ENTERPRISES, INC.
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Nevada 87-0450450
73-251 Amber Street
Palm Desert, CA 92260
(619) 346-4812
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [ ] No [X] (2) Yes [X] No [ ]
State Registrant's revenues for its most recent fiscal year. $0.00
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past
60 days. $243,172
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date: 10,758,614 shares
of its $0.001 par value common stock as of November 5, 1996
DOCUMENTS INCORPORATED BY REFERENCE
None of the documents referred to by this Item are incorporated by reference
Transitional Small Business Disclosure Format (check one): Yes ___; No X
<PAGE> 2
ITEM 1. BUSINESS
The Registrant was incorporated under the laws of the state of Nevada in
October of 1987, under the name of North Star Petroleum, Inc. and
completed a public offering of its common stock and warrants in August of
1988. Subsequent to the public offering, the Registrant engaged in the
exploration, development and production of oil and gas on a joint venture
basis with other industry partners.
In May of 1990, the Registrant amended its Articles of Incorporation,
thereby changing its name to Gemstar Enterprises, Inc., increasing its par
value from $0.001 to $0.02, and authorizing for issuance 5,000,000 shares of
preferred stock. Additionally, the Registrant reverse split its common stock
on the basis of one $0.02 par value common share for twenty $0.001 par value
common shares [1 for 20 reverse]. All references to the Registrant's common
stock in this report have taken this reverse split into account. During 1990,
the Registrant also acquired approximately 200 acres of real property
located in Alexander County, North Carolina. The Registrant's performance
in both its oil and gas business and its investment in real estate did not
generate sufficient revenue to result in profitable operations.
During the Registrant's last fiscal year ending in September, 1996, and in
its preceding two fiscal years, the Registrant did not engage in any
business activity. During the fiscal year ending in September, 1993, the
Registrant sold all of its assets and associated liabilities, thus
avoiding any bankruptcy, receivership or similar proceeding. By April,
1993, this reorganization was completed and the Registrant retained only a
receivable from its sole officer and director, which amounted to less than
$10,000. As a consequence, since April of 1993, the Registrant has been
considered a new entity for accounting purposes.
The Registrant recently sold shares of its common stock in a private
transaction for the purpose of paying its operating costs, including the
audit of its financial statements. The Registrant is now actively
seeking a business to acquire or to merge with in order to establish
operations. The Registrant emphasizes that its success in this regard
can not be assured and that the acquisition of any asset or business
enterprise (profitable or not profitable) will in all likelihood result in a
dilution in the percentage ownership that a current shareholder of the
Registrant now holds.
ITEM 2. PROPERTIES
The Registrant does not own any property and its principal executive offices
are located at the residence of its sole officer and director. The Registrant
does not have any property interest in such residence.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is not engaged in any legal proceedings.
<PAGE> 3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Section 78.320-2 of the Nevada Revised Statues, states that: "any
action required or permitted to be taken at a meeting of the stockholders may
be taken without a meeting if a written consent thereto is signed by
stockholders holding at least a majority of the voting power." Furthermore,
Section 78.320-3 of the Nevada Revised Statues, states that: "In no instance
where action is authorized by written consent need a meeting of stockholders
be called or notice given."
In compliance with these Sections of the Nevada Revised Statues, the
Registrant set March 25, 1996 as the record date to obtain the consent of a
majority of its shareholders for the purpose of amending its Articles of
Incorporation by changing the par value of the common stock from $0.02 per
share to $0.001 per share. This Amendment was filed in the office of the
Secretary of State of Nevada on April 29, 1996. The number of shares of the
Registrant's common stock eligible to vote was 6,758,614 shares, of which
consent resolutions representing 4,915,000 shares (73% of the shares eligible
to vote) were voted for adopting such Amendment.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Registrant's common stock is quoted on the National Association of
Securities Dealers' OTC Bulletin Board with a symbol of "GMSE". The high and
low bid quotations provided below were derived from this electronic quotation
system and reflect inter-dealer prices, without retail markup, mark-down
or commissions and may not represent actual transactions. A review of the
trading volume of the common stock as reflected on this system, indicates
that actual transactions occurred sporadically and infrequently.
Consequently, the information provided below may not be indicative of the
Registrant's common stock price under different conditions, such as increased
volume of trades, the frequency of trades and a more consistent pattern of
both volume and trades.
