SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES AND EXCHANGE COMMISSION
For the fiscal year ended Commission File No. 33-22097-NY
June 30, 1996
HAVENWOOD VENTURES, INC.
------------------------
(Exact name of Registrant as specified in its charter)
Delaware 11-2908692
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P O Box 1451 Sedona, AZ 86336
----------------------- -----
(Address of principle executive offices) (Zip code)
Registrant's telephone number, including area code: (520) 282-1275
Securities registered pursuant to section 12 (g) of the Act:
None
----
(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 last 90 days.
Yes X No
----- -----
State the aggregate fair market value of the voting stock held by nonaffiliates
of the Registrant: No bid-undetermined value as of September 18, 1996.
Indicate the number of shares outstanding of each class of the Registrant's
classes of common stock as of the latest practicable date: No Par Value Common
Stock: 258,365,000 shares as of September 18, 1996.
EXHIBIT INDEX IS LOCATED ON PAGE 9.
<PAGE>
PART I
ITEM 1. BUSINESS
A) General
Havenwood Ventures, Inc. (the "Company") was incorporated in April, 1988 in
Delaware and raised $499,500 in its initial public offering. The stock is
currently quoted on the electronic bulletin board but to the best of the
Company's knowledge, its common stock has not been actively traded in several
years.
In 1989, the Company commenced development of a theme attraction in Sedona,
Arizona, the Sedona Spirit Theater (the "Theater"). The Company had acquired
three parcels of land for $843,000, subject to a first mortgage totalling
$400,000. In addition, approximately $400,000 had been spent for site-planning,
show and theme attraction development, planning and zoning approvals and general
expenses.
During the fiscal year ended June 30, 1992, the Board of Directors voted to
discontinue development of the Theater due to the inability of the Company to
continue to attract financing for further development on the project.
During the fiscal year ended June 30, 1992, the Registrant divested itself of
the Theater real estate properties. This transaction was consummated with the
vice-president, who is also a director, of the Company. At a February 1992 board
meeting, the Directors had approved the sale of its Theater real estate
properties for $953,000. ($400,000 in debt assumption, $453,000 in debt
cancellation and $100,000 in cash and notes). During the year ended June 30,
1995, the vice-president/director made the final payment on the amounts owed
from the sale.
Other than as set forth, the Company has not been a party to any bankruptcy,
receivership, reorganization, readjustment or similar proceedings. The Company
has virtually no assets, tangible or intangible, and did not generate any
revenues during the fiscal year ended June 30, 1996. The Company had no back-log
of orders for goods or services and did not make any material expenditures for
research or development during the fiscal year ended June 30, 1996.
2
<PAGE>
B) Narrative Description of Business
During the fiscal year ended June 30, 1996, the Company's only operations
consisted of management's investigation of business opportunities. The Board of
Directors of the Company has resolved to investigate all possible business
opportunities, none of which involve activities in Theater attractions.
Management will continue its consideration of opportunities to establish a
business for the Company. Criteria used in evaluating future opportunities will
include, but not be limited to, establishing an asset base for the Company and
confirmation of the availability of cash flow from operations to enhance
viability and establish value for the Company's shareholders. Management
anticipates future business combinations may take the form of a merger, assets
acquisition or stock acquisition. However, there is no assurance that such a
transaction will be consummated.
Employees and Consultants
The Company's only employees at June 30, 1996, consisted of two executive
officers. Each of the Company's executive officers and directors devotes only
part-time to the affairs of the Company and serves without compensation. The
President of the Company currently devotes approximately ten hours per month to
the affairs of the Company.
Certain members of management of the Company provide all secretarial and
clerical services to the Company on a part-time basis for no consideration.
Management believes such arrangements are currently adequate to accommodate the
limited level of operations being carried on by the Company, although there is
no assurance such arrangements will continue indefinitely in the future.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's principal executive offices are located at 1350 Dry Creek Road,
Sedona, Arizona 86339. This space is provided at no cost to the Company and is
adequate for its present purposes.
ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings, to which the Company is a party or to which
property of the Company is subject, is pending or is known by the Company to be
contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders during the
fiscal year ended June 30, 1996.
