U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (Fee Required) For the fiscal year ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1943 [No Fee Required]
For the transition period from ____________ to _______________
CONDOR CAPITAL, INC.
--------------------
(Name of small business issuer in its charter)
Colorado 84-1075696
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8891 East Easter Place, Englewood, Colorado 80112
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(Address of principal executive offices) (zip code)
Issuer's telephone number: 303-741-0749
Securities to be registered under Section 12(b) of the Exchange Act: None
Title of each class: None.
Name of each exchange on which registered: None.
Securities to be registered under Section 12(g) of the Exchange Act: None.
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of the 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. [X]
State issuer'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. There is no established trading market for the Registrant's common stock.
Based on the most recent private placement of the Registrant's common stock at a
maximum price of $0.0033 per share, the aggregate value of common stock held by
non-affiliates is $30,752.
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
11,820,010 shares of common
stock were outstanding as of January 6, 1999
--------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE: None
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Item 1. Business.
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(a) General Development of Business.
--------------------------------
Condor Capital, Inc., (the "Registrant") is a corporation formed under the
laws of the State of Colorado on December 22, 1987 to evaluate, structure and
complete a merger with, or to acquire business prospects consisting of private
companies, partnerships or sole proprietorships.
By Prospectus dated June 8, 1988, the Registrant conducted a public
offering whereby it sold 30,000,000 Units at $0.01 per Unit, for net proceeds of
approximately $243,000. The public offering closed on October 20, 1988. Each
Unit consisted of one share of the Registrants's no par common stock and four
(4) Class A Common Stock purchase warrants. Each Class A Warrant entitled the
holder at a price of $0.02 per Class A Warrant exercised, to purchase one share
of Common Stock and one Class B Common Stock Purchase Warrant during the two
year period commencing June 8, 1988. Each Class B Warrant entitled the holder to
purchase one share of Common Stock at $0.03 per share during the three year
period commencing on June 8, 1988. The exercise period of the Class A Warrants
was extended from time to time but all extension periods have lapsed prior to
exercise of any Class A Warrants. Accordingly, all of the Class A Warrants and
Class B Warrants have expired by their terms.
On October 27, 1989, the Registrant and Redding Acquisition Corp., a New
York corporation, and B. Meyers & Company, the sole shareholder of Redding
("Redding's Shareholder") entered into an agreement whereby Redding was to
become a wholly owned subsidiary of the Registrant. In connection therewith, the
Registrant was to issue 133,100,000 restricted shares of its no par value common
stock and 141,100 shares of its Class A no par preferred stock to Redding's
Shareholder, in exchange for all of the issued and outstanding shares of
Redding.
Redding Acquisition Corp. intended to acquire a television station using
the Registrant's capital. Management of Redding represented to management of the
Registrant that they were prepared to conclude an acquisition for an identified
television station.
On October 27, 1989, pursuant to the terms of the agreement, Messrs. Dale
B. Carson, Robert M. Geller and Sanford L. Schwartz resigned as officers and
Directors of the Registrant, and Mr. Allen R. Goldstone resigned as President
while remaining on the Board of Directors. Messrs. Tom LaRousch and Bill
O'Callaghan were elected President and Secretary/Treasurer, respectively, and
were also appointed to the Board of Directors.
On November 17, 1989, the Registrant's shareholders, at a special meeting,
replaced the new Board of Directors with Messrs. Goldstone, Geller and Schwartz,
which Directors then replaced Messrs. LaRousch and O'Callaghan with Mr.
Goldstone as President, Mr. Geller as Vice President and Mr. Schwartz as
Secretary and Treasurer of the Registrant. These Directors also resolved on
November 17, 1989, that it would be in the best interest of the Registrant and
its shareholders to seek rescission of the Registrant's acquisition of Redding
and to recover as much of the Registrant's remaining funds as possible.
The Board of Directors' decision to seek rescission was based upon the
Board's opinion that the officers appointed pursuant to the October 27, 1989
Agreement could not or would not satisfactorily perform their duties and that
the continuation of Redding Acquisition Corp. as a wholly owned subsidiary of
the Registrant did not sufficiently improve the Registrant's ability to further
its business plan nor advance the interests of shareholders so as to justify the
number of shares to be issued to Redding's Shareholder, nor justify the further
expenditure of its capital pursuant to the business plan of the Redding
appointed management.
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On December 20, 1989, the Registrant entered into a settlement agreement
with Redding, Meyers and the former officers, directors, shareholder and/or
consultant of Redding whereby the Acquisition Agreement of October 27, 1989 was
rescinded, the shares to be issued to Redding and to Meyers were canceled and
approximately $160,000 was returned to the Registrant.
On December 14, 1989, the Registrant entered into a letter of intent with
Aviation Management Group, Inc. ("AMG"), pursuant to which the Registrant
proposed to acquire 100% of the issued and outstanding common stock of AMG in
exchange for 160,000,000 restricted shares of the Registrant's no par value
common stock and 140,000 shares of the Registrant's convertible preferred stock.
The definitive agreement with AMG and its shareholders was executed on
January 22, 1990. Pursuant to the agreement, 160,000,000 shares of the
Registrant's no par value common stock and 140,000 shares of the Registrant's
Class B convertible preferred stock were issued to the shareholders of AMG in
exchange for 100% of the outstanding common stock of AMG. Sixty million
(60,000,000) shares of the Registrant's no par value common stock issued to the
AMG shareholders were placed in escrow with legal counsel to the Registrant at
that time to be released if and when the Registrant at that time became listed
for trading on the National Association of Securities Dealers Automated
Quotation (NASDAQ) system by January 25, 1994. The Registrant's Board of
Directors set the preferences of the Class B convertible preferred stock as a
$0.01 per preferred share liquidation preference prior to a distribution of
liquidated assets to common stock, conversion of 40,000 shares of the Class B
Preferred to up to 40,000,000 shares of its common stock upon the Registrant's
Common Stock becoming listed for trading on NASDAQ, and conversion of the
remaining 100,000 shares of the preferred to up to 100,000,000 shares of common
stock upon the Registrant having a net worth of at least $2,000,000 as shown on
the Registrant's audited financial statements. The 60,000,000 shares of common
stock held in escrow were subsequently canceled for failure to obtain NASDAQ
listing within the prescribed deadline.
