<PAGE>
FORM 10-K
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 MAY 31, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from to
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Commission file number 33-27625
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CONDOR WEST CORPORATION
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(Exact name of registrant as specified in its charter)
NEVADA NO. 76-0251547
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(State or other jurisdiction (I.R.S. Employer Identification No.)
Of incorporation or organization)
909 FROSTWOOD, SUITE 261
HOUSTON, TEXAS 77024
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (713) 461-5910
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8547 ARAPAHO ROAD, SUITE 416J, GREENWOOD VILLAGE, CO 80112
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(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK (PAR VALUE $.001 PER SHARE)
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
14,939,468 Common Shares were outstanding as of May 31, 1997
with a market value of $0.00.
<PAGE>
CONDOR WEST CORPORATION
TABLE OF CONTENTS
PART I
Item 1. Organization and Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security-Holders
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data
(Included in Item 14)
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Management Remuneration
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports
on Form 8-K
<PAGE>
PART I
ITEM 1. ORGANIZATION AND BUSINESS
Condor West Corporation ("The Company"), a Nevada corporation organized in
October 1987 for the purpose of implementing an initial distribution of its
stock and thereafter to seek operating businesses as potential candidates for
acquisition or other forms of combination. The Company has no operating
history. No representation is made, nor is any intended, that the Company will
be able to acquire one or more operating businesses or, if any acquisitions are
made, that any operations will be profitable.
On May 7, 1990, 650,000 shares, constituting 52% of the Company's 1,250,000
outstanding shares of Common Stock, were acquired by Dr. Everett Renger and Carl
D. Nation. Concurrent therewith, the Company's existing officers and directors
resigned and were replaced by:
Dr. Everett Renger, Chairman of the Board
Carl D. Nation, President and Director
Steven R. Paige, Director
Terrance Rasmussen, Vice President, Treasurer and Director
Patrick D. West, Executive Vice President
David A. Christman, Secretary
(See Item 10, Directors and Executive Officers of the Registrant.)
The newly-elected Board of Directors, in 1994, authorized the issuance of
541,766 shares of the Company's previously unissued Common Stock in exchange for
all of the outstanding shares of Super Brakes, Inc., a corporation owned equally
by Messrs. Renger and Nation. Super Brakes, Inc. was in the organizational
stage and its activities had consisted solely of the development of a business
plan for the financing and establishment of a chain of Company owned retail
brake and installation outlets. As Super Brakes, Inc. had no significant assets
or operations at that time, the shares issued to Messrs. Renger and Nation were
recorded at a nominal amount representing their aggregate par value of $542, of
which $10 was capitalized as the cost of the investment, and the remaining $532
was deemed to be for services rendered and was expensed.
On May 18, 1996, the Super Brakes investment was sold back to Mr. Nation for
$10, resulting in no gain nor loss. Thereafter, the Company abandoned its plans
to enter the retail automobile services field.
The Company is not currently engaged in any business. It is investigating
various business opportunities, and does not expect to have substantial revenues
until it either acquires or starts a business activity.
In its current development stage, management anticipates incurring additional
losses as it investigates business opportunities. Although management is
currently seeking additional business opportunities and sources of equity or
debt financing, there is no assurance these activities will be successful.
Accordingly, the Company must rely on its officers and directors to perform
<PAGE>
essential functions to maintain the corporate entity, and to provide funds to
pay for essential expenses until a business operation can be commenced. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
ITEM 2. PROPERTIES
None
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings pending in which Registrant is named a
party.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the Registrant's security holders
during the fourth quarter of the fiscal period covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
There is no active market for the Company's shares.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
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1997 1996 1995 1994 1993
--------------- --------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Total assets $ -0- $ 889 $202,915 $ -0- $ -0-
Long term debt -0- -0- 200,000 -0- -0-
Preferred stock -0- -0- -0- -0- -0-
Net revenue -0- -0- -0- -0- -0-
Net loss (7,630) (290,063) (26,266) -0- (8,903)
Loss per share (.00) (.02) (.01) (.00) (.01)
</TABLE>
During the five year period ended May 31, 1997 there were no changes in
accounting methods.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the current fiscal year, the Company was dormant. During the prior
fiscal year, the Company had begun activities aimed at entering the retail
automotive repair business, to be known as Super Brakes. To implement this
plan, three officers of the Company, Messrs. Althen, Nation, and Paige became
full time employees beginning in June, 1995. During this period of time, a
business plan was developed, and active negotiations were held in an effort to
acquire an existing chain of brake repair stores. The Company also explored
various sources of financing to complete the proposed acquisition. To finance
the additional operating expenses, the Company borrowed $300,000 from a
<PAGE>
Director/Stockholder (see item 13). After several months of negotiations, the
Company's efforts to complete the acquisition were unsuccessful and the efforts
were abandoned. In addition, the funds provided by the loans were depleted.