Quarter Ended .......................... High Bid Low Bid
December, 1993 ......................... $ 1/32 $ 1/32
March, 1994 ............................ 1/32 1/32
June, 1994 ............................. 1/32 1/32
September, 1994 ........................ 1/32 1/32
December, 1994 ......................... $ 1/32 $ 1/32
March, 1995 ............................ 1/32 1/32
June, 1995 ............................. 1/32 1/32
September, 1995 ........................ 1/32 1/32
December, 1995 ......................... $ 3/32 $ 1/32
March, 1996 ............................ 3/32 1/16
June, 1996 ............................. 1/16 1/16
September, 1996 ........................ 1/16 1/16
The Registrant's shareholders of record of its common stock is a total of 106
shareholders as of September 30, 1996 and includes broker/dealers and clearing
house agents. Based on information obtained through use of a "NOBO" list
obtained within the last nine months, shares held beneficially by
broker/dealers and clearing house agents for the accounts of others, totaled
an additional 73 shareholders. Thus, the Registrant has a combined total of
approximately 179 shareholders.
<PAGE> 4
During the fiscal years ended September 30, 1996, 1995 and 1994, the
Registrant had not declared any cash dividends on its common stock. The
Registrant doesn't anticipate declaring any cash dividends on its common stock
within the foreseeable future.
In addition to its common stock, the Registrant has outstanding two Series of
warrants, namely Series A and Series B (collectively referred to as the
"Warrant(s)"). The exercise of one Warrant provides for the purchase of
one share of the Registrant's common stock. The Series A Warrant was issued
to the initial founders of the Registrant and to the purchasers of the "Unit"
which the Registrant sold in its initial public offering in 1988. The Series B
Warrant was distributed without cost to the holders of record on May 11,
1990, of the Registrant's common stock.
The common stock issuable upon exercise of the Series A Warrant was included
in the registration statement filed with the SEC in the Registrant's initial
public offering. Subsequently, 198,855 Series A Warrants were exercised. The
Registrant amended the expiration date of the Series A Warrant by conforming
its terms to those of the Series B Warrant. The commencement date for
exercise of the Warrants is that date that a registration statement relating
to the common stock issuable on exercise of the Warrants has been declared
effective by the SEC. The termination date for the Series A Warrants is 45
days after the commencement date. The termination date for the Series B
Warrants is six months after the commencement date. The exercise price for
the Series A and B Warrants is 1.60 and $4.00 per share, respectively, and
subject to adjustments for changes in capitalization, including stock splits.
At the present time, a registration statement is not in effect to allow
for the exercise of the Warrants and the Registrant does not
anticipate that a registration statement with respect to the Warrants will
be filed with the SEC in the near future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The Registrant did not generate any revenue from operations during each of
its last three fiscal years ending September 30, 1996, 1995, and
1994, nor has the Registrant generated any revenue from the date of its
latest fiscal year end through the date of this report. During the current
fiscal year, which commenced on October 1, 1996, the Registrant's cash flow
requirements have, to a great extent, been covered from proceeds of its sale
of the Registrant's common stock.
As discussed as a part of Item 1 of this report, the Registrant is seeking a
business opportunity and if an appropriate situation should arise, the
Registrant would enter into a plan of reorganization with such other entity.
Management intends to evaluate such potential reorganizations by giving
consideration to the following items:
A] If the entity with which the Registrant would enter into a plan and
agreement of reorganization has been and currently is engaged in profitable
operations.
B] The adequacy of such entities working capital and its ability to
continue to operate in a favorable cash flow environment.
<PAGE> 5
The criteria, pursuant to which the Registrant is seeking to enter into a
reorganization, is a significant improvement of the Registrant's current
position. Consequently, a reorganization would most likely result in a
dilution in the current shareholder's ownership percentage in the Registrant
after the completion of such a reorganization. Additionally, the
Registrant may be required to sell additional shares of its equity securities
in order to make its public status a desired asset which is being sought by
the entity seeking to reorganize with the Registrant. Such action would also
result in a dilution of the ownership percentage in the Registrant by
current shareholders.
The Registrant has had no employees during each of its last two fiscal
years. During its current fiscal year, the Registrant has not employed anyone
and does not intend to employ anyone in the future, unless its business
operations were to change and therefore require that individuals be hired in
anticipation that revenue would be generated. Management is providing
the Registrant with a location for its principal executive offices on a
"rent free basis" and no salaries or other form of compensation are
currently being paid by the Registrant for the time and efforts required by
management to seek an entity for purposes of entering into a reorganization.