3
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
In July, 1990, the Class A and Class B common stock purchase warrants issued
with the Registrant's initial public offering expired. The Registrant's Common
Stock began trading in the over-the-counter market in October, 1988, commonly
known as the `pink- sheets'. During the past year, trading in the shares of the
Registrant has been non-existent. Set forth below are prices for the Common
Stock as reported during periods indicated. Prices represent quotations between
dealers without adjustment, for retail markups, markdowns or commissions and may
not represent actual transactions:
1994 Low Bid High Bid
---- ------- --------
First Quarter no bid no bid
Second Quarter no bid no bid
Third Quarter no bid no bid
Fourth Quarter no bid no bid
1995 Low Bid High Bid
---- ------- --------
First Quarter no bid no bid
Second Quarter no bid no bid
Third Quarter no bid no bid
Fourth Quarter no bid no bid
1996 Low Bid High Bid
---- ------- --------
First Quarter no bid no bid
Second Quarter no bid no bid
Third Quarter no bid no bid
Fourth Quarter no bid no bid
As of June 30, 1996, the Registrant had 107 shareholders of record and believes
it had approximately 116 beneficial owners for a total of 223 shareholders.
The Registrant has not declared any cash dividends on its Common Stock since
inception and its Board of Directors has no present intention of declaring any
dividends. For the foreseeable future, the Registrant intends to retain all
earnings, if any, for use in the development and expansion of its business.
ITEM 6. SELECTED FINANCIAL DATA
The following summarizes certain financial data and is qualified in its entirety
by the more detailed audited financial statements.
4
<PAGE>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Operating revenues N/A N/A N/A N/A N/A
Income (loss) from
operations $ (8,672) $(10,470) $(7,056) $(12,120) $(6,920)
Income (loss)
from operations
per share * * * * *
Total assets $ 2,526 $ 9,218 $18,320 $ 24,292 $37,653
Long-term
obligations N/A N/A N/A N/A N/A
Total shareholders'
equity (deficit) $ (3,287) $ 5,385 $15,855 $ 22,911 $35,082
No cash dividends were paid during the years ended June 30, 1996, 1995, 1994,
1993 and 1992.
* Less than $.01
ITEM 7. PLAN OF OPERATIONS
Financial condition
The Company is a shell corporation with virtually no assets. The Company's main
cash flow items, other than its net losses, have been the repayments of a
shareholder loan. During the years ended June 30, 1995, 1994, 1993 and 1992, the
shareholder paid a $50,000 note in installments of $16,470, $6,095, $9,500 and
$17,935, respectively. The shareholder made the final payment on the loan during
the year ended June 30, 1995.
Management plans to seek and evaluate privately held corporations for the
purpose of consummating a merger. Various shareholders will inject cash into the
Company as needed to pay for operating expenses. Management feels that this will
be sufficient to permit management to seek and evaluate potential merger
candidates as well as meet its reporting and filing obligations through the
coming fiscal year.
5
<PAGE>
Results of operations
The Company conducted no operations for the fiscal year ended June 30, 1996.
Expenses in the current year consisted mostly of legal, accounting and stock
transfer fees.
During the year ended June 30, 1991, the Company incurred a net loss of $585,048
due largely to the loss on the development of the Theater of $536,422. The net
income for the year ended June 30, 1992 of $133,020 consisted of rental income
from the Theater property totalling $15,099 and a one time gain of $124,841 on
the disposal of the Theater real estate holdings. The fiscal years ended June
30, 1996, 1995, 1994 and 1993 losses were due to general and administrative
expenses.