Therefore, salaries to the three officers were discontinued in December, 1995,
and the Company reverted to an entity without active business operations. The
$300,000 loan, plus accrued interest of $4,068, was repaid on June 30, 1995 by
the issuance of 540,000 shares of common stock at the rate of $0.563 per share.
At May 31, 1997, the Company remains a development stage enterprise without any
business operations. The Company's officers and directors will continue to seek
investment capital and possible merger or acquisition candidates. As the
Company has no source of funds and no working capital, it plans to finance
expenses incident to maintenance of its corporate status, including legal,
accounting, filing fees, and other similar costs, primarily through advances
from its officers and directors, or from the sale of additional shares.
RESULTS OF OPERATIONS
As a result of discontinuing the activity described above, development stage
loss decreased from $290,063 for fiscal 1996 to $7,630 for fiscal 1997. The
decreases were primarily attributable to salaries (which decreased approximately
$101,000) and other general and administrative expenses (which decreased
approximately $88,500. Prior to the fiscal 1996, the Company had no operations.
See the discussion regarding changes in amounts previously reported for the year
ended May 31, 1995, below under Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Effective January 1, 1995, the Company's prior auditors, O'Neal and White, P.C.,
merged their audit practice into the firm of C. Williams & Associates, P.C. of
Houston, Texas. During the preceding two fiscal years ending May 31, 1994 and
through January 1, 1995, the Company had no disagreements with O'Neal and White,
P.C. on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure. In February, 1996, the Texas State
Board of Public Accountancy revoked the license of Charles R. Williams, the
principal of C. Williams & Associates, and the SEC required the Company to have
its May 31, 1995 financial statements re-audited. As a result, it retained the
firm of Bateman, Blomstrom & Co. (now known as Bateman & Co., Inc., P.C.) as
auditors, who conducted the re-audit as of May 31, 1995. As a result of the re-
audit, the Company restated certain accounting items, including the following:
(1) the investment in Super Brakes, Inc. was restated at a value of $10, from
the previous $542; (2) shares issued to officers and directors for services in
creating a business plan for Super Brakes were originally capitalized as
organization expenses of $18,192, but were charged to expense as a result of the
re-audit; (3) 7,541,680 shares of the Company's stock, originally issued to two
of its officers in connection with the Super Brakes business plan development,
were re-contributed back to the Company in October, 1995, and the return was
retroactively recorded at May 31, 1995. As a result of the adjustments from the
re-audit, the Company's stockholders' equity was decreased from $20,242 to
($13,516), and net loss was
<PAGE>
restated from ($3,935) to ($26,266).
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following person are the directors and (where indicated) executive officers
of the Company and have served in their respective positions since the indicated
dates:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Dr. Everett Renger (1) 54 Chairman
Carl D. Nation (1) 62 President, CEO (elected 9/10/97)
Wade D. Althen (2) 54 President, CEO (resigned 8/28/97)
David A. Christman (2) 54 Vice President of Finance,
Treasurer, CFO (removed 9/10/97)
Steven R. Paige (1) 35 Executive Vice-President
Terrance L. Rasmussen (1) 35 Vice President, Secretary & Treasurer
Dennis L. Swenson (3) 45 Vice President, Human
Resources (removed 9/10/97)
John A. Murdock III (3) 52 (deceased, 1997)
Dr. Felix F. Banchs (3) 57 (removed 9/10/97)
</TABLE>
(1) Joined Company on May 7, 1990
(2) Joined Company on August 4, 1993
(3) Joined Company on May 12, 1995
Dr. Everett Renger has been a practicing orthodontist in Houston, Texas since
1973. He received both a Bachelor of Science and a Doctor of Dental Science
degrees from Baylor University and a Master of Science (orthodontics) from the
University of Texas Dental School. Dr. Renger is a member of the American
Association of Orthodontists, Southwest Society of Orthodontists, American
Dental Association, Texas Dental Association, Houston District Dental Society,
Baylor Dental Alumni Association and the University of Texas orthodontic Alumni
Association. He is currently serving on the Peer Review Committee of the
Houston District Dental Society and is President of Wilson Radiographic Centers
of Houston.
Mr. Carl D. Nation founded Super Brakes, Inc. in 1981. He, along with Dr.
Renger, acquired controlling interest in the Company in 1990 in order to provide
a public vehicle to facilitate growth in the automotive after-market field. Mr.
Nation has been a self-employed financial consultant in the Fort Worth, Texas
area for the past fifteen years representing several major industries, including
precious metals, banks municipalities and various government and private
businesses. Effective June 1, 1995, Mr. Nation became a full time employee of
the company; his full time employment terminated prior to May 31, 1996. Mr.