The Registrant reimburses management for out-of-pocket costs incurred in
seeking a business venture and for general operating expenses. To the extent
that management's time requirements in fulfilling its responsibilities
become excessive, the Registrant may accrue a liability to management.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Commencing on the following page, the Registrant has presented its
financial statements as of September 30, 1995 and for the year ended
September 30, 1995 and 1994. Included as a part of these financial statements
is the opinion of the Registrant's independent certified public accountants.
TABLE OF CONTENTS
Page
Report of Independent Auditors 6
Balance Sheet - September 30, 1995 7
Statements of Operations for the Years Ended September 30, 1995 and
1994, and for the Period April 10, 1993 (Date of Inception as a
Development Stage Company) through September 30, 1995 8
Statements of Stockholders' Equity for the period April 10, 1993 (Date
of Inception as a Development Stage Company) through September 30, 1995 9
Statements of Cash Flows for the Years Ended September 30, 1995 and
1994, and for the Period April 10, 1993 (Date of Inception as a
Development Stage Company) through September 30, 1995 10
Notes to Financial Statements 11
<PAGE> 6
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Gemstar Enterprises, Inc.
Palm Desert, California
We have audited the accompanying balance sheet of Gemstar Enterprises, Inc.
(a development stage company) as of September 30, 1995 and the related
statements of operations, stockholders' equity, and cash flows for the
years ended September 30, 1995 and 1994 and for the period from April 10,
1993 (date of inception as a development stage company) to September 30, 1995.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Gemstar Enterprises, Inc.
as of September 30, 1995, and the results of its operations and its cash flows
for the years ended September 30, 1995 and 1994 and from April 10, 1993 to
September 30, 1995, in conformity with generally accepted accounting
principles.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
May 28, 1996
<PAGE> 7
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
SEPTEMBER 30, 1995
ASSETS
Current Assets
Cash in bank ................................................ $ 8,000
---------
Total Assets ............ ....................................... $ 8,000
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loan from officer ........................................... $ 603
---------
Total Current Liabilities ............................... 603
---------
Stockholders' Equity
Preferred stock, $0.001 par value, 5,000,000 shares authorized,
no shares issued and outstanding .......................... -0-
Common stock, $0.001 par value, 100,000,000 shares authorized,
6,758,614 issued and outstanding .......................... 6,759
Additional paid-in capital .................................. 908,285
Deficit accumulated prior to the development stage .... ..... (905,548)
Deficit accumulated during the development stage ............ (2,099)
---------
Total Stockholders' Equity .............................. 7,397
---------
Total Liabilities and Stockholders' Equity ...................... $ 8,000
=========
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
April 10, 1993
(Date of
Inception as
a Development
Stage Company)
For the Years Ended through
September 30, September
------------------------- 30,
1995 1994 1995
----------- ---------- ------------
Revenues ....................... $ -0- $ -0- $ -0-
Expenses
General and administrative .... 615 354 1,687
Amortization .................. -0- -0- 412
----------- ---------- ------------
Net Loss ....................... $ (615) $ (354) $ (2,099)
=========== ========== ============
Net Loss Per Common Share ...... $ -0- $ -0- $ -0-
=========== =========== ============
Common Shares Used in
Net Loss Calculation ........... 6,758,614 6,758,614 6,758,614
=========== =========== ============
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit Deficit
Accumulated Accumulated Total
Common Stock Additional Prior to the During the Receivable Stockholders'
Paid-in Development Development From Equity
Shares Amount Capital Stage Stage Officer (Deficit)
-------- ------- ---------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance-April 10,
1993 (Inception
as a Development
Stage Company) ...1,698,864 $ 1,699 $ 812,150 $(905,548) $ -0- $ -0- $ (91,699)
Issuance of common
stock at $0.02
per share for
assumption of
liabilities, payable
to shareholder, and
a receivable from
officer; August 16,
1993 ............5,000,000 5,000 95,000 -0- -0- (7,783) 92,217
Net loss for the
period from April
10, 1993 through