6
<PAGE>
ITEM 8. Financial statements and supplementary data
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
PAGE
Independent auditors' reports.............................................. F-2
Consolidated balance sheet as of June 30, 1996............................. F-3
Consolidated statements of operations, for the years
ended June 30, 1996 and 1995 and from April 28, 1988
(inception) through June 30, 1996 (unaudited).............................. F-4
Consolidated statements of cash flows, for the years
ended June 30, 1996 and 1995 and from April 28, 1988
(inception) through June 30, 1996 (unaudited).............................. F-5
Consolidated statements of shareholders' equity, April
28, 1988 (inception) through June 30, 1996 (unaudited)..................... F-7
Summary of significant accounting policies................................. F-9
Notes consolidated financial statements.................................... F-10
F-1
<PAGE>
Board of Directors
Havenwood Ventures, Inc.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheet of Havenwood
Ventures, Inc. (a development stage company) as of June 30, 1996, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for the years ended June 30, 1996 and 1995. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Havenwood Ventures,
Inc. as of June 30, 1996, and the results of its operations and its cash flows
for the years ended June 30, 1996 and 1995, in conformity with generally
accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note G to the
consolidated financial statements, the Company has no operations as of June 30,
1996, and the Company's operating losses since inception raise substantial doubt
about its ability to continue as a going concern. Management's plans concerning
these matters are also described in Note G. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
Cordovano and Company, P.C.
Denver, Colorado
July 31, 1996
F-2
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
ASSETS
June 30,
1996
----
Cash............................................................... $ 2,526
Property and equipment, net of accumulated depreciation (Note C)... -
------------
$ 2,526
===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
Accounts payable, trade.......................................... $ 5,813
------------
Total liabilities............................................. 5,813
------------
SHAREHOLDERS' DEFICIT (Note F) Common stock, 350,000,000 shares
authorized, $.00001 par value;
258,365,000 shares issued and outstanding...................... 2,584
Additional paid-in capital....................................... 585,965
Deficit accumulated during development stage..................... (591,836)
------------
Total shareholders' deficit.................................. (3,287)
------------
$ 2,526
============
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-3
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
April 28, 1988
(inception)
through
Years Ended June 30, June 30,
--------------------
1996 1995 1996
---- ---- ----
(Unaudited)
COSTS AND EXPENSES
General and administrative.............. $ 8,672 $11,270 $147,053
Loss on development of Theme Park (Note D) - - 612,705
------ ------- -------
Operating loss........................ (8,672) (11,270) (759,758)
NON-OPERATING INCOME
Gain on disposal of Theme Park assets
(Note B).............................. - - 124,841
Other................................. - 800 43,081
NET LOSS.................................. $(8,672) $(10,470) $(591,836)
======= ======== =========
Weighted average shares outstanding..... 258,365,000 258,365,000 232,585,077
=========== =========== ===========
Net loss per share...................... $ * $ * $ *
----------- ----------- -----------
* Less than $.01 per share
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
April 28, 1988
(inception)
Years Ended June 30, through
-------------------- June 30,
1996 1995 1996
---- ---- ----
(Unaudited)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss .................................................. $ (8,672) $ (10,470) $(591,836)
Transactions not requiring cash:
Depreciation and amortization ............................. 68 216 20,006
Common stock issued for services .......................... -- -- 63,137
Common stock issued for shareholder debt (Note B) ......... -- -- 58,464
Common stock issued for interest (Note B) ................. -- -- 1,093
Changes in current assets and current liabilities:
Receivables and other current assets ...................... -- 554 --
Accounts payable and accrued expenses ..................... 1,980 1,368 (14,189)
----- ----- -------
CASH (USED IN) OPERATING ACTIVITIES.......................... (6,624) (8,332) (463,325)
------- ------- ---------
INVESTING ACTIVITIES
Acquisition of land, property and equipment................ -- -- (845,140)
Start up costs of Theme Park............................... -- -- (233,505)