Nation has held a prior position as Vice President and General Manager of
Insurers of America, representing Lloyds of America. Mr. Nation completed an
executive management program that consisted of six months manufacturing,
shipping and receiving, inventory control and sales management. Upon completion
he served as marketing director for the Northeastern United States for Kelsey-
Hayes Company, a major manufacturer of disc brakes. He managed sales personnel,
opened new distribution channels, organized sales and
<PAGE>
product clinics through automotive, manufacturing, warehousing, national
accounts, mass merchants, municipalities and state governments. He then became
the district manager of the New England district for Monroe Auto Equipment
Company, a manufacturer of shock absorbers. While with Monroe, he directed the
sales force, marketing products through national accounts, mass merchants,
automotive distribution centers, jobbers and dealers. He also organized and
instructed approximately fifty product and sales clinics annually. His
responsibilities included administration, sales training and new distribution
and arranging credit through financial institutions for new customers. Before
that, he was the marketing director of nine northeastern states for Belden
Corporation, a manufacturer of electrical wire and cable. He held a prior
position as the operations department manager for Hartford National Bank. Mr.
Nation was honorably discharged from the United States Marine Corps.
Mr. Wade D. Althen began functioning as the President/CEO of the Company on a
full time basis effective June 1, 1995; his full time employment terminated
prior to May 31, 1996. During April and May of 1995 he served as Licensed
Manager of Employment World, Inc. in North Little Rock, Arkansas. From May 1992
to March 1995 he was employed by National Education Centers, Inc. a subsidiary
of National Education Corporation (a NYSE company). His positions with National
Education Corporation included Business Instructor in Economics, Accounting and
Computer Science and Co-Chair of the Business Department from May 1992 to June
1993. From July 1993 to June 1994 he was Education Director in charge of:
curriculum; hiring, scheduling and training instructional staff; budgeting;
attrition of student body; and filing Accreditation reports. These positions
were all at the Little Rock, Arkansas campus. In June 1994 Mr. Althen was
appointed Director and President of the Fort Worth, Texas campus until his
resignation in March 1995. From February 1987 to May 1992 he was a self-
employed Certified Public Accountant and financial consultant in North Little
Rock, Arkansas. He has provided executive level management for eighteen of the
last twenty-one years including four years as Chief Executive of a commercial
bank, one year as Chief Executive Officer of a publicly traded petroleum company
and two years as managing partner of a CPA firm.
Mr. Althen has prepared and provided oversight of preparation of budgets in many
industries. In the banking industry, he planned for significant growth by
utilizing financial and human resources to enable a seventy year old bank to
double in size within four years. In the petroleum industry, he established and
executed a plan that made a publicly traded company that was in reorganization
viable as an acquisition candidate. He is experienced with preparation of
initial registrations of public corporations and Securities and Exchange
Commission reports. He has conducted audits for many types of industries and
submitted financial statements to clients and regulatory agencies. He also has
experience with statements required by the Federal Deposit Insurance Corporation
and other banking agencies. In 1970, Mr. Althen obtained his Bachelor of
Science Degree in Accounting from Arkansas State University and received one
year of post graduate training from the Stonier Graduate School of Banking at
Rutgers University. He has been a Certified Public Accountant since 1972.
Mr. David A. Christman has been a Senior Financial Analyst with Intellicap
Limited since November 1994 working with the Ministry of Finance of the State
<PAGE>
of Kuwait to develop and administer the government's Counter-Trade Offset
Program. His duties include working with supply contractors. He contributed to
the design of the program's guidelines and designed and implemented the
Financial Performance Model of evaluating the feasibility and acceptability of
business plans submitted by the contractors. He also developed a training
program and teaches finance to the Kuwaiti staff. From January 1991 to November
1994 he was the principal in David A. Christman & Associates, an independent
financial and management consulting firm in Dallas, Texas. His work consisted of
installing management accounting systems, job cost reporting systems, standard
cost accounting systems and other phases of financial management procedures and
policies. He also helped with restructuring organizations, wrote job
descriptions, designed and installed incentive plans and employee evaluation
procedures. He provided management training, wrote employee handbooks and
installed management by objectives (MBO) programs. From February 1988 to January
1991 he served as a management consultant with George S. May International
Company where his duties included all aspects of financial and organizational
management consulting as well as computer installation. Mr. Christman holds a
Bachelor of Science in Business Administration Degree with a Major in Accounting
from Rochester Institute of Technology in New York and has completed a post-
graduate program in finance and statistics.
Mr. Steven R. Paige graduated from the University of New York at Albany in 1984
with a Bachelor of Science degree in Business Administration which he achieved
while enlisted in the U.S. Air Force. Upon completion of his enlistment and
degree requirements, Mr. Paige worked for a major television station in Denver,
Colorado as an account executive. In 1986 he joined one of Denver's most
prominent advertising agencies. Within two years, Mr. Paige was personally
responsible for doubling the firm's gross revenues by acquiring three national
accounts, and was promoted to Executive Vice President. His new
responsibilities included personnel development, full creative and buying
authority, and future business development. In 1988 he left the agency and
formed his own marketing company, The Paige Group, which pursued new areas of
marketing, advertising and finance for clients. From March 1989 to June 1990,
Mr. Paige was Sales Manager for Mike Naughton Ford Company with full
responsibility for hiring and training of sales personnel as well as total
responsibility for movement of inventory including advertising, marketing and
promotional activities. Through his implementation of creative marketing and
sales techniques, he was instrumental in bringing the dealership from a seventh
place rating to a number one rating in a little over a year. From June 1990 to
December 1991, Mr. Paige was General Manager of Metro Toyota with overall
responsibility of the dealership including inventory control, budgeting, sales
performance, service and maintenance operations and total income performance.