Also pursuant to the AMG Agreement, Messrs. Goldstone, Carson, Schwartz and
Geller resigned as officers and Directors of the Registrant and Messrs. Andrew
L. Stumpf, Burnell M. Calvin, John T. Forrester, Robert J. Brozovich and Robert
Hirsekorn were appointed to the Board of Directors of the Registrant. Messrs.
Stumpf, Calvin and Forrester were appointed President and Vice Presidents.
Kathleen S. Stumpf was appointed Secretary and Treasurer.
The business plan of the Registrant's new management was to develop a
regional airline company through acquisitions and joint ventures. The business
plan required significantly greater capital than the Registrant possessed. The
Registrant's available business development capital was to be used to pay
management's salaries and expenses while seeking potential acquisitions and
joint ventures as well as additional financing.
In March 1990, the new Management of the Registrant began contacting
airline and aircraft repair businesses offered for sale in trade publications
and evaluating the responses for possible acquisitions. During the fiscal year,
the Registrant evaluated approximately twenty-five (25) responses to its
inquiries. While several discussions were held with potential acquisitions, no
preliminary or definitive agreements were concluded.
On May 21, 1990 the Registrant, through a newly formed wholly owned
subsidiary, Condor Printing and Publishing, Inc., entered into an agreement with
Kevin P. Hager, an unaffiliated individual, to purchase a printing business
operating as Speedy Print of Aurora for a $55,000 promissory note to be repaid
from the operations of the printing business. The Registrant and its President,
Mr. Stumpf, guaranteed payment of the Note. Management of the Registrant
intended to operate this business in order to generate revenue to continue the
primary objective of seeking acquisition of an airline or aircraft repair
station.
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Also in May 1990, the Registrant, through Condor Insurance Services, Inc.,
a newly formed, wholly owned subsidiary, entered into an agreement with Burnell
Calvin, the Registrant's Vice President at the time, to operate Mr. Calvin's
insurance business in Colorado Springs, Colorado. Management of the Registrant
intended to operate this second business in order to generate revenue to
continue the primary objective of seeking acquisition of an airline or aircraft
repair station.
On January 31, 1991, the Registrant, its wholly owned subsidiary Condor
Printing and Publishing, Inc., Mr. Stumpf and Mr. Hager entered into an
agreement whereby the Registrant transferred all assets of the Speedy Print of
Aurora business back to Mr. Hager. The Agreement also released the Registrant's
guarantee under the May 21, 1990 Agreement.
On February 18, 1991, the Registrant entered into agreements with Mr.
Stumpf and Mr. Calvin respectively whereby in consideration of the transfer to
the Registrant of all of each of their respective shares of common stock in the
Registrant and mutual indemnification, the Registrant transferred all of its
shares in Condor Printing and Publishing, Inc. to Mr. Stumpf and all of its
shares in Condor Insurance Services, Inc., to Mr. Calvin. Pursuant to these
agreements Messrs., Stumpf and Calvin transferred to the Registrant the
93,120,000 shares of common stock and 6,400,000 shares of common stock issued to
them respectively pursuant to the AMG agreement. These shares have since been
canceled. A portion of the shares agreed to be canceled were included within the
60,000,000 escrowed shares described above. In addition, all 140,000 shares of
the Registrant's Class B convertible preferred stock were subsequently returned
to the Registrant for cancellation. As a result of these transactions, AMG
remained a subsidiary of the Registrant, but effective January 1, 1995, AMG was
administratively dissolved by the office of the Colorado Secretary of State.
On February 18, 1991, the Board of Directors of the Registrant met to
discuss the financial condition of the Registrant. Mr. Stumpf reported that Mr.
Forester had resigned his positions with the Registrant due to other
responsibilities preventing him from active participation in the affairs of the
Registrant. Mr. Stumpf further reported that despite conservative efforts the
Registrant's funds had been dissipated in the pursuit of acquisition candidates
and that while the corporation's liabilities would be met, the Registrant did
not have sufficient capital to continue its search for acquisitions and would
have to discontinue operations. Mr. Virgil Rose was appointed to the Board of
Directors and Messrs. Stumpf and Calvin and Ms. Stumpf resigned their respective
positions with the Registrant. Thereafter, Mr. Rose was appointed President and
Mr. Hirsekorn was named as Secretary/Treasurer. The Board also authorized the
issuance of 2,000,000 restricted shares of common stock of the Registrant to
Robert D. Hirsekorn in consideration of his past services to the Registrant.
The reconstituted Management of the Registrant resolved to preserve the
remaining assets and the corporate existence of the Registrant while continuing
to seek a business combination with another entity seeking the advantages of an
existing publicly held corporation notwithstanding the Registrant's lack of
capital. Management recognized that the Registrant's lack of capital was a
serious disadvantage both in terms of attractiveness to a potential acquiring
entity as well as restricting Management's ability to promote the Registrant and
pursue negotiations. It was determined that the best way to proceed was to seek
a business combination partner through the personal business contacts of
Management.
In April 1992, the Registrant entered into negotiations with Analytical
Development Corporation (ADC), a company headquartered in Colorado Springs,
Colorado, engaged in the business of water pollution remediation through
chemical processes. The proposed transaction with ADC contemplated a Plan of
Merger with ADC to be submitted to the Registrant's and ADC's shareholders
pursuant to a combined proxy and prospectus. On May 15, 1992, ADC terminated the
negotiations.
4
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In August 1992, the Registrant entered into a letter of intent with
International Golf Investments (IGI), a California corporation whereby the
Registrant agreed to issue to the shareholders of IGI a number of shares of the
Registrant's common stock representing not less than ninety percent (90%) of the
issued and outstanding shares of the Registrant's common stock in exchange for
one hundred percent (100%) of the outstanding shares of IGI. In conjunction with
the exchange of shares, nominees designated by IGI would be appointed to the
Board of Directors of the Registrant and would constitute a majority of the
Board of Directors. IGI was to be engaged in the business of acquiring,
developing and operating golf courses in the United States including the
retailing of golf related merchandise in its golf course pro shops.