Write off of start up costs of Theme Park.................. -- -- 233,505
Organization costs incurred................................ -- -- (5,671)
------- ------- ---------
CASH (USED IN) INVESTING ACTIVITIES.......................... -- -- (850,811)
------- ------- ---------
FINANCING ACTIVITIES
Cash proceeds from issuance of common stock................ -- -- 527,095
Purchase of treasury stock; subsequently cancelled......... -- -- (51)
Offering costs incurred.................................... -- -- (61,189)
Cash proceeds on loan from shareholder (Note B)............ -- -- 50,000
Principal payment on loan from shareholder (Note B)........ -- -- (50,000)
Issuance of loan to shareholder (Note B)................... -- -- (50,000)
Proceeds from repayment of loan to shareholder (Note B).... -- 16,470 50,000
Proceeds from long term debt issued to shareholder (Note B) -- -- 453,500
Proceeds from long term debt............................... -- -- 400,000
Principal payments on long term debt....................... -- -- (2,786)
Capital contribution by president (Note B)................. -- -- 93
------- ------- ---------
CASH PROVIDED BY FINANCING ACTIVITIES........................ -- 16,470 1,316,662
------- ------- ---------
NET INCREASE (DECREASE) in cash and cash equivalents......... (6,624) 8,138 2,526
Cash and cash equivalents at beginning of period............. 9,150 1,012 --
------- ------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .................. $ 2,526 $ 9,150 $ 2,526
============= ========= =========
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-5
<PAGE>
<CAPTION>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)
April 28, 1988
(inception)
Years Ended June 30, through
-------------------- June 30,
1996 1995 1996
---- ---- ----
(Unaudited)
<S> <C> <C> <C>
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ................................................... $ -- $ -- $ 77,274
Income taxes ............................................... $ -- $ -- $ --
NONCASH INVESTING AND FINANCING TRANSACTIONS:
Exchange of property and equipment (Theme Park)
for debt assumption and forgiveness with
related party (Note B) .................................. $ -- $ -- $ 832,191
Assumption of long term debt by related party (Note B) ..... $ -- $ -- $(397,214)
Forgiveness of long term debt, related party (Note B) ...... $ -- $ -- $(453,500)
Increase in additional paid-in capital (surrender of shares) $ -- $ -- $ (140)
Common stock issued for services ........................... $ -- $ -- $ 63,137
Common stock issued for shareholder debt (Note B) .......... $ -- $ -- $ 58,464
Common stock issued for interest (Note B) .................. $ -- $ -- $ 1,093
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-6
<PAGE>
<CAPTION>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
April 28, 1988 (inception)through June 30, 1996
(Unaudited)
Deficit
Accumulated
Common Stock Additional During
-------------- Paid-in Development
Shares Par Value Capital Stage Total
------ --------- ------- ----- -----
<S> <C> <C> <C> <C> <C>
Inception (April 28, 1988), shares issued for cash .............. 150,000,000 $ 1,500 $ 25,502 $ -- $ 27,002
Net loss for the period ......................................... -- -- -- (96) (96)
----------- --------- -------- ----- -------
Balance June 30, 1988 ........................................... 150,000,000 1,500 25,502 (96) 26,906
July, 1988, shares issued for cash .............................. 50,000,000 500 499,500 500,000
July, 1988, offering costs incurred ............................. -- -- (61,189) (61,189)
May, 1989, shares issued for services, at cost .................. 675,000 7 1,680 1,687
Net loss for the year ........................................... -- -- -- (9,127) (9,127)
----------- --------- --------- ------- --------
Balance at June 30, 1989 ........................................ 200,675,000 2,007 465,493 (9,223) 458,277
March 1990, shares issued for services, at cost ................. 13,600,000 136 47,464 47,600
June, 1990, shares exchanged for shareholder debt (Note B) ..... 54,500,000 545 57,919 58,464
Net loss for the year ........................................... -- -- -- (92,267) (92,267)
----------- --------- --------- --------- --------
Balance at June 30, 1990 ........................................ 268,775,000 2,688 570,876 (101,490) 472,074
August, 1990, shares issued for services, at cost ............... 2,000,000 20 3,980 -- 4,000
November, 1990, shares issued for services, at cost ............. 500,000 5 1,745 -- 1,750
December, 1990, shares issued for services, at cost ............. 500,000 5 1,745 -- 1,750
January, 1992, shares issued for services, at cost .............. 1,000,000 10 4,990 -- 5,000
February, 1991, Shares issued for services, at cost ............. 250,000 3 1,347 -- 1,350
January, 1991, shares issued for interest, at cost (Note B) ..... 2,000,000 19 1,074 -- 1,093