From January 1992 to May 1995, he was Sales Manager and General Manager of Don
Massey Cadillac (a member of the largest Cadillac group in the world) with total
responsibility as dealer-operator including procurement of all major inventory.
Again, with his implementation of marketing and sales techniques, he brought the
dealership from a number six rating to a number one rating in less than six
months. Mr. Paige has been associated with Condor West Corporation and with Mr.
Carl D. Nation, a Director, for more than five years. Effective June 1, 1995 he
became a full-time employee of the Company; his full time employment terminated
prior to May 31, 1996.
<PAGE>
Mr. Terrance L. Rasmussen has been employed in a management position with Hilti
Corporation since 1990. His responsibilities include inventory control and
internal auditing. Prior to that he was employed by A & A Plate Service, Inc.
and Sears, Roebuck and Company in computerized accounting systems. Additional
areas of experience accounts payable, accounts receivable, payroll and tax
consulting. Mr. Rasmussen has also analyzed company operations for purposes of
recommending changes for improvement, and potential companies for take-over
based on profitability potential. Major projects included areas of real estate,
manufacturing and agriculture. Mr. Rasmussen is licensed by NASD and was an
account executive for a national brokerage firm where he developed corporate and
individual accounts. He provided guidance to clients, determined investment
objectives and developed solid portfolios according to the objectives using
stocks, bonds, and mutual funds. He received a Bachelors degree in business,
management and finance from Iowa State university in Ames, Iowa, and attended
the Metropolitan State University in Minneapolis, Minnesota where he obtained a
degree in accounting. Mr. Rasmussen is also a CPA.
John A. Murdock III is the founder of JAM Consulting Service, Inc. and principal
stockholder, chief executive officer and founder of Power By Nature, Inc. Mr.
Murdock served more than 20 years in the United States Air Force where he
obtained extensive training in management and operations. As Weapons
Superintendent, he was responsible for more than 250 airmen and worked world
wide in areas of Europe, Asia and the Middle East. Mr. Murdock's decorations
include the Distinguished Flying Cross (with four oak leaf clusters), the
Airman's Medal of Valor, the Air Medal (with 18 oak leaf clusters), the
Vietnamese Cross of Gallantry (with Bronze Star, Palm Leaf and 3 oak leaf
clusters), and the Good Conduct Medal (with 7 oak leaf clusters). After
retiring from the United State Air Force, Mr. Murdock used his experience to be
an advisor for the Armament and Mobility Officers for the Royal Saudi Air Force.
He worked directly with foreign country representatives as a Logistics Engineer
for Foreign Military Sales. This included the sale of aircraft and other
defense systems. Currently, he is an agent for the leasing of Deeds of
Assignments of United States Treasuries. These are used to aid in the funding
of projects, and require highest contacts in banking and business. Mr. Murdock
Obtained a B.S. Degree from Troy State Unviersity, a Masters in Business
Administration in Personnel Administration from Chapman College, and a Doctor of
Laws degree from Louisiana Baptist University.
Dennis L. Swenson possesses more than 25 years of human resource and
administrative management experience with Fortune 500 and smaller corporations.
From January 1991 to present he has been Vice President Human Resources and
Administration for PharmAssist, Inc. as well as owner of DLS Associates, a Human
Resources consulting firm. From January 1987 to January 1991 he was Director of
Compensation and Benefits for FoxMeyer Corporation and from May 1969 to December
1986 he was Manager of Employee Benefits for Burlington Northern Railroad
Company. While at FoxMeyer Corporation he established the Human Resource
Department serving more than 4,500 employees as well as developing and staffing
the Customer Service Department for a $45 billion wholly owned subsidiary.
While employed with Burlington Northern, Inc., Mr. Swenson managed and
administered all labor relations functions, including negotiation of the
benefits program covering 48,000 employees. Through design and administrative
modifications, he was responsible for cost
<PAGE>
reductions of nearly $5 million annually. In 1990, he served as acquisition
consultant to ComputerLand Corporation when they acquired the $750 million Nynex
Business Information Systems. He has extensive experience in conducting audits
to assure sound and feasible business practices based upon corporate liability
and profit margin.