The letter of intent with IGI contemplated the execution of a definitive
agreement containing customary terms for the proposed exchange of shares and
change in control. On January 27, 1993, the Registrant informed IGI that the
letter of intent was terminated.
Effective, December 31, 1992, Virgil Rose resigned as President and
Director. Also effective that date John Henz was appointed as Director, Mr.
Hirsekorn was named President and Mr. Henz was named Secretary/Treasurer.
Thereafter the Registrant resumed its original business direction of
seeking a merger, reverse acquisition or other defined change in control
agreement which would be in the best interests of the Registrant's shareholders.
As a result thereof, the Registrant began negotiations with GolfNet Corporation
(GolfNet), a California corporation, for a business combination with the
Registrant. GolfNet was engaged in the distribution of golf related merchandise,
primarily through golf course pro shops. The Registrant entered into an
Agreement with GolfNet on August 10, 1993. In connection with the proposed
transaction, on August 10, 1993 the Board of Directors authorized a one (1) for
two hundred (200) reverse stock split of its common stock, which became
effective August 19, 1993.
For various reasons, the Registrant and GolfNet determined not to proceed
to complete the transactions contemplated by the August 10, 1993 Agreement. As a
result of the conclusion of the relationship with GolfNet, the Registration was
left with virtually no funds and no pending prospects for developing business
relationships with other companies. The Registrant did not file any periodic
reports with the Securities and Exchange Commission subsequent to the Form 10-Q
filed for the quarter ended December 31, 1989 and a Form 8-K on May 10, 1990.
In August 1997, John Venette and Sheryl Allen were appointed to the Board
of Directors by the Registrant's then sole director, Robert Hirsekorn. In
September 1997, the Registrant completed a private placement of 11,236,651
shares of its common stock for a total purchase price of $33,434.66.
In May of 1998, Sheryl Allen resigned as Secretary and a member of the
Board of Directors. John Venette assumed the responsibilities as Secretary.
5
<PAGE>
(b) Narrative Description of Business.
----------------------------------
The Registrant has insufficient capital with which to finance cash
acquisitions of other business entities. Accordingly, the Registrant will be
incapable of acquiring the assets or business of other entities except in those
instances where the Registrant exchanges its common stock with those held by the
target company and/or the target company's shareholders. Another possibility,
although less likely, is that the Registrant may give its common stock to a
target in exchange for the target's assets. Management expects that an exchange
of the Registrant's Common Stock in a merger or acquisition, if ever, would
require the Registrant to issue a substantial number of shares of its common
stock. Accordingly, the percentage of common stock held by the Registrant's then
current shareholders would be reduced as a result of the increased number of
shares of common stock issued and outstanding following any such merger or
acquisition.
The Registrant expects to continue to concentrate primarily on the
identification and evaluation of prospective merger or acquisition "target"
entities. The Registrant does not intend to act as a general or limited partner
in connection with partnerships it may merge with or acquire. Management has not
identified any particular area of interest within which the Registrant will
continue its efforts. The Registrant's officers and directors will devote only
such time as is necessary to seek out a suitable opportunity.
Management contemplates that the Registrant will seek to merge with or
acquire a target company with either assets or earnings, or both, and that
preliminary evaluations undertaken by the Registrant will assist in identifying
possible target companies. The Registrant has not established a specific level
of earnings or assets below which the Registrant would not consider a merger or
acquisition with a target company. Moreover, Management may identify a target
company generating losses which the Registrant will seek to acquire or merge
with the Registrant. There is no assurance that if the Registrant acquires a
target company with assets or earnings, or both, that the price of the
Registrant's common stock will increase.
Plan of Acquisition
-------------------
In evaluating target companies, Management intends to concentrate on
identifying any number of preliminary prospects which may be brought to the
attention of management through present associations or otherwise. Management
will then apply certain of its broad criteria to the preliminary prospects.
Essentially, this will entail a determination by Management as to whether or not
the prospects are in an industry which appears promising and whether or not the
prospects themselves have potential within their own industries. During this
initial screening process, Management will ask and receive answers to questions
framed to provide appropriate threshold information, depending upon the nature
of the prospect's business. If a prospect is selected for an in-depth review,
Management will review in detail the prospect's business activities, including
its audited financial statements, if any.
Management expects to enter into further negotiations with target company
management following successful conclusion of financial and evaluation studies.
Negotiations with target company management will be expected to focus on the
percentage of the Registrant which target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, the Registrant's
shareholders will in all likelihood hold a lesser percentage ownership interest
in the Registrant following any merger or acquisition. The percentage ownership
may be subject to significant reduction in the event the Registrant acquires a
target company with substantial assets. Any merger or acquisition effected by
the Registrant can be expected to have a significant dilutive effect on the
percentage of shares held by the Registrant's then current shareholders.
6
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The final stage of any merger or acquisition to be effected by the
Registrant will require the Registrant to retain the services of its counsel and
a qualified accounting firm in order to properly effect the merger or
acquisition. The Registrant would incur significant legal fees and accounting
costs during the final stages of a merger or acquisition. Also, if the merger or
acquisition is successfully completed, Management anticipates that certain costs
will be incurred for public relations, such as the dissemination of information
to the public, to the shareholders and to the financial community. If the
Registrant is unable to complete the merger or acquisition for any reason, the
Registrant's then supply of capital may be substantially depleted if legal fees
and accounting costs have been incurred. Management intends to retain legal and
accounting services only on an as-needed basis in the latter stages of a
proposed merger or acquisition. It is likely that the Registrant will seek to
accomplish any business combination in a manner which will not require
shareholder approval.
The Registrant may be required to seek additional financing in order to
proceed with any proposed transaction with a target company, which could be
accomplished by either the sale of common stock, the issuance of debt, or both.
Competition
-----------
The Registrant will remain an insignificant participant among the firms
which engage in mergers with and acquisitions of privately-financed entities.
There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Registrant. In view of the Registrant's limited financial resources and
limited management availability, the Registrant will continue to be at a
significant competitive disadvantage compared to the Registrant's competitors.