Net loss for the year ........................................... -- -- -- (585,048) (585,048)
----------- --------- --------- --------- ---------
Balance at June 30, 1991 ........................................ 275,025,000 2,750 585,757 (686,538) (98,031)
Capital contribution by president (Note B) ...................... -- -- 93 -- 93
Net income for the year ......................................... -- -- -- 133,020 133,020
----------- --------- --------- --------- --------
Balance at June 30, 1992 ........................................ 275,025,000 2,750 585,850 (553,518) 35,082
October, 1992 redemption and cancellation of
treasury shares (Note B) ...................................... (16,660,000) (166) 115 -- (51)
Net loss for the year ........................................... -- -- -- (12,120) (12,120)
----------- --------- --------- --------- --------
Balance at June 30, 1993 ........................................ 258,365,000 2,584 585,965 (565,638) 22,911
Net loss for the year ........................................... -- -- -- (7,056) (7,056)
----------- --------- --------- --------- -------
Balance at June 30, 1994 ........................................ 258,365,000 2,584 585,965 (572,694) 15,855
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-7
<PAGE>
<CAPTION>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF
SHAREHOLDERS' EQUITY, CONCLUDED
April 28, 1988 (inception) through June 30, 1996
(Unaudited)
Deficit
Accumulated
Common Stock Additional During
------------ Paid-in Development
Shares Par Value Capital Stage Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net loss for the year .. -- -- -- (10,470) (10,470)
---------- -------- -------- -------- -------
Balance at June 30, 1995 258,365,000 2,584 585,965 (583,164) 5,385
Net loss for the year .. -- -- -- (8,672) (8,672)
---------- -------- -------- -------- -------
Balance at June 30, 1996 258,365,000 $ 2,584 $ 585,965 $ (591,836) $ (3,287)
------------ ------------ ------------ ----------- ---------
</TABLE>
See accompanying summary of significant accounting policies and notes to
consolidated financial statements.
F-8
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Summary of Significant Accounting Policies
June 30, 1996
Principles of consolidation
- ---------------------------
The accompanying consolidated financial statements include the accounts of
Havenwood Ventures, Inc. and its wholly-owned subsidiary, SST Productions, Inc.
Intercompany balances and transactions have been eliminated in consolidation.
Development stage company
- -------------------------
The Company is in the development stage in accordance with SFAS No. 7 and was
formed to evaluate, structure and complete a merger with, or acquisition of a
privately owned corporation.
Cash equivalents
- ----------------
For financial accounting purposes and the statement of cash flows, cash
equivalents include all highly liquid debt instruments with original maturities
of three months or less.
Property and equipment
- ----------------------
Property and equipment are recorded at cost. Depreciation is calculated using
the straight-line method over an estimated life of seven years.
Net loss per share
- ------------------
Net loss per share is based on the weighted average number of common shares
outstanding for the periods presented according to the rules of the Securities
and Exchange Commission. Such rules require that any shares sold at a nominal
value prior to a public offering, should be considered outstanding for all
periods presented.
Reclassifications
- -----------------
Certain reclassifications have been made in the June 30, 1995 financial
statements to conform with the classifications used in the current year.
F-9
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to Consolidated Financial Statements
June 30, 1996
Note A: Nature of organization
Havenwood Ventures, Inc. (the Company) was incorporated under the laws of
Delaware on April 28, 1988. The principal activities from inception have been
organizational matters and the sale and issuance of shares of its $.00001 par
value common stock and preliminary development of a theme park, tentatively
named "the Sedona Spirit Theater", which was disposed of during fiscal 1991.
Currently, the Company is a "blind pool" and is seeking to acquire or merge with
a privately owned company. The Company is in the development stage in accordance
with SFAS No. 7.
Note B: Related party transactions
1996
The Company utilized office space on a rent-free basis from the president during
all periods presented. The Company does not anticipate changing this arrangement
until the Company's operations have commenced.
1995
During the year ended June 30, 1995, a shareholder repaid the Company $16,470
which was the final installment of a note dated January 27, 1992.
During the year ended June 30, 1995, $554 owed from an affiliate was forgiven.