September 30, 1993 -0- -0- -0- -0- (1,130) -0- (1,130)
--------- -------- --------- --------- --------- --------- ---------
Balance-September
30, 1993 ........6,698,864 6,699 907,150 (905,548) (1,130) (7,783) (612)
Expenses paid by
officer ......... -0- -0- -0- -0- -0- 966 966
Net loss for year
ended September
30, 1994 ........ -0- -0- -0- -0- (354) -0- (354)
--------- -------- --------- --------- --------- --------- ---------
Balance-September
30, 1994 ........6,698,864 6,699 907,150 (907,548) (1,484) (6,817) -0-
Issuance of common
stock at $0.02
per share; for
cash, October 15,
1994 ............ 59,750 60 1,135 -0- -0- -0- 1,195
Loan to officer,
October 15, 1994.. -0- -0- -0- -0- -0- (1,195) (1,195)
Expenses paid by
officer ......... -0- -0- -0- -0- -0- 615 615
Collection of loan
to officer,
September 30, 1995 -0- -0- -0- -0- -0- 7,397 7,397
Net loss for year
ended September
30, 1995 ........ -0- -0- -0- -0- (615) -0- (615)
--------- -------- --------- --------- --------- -------- ---------
Balance-September
30, 1995 ........6,758,614 $ 6,759 $ 908,285 $(905,548) $ (2,099) $ -0- $ 7,397
========= ======== ========= ========= ========= ======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
April 10,
1993
(Date of
Inception
as a
Development
Stage
Company)
For the Years Ended through
September 30, September
------------------------- 30,
1995 1994 1995
----------- ---------- -----------
Cash Flows From Operating
Activities
Net loss ...................... $ (615) $ (354) $ (2,099)
Amortization .................. -0- -0- 412
Expenses paid by officer ...... 615 966 1,581
Decrease in accounts payable... -0- (612) (612)
----------- ---------- -----------
Net Cash Used in Operating
Activities ........................ -0- -0- (718)
----------- ---------- -----------
Cash Flows From Financing
Activities
Proceeds from issuance of
common stock .................. 1,195 -0- 1,195
Advance from officer .......... 603 -0- 603
Advance to officer ............ (1,195) -0- (1,195)
Collection of receivable
from officer ................. 7,397 -0- 7,397
----------- ---------- -----------
Net Cash Provided by Financing
Activities ........................ 8,000 -0- 8,000
----------- ---------- -----------
Net Increase in Cash .............. 8,000 -0- 7,282
Cash at Beginning of Period ....... -0- -0- 718
----------- ---------- -----------
Cash at End of Period ............. $ 8,000 $ -0- $ 8,000
=========== ========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE> 11
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE - 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Corporate History
Gemstar Enterprises, Inc. (the Company) was incorporated in Nevada
in October 1987 as North Star Petroleum, Inc. In May 1990 its name was
changed to Gemstar Enterprises, Inc. Since its organization, the Company
had operations relating to oil and gas interests and owned real property.
These operations were disposed of in June 1991 and in April 1993, resulting
in a loss from their disposition of $238,820, which amount is a part of the
deficit accumulated prior to the development stage of $905,548. Since April
10, 1993, the Company has had no operations and has since then been
considered to be a development stage enterprise. The development stage
activities of the Company have been confined to raising capital and searching
for other business opportunities.
On March 25, 1996, the stockholders of the Company approved an amendment
to the articles of incorporation changing the par value of the Company's
common stock from $0.02 per share to $0.001 per share. The amount of the
common stock and the additional paid-in capital in accompanying financial
statements have been retroactively restated for the effects of the change
for all periods presented.
Use of 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,
liabilities and equity at the date of the financial statements and the
amounts of expenses reported during the periods presented. Actual results
could differ from those estimates.
Loss per Common Share
Loss per share has been computed based upon the ending number of shares
of common stock outstanding.
NOTE - 2 - STOCKHOLDERS' EQUITY
The Company has 551,145 Series "A" Warrants outstanding which entitle
the holders thereof to purchase 551,145 shares of common stock of the
Company at $1.60 per share. Also, there are 548,864 Series "B" Warrants
outstanding which may be exercised to purchase 548,864 shares of common stock
at $4.00 per share. Exercise of these warrants is conditioned upon a
registration statement relating to the underlying common stock being
declared effective . Additionally, the Company may redeem both the series
of warrants at $0.02 per warrant upon giving 30 days written notice.