Employees
---------
The Registrant does not have any employees, and did not have any during the
fiscal year ended September 30, 1998.
Item 2. Properties.
- -------------------
The Registrant does not own or lease any property. The Registrant's
President provides any office space required by the Registrant at no cost.
Item 3. Legal Proceedings.
- --------------------------
There are no pending legal proceedings involving the Registrant and the
Registrant is not aware of any proceeding that any governmental authority or any
other party is contemplating.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
No matters were submitted to a vote of the Registrant's shareholders during
the fiscal year ended September 30, 1998.
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PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
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(a) Market Information.
-------------------
During the fiscal year ended September 30, 1998, and during the preceding
two fiscal years, there has been no established market for the Registrant's
common stock and to the best of the Registrant's knowledge there has been no
trading. There are no outstanding options or warrants to purchase any Common
Stock, as all previously issued warrants have expired by their terms.
(b) Holders.
--------
The approximate number of holders of record of the Registrant's Common
Stock as January 6, 1999, was 996.
(c) Dividends.
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Holders of common stock are entitled to receive such dividends as may be
declared by the Registrant's Board of Directors. No dividends have been paid
with respect to the Registrant's common stock and no dividends are anticipated
to be paid in the foreseeable future.
Item 6. Plan of Operation.
- --------------------------
During the last two fiscal years, the Registrant has not had revenues from
operations. Rather, the Registrant's plan of operation for the next twelve (12)
months is described in the Section above in Item 1(b) entitled "Business -
Narrative Description of Business". In the event that the Registrant contacts or
is contacted by a private company or other entity which may be considering a
merger with or into the Registrant, it is possible that the Registrant would be
required to raise additional funds in order to accomplish the transaction. The
Registrant intends to raise a nominal amount of money in a private placement to
pay outstanding professional fees and other bills related to periodic filings
with regulatory agencies and to maintaining the Registrant's corporate status in
good standing. Otherwise, and even though the Registrant only possesses nominal
funds, as the Registrant does not engage in any ongoing business which requires
the routine expenditure of funds, the Registrant would not be required to raise
additional funds during the next twelve months. The Registrant does not
routinely expend any funds for the ownership or lease of property, as any
routine activities are being conducted out of an office made available by the
Registrant's President.
Item 7. Financial Statements.
- -----------------------------
The following financial statements are filed as part of this Form 10-KSB:
consolidated balance sheets as of September 30, 1998 and September 30, 1997;
consolidated statements of operations for the years ended September 30, 1998 and
1997 and cumulative since October 1, 1990 (inception of development stage);
consolidated statements of changes in stockholders' equity (deficit) for the
years ended September 30, 1998 and September 30, 1997; consolidated statements
of cash flows for the years ended September 30, 1998 and 1997 and cumulative
since October 1, 1990 (inception of development stage); independent auditor's
report.
8
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Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
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On December 5, 1996, Gordon, Hughes & Banks, LLP, Certified Public
Accountants, was engaged by the Registrant as the principal accountant to the
Registrant. There were no disagreements with former accountants on accounting
principles or on any other matter.
PART III
Item 9. Identification of Directors and Executive Officers.
- -----------------------------------------------------------
The following persons served as the directors and officers of the
Registrant.
Robert D. Hirsekorn, age 49, has served as a director of the Registrant
since 1992. He has served as the Registrant's president since 1993. During the
past five years, Mr. Hirsekorn has been self-employed as a management consultant
to companies in health care services, health care product manufacturing,
computer software development, and other areas. In addition, in March, 1997, Mr.
Hirsekorn was hired as Vice President Finance of Duplication Technology, Inc., a
company engaged in the business of Software Duplication Services. This position
terminated at the end of April 1998. Mr. Hirsekorn does not serve as a director
of any other publicly held company.
John H. Venette, age 34, is a director of the Registrant and also serves as
the secretary, treasurer and chief financial officer. He joined the Board of
Directors in August 1997. For the past two and one-half (2-1/2) years, Mr.
Venette has been employed by Creative Business Strategies Inc., a business
consulting firm, as director of research. Prior thereto he was a student at the
University of Colorado. He does not serve as a director of any other publicly
held company.
The Registrant's directors hold office until the next annual meeting of the
Registrant's shareholders, and officers of the Registrant hold office until
removed or replaced by the directors of the Registrant. There is no arrangement
or understanding between any director and any other person pursuant to which he
or she was selected as a director and officer of the Registrant.
(b) No Significant Employees.
-------------------------
The Registrant does not employ any person who is expected to make
significant contributions to the business of the Registrant and who is not an
executive officer.
(c) No Family Relationships.
------------------------
There are no family relationships between any director and any person who
may be nominated or chosen to be a director or executive officer.
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(d) Involvement in Certain Legal Proceedings.
-----------------------------------------
No event or legal proceeding occurred during the past five years which is
material to an evaluation of the ability or integrity of any of the directors.
Item 10. Executive Compensation.
- --------------------------------
The only compensation of any kind paid to any director or officer of the
Registrant during the fiscal year ended September 30, 1998 or during either of
the preceding two fiscal years was the issuance of 35,620 shares of Common Stock
to Robert Hirsekorn. Of the shares issued, 12,000 shares had been authorized for
issuance in 1991 and 1993 but had never been issued, and 23,620 shares were
authorized in August 1997 for services performed for the Company since 1993.
There are no standard or other arrangements for the payment of any compensation
to directors of the Registrant. There are no employment contracts to which the
Registrant is a party.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
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(a) Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the number of shares of the Registrant's
Common Stock owned by each person who, as of January 6, 1999 was known by the
Registrant to own beneficially more than five percent (5%) of the Registrant's
outstanding Common Stock.