The $554 was classified as due from affiliate as of June 30, 1994.
1994
During the year ended June 30, 1994, the Company made payments of $500
(unaudited) and $54 (unaudited) on behalf of an affiliate for accounting fees
and taxes, respectively. These payments are shown on the accompanying financial
statements as due from affiliate.
1993
On October 22, 1992, the Company acquired 16,600,000 (unaudited) shares of its
own stock and subsequently cancelled those shares. The effect of the transaction
was an adjustment to common stock and additional paid-in capital.
On December 14, 1992, two stockholders surrendered 14,110,000 (unaudited) shares
of the Company's common stock. The effect of this transaction was an adjustment
to common stock and additional paid-in capital.
F-10
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to Consolidated Financial Statements, Continued
June 30, 1996
Note B: Related party transactions, continued
1992
Effective January 27, 1992, a shareholder cancelled a note in the amount of
$453,500 (unaudited), assumed a mortgage in the amount of $397,214 (unaudited),
paid cash of $50,000 (unaudited) and executed a note to the Company in the
amount of $50,000 (unaudited), in exchange for three parcels of land. The
transaction resulted in a $124,841 (unaudited) gain which is included in the
accompanying financial statements as gain on disposal of Theme Park assets. The
land was originally acquired by the Company for development of the Sedona Spirit
Theater. As of June 30, 1992, the shareholder had advanced the Company $17,935
(unaudited) against the note.
During the year ended June 30, 1992, the president contributed $93 (unaudited)
for no consideration. This amount is reflected as contributed capital in the
accompanying financial statements.
1991
During the year ended June 30, 1991, a shareholder advanced the Company $231,500
(unaudited) in interim financing for the development of the Sedona Spirit
Theater project pursuant to an agreement dated June 25, 1990. The note was
guaranteed by the president and a director of the Company and was collateralized
by land.
Effective February 5, 1990, the Company executed an agreement with an affiliate
for the purpose of providing special effects in the proposed development of the
Sedona Spirit Theater. The affiliate was advanced $12,000 (unaudited) during the
year ended June 30, 1991.
On January 9, 1991, the Company issued 2,000,000 (unaudited) shares of its
$.00001 par value common stock in lieu of accrued interest totalling $1,094
(unaudited) on a $50,000 (unaudited) note payable to a shareholder. This amount
is reflected as shares issued for interest in the accompanying financial
statements. The Company repaid the $50,000 (unaudited) note on March 26, 1991.
F-11
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to Consolidated Financial Statements, Continued
June 30, 1996
Note B: Related party transactions, concluded
1990
During the year ended June 30, 1990, a shareholder advanced the Company $222,000
(unaudited) for interim financing of the development of the Sedona Spirit
Theater project pursuant to an agreement dated June 25, 1990. The note was
guaranteed by the president and a director of the Company and was collateralized
by land.
Effective February 5, 1990, the Company executed an agreement with an affiliate
for the purpose of providing special effects in the proposed development of the
Sedona Spirit Theater. The affiliate was advanced $10,000 (unaudited) during the
year ended June 30, 1990. This amount was capitalized as start up costs as of
June 30, 1990 and included in loss from operations for the year ended June 30,
1991.
1989
Effective January 29, 1990 and March 13, 1990, two shareholders exchanged debt
totalling $58,464 (unaudited) for 2,000,000 (unaudited) and 52,500,000
(unaudited) shares, respectively of the Company's $.00001 par value common
stock. This amount is reflected as shares exchanged for shareholder debt in the
accompanying financial statements.
Note C: Property and equipment
As of June 30, 1996, major classes of property and equipment consisted of:
June 30, 1996
-------------
Equipment.......................................................... $ 1,414
Less accumulated depreciation...................................... (1,414)
-----------
$ -
=======
Depreciation expense for the year ended June 30, 1996 totalled $68.