The Company's articles of incorporation authorize the issuance of
5,000,000 shares of preferred stock. The Board of Directors have the
authority to designate dividend, liquidation, voting and any other rights
associated with these shares at the time of their issuance.
<PAGE> 12
NOTE - 3 - RELATED PARTY TRANSACTIONS
On August 16, 1993 in connection with the issuance of common stock,
the Company recognized a receivable from the officer of the Company, which is
also a shareholder, in the amount of $7,783. The officer has paid expenses
for the Company which have reduced the receivable. The Company loaned
$1,195 to the officer on October 15, 1994. On September 30, 1995, the
officer paid $8,000 to the Company of which $7,397 paid the remaining balance
of the receivable from the officer in full and the remaining $603 was
accounted for as a payable to the officer. Terms for payment of the amount
due to the officer have not been established.
NOTE - 4 - DEFERRED INCOME TAXES
Income tax accruals are based on taxable losses incurred each period.
The deferred income taxes resulted from the potential future benefit of
operating loss carry forwards. A valuation allowance has been provided
to reduce the deferred tax asset to zero because realization of this
operating loss carry forward is not likely. The availability of operating
loss carry forwards to offset future taxable income may be substantially
limited due to tax limitations relating to changes in ownership. Accordingly,
there was no current or deferred benefit from the losses from operations. At
September 30, 1995, the Company had $90,926 of operating loss carry forwards
that expire in 2007 through 2010 if not used.
The components of the net deferred tax asset at September 30, 1995, are
as follows:
Operating loss carry forwards...... $ 13,639
Less: Valuation allowance.......... (13,639)
----------
Net Deferred Tax Asset............. $ -0-
==========
<PAGE> 13
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Director of Registrant
Denny W. Nestripke, age: 49, serves the Registrant as its only director and
in the additional capacities of President (CEO), Secretary and Treasurer
(CFO). Mr. Nestripke is also a director of Municipal Systems, Inc., a
currently inactive company that had registered its securities pursuant a
registration statement filed on Form S-18. Mr. Nestripke has not been subject
to any legal proceedings during the past five years of a nature requiring
disclosure pursuant to this item of the report and he, nor any business in
which he is or was involved, has filed a petition for bankruptcy.
The term of office, pursuant to the Registrant's by-laws, is for the period
of one year and longer, if no other individual is qualified and elected to
serve in the capacity of a director. The positions of President, Secretary
and Treasurer are held for an indefinite period, which is determined
by the board of directors. Mr. Nestripke has held the positions referred to
above from April 10, 1993 through to the present time. Prior thereto,
Mr. Nestripke served as President, Treasurer and Director of the
Registrant from the Registrant's inception, in October of 1987 through
December of 1991.
Mr. Nestripke is licensed as a certified public accountant by the states
of California and Utah. Since November, 1995, in addition to pursuing his
business obligations related to the Registrant, Mr. Nestripke has
assisted in the reorganization of another business entity and has maintained
his own investment portfolio. From September, 1992, through November, 1995,
Mr. Nestripke served as Controller and Chief Accounting Officer of Magnum
Petroleum, Inc., an oil and gas concern listed on the American Stock
Exchange. Prior to September, 1992, and for a period of approximately 13
years, Mr. Nestripke was the sole proprietor of a certified public
accountant firm, with emphasis on the audit of financial statements for
small capitalized corporations, filing registration statements with the
SEC. Upon the implementation of the requirement of a concurring partner
review of the audit work papers, Mr. Nestripke ceased performing audits
and focused his accounting practice on assisting public companies in the
preparation of financial statements for reporting to the SEC pursuant to
The Securities Exchange Act of 1934.
<PAGE> 14
ITEM 10. EXECUTIVE COMPENSATION
As set forth in the compensation table below, the Registrant has not paid
any compensation, either in cash or otherwise, to its only officer and
director for the last three completed fiscal years. Furthermore, no
compensation has been paid and it is not expected that any compensation will
be paid to Mr. Nestripke for the Registrant's fiscal year ended September 30,
1996.