Dr. Felix F. Banchs has served as Mexico Project Manager/Nationally Certified
Financial Counselor for the National Foundation for Consumer Credit, Fort Worth,
Texas from 1992 to present where his responsibilities include the development,
implementation and supervision of debt management and financial programs for the
USA, Puerto Rico and Mexico. From 1990 to 1992 he was Director of Training for
Centro de Amistad, Dallas, Texas where he developed and supervised vocational
training programs. From 1977 to 1990, Dr. Banchs was Vice President for
Administration and Dean of Business Administration for Boricua College in New
York. His responsilbilities included the development of the business
administration curriculum and management of three campuses. During his tenure,
both faculty and student population increased by 500%. In addition, Dr. Banchs
has held executive positions with Shell Oil Co., Baxter-Travenol Laboratories
and Colgate-Palmolive. Dr. Banchs graduated Magna Cum Laude with a BBA in
Management from Catholic University of Puerto Rico, Cum Laude with a Masters in
Business Administration in Marketing Management from St. John's University, New
York and earned a PhD in Business Administration and Economics from Columbia
University, New York. Dr. Banchs is listed in AWho's Who in Finance and
Industry in America and is a veteran of the United States Air Force.
ITEM 11. MANAGEMENT REMUNERATION
Through May 31, 1995, the Company's officers received no compensation.
Compensation paid to officers during the year ended May 31, 1996 aggregated
$191,807, paid to three officers; no single officer received compensation in
excess of $100,000. All officers terminated employment prior to May 31, 1996,
and no compensation was paid during the year ended May 31, 1997. The Company
has not adopted any stock option plans, long term compensation payouts, deferred
compensation plans, incentive plans, pension plans, change-in-control
arrangements, or other compensation plans. The Company's officers are reimbursed
for reasonable business expenses incurred in connection with their activities on
its behalf.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Officers and Directors, and persons beneficially owning more than 5% of the
14,939,468 shares of common stock outstanding at May 31, 1996 were as follows:
<TABLE>
<CAPTION>
NAME OFFICER DIRECTOR SHARES PERCENT
<S> <C> <C> <C> <C>
Dr. Everett Renger Yes Yes 5,325,000(1) 35.6%
Carl D. Nation Yes Yes 5,325,000(1) 35.6
Wade D. Althen Yes Yes 1,000,000 6.7
Steven R. Paige Yes Yes 1,000,000 6.7
John A. Murdock, III No Yes 540,000 3.6
Terrance L. Rasmussen Yes Yes 300,000 2.0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME OFFICER DIRECTOR SHARES PERCENT
<S> <C> <C> <C> <C>
David A. Christman Yes Yes 200,000 1.3%
Dennis L. Swenson Yes Yes 200,000 1.3
All officers and
directors as a group 13,890,000 93.0
</TABLE>
(1) On October 10, 1995, Messrs Renger and Nation each returned 3,770,840
shares to the Company as an anti-dilutionary measure. Shares shown above are net
of the returned shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See Item 1, "Organization and Business", for discussion of the acquisition of
all the outstanding stock of Super Brakes, Inc. from Dr. Renger and Mr. Nation.
On April 28, 1995, May 30, 1995, and June 22, 1995, John A. Murdock, III, a
Director, loaned the Company $100,000 on each occasion, or a total of $300,000.
The notes bore interest at 15% and were due and payable two years after date.
Under the terms of the notes, Mr. Murdock had the option to convert each note
into 130,000 shares of common stock of the Company. However, on June 30, 1995,
the notes and accrued interest of $4,068 were converted into 540,000 shares of
stock at the rate of $0.563 per share.
During the year ended May 31, 1997, certain officers and directors paid expenses
of the Company without seeking reimbursement and without receiving stock
therefor. The amounts paid were as follows:
PAID BY AMOUNT
Dr. Everett Renger $4,380
Wade D. Althen 360
------
Total $4,740
======
An additional $2,000 was paid by Benchmark Equities Corporation. All of the
amounts paid are included in Other operating expenses in the accompanying
financial statements.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS OF FORM 8-K
<PAGE>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
INDEX TO FINANCIAL STATEMENTS
MAY 31, 1997
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DESCRIPTION
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Report of Independent Certified Public Accountants
Balance sheets as of May 31, 1997 and 1996
Statements of loss for the periods ended May 31, 1997, 1996 and 1995
Statements of stockholders' equity for the years ended May 31, 1997,
1996 and 1995
Statements of cash flows for the periods ended May 31, 1995, 1996 and
1995
Notes to financial statements
<PAGE>
BATEMAN & CO., INC., P.C.
Certified Public Accountants
5 Briardale Court
Houston, Texas 77027-2904
(713) 552-9800
FAX (713) 552-9700
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To The Board of Directors and Stockholders
Condor West Corporation
Houston, Texas
We have audited the accompanying balance sheets of Condor West Corporation (a
development stage enterprise) as of May 31, 1997 and 1996, and the related
statements of loss, stockholders' equity, and cash flows for the periods ended
May 31, 1997, 1996, and 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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 West Corporation (a
development stage enterprise) as of May 31, 1997 and 1996, and the results of
its operations and its cash flows for the periods ended May 31, 1997, 1996, and
1995, 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 7 to the
financial statements, the Company has exhausted all its cash and has no
operations, employees, or assets. These factors raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 7. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
BATEMAN & CO., INC., P.C.