F-12
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes Consolidated to Financial Statements, Continued
June 30, 1996
Note D: Theme Park
As of November 22, 1991, the Board of Directors approved a plan to terminate
preliminary development of a theme park, tentatively named "the Sedona Spirit
Theater", and on November 22, 1991, the Board of Directors approved the sale of
three parcels of land to a shareholder in exchange for debt cancellation, debt
assumption and a note, totalling $950,000 (unaudited). The land, located in
Sedona, Arizona had been acquired for development of the theme park. The
following results of operations of development of the Sedona Spirit Theater
project are included in the loss on Theme Park development:
Inception
to
1996 1995 Disposition
---- ---- -----------
(Unaudited)
Revenues.......... $ - $ - $87,376
Costs and expenses - - (728,662)
Gain on debt
restructuring... - - 28,581
------------ ------------ ------------
$ - $ - $ (612,705)
========== ========== ===========
Note E: Income taxes
At June 30, 1996, deferred taxes consisted of the following:
June 30,
1996
--------
Deferred tax asset, net
operating loss carryforward............... $ 199,125
Deferred tax liabilities.................... -
Valuation allowance......................... (199,125)
------------
Net deferred taxes........................ $ -
============
The Company has available, as of June 30, 1996, unused Federal operating loss
carryforwards of approximately $586,023 and State operating loss carryforwards,
where the Company is still registered, of approximately $522,510 which expire
through the years 2011 and 2011, respectively. The loss carryforward will not be
available to the Company should its line of business or its ownership change
substantially.
F-13
<PAGE>
HAVENWOOD VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes Consolidated to Financial Statements, Concluded
June 30, 1996
Note F: Loss of control
If the Company is successful in its effort to merge with or acquire an
existing privately held company, the majority of the control of the Company may
rest with the former shareholders of the merged or acquired company. Therefore,
significant changes may be made to the present slate of officers and directors
of the Company.
Note G: Going concern
As of June 30, 1996, the Company had no operations. Management is
evaluating a plan to raise working capital and search for and consummate a
merger with or acquisition of, a private operating company. There is no
assurance that a suitable candidate will be found. Various shareholders will
inject cash into the Company as needed to pay for operating expenses. Management
plans to continue this arrangement until such time as a merger or acquisition,
if ever, is consummated.
F-14
<PAGE>
ITEM 9. DISAGREEMENTS IN ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth the names of the Registrant's directors and officers.
The directors of the Company are elected annually by the shareholders and the
officers are appointed annually by the Board of Directors. Officer/ Director
Name Age Office Since
- ---- --- ------ -----
Mark Leibovit 48 President and
Director April 1988
Alice Leibovit 47 Secretary,
Treasurer
and Director April 1988
Reed Slatkin 48 Vice President,
and Director June 1990
Mark and Alice Leibovit are husband and wife.
Mark Leibovit
Mark Leibovit is a technical stock market analyst and is caretaker/proprietor of
his trademarked VOLUME REVERSAL. His newsletter, THE VOLUME REVERSAL SURVEY,
written since 1979, was formally made available on a subscription basis late in
1984. Mr. Leibovit also provides his analysis intra-day on THE LEIBOVIT LINE, a
900 telephone hotline service.
In 1977, Mr. Leibovit became a member of both the Midwest Options Exchange and
the Chicago Board Options Exchange serving as Market Maker. In 1979, he joined
Freehling & Co. as Director of Research and in July 1986, he joined Rodman &
Renshaw, Inc. as Technical Research Director, a position he held until December
1987. From 1987 until 1990 he served as a technical consultant to Rodman &
Renshaw, Inc.
On June 23, 1994, Mark Leibovit resigned as Vice President and director of TRE
Group, Inc. (formerly Talking Rings Entertainment, Inc.), a public company
formed in 1988 to develop motion pictures for theatrical and television release.
7
<PAGE>
Alice Leibovit
Alice Leibovit has acted as Secretary/Treasurer for Almarco Trading Corporation,
the publisher of THE VOLUME REVERSAL SURVEY since 1979 and has been actively
involved in the day to day management of the business in the capacity of office
manager and maintains company books and records. Mrs. Leibovit holds a Bachelor
of Arts with high honors from the University of Florida, Gainseville. Due to a
serious illness, Mrs. Leibovit has taken a temporary leave of absence from the
Company.