Summary Compensation Table
- --------------------------
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Denny W. Nestripke 1995 $-0- -0- -0- -0- -0- -0- -0-
C.E.O and C.F.O 1994 -0- -0- -0- -0- -0- -0- -0-
1993 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners:
Amount and
Name and Address Nature of
of the Beneficial Percent
Title of Class Beneficial Owner Owner of Class
- --------------- ------------------- ---------- --------
Common Stock Denny W. Nestripke 3,890,750 35.4 %
P. O. Box 3854
Palm Desert, CA
Common Stock Suzanna Call 900,000 8.4 %
304 West 770 North
Kaysville, UT
Common Stock Wendy Harper 800,000 7.4 %
87 North 2080 South
St. George, UT
Common Stock Shanna Atkinson 800,000 7.4 %
1218 North 250 West
American Fork, UT
<PAGE> 15
Security Ownership of Management:
Amount and
Name and Address Nature of
of the Beneficial Percent
Title of Class Beneficial Owner Owner of Class
- --------------- ------------------- ---------- --------
Common Stock Denny W. Nestripke 3,890,750 35.4 %
P. O. Box 3854
Palm Desert, CA
The Registrant does not have any options, warrants (except for those
Warrants discussed under Item 5. of this report), rights or other conversion
privileges outstanding. Thus, the number of shares stated in the above
tables include all shares which any of these individuals own or have a
right to acquire within sixty days of this report. None of the above named
individuals hold any shares pursuant to a voting trust or similar agreement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August of 1996, the Registrant sold 4,000,000 shares of common stock to
four individuals at a price of $0.0025 per share. One of the
individuals participating in this purchase was Mr. Nestripke, an officer and
director of the Registrant, who purchased 1,500,000 shares for $3,750.00 in
cash consideration. This transaction, as it relates to Mr. Nestripke, was
not undertaken on an independent basis and could not be considered an arms
length transaction. These shares have not been registered and Mr.
Nestripke, as well as the other purchasers, did not received any rights
which would allow them to compel the Registrant to register these shares.
Thus, the resale of these shares is subject to a current registration
statement being in effect or that an exemption from registration, such as
Rule 144 of The Securities Act of 1933, be available to the purchasers.
Mr. Nestripke is the Registrant's only director and officer and is the owner
of 35.4 % of the Registrant's issued and outstanding voting
securities. Consequently, Mr. Nestripke may be deemed to be a parent of the
Registrant as that term is defined under this Item of The Securities and
Exchange Act of 1934.
<PAGE> 16
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the last quarter of the
period being covered by this report.
Index of Exhibits:
==================
Number 3: Initial Articles of Incorporation and By-laws
Incorporated by reference to the registrant's registration statement on Form
S-18, File No. 33-19980-D
- -------------------------
Number 3: Amended Articles of Incorporation and By-laws
Incorporated by reference to the registrant's registration statement on Form
S-1
- -------------------------
Number 3: Amended Articles of Incorporation
SEE - Exhibit 3(i), included as a part of this Form 10-KSB
- -------------------------
Number 4: Warrant Agent Agreement
Incorporated by reference to the registrant's registration statement on Form
S-18, File No. 33-19980-D
- -------------------------
Number 4: First Amendment to Warrant Agent Agreement
Incorporated by reference to the registrant's registration statement on Form
S-1
- -------------------------
Number 4: Second Amendment to Warrant Agent Agreement
SEE - Exhibit 4, included as a part of this Form 10-KSB
- -------------------------
Number 11: Computation of Loss per Share
SEE PAGE 11 - Included as a part of the Footnotes to the Financial Statements
- -------------------------
Number 22: Consent Resolution adopted by shareholders to amend the Articles
of Incorporation
SEE - Exhibit 22, included as a part of this Form 10-KSB
- -------------------------
Number 27: Financial Data Schedule
SEE - Exhibit 27
- -------------------------
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
GEMSTAR ENTERPRISES, INC.
By: /S/Denny W. Nestripke
---------------------------------
Chief Executive Officer and
Chief Financial Officer
Date: November 7, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
GEMSTAR ENTERPRISES, INC.
By: /S/Denny W. Nestripke
---------------------------------
Director
Date: November 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000829323
<NAME> GEMSTAR ENTERPRISES, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 8,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,000
<CURRENT-LIABILITIES> 603
<BONDS> 0
0
0
<COMMON> 915,044
<OTHER-SE> (905,548)
<TOTAL-LIABILITY-AND-EQUITY> (2,099)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 615
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (615)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (615)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
<PAGE> 1
EXHIBIT NO. 3(i)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GEMSTAR ENTERPRISES, INC.
