SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
Mark One
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO N/A
COMMISSION FILE NUMBER: 33-23473-NY
VESTEX, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 11-2917728
------------------------ ----------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
7 OLD LANTERN ROAD, NORWALK, CONNECTICUT 06851
------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (203) 846-4981
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock. $0.001 par value
(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 files such reports), and (2) has been subject to
such filing requirements for the past 90 days. (1) [ ]No as to filing;
(2) [X] Yes as to requirement.
<PAGE>
As of March 15, 2000, the aggregate market value of the voting stock held by
non-affiliates of the Registrant, computed by reference to the average of the
bid and ask price on such date was $663,000.
As of March 15, 2000, the Registrant had outstanding approximately 120,000,000
shares of common stock ($.001 par value).
An index of the documents incorporated herein by reference and/or annexed as
exhibits to the signed originals of this report appears on page 10.
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
PART I ...................................................................... 4
Item 1. DESCRIPTION OF BUSINESS......................................... 4
Item 2. DESCRIPTION OF PROPERTIES....................................... 5
Item 3. LEGAL PROCEEDINGS............................................... 5
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............. 5
PART II ..................................................................... 5
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS............................................ 5
Item 6. SELECTED FINANCIAL DATA......................................... 6
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS............................ 7
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................... 9
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES........................... 9
PART III .................................................................... 10
Item 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND
CONTROL PERSONS, COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT................... ........................... 10
Item 11. EXECUTIVE COMPENSATION.......................................... 10
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT..................................................... 11
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................. 11
PART IV ..................................................................... 12
Item 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON
FORM 8K........................................................ 12
SIGNATURES................................................................... 12
Page 3
<PAGE>
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
A. GENERAL DESCRIPTION
Vestex, Inc. ("Vestex"), a development stage company, was organized on June 22,
1988 and became a publicly owned company on March 15, 1989. Vestex had been
organized to evaluate, structure and complete an acquisition of a business,
which it believed had potential for successful development. On November 21,
1990, Vestex acquired all the issued and outstanding shares of common stock
of Nuvision Entertainment, Inc. ("Nuvision"), also a development stage
company (the "Acquisition"). The Acquisition was the only such transaction
consummated by Vestex. As a result of the Acquisition, Nuvision became a
wholly owned subsidiary of Vestex.
Nuvision, founded in January 1990, was a company that was going to create,
develop and market interactive entertainment products and video game software
primarily for use with the Sega Genesis System, a 16-bit, video game system
from Sega Enterprises Ltd., a Japanese-based manufacturer and world leader
in the high technology arcade game business and video game market.
On February 26, 1992, the Company ceased operations due to the unsuccessful
efforts in raising additional capital required to fulfill its financial needs
to become a viable on-going business enterprise. The company wound up its
affairs and liquidated its assets to pay off the then existing liabilities.
Since February 26, 1992, the Company has been dormant and once again entered
the development stage to evaluate, structure and complete an acquisition of a
business, which would have potential for successful development.
In the latter half of 1999, the Company replaced its Board of Directors with
two new members and has directed these individuals to seek, identify, engage
and acquire a new business on behalf of the Company.
Vestex was incorporated in New York, and Nuvision, was dissolved in 1994 and
was a Delaware corporation. Therefore, the Company is the sole remaining
entity.
The Company's stock is currently quoted on the NASD OTC Bulletin Board, and
there have been no reorganizations in the past three years.
The Company's business is not dependent upon one or a few major customers, and
no government regulations are known to have any effect on its respective
business.
The Company has not booked any significant research and development costs and,
therefore, does not expect to pass any costs to any customers. The Company has
no product development and research and development costs.
At the present time, the Company does not have any full or part-time employees.
The Company's mailing address is 7 Old Lantern Rd., Norwalk, Connecticut 06851.
The telephone number of its principal executive office is (203) 846-4981.
Page 4
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES
The Company currently occupies space at the offices of the President and
Director of the Company on a rent-free basis until the Company commences
revenue-generating activities. The Company believes that this office
arrangement is adequate to meet its needs for the immediate future.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any lawsuit or legal proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company presently does not have any matters pending which would require
shareholder vote or approval. The Company anticipates scheduling its first
post reorganizational shareholder annual meeting on April 17, 2000. At this
shareholder meeting no extraordinary matters are anticipated to be presented
and the shareholder meeting is anticipated to be devoted solely to election
of directors; ratification of the appointment of the Company's independent
auditors; and other routine business as may come before the meeting.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company is authorized to issue 120,000,000 shares of common stock, par
value $.001 per share. As of March 15, 2000, there were 120,000,000 shares
issued and outstanding, all of which were fully paid and non-assessable.