Reed Slatkin
Reed Slatkin, has been Vice-President of Finance and a director of Havenwood
Ventures, Inc. since June 25, 1990 and has been an advisor since the founding of
the Company. He also served as Vice-President of Finance for Talking Rings
Entertainment, Inc. Mr. Slatkin has been a private investor and money manager
for the past 13 years. He has been Executive Director of R. Slatkin & Associates
where he has headed venture capital projects for more than 13 years. He holds a
B.A. from the University of Michigan and did graduate work at the University of
California, Berkeley. On June 23, 1994, Reed Slatkin resigned as Vice-President
of Finance for TRE Group, Inc. (formerly Talking Rings Entertainment, Inc.) a
public company formed in 1988 to develop motion pictures for theatrical and
television release.
ITEM 11. EXECUTIVE COMPENSATION
During the fiscal year ended June 30, 1996, no compensation was paid to any
officer of the Registrant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 30, 1996 the number and percentage of
shares of Common Stock of the Registrant, owned of record and beneficially by
each officer and director of the Registrant any by any other person owning more
than 5% of the Registrant's outstanding Common Stock, and by all officers and
Directors.
Percent
of
Name Numbers Class
Mark Leibovit, 96,738,899 Common Shares 37.4%
Alice Leibovit (1)
Reed Slatkin 71,362,566 Common Shares 27.6%
All directors and 168,101,465 Common Shares 65.0%
officers as a
group (3 persons)
8
<PAGE>
(1) May be deemed to a parent and promoter as such terms are defined under the
Securities Act of 1933. Addresses for the persons listed are P.O. Box 1451,
Sedona, Arizona 86336. Mark and Alice Leibovit are husband and wife.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reed Slatkin ("Slatkin") acquired 52,500,000 shares as additional consideration
under an Agreement dated June 25, 1990 (amended November 14, 1990) between
Slatkin and Mark A. Leibovit, Arnold L. Leibovit, the Registrant, SST
Productions, Inc. ("SST"), and Talking Rings Entertainment, Inc., a Delaware
Corporation, pursuant to which Slatkin agreed to advance funds to the
Registrant, from time to time, of up to $450,000 to be used for working capital
purposes of SST including expenses incurred in connection with the proposed
offering of limited partnership interests. The total advance came to $453,500.
The offering of limited partnership interests expired on December 31, 1991. On
May 26, 1992, Arnold Leibovit sold 34,375,132 shares owned by him in Havenwood
Ventures, Inc. Half this amount or 17,187,566 shares was sold to Mark Leibovit,
President of the Registrant and half these shares or 17,187,566 shares was sold
to Reed Slatkin, Vice- President of the Registrant. The shares were acquired by
Messrs. Slatkin and Leibovit for investment purposes. Arnold Leibovit still owns
5,291,535 shares of Havenwood Ventures, Inc. Mr. Slatkin currently owns 27.6% of
all outstanding common shares. Mark Leibovit together with his wife, Alice,
currently owns 37.4% of all outstanding common shares.
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements:
The following financial statements are included in Part II, Item 8 as of
June 30, 1996: Balance Sheet; for the two years ended June 30, 1996:
Statements of Operations, Statements of Changes in Stockholder's Equity,
Statements of Cash Flows and Notes to Financial Statements.
2. Financial Statements Schedules:
All schedules have been omitted because they are not applicable.
(b) 3. Exhibits: None.
Reports on Form 8-K: No reports on Form 8-K were filed during the period
covered by this report.
9
<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
_____________________, 1996 on its behalf by the undersigned, thereto duly
authorized.
HAVENWOOD VENTURES, INC.
By /s/ Mark Leibovit
--------------------
Mark Leibovit
President
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 indicated on _____________________, 1996.
/s/ Mark Leibovit
-----------------
Mark Leibovit
President and Director
(Principal Executive Officer)
/s/ Alice Leibovit
------------------
Alice Leibovit
Treasurer and Director
(Principal Financial &
Accounting Officer)
/s/ Reed Slatkin
----------------
Reed Slatkin
Vice-President and Director
10
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