Pursuant to the applicable provisions of the Nevada Revised
Statutes, the undersigned officer, duly authorized by the shareholders
of GEMSTAR ENTERPRISES, INC., adopts the following Articles of Amendment to
its Articles of Incorporation by stating the following:
FIRST: The present name of the Corporation is Gemstar Enterprises, Inc.
SECOND: The following Amendment to the Articles of Incorporation
was adopted by a majority vote of the shareholders of the Corporation
eligible to vote on the 25th day of March, 1996 pursuant to Section 78.320
of the Nevada Revised Statutes.
1. Article IV - Stock is amended only with respect to paragraph A.
Common Stock as follows. Paragraph B. Preferred Stock is not amended by this
Amendment to the Articles of Incorporation.
ARTICLE IV - STOCK
A. Common Stock.
The aggregate number of shares of Common Stock which the Corporation
shall have authority to issue is 100,000,000 shares at a par value of $.001
per share. All stock when issued shall be fully paid and non-assessable.
The Board of Directors of the Corporation may, at its discretion and by
resolution of the majority of all of the members of the Board of Directors
at the time of such resolution, issue any authorized but unissued Common
Stock of the Corporation which has not been reserved for issuance upon the
exercise of any outstanding warrants, options, or other document evidencing
the right to acquire the Common Stock of the Corporation.
Each share of Common Stock shall be entitled to one vote at any meeting
of the Corporation's shareholders duly called for in accordance with the
Nevada Revised Statutes, either in person or by proxy. Cumulative voting
shall not be permitted for the election of individuals to the
Corporation's Board of Directors or for any other matters brought
before any meeting of the Corporation's shareholders, regardless of the
nature thereof. Shareholders of the Corporation's Common Stock shall not
be entitled to any pre-emptive or preferential rights to acquire
additional Common Stock of the Corporation.
THIRD: The number of shares of the Corporation outstanding stock
eligible to vote on March 25, 1996, the date that this Amendment was
adopted by the shareholders of the Corporation, was 6,758,614 shares.
FOURTH: The number of shares of the Corporation that voted for the
adoption of this Amendment was 4,915,000 shares, representing 73% of the
shares eligible to vote. There were no shares voted against the adoption of
this Amendment.
<PAGE>
<PAGE> 2
DATED this 26th day of April 1996
Attest: GEMSTAR ENTERPRISES, INC.
By: /S/Denny W. Nestripke By: /S/Denny W. Nestripke
--------------------- ------------------
Secretary President
AFFIRMATION
State of California
County of Riverside
Subscribed and affirmed before me, Kathleen Jones, Notary Public, on
this 26th day of April, 1996, by Denny W. Nestripke, who attests, deposes and
states that he signed this Amendment to the Articles of Incorporation in his
capacity as Secretary and President of Gemstar Enterprises, Inc., that he has
read these Articles of Amendment, that he knows the contents thereof
and that these Articles of Amendment contain the Amendment duly adopted on
March 25, 1996, by those shareholders of Gemstar Enterprises, Inc. eligible
to vote in accordance with Section 78.320 of the Nevada Revised Statutes.
WITNESS my hand and official seal.
/S/Kathleen Jones
- ------------------------------------
Signature of Notary
[Official Seal]
<PAGE> 1
EXHIBIT NO. 4
SECOND AMENDMENT TO WARRANT AGREEMENT
This Second Amendment ("Amendment"), which is an amendment to the
First Amendment (the "First Amendment") to that certain Warrant
Agreement dated December 2, 1987 (the "Agreement") between Gemstar
Enterprises, Inc., formerly North Star Petroleum, Inc., a Nevada corporation
(the "Company") and Cottonwood Stock Transfer (the "Warrant Agent"),
successor to the warrant agent by virtue of the First Amendment, such
warrant agent originally being Western States Transfer & Registrar, Inc.
(the "Initial Agent"), is entered into between the Company and the Warrant
Agent effective as of May 1, 1993.
WHEREAS, the Company and the Warrant Agent desire to modify the
First Amendment and to such extent as appropriate, the Agreement, to
reflect such changes and other amendments as set forth herein; and
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. The Company's address is changed to 73-251 Amber Street, Palm
Desert, California 92260.
2. The Warrant Agent's address is changed to Cottonwood Stock
Transfer, 5899 South State Street, Salt Lake City, Utah 84107.