Houston, Texas
November 30, 1998
<PAGE>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
MAY 31, 1997 AND 1996
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<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ - $ 53
---------- ----------
Total current assets - 53
---------- ----------
Office and computer equipment, net of
accumulated depreciation of $140 - 836
---------- ----------
Other assets - -
---------- ----------
Total assets $ - $ 889
========== ==========
LIABILITIES
Total liabilities - -
---------- ----------
Commitments and contingencies - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share,
35,000,000 shares authorized,
14,939,468 shares issued and outstanding 14,940 14,940
Capital in excess of par value 363,469 356,728
Deficit accumulated during the
development stage (378,409) (370,779)
---------- ----------
Total stockholders' equity (deficit) - 889
---------- ----------
Total liabilities and stockholders'
equity $ - $ 889
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF LOSS FOR THE PERIODS ENDED
MAY 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
CUMULATIVE
OCTOBER 8,
1987
THROUGH YEARS ENDED MAY 31,
MAY 31, ----------------------------------
1997 1997 1996 1995
--------- ---------- ---------- ---------
Revenues $ 191 $ - $ - $ -
--------- ---------- ---------- ---------
Expenses:
Depreciation and
amortization 40,326 - 140 -
Salaries and fees for
services 210,696 - 191,107 19,589
Other general and
administrative 123,470 7,630 96,105 5,280
--------- ---------- ---------- ---------
Total expenses 374,492 7,630 287,352 24,869
--------- ---------- ---------- ---------
Income (loss) from
operations (374,301) (7,630) (287,352) (24,869)
Other income (expenses):
Interest (4,108) - (2,711) (1,397)
--------- ---------- ---------- ---------
Net (loss) $(378,409) $ (7,630) $ (290,063) $ (26,266)
========= ========== ========== =========
Net (loss) per common
share $ (0.001) $ (0.020) $ (0.004)
========== ========== =========
Weighted average number
of shares outstanding 14,841,107 14,841,107 7,572,071
========== ========== =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED
MAY 31, 1997, 1996 AND 1995
- -----------------------------------------------------------------------------------------------------------------------------------
DEFICIT
ACCUMULATED TOTAL
ADDITIONAL DURING THE STOCKHOLDERS'
COMMON STOCK PAID IN DEVELOPMENT EQUITY
SHARES AMOUNT CAPITAL STAGE (DEFICIT)
------------ ----------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Balances, May 31, 1994 1,249,468 $ 1,250 $ 53,200 $ (54,450) $ -
Stock issued for services, net of
shares subsequently returned 12,740,000 12,740 - - 12,740
Stock issued for other assets 10,000 10 - - 10
Net loss (26,266) (26,266)
------------ ----------- ------------ -------------- --------------
Balances, May 31, 1995 13,999,468 14,000 53,200 (80,716) (13,516)
Stock issued for debt 540,000 540 303,528 304,068
Stock issued for services 400,000 400 - 400
Net loss (290,063) (290,063)
------------ ----------- ------------ -------------- --------------
Balances, May 31, 1996 14,939,468 14,940 356,728 (370,779) 889
Expenses paid by shareholders for
which no shares were issued - - 6,741 6,741
Net loss (7,630) (7,630)
------------ ----------- ------------ -------------- --------------
Balances, May 31, 1997 14,939,468 $ 14,940 $ 363,469 $ (378,409) $ -
============ =========== ============ ============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED
MAY 31, 1997, 1996 AND 1995
- ------------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
OCTOBER 8,
1987
THROUGH YEARS ENDED MAY 31,
MAY 31, -----------------------------------------
1997 1997 1996 1995
------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net (loss) $ (378,409) $ (7,630) $(290,063) $ (26,266)
Adjustments to reconcile net loss to net cash
used in operating activities:
Operating expenses incurred by issuance of stock 15,851 - 3,111 12,740
Increase (decrease) in accounts payable, related party (19,475) - (15,064) 12,129
Operating expenses paid by shareholders 6,741 6,741 - -
Writeoff of office and computer equipment 836 836
Increase (decrease) in accrued interest 1,397 - - 1,397
Depreciation and amortization 40,326 - 140 -
------------- ------------ ----------- ----------
Net cash flows from operating activities (332,733) (53) (301,876) -
------------- ------------ ----------- ----------
Cash flows from investing activities:
Acquisition of office and computer equipment (976) - (976) -
Increase in deferred organization costs (23,646) - - -
------------- ------------ ----------- ----------
Net cash flows from investing activities (24,622) - (976) -
------------- ------------ ----------- ----------
Cash flows from financing activities:
Proceeds from sale of common stock 20,625 - - -
Proceeds from notes payable, related party 300,000 - 100,000 200,000
Increase in account payable, related party 2,905 - - 2,905
Liability assumed by parent 33,825 - - -
------------- ------------ ----------- ----------
Net cash flows from financing activities 357,355 - 100,000 202,905
------------- ------------ ----------- ----------
Net increase in cash and cash equivalents - (53) (202,852) 202,905
Cash and cash equivalents, beginning of period - 53 202,905 -
Cash and cash equivalents, end of period $ - $ - $ 53 $ 202,905
============= ============ =========== ==========
Supplementary cash flow
information:
Non-cash investing and financing activities:
Common stock issued for services $ 13,140 $ - $ 400 $ 12,740
Common stock issued for other assets 10 - - 10
Common stock issued for debt and accrued interest 304,068 - 304,068 -
Operating expenses paid by shareholders for which no
stock was issued 6,741 6,741 - -
Cash paid for interest - - - -
Cash paid for income taxes - - - -
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997, 1996 AND 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Following is a summary of the Company's organization and significant accounting
policies:
ORGANIZATION AND NATURE OF BUSINESS - Condor West Corporation (the Company)
is a Nevada corporation, incorporated on October 8, 1987, engaged in
organizational activities, raising capital, and investigating business
opportunities. Accordingly, the Company has no business operations and
does not intend to engage in an active business until it acquires or
combines with an operating enterprise.