Name and Address Amount and Nature
of Beneficial Owner of Beneficial Ownership Percent of Class(1)
------------------- ----------------------- -------------------
Michael Friess 1,137,222 shares; Direct 9.6
1120 Linden Avenue
Boulder, Colorado 80304
Sanford Schwartz 1,231,421 shares; Direct 10.4
1010 Orange Place
Boulder, Colorado 80304
Allen R. Goldstone 1,231,420 shares; Direct 10.4
2495 Agate Road
Boulder, Colorado 80304
Ted Bodensteiner 960,000 shares; Direct 8.1
1440 S.W. 19th Street
Boca Raton, Florida 33486
Mark DePew 960,000 shares; Direct 8.1
851 Windmill Place
Highlands Ranch, Colorado 80126
Wei Ying Wong 2,136,588 shares; Direct 18.1
2 East End Avenue
New York, New York 10021
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Chunyian Geng 1,000,000 shares; Direct 8.5
375 Park Avenue, Suite 3407
New York, New York 10152
D.C. Group, Inc. 1,290,000 shares; Direct 10.9
375 Park Avenue, Suite 3407
New York, New York 10152
JK Global Corp. 1,290,000 shares; Direct 10.9
375 Park Avenue, Suite 3407
New York, New York 10152
(1) Based upon 11,820,000 shares of Common Stock outstanding on January 6,
1999.
(b) Security Ownership of Management.
---------------------------------
The following table sets forth, as of January 6, 1999 the total number of
shares of Common Stock owned by Robert D. Hirsekorn. No other director or
officer beneficially owns any securities of the Registrant.
Name and Address Amount and Nature
of Beneficial Owner of Beneficial Ownership Percent of Class(2)
------------------- ----------------------- -------------------
Robert D. Hirsekorn, President, 38,120 shares; Direct Less than one percent
Director
8891 East Easter Place
Englewood, Colorado 80112
(2) Based upon 11,820,010 shares of Common Stock outstanding on January 6,
1999.
(c) Changes in Control.
-------------------
There are no arrangements which may result in a change in control of the
Registrant.
Item 12. Certain Relationships and Related Transactions.
- --------------------------------------------------------
There have not been any reportable transactions during the last two years,
and there are no proposed reportable transactions, to which the Registrant was
or is to be a party, in which any of the following persons had or is to have a
direct or indirect material interest: any director or executive officer of the
Registrant, any nominee for election as a director, any security holder owning
more than five percent (5%) of the Common Stock, or any member of the immediate
family of any of the foregoing group.
11
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) The financial statements described in Item 7 of this Form 10-KSB follow the
signature page of this Form. The following exhibits are also filed as part of
this Form.
3(i)* Articles of Incorporation of Registrant as amended
3(ii)* Bylaws of Registrant
4* Specimen certificate for common stock
27 Financial Data Schedule
* Incorporated by reference to the Registrant's Form 10-KSB filed for the
fiscal year ended September 30, 1997
(b) There were no reports on Form 8-K filed during the fiscal year ended
September 30, 1998, or at any time since then through the filing of this Form
10-K.
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
(Registrant) CONDOR CAPITAL, INC.
By: /s/ Robert D. Hirsekorn By: /s/ John H. Venette
-------------------------------- ----------------------------------------
Robert D. Hirsekorn, President John H. Venette, Chief Financial Officer
Date: January 8, 1999 Date: January 8, 1999
------------------------------ --------------------------------------
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Robert D. Hirsekorn
- -------------------------- President, Director January 8, 1999
Robert D. Hirsekorn
/s/ John H. Venette
- -------------------------- Director, Treasurer, Chief
John H. Venette Financial Officer January 8, 1999
Supplemental information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Exchange Act by Non-Reporting Issuers
No annual report or proxy material covering the registrant's last fiscal year
has been sent to security holders. If such annual report or proxy material is to
be furnished to security holders, the registrant shall furnish copies of such
material to the Commission when it is sent to security holders.
13
<PAGE>
EXHIBIT INDEX
Exhibit No
----------
27 Financial Data Schedule
<PAGE>
CONDOR CAPITAL, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
<PAGE>
CONTENTS
Page
----
Independent auditors' report F-1
Financial statements:
Balance sheets F-2
Statements of operations F-3
Statements of stockholders' equity (deficit) F-4 - 5
Statements of cash flows F-6
Notes to financial statements F-7 - 14
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Condor Capital, Inc.
Denver, Colorado
We have audited the accompanying balance sheets of Condor Capital, Inc. (a
development stage company) as of September 30, 1998 and 1997, and the related
statements of operations, changes in stockholders' equity (deficit) and cash
flows for each of the years then ended and for the cumulative period October 1,
1992 to September 30, 1998. 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. The financial statements for the
cumulative period October 1, 1990 (Inception of the development stage) to
September 30, 1992 were audited by other auditors, whose report dated May 4,
1993, expressed an opinion that contained a paragraph that indicated substantial
doubt about the Company's ability to continue as a going concern.