3. Paragraph three [ 3 ] of the First Amendment shall be modified to
state the following:
The Company has authorized and issued 551,145 Class A Warrants which,
when the underlying common stock has been "Registered" with the
Securities and Exchange Commission, shall entitle the individual or
entity, either one being either singular or plural, upon the surrender of
each Class A Warrant and the payment of $1.60 per Class A Warrant
surrendered, to be issued one share of the Company's common stock,
without being placed thereon a restriction or a legend restricting the sale
or transfer thereof.
Additionally, the Company has authorized and issued 548,864 Class B
Warrants which, when the underlying common stock has been "Registered", as
that term is hereinafter defined, shall entitle the individual or entity,
either one being either singular or plural, upon the surrender of each Class
B Warrant and the payment of $4.00 per Class B Warrant surrendered, to be
issued one share of the Company's common stock, without being placed
thereon a restriction or a legend restricting the sale or transfer thereof.
4. Paragraph 7 of the First Amendment shall be further modified by use
of the addresses given within Item 1 and Item 2 of this Amendment. The
Company and Warrant Agent agree that any further modification thereof or
the request from one party to the other party to provide the name, address,
telephone and fax number of their legal counsel shall be accomplished
without delay and in writing.
Execution of this Amendment shall serve as evidence that the Company
has pre-paid all fees relative to the termination of the Warrant Agent,
in its capacity relative to the Warrants.
<PAGE>
Should the validity of any paragraph of this Amendment be challenged
and found to be inconsistent with the terms, conditions, interpretations
and performance of Agreement, then such inconsistency shall not effect any
other paragraph of this Amendment.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties hereto on the day and year written below.
GEMSTAR ENTERPRISES, INC. COTTONWOOD STOCK TRANSFER
By: /S/Denny W. Nestripke By: /S/David Sorensen
----------------------------- -------------------------
Denny W. Nestripke, President David Sorensen, President
Date: August 26, 1996 Date: August 26, 1996
--------------- ---------------
<PAGE>
EXHIBIT NO. 22
CONSENT RESOLUTION
OF A
SHAREHOLDER
OF
GEMSTAR ENTERPRISES, INC.
This Consent Resolution, dated this 25th day of March, 1996, is
being executed pursuant to Section 78.320 of the Nevada Revised
Statutes, which provides that action so taken shall have the same effect as
to cast one's vote at a Meeting of Shareholders', duly noticed and attended
by a majority of those Shareholders' eligible to vote at such a
Meeting. The undersigned, ________________________ acknowledges
compliance with and agrees to be subject to such Section of the Nevada Revised
Statutes (hereinafter referred to as an "Eligible Shareholder").
The Eligible Shareholder of Gemstar Enterprises, Inc. (hereinafter
referred to as the "Corporation") is the record holder of ___________________
shares of the Corporation's issued and outstanding common stock, which
amount represents _______ % of the total 6,758,614 shares of the issued and
outstanding common stock of the Corporation.
The Eligible Shareholder of the Corporation has reviewed the benefits
of revising the par value of the Corporation's common stock from $.02 per
share to $.001 per share and has determined that such a revision would be
in the best interest of the Corporation and of the Corporation's shareholders.
Furthermore, the Eligible Shareholder has been informed by the presently
constituted Board of Directors of the Corporation, that such a revision
would not have an adverse effect with respect to any individual or entity
to whom the Corporation is indebted at the present time, in any form,
fashion or manner.
Accordingly, the Eligible Shareholder approves the following Resolution
to change the par value of the Corporation's common stock by amending the
first paragraph of:
Article IV - Stock
A. Common Stock, of the Articles of Amendment to the Articles
of Incorporation:
RESOLVED: That the par value of the common stock of the Corporation
be revised from $.02 to $.001 per share and that such revision shall take
effect as of the date hereof without any other changes to the Articles of
Incorporation of the Corporation.
FURTHER RESOLVED: That the second paragraph of A. Common Stock,
be revised to eliminate the right of the Board of Directors of the
Corporation to allow "any unissued securities of the corporation
[shall] be offered for subscription solely to the holders of common stock
of the corporation or solely to the holders of any class or classes of
such stock, in such proportions based on stock ownership as said board at its
discretion may determine."
_________________________
Eligible Shareholder