To date, the Company's activities have been limited to its formation, the
initial registration of its securities, and the identification and
screening of potential business acquisitions. In its current development
stage, management anticipates incurring substantial additional losses as it
investigates business opportunities.
BASIS OF PRESENTATION - The accounting and reporting policies of the
Company conform to generally accepted accounting principles applicable to
development stage enterprises.
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 and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from
those estimates. The Company's periodic filings with the Securities and
Exchange Commission include, where applicable, disclosures of estimates,
assumptions, uncertainties and concentrations in products and markets which
could affect the financial statements and future operations of the Company.
CASH AND CASH EQUIVALENTS - For purposes of the statement of cash flows,
the Company considers all cash in banks, money market funds, and
certificates of deposit with a maturity of less than one year to be cash
equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS -
The Company has adopted Statement of Financial Accounting Standards number
119, Disclosure About Derivative Financial Instruments and Fair Value of
Financial Instruments. The carrying amounts of cash, accounts payable, and
accrued expenses approximate fair value because of the short maturity of
these items. The carrying amount of long term debt approximates fair
value because the interest rate on this instrument approximates a market
interest rate. These fair value estimates are subjective in nature and
involve uncertainties and matters of
<PAGE>
significant judgment, and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect these estimates. At May
31, 1997 and 1996, the Company had no derivative financial instruments.
OFFICE AND COMPUTER EQUIPMENT - Office and computer equipment is stated at
cost less accumulated depreciation, computed principally on the straight-
line method over the estimated useful lives of the assets. Depreciation is
taken on the straight-line method for tax purposes also, using lives
prescribed by the Internal Revenue Code, which are similar to book basis
lives.
FEDERAL INCOME TAXES - Deferred income taxes are reported for timing
differences between items of income or expense reported in the financial
statements and those reported for income tax purposes in accordance with
Statement of Financial Accounting Standards number 109 Accounting for
Income Taxes, which requires the use of the asset/liability method of
accounting for income taxes. Deferred income taxes and tax benefits are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases, and for tax loss and credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The
Company provides deferred taxes for the estimated future tax effects
attributable to temporary differences and carryforwards when realization is
more likely than not.
NET INCOME PER SHARE OF COMMON STOCK - Net income per share of common stock
is computed by dividing net income by the weighted average number of shares
of common stock outstanding during the period, after giving retroactive
effect to stock splits, if any.
NOTE 2 - ISSUANCE OF STOCK:
Since its inception, the Company has issued shares of its common stock as
follows:
<TABLE>
<CAPTION>
PRICE PER
DATE DESCRIPTION Shares SHARE AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSACTIONS PRIOR TO
CURRENT YEAR:
10/8/87 Shares issued for cash 750,000 $ .0275 $ 20,625
5/31/90 Shares issued in exchange
for debt 499,468 .0677 33,825
12/1/94 Shares issued to officers
and directors for services 20,281,680 .001 20,282
Less, shares subsequently returned (7,541,680) .001 (7,542)
------------ ----------
Net shares issued for services 12,740,000 12,740
12/1/94 Shares issued to acquire all of the
outstanding stock of Super Brakes, Inc. 10,000 .001 10
6/30/95 Shares issued for debt and accrued interest 540,000 .563 304,068
6/30/95 Shares issued for services 200,000 .001 200
8/08/95 Shares issued for services 200,000 .001 200
------------ ----------
Cumulative total 14,939,468 $ 371,668
============ ==========
</TABLE>
<PAGE>
During the year ended May 31, 1995, the Company began the formulation of a
business plan to enter the retail automotive service field. In that connection,
20,281,680 shares of common stock (including 531,666 shares described in the
following paragraph) were issued to 8 officers and directors for their services
in connection with the proposed business, including the development of a
business plan. Subsequently, on October 10, 1995, two of the officers returned
7,541,680 of these shares to the Company for cancellation as an adjustment in
the value of the services rendered. The return of shares has been retroactively
recorded as of December 1, 1994. Shares issued were recorded at par value,
which approximates fair value of the services rendered, and were charged to
expense as incurred.