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 Condor Capital, Inc. as of
September 30, 1998 and 1997, and the results of its operations and cash flows
for each of the years then ended and for the cumulative period October 1, 1992
to September 30, 1998, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1, the Company
does not have ongoing operations and its ability to establish itself as a going
concern is dependent upon the Company obtaining sufficient financing to develop
viable business operations and, ultimately, to achieve profitable operations.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Gordon, Hughes & Banks, LLP
December 10, 1998,
Englewood, Colorado
F-1
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997
1998 1997
---- ----
Assets
<S> <C> <C>
Current assets, cash $ 901 $ 11,731
--------- ---------
Total assets $ 901 $ 11,731
========= =========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable $ 12,344 $ 4,941
Note payable, stockholder 1,000 --
--------- ---------
Total current liabilities 13,344 4,941
Stockholders' equity (deficit):
Preferred stock: no par value, 10,000,000
shares authorized:
Series A convertible preferred stock:
Liquidation preference $.01 per share, 141,100
shares authorized, none issued or outstanding
for 1998 and 1997 -- --
Series B convertible preferred stock:
Liquidation preference $.01 per share, 140,000
shares authorized, none issued or outstanding
for 1998 and 1997 -- --
Common stock: no par value, 800,000,000 shares authorized,
11,820,010 shares issued and outstanding for 1998 and 1997 318,916 314,916
(Deficit) accumulated prior to the development stage (172,222) (172,222)
(Deficit) accumulated during the development stage (159,137) (135,904)
--------- ---------
Total stockholders' equity (deficit) (12,443) 6,790
--------- ---------
Total liabilities and stockholders' equity (deficit) $ 901 $ 11,731
========= =========
F-2
See notes fo financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
AND CUMULATIVE SINCE OCTOBER 1, 1990 (INCEPTION OF DEVELOPMENT STAGE)
Cumulative
During
Development
Stage 1998 1997
----- ---- ----
Operations:
<S> <C> <C> <C>
General and administrative expenses $ 167,298 $ 23,233 $ 16,141
------------ ------------ ------------
(Loss) from operations (167,298) (23,233) (16,141)
Other income, interest income 471 -- --
------------ ------------ ------------
(Loss) before extraordinary item (166,827) (23,233) (16,141)
Extraordinary item,
Forgiveness of debt (Note 7) 7,690 -- 7,690
------------ ------------ ------------
Net (loss) $ (159,137) $ (23,233) $ (8,451)
============ ============ ============
Basic income (loss) per share:
(Loss) before extraordinary item $ (0.06) $ -- $ --
Extraordinary item -- -- --
------------ ------------ ------------
Net (loss) $ (0.06) $ -- $ --
============ ============ ============
Weighted average number of common
shares outstanding 2,844,276 11,820,010 6,752,061
============ ============ ============
F-3
See notes fo financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
(Deficit)
Accumulated
Series B During
Preferred Stock Common Stock Development
Shares Amount Shares Amount Stage
------ ------ ------ ------ -----
Balances,
<S> <C> <C> <C> <C> <C>
September 30, 1996 140,000 $-- 1,150,739 $ 277,481 $ (127,453)
Management services
contributed by officers -- -- -- 3,900 --
Issuance of common stock
to officer for services
($.0042 per share) -- -- 23,620 100 --
Sale of common stock
for cash ($.0024 per share) -- -- 2,462,841 5,835 --
Sale of common stock
for cash ($.0028 per share) -- -- 3,273,810 9,167 --
Sale of common stock
for cash ($.0034 per share) -- -- 1,920,000 6,500 --
Sale of common stock
for cash ($.0033 per share) -- -- 3,580,000 11,933 --
Return and cancellation
of preferred shares (140,000) -- -- -- --
Return and cancellation
of common stock from
former officer -- -- (93,400) -- --
Cancellation of common
stock held in escrow
and in treasury -- -- (497,600) -- --
Net (Loss) -- -- -- -- (8,451)
----------- ---- ----------- ----------- -----------
Balances,
September 30, 1997 -- -- 11,820,010 314,916 (135,904)
Management services
contributed by officers -- -- -- 4,000 --
Net (Loss) -- -- -- -- (23,233)
----------- ---- ----------- ----------- -----------
Balances,
September 30, 1998 -- $-- 11,820,010 $ 318,916 $ (159,137)
=========== ==== =========== =========== ===========
F-4
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
(Deficit)
Accumulated
Prior to
Development Treasury Stock
Stage Shares Amount Total
----- ------ ------ -----
Balances,
September 30, 1996 $ (172,222) 497,600 $ -- $ (22,194)
Management services
contributed by officers -- -- -- 3,900
Issuance of common stock
to officer for services
($.0042 per share) -- -- -- 100
Sale of common stock
for cash ($.0024 per share) -- -- -- 5,835
Sale of common stock
for cash ($.0028 per share) -- -- -- 9,167
Sale of common stock
for cash ($.0034 per share) -- -- -- 6,500
Sale of common stock
for cash ($.0033 per share) -- -- -- 11,933
Return and cancellation
of preferred shares -- -- -- --
Return and cancellation
of common stock from
former officer -- -- -- --
Cancellation of common
stock held in escrow
and in treasury -- (497,600) -- --
Net (Loss) -- -- -- (8,451)
----------- ----------- ----------- -----------
Balances,
September 30, 1997 (172,222) -- -- 6,790
Management services
contributed by officers -- -- -- 4,000
Net (Loss) -- -- -- (23,233)
----------- ----------- ----------- -----------
Balances,
September 30, 1998 $ (172,222) -- $ -- $ (12,443)
=========== =========== =========== ===========
F-5
See notes fo financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
AND CUMULATIVE SINCE OCTOBER 1, 1990 (INCEPTION OF DEVELOPMENT STAGE)
Cumulative
During
Development
Stage 1998 1997
----- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Net (loss) $(159,137) $ (23,233) $ (8,451)
Adjustments to reconcile net (loss)
to cash (used) by operating activities:
Loss on disposal of assets 20,169 -- --
Issuance of stock for services 6,100 -- 100
Management services contributed 27,900 4,000 3,900
Changes in assets and liabilities:
Decrease in prepaid expenses 3,634 -- --
Increase (decrease)
in accounts payable 11,205 7,403 (17,253)
--------- --------- ---------
Net cash (used) by operating activities (90,129) (11,830) (21,704)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from note payable 1,000 1,000 --
Proceeds from issuance of common stock 33,435 -- 33,435
Contributions to capital 14,000 -- --
--------- --------- ---------
Net cash provided by financing activities 48,435 1,000 33,435
--------- --------- ---------
Net (decrease) increase in cash (41,694) (10,830) 11,731
Cash, beginning of period 42,595 11,731 --
--------- --------- ---------
Cash, end of period $ 901 $ 901 $ 11,731
========= ========= =========
F-6
See notes fo financial statements
</TABLE>
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
Note 1 - Operations and Summary of Significant Accounting Policies
Organization
------------
Condor Capital, Inc. (the "Company") was incorporated in Colorado on
December 22, 1987. In January 1990, Condor Capital , Inc. acquired all of
the outstanding common stock of Aviation Management Group, Inc. ("AMG" and
also referred to as the "Company"). For accounting purposes, the
acquisition was treated as a recapitalization of the Company with AMG being
treated as the acquirer ( in a reverse acquisition).
After the acquisition, AMG conducted business as Condor Capital, Inc. AMG
was incorporated January 5, 1987 under the name Spectrum Publications, Inc.