Also on December 1, 1994, the Company issued 541,666 shares to its Chairman and
Co-chairman in exchange for all the outstanding stock of Super Brakes, Inc.
Super Brakes was an inactive corporation with no assets, liabilities or
operations that was formed to engage in the proposed retail automotive services
business. Of the total shares issued, 10,000 shares (or $10) were capitalized
as the investment cost, and the remaining 531,666 shares (or $532) were deemed
to have been issued for services and were charged to expense. On May 18, 1996,
the Super Brakes investment was sold back to the Co-chairman for $10.
At May 31, 1997 and 1996, the Company had abandoned its plans to enter the
retail automobile services field, and was engaged in seeking other business
opportunities.
NOTE 3 - NOTES PAYABLE, RELATED PARTY:
The Company borrowed a total of $300,000 from a Director and executed three
promissory notes dated April 28, 1995, May 30, 1995, and June 22, 1995 in the
amount of $100,000 each. The notes were originally due two years after date,
bore interest at 15%, and were unsecured. On June 30, 1995, the three loans,
plus accrued interest of $4,068, were exchanged for 540,000 shares of common
stock at the rate of $0.563 per share.
NOTE 4 - FEDERAL INCOME TAX:
No provision for currently refundable Federal income tax has been made in the
accompanying statements of loss as no recoverable taxes were paid previously.
Similarly, no deferred tax asset attributable to the net operating loss
carryforward has been recognized, as it is not likely to be realized. At May
31, 1997, the Company had unused net operating loss carryovers which may be used
to offset future taxable income and which expire as follows:
<PAGE>
EXPIRES MAY 31, AMOUNT
- ---------------------------------------------------------------------------
2004 $ 16,233
2005 10,857
2006 9,553
2007 8,904
2008 8,903
2009 -
2010 26,266
2011 290,063
2012 7,630
--------
Total net operating loss carryover $378,409
========
The current provision for refundable Federal income tax consists of the
following:
1997 1996
-----------------------
Refundable Federal income tax attributable to:
Current operations $ 1,145 $ 101,500
Less, Limitation due to absence of prior
year taxable income (1,145) (101,500)
-----------------------
Net refundable amount - -
=======================
Deferred Federal income tax consists of the following:
1997 1996
-----------------------
Deferred tax asset attributable to:
Net operating loss carryover $ 132,400 $ 129,700
Less, Valuation allowance (132,400) (129,700)
-----------------------
Net deferred tax asset - -
=======================
NOTE 5 - COMMITMENTS:
The Company is obligated on two operating leases for automobiles requiring
monthly payments of $1,342, and expiring in May 1998 and October 1998. Aggregate
commitments under these leases at May 31, 1997 were as follows:
YEAR ENDED MAY 31, AMOUNT
- ---------------------------------------- -------------
1998 $3,625
In May, 1995, the Company also entered into a lease for office space on a month-
to-month lease requiring monthly rentals of $1,250 per month. The total amount
charged to operations under operating leases were $22,193 (1996) and $1,342
(1995).
In December 1995, the auto lease obligations were assumed by two officers of the
Company and the related vehicles were retained by them.
<PAGE>
NOTE 6 - YEAR 2000 ISSUES:
Inasmuch as the Company is dormant and does not own or utilize computers,
management believes that the year 2000 issue relating to computers will not have
a material effect on the Company's financial position.
NOTE 7 - UNCERTAINTY, GOING CONCERN:
At May 31, 1997, the Company had exhausted all of its cash and had no
operations, employees, or assets. Although management is currently seeking
additional business opportunities and sources of equity or debt financing, there
is no assurance these activities will be successful. Accordingly, the Company
must rely on its officers and directors to perform essential functions and to
provide funds to pay for essential expenses until a business operation can be
commenced. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
<PAGE>
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.
CONDOR WEST CORPORATION
Dated January 19, 1999 By /s/ Dr. Everett Renger
----------------------- -----------------------------
Dr. Everett Renger
Chairman of the Board
Dated January 19, 1999 By /s/ Carl D. Nation
----------------------- -----------------------------
Carl D. Nation, President, CEO,
and Director
Dated January 19, 1999 By /s/ Steven R. Paige
----------------------- -----------------------------
Steven R. Paige, Executive Vice
President and Director
Dated January 19, 1999 By /s/ Terrance Rasmussen
----------------------- -----------------------------
Terrance Rasmussen, Secretary,
Treasurer, and Director
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:
Dated January 19, 1999
-----------------------
/s/ Dr. Everett Renger
---------------------------
Dr. Everett Renger
Chairman of the Board
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF CONDOR WEST CORPORATION AS OF MAY 31, 1996 AND FOR THE YEAR THEN
ENDED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> MAY-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 14,940
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,630
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,630)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,630)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,630)
<EPS-PRIMARY> (0.001)
<EPS-DILUTED> (0.001)
</TABLE>