("Spectrum") as a Colorado Corporation. In November 1989, Spectrum amended
its Articles of Incorporation and changed its name to Aviation Management
Group, Inc. The Company had no operations prior to October 1989. In October
1989, the Company entered the insurance and printing business.
Later in 1990, all of the Company's insurance and printing operations were
terminated. Therefore, effective October 1, 1990, the Company reentered the
development stage as defined in Statement of Financial Accounting Standards
No. 7, "Accounting and Reporting by Development Stage Enterprises." Since
entering the development stage, the Company has had a number of acquisition
negotiations with other companies, none of which have resulted in an
acquisition. In the future, the Company intends to evaluate, structure and
complete a merger with, or acquisition of, prospects consisting of private
companies, partnerships or sole proprietorships. The Company may seek to
acquire a controlling interest in such entities in contemplation of later
completing an acquisition.
Effective January 1, 1995, AMG was administratively dissolved by the office
of the Colorado Secretary of State. As a result, Condor Capital, Inc. (the
former legal acquirer) ceased to have a subsidiary and became the sole
surviving entity.
Basis of Presentation and Going Concern
---------------------------------------
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The financial statements do
not include any adjustments relating to the amount and classification of
liabilities that might be necessary should the Company be unable to
continue as a going concern. The Company's continuation as a going concern
is dependent upon its ability to obtain additional financing as may be
required and to develop viable business operations that will generate
sufficient cash flow to meet its obligations on a timely basis. If the
Company cannot raise additional capital or debt financing, it may not be
able to continue as a going concern.
F-7
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles (Continued)
Cash Equivalents
----------------
For statement of cash flows purposes, the Company considers any short-term
investments with original maturities of three months or less to be cash
equivalents.
Use of estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates. Significant
estimates have been made with regards to estimates of contributed services.
Reverse Stock Split
-------------------
Effective August 19, 1993, the Company approved a one for two hundred
reverse stock split of all outstanding common shares and common stock
purchase warrants. All share amounts, warrant amounts and (losses) per
share amounts have been retroactively restated for the reverse stock split.
Presentation of treasury stock
------------------------------
Colorado state law was revised in 1995 to eliminate the concept of treasury
stock. As a result, the outstanding shares on the balance sheets are
presented net of treasury stock. However, for explanatory purposes, the
Statement of Changes in Stockholders' Equity (Deficit) presents the
treasury stock until canceled in 1997.
Net Earnings (Loss) per share
-----------------------------
In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 128 ("SFAS No. 128"), addressing earnings per
share. SFAS No. 128 changed the methodology of calculating earnings per
share and renamed the two calculations basic earnings per share and diluted
earnings per share. The calculations differ by eliminating any common stock
equivalents (such as stock options, warrants, and convertible preferred
stock) from basic earnings per share and changes certain calculations when
F-8
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles (Continued)
Earnings per share (continued)
------------------------------
computing diluted earnings per share. The Company has adopted SFAS No. 128
in fiscal year 1998. Earnings (Loss) per share in fiscal 1997 is unchanged
by the retroactive application of SFAS No. 128.
The following is a reconciliation of the numerators and denominators used
in the calculations of basic and diluted earnings (loss) per share for the
years ended September 30, 1998, and 1997:
<TABLE>
<CAPTION>
1998 1997
Per Per
Net Share Net Share
(Loss) Shares Amount (Loss) Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share:
Net (loss) and share amounts $ (23,233) 11,820,010 $-- $ (8,451) 6,752,061 $--
Dilutive securities:
Stock warrents -- -- -- -- -- --
---------- ---------- ---- ---------- ---------- ----
Dilutive earnings per share:
Net (loss) and assumed share
conversion $ (23,233) 11,820,010 $-- $ (8,451) 6,752,061 $--
========== ========== ==== ========== ========== ====
</TABLE>
Capital Structure
-----------------
In February 1997, the Financial Accounting Standards Board issued SFAS No.
129, "Disclosure of Information about Capital Structure" ("SFAS No. 129"),
which requires all companies to disclose all relevant information regarding
their capital structure. SFAS No. 129 presentation is required for
reporting periods ending after December 15, 1997. Based on the capital
structure disclosures presented in the accompanying financial statements
and notes thereto, the Company does not believe that any additional
disclosures will be required as a result of adopting this pronouncement in
fiscal 1998.
Comprehensive income
--------------------
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"), which establishes
F-9
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles (Continued)
Comprehensive income (continued)
--------------------------------
standards for reporting of comprehensive income. This pronouncement
requires that all items recognized under accounting standards as components
of comprehensive income, as defined in the pronouncement, be reported in a
financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income includes changes in equity
during a period, except those changes resulting from investments by and
distributions to owners. Under comprehensive income, the Company would
report unrealized gains and losses on investments in debt and equity
securities. The financial statement presentation required under SFAS No.
130 is effective for all fiscal years beginning after December 15, 1997.
The Company will adopt SFAS No. 130 in fiscal 1999 but expects no financial
impact on prior periods as a result of adoption of this pronouncement.
Segment reporting
-----------------
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information" ("SFAS
No. 131"), which amends the requirements for a public enterprise to report
financial and descriptive information about its reportable operating
segments. Operating segments, as defined in the pronouncement, are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the Company in deciding how to
allocate resources and in assessing performance. The financial information
is required to be reported on the basis that is used internally for
evaluating segment performance and deciding how to allocate resources to
segments. The disclosures required by SFAS No. 131 are effective for all
fiscal years beginning after December 15, 1997. The Company will adopt SFAS
No. 131 in fiscal year 1999.
Pension and other post-retirement benefits
--------------------'----------------------
Statement of Financial Accounting Standards No. 132, "Employers'
Disclosures about Pension and Other Post-retirement Benefits" is effective
for financial statements with fiscal years beginning after December 31,
1997. Earlier application is permitted. The new standard revises employers'
disclosures about pension and other post-retirement benefit plans but does
not change the measurement or recognition of those plans. SFAS No. 132
standardizes the disclosure requirements for pensions and other
post-retirement benefits to the extent practicable, requires additional
information on change in the benefit obligations and fair values of the
plan assets that will facilitate financial analysis and eliminates certain
disclosures previously required when no longer useful. The Company does not
expect the adoption of SFAS No. 132 to have a material effect, if any, on
its results of operation.
F-10
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles (Continued)
Derivatives instruments ans hedging activities
----------------------------------------------
The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133
established standards for recognizing all derivative instruments including
those for hedging activities as either assets or liabilities in the
statement of financial position and measuring those instruments at fair
value. This Statement is effective for fiscal years beginning after June
30, 1999. The Company has not yet determined the effect, if any, of SFAS
No. 133 on its financial statements.
Note 2 - Note payable to Stockholder
During 1998, a stockholder advanced the Company $1,000. The amount payable
to the stockholder bears no interest rate or maturity date. The note is
unsecured and has been presented as a current liability.
Note 3 - Common and Preferred stock
As described in Note 1, the Company reentered the development stage on
October 1, 1990. The following information describes the changes in
components of the Company's stockholders' equity (deficit) from the date of
reentering the development stage on October 1, 1990 to September 30, 1996.
<TABLE>
<CAPTION>
Series B
Preferred Stock Common Stock
----------------- --------------------- Cumulative
Shares Amount Shares Amount (Deficit)
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Balances, October 1, 1990 140,000 $-- 1,135,280 $ 237,481 $(172,222)
Cash contributed to capital -- -- -- 14,000 --
Issuance of common stock to
shareholder for services -- -- 15,000 6,000 --
Shares issued in stock split -- -- 459 -- --
Management services contributed
by shareholders -- -- -- 20,000 --
Net (losses) from October 1, 1990 to
September 30, 1996 -- -- -- -- (127,453)
--------- ---- --------- --------- ---------
Balances, September 30, 1996 140,000 $-- 1,150,739 $ 277,481 $(299,675)
========= ==== ========= ========= =========
</TABLE>
In January 1990 and in conjunction with the acquisition of AMG, the Company
had established a series B convertible preferred stock with 140,000 shares
F-11
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 3 - Common and Preferred stock (Continued)
authorized. The 140,000 shares of preferred stock were issued to former AMG
stockholders . The preferred stock was convertible into common stock under
certain conditions. Those conditions were never attained and no preferred
shares were ever converted into common stock. The preferred shares were
returned to the Company and canceled in 1997 along with the shares of
common stock, as described below.
In fiscal 1991 and 1993, the Company issued 15,000 shares of common stock
to the Company's management for services valued at $6,000. In 1993 and
1994, the Company conducted merger negotiations with Golfnet Corporation
("Golfnet"). At that time, Golfnet paid a total of $14,000 for legal and
accounting services provided to the Company in connection with the merger.
To facilitate the merger, the Board of Directors of the Company enacted a
200 for 1 reverse split of the Company's common stock and negotiated with
former AMG shareholders to retrieve and cancel 497,600 common shares and
140,000 preferred shares originally issued to them. However, the
negotiations with Golfnet terminated. The Company retained those shares and
canceled them, along with an additional 93,400 shares returned by AMG
shareholders, in 1997.
During the year ended September 30, 1997, the Company awarded 23,620 shares
of common stock to the Company's president and valued the transaction at
$100. Management services during the year valued at $3,900 were contributed
by officers and certain shareholders. The Company sold 2,462,841 shares,
3,273,810 shares and 1,920,000 shares to current stockholders for $5,835,
$9,167 and $6,500, respectively. In addition, the Company sold 3,580,000
shares to outside investors for $11,993. During the year ended September
30, 1998, there were no common or preferred stock transactions. However,
management services valued at $4,000 were contributed to the Company by
certain shareholders.
Note 4 - Related Party Transactions
From 1993 to the present time, management has contributed services without
compensation. The services have been valued and expensed at a range of
$4,000 to $8,000 per year for a total of $27,900.
The Company currently utilizes office space provided free by the Company's
President. In addition, shareholders have contributed management services
to the Company.
The Company has an outstanding note payable to a shareholder for $1,000
(Note 2).
Note 5 - Incentive Stock Option Plan
In February 1988, the Company's Board of Directors authorized an Incentive
Stock Option Plan and reserved 10,000,000 shares of the Company's no par
value common stock for issuance to key employees. The Board of Directors is
F-12
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 5 - Incentive Stock Option Plan (Continued)
authorized to determine the exercise price, time period, number of shares
subject to the option, and the identity of those persons receiving the
options. As of September 30, 1998, no options have been granted pursuant to
the plan.
Note 6 - Income Taxes
At September 30, 1998, the Company has a net operating loss (NOL)
carry-forward for tax purposes of approximately $400,000 (expiring in the
years 2004 to 2011).
Deferred tax assets at September 30, 1998 and 1997 are as follows:
1998 1997
---- ----
Deferred tax assets due to:
Net operating loss carry-forward $ 119,894 $ 114,125
Valuation allowance for deferred
tax asset (119,894) (114,125)
--------- ---------
Net deferred tax asset $ -- $ --
========= =========
Deferred income taxes are recorded to reflect the tax consequences on
future years of differences between the tax basis of assets and liabilities
and their financial reporting amounts at each year end. Deferred income tax
assets are recorded to reflect the tax consequences on future years of
income tax carry-forward benefits, reduced by benefit amounts not expected
to be realized by the Company.
There was no income tax provision or benefit for the years ended September
30, 1998 and 1997.
Note 7 - Extraordinary Item
During the year ended September 30, 1997, the Company settled $13,690 of their
accounts payable for $6,000. In accordance with Statement of Financial Standards
("SFAS") No.15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings", the Company has treated the gain of $7,690 as an extraordinary
item in the statement of operations.
F-13
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(CONTINUED)
Note 8 - Subsequent Event
Subsequent to year end, a stockholder advanced the Company $1,000. The
amount payable bears no interest rate or maturity date but may be
considered as due on demand. The note payable is unsecured.
F-14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<CASH> 901
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 901
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 901
<CURRENT-LIABILITIES> 13,344
<BONDS> 0
0
0
<COMMON> 318,916
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 901
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
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</TABLE>