Holders of shares of common stock are entitled to one vote for each share
held. There are no preemptive, subscription, conversion or redemption
rights pertaining to the shares. Holders of the shares are entitled to
receive such dividends as may be declared by the Board of Directors out
of assets legally available and to share ratably in the assets of the Company
available upon liquidation. The holders of shares do not have the right to
cumulate their votes in the election of directors and, accordingly, the
holders of more than 50% of all the shares outstanding can elect all the
directors. Remaining shareholders will be able to elect any directors.
The common stock of the Company is traded on the OTCBB market. The high and
low bids quotations for the quarters for the last two years are listed below.
<TABLE>
<CAPTION>
Common Stock
High Low
------ ------
<S> <C> <C>
Fiscal 1998
1st quarter .02 .025
2nd quarter .02 .025
3rd quarter .02 .025
4th quarter .02 .025
Fiscal 1999
1st quarter .05 .001
2nd quarter .05 .001
3rd quarter .05 .001
4th quarter .05 .001
</TABLE>
Page 5
<PAGE>
The quotations set forth in the above table reflect inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.
As of March 15, 2000, there were approximately 110 holders of record of the
Company's common stock.
The Company has not paid any cash dividends in the past and does not anticipate
paying cash dividends in the foreseeable future. Management intends to reinvest
earnings, if any, in the development and expansion of the Company's business.
The declaration in the future of any cash dividends will be at the election
of the Board of Directors and will depend upon the earnings, capital
requirements, agreements with lenders, and financial position of the Company,
general economic conditions and other pertinent factors.
Recent Sales of Unregistered Securities:
Following is a summary of sales of unregistered securities through the date of
filing of this Form 10-KSB. All securities were issued as restricted common
shares, which are subject to Rule 144 of the Securities and Exchange
Commission. Generally, Rule 144 requires shareholders to hold the shares
for a minimum of one year before sale. In addition, officers, directors and
more than 10% shareholders are further restricted in their ability to sell
such shares. There have been no underwriters of these securities and no
commissions or underwriting discounts have been paid.
<TABLE>
<CAPTION>
Shares Value
Transaction Description Issued Received
- ----------------------------- ---------- -----------
<S> <C> <C>
Sale of 144 common stock for debt conversion 11,000,000 $11,000
Consulting expenses 29,000,000 $29,000
</TABLE>
The above transactions qualified for exemption from registration under
Sections 3(b) or 4(2) of the Securities Act of 1933. Private placements for
cash were non-public transactions. The Company believes that all such
investors are either accredited or, either alone or with their purchaser
representative, have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the
prospective investment.
ITEM 6. SELECTED FINANCIAL DATA
The following tables should be read in conjunction with Management's Discussion
and Analysis of Financial Condition and Results of Operations, and the Financial
Statements and the notes thereto appearing elsewhere in this report. The
financial data in the following tables has been selected by the Company and
has been derived from the financial statements of the Company for the year
ended December 31, 1999.
Page 6
<PAGE>
<TABLE>
<CAPTION>
Income Statement Data
Year Ended December 31,
------------------------------------------
1999 1998
------------------------------------------
<S> <C> <C>
Costs and expenses 3,086 -
Net loss and accumulated deficit 4,086 1,000
Loss per share .00 .00
Weighted average shares outstanding 80,397,260 80,000,000
Balance Sheet Data
December 31,
-----------------------------------------
1999 1998
-----------------------------------------
Total assets 29,000 -
Total liabilities 14,386 10,300
Working capital 14,614 -
Deficit accumulated during
development stage 14,386 10,300
Stockholders' equity 14,614 <10,300>
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis may contain forward-looking statements
that involve risks and uncertainties. The statements contained in this Form
10-KSB Report that are not purely historical are forward-looking statements
within the meaning of Section 21E of the Exchange Act, including, without
limitation, statements regarding the Company's expectations, beliefs,
estimates, intentions, and strategies about the future. Words such as
anticipates, expects, intends, plans, believes, seeks, estimates, predicts,
forecasts or variations of such words and similar expressions are intended
to identify such forward-looking statements, but their absence does not mean
the statement is not forward-looking. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties, and
assumptions that are difficult to predict; therefore, actual results may
differ materially from those expressed or forecast. Any such forward-looking
statements are subject to certain unforeseen factors, which may cause a
discrepancy with actual results.
Currently, the Company has certain commitments to loan the Company enough money
to sustain operations. However, in order to fund any activities that may be
acquired by the Company, the Company expects that it will have to either borrow
or seek additional monies through a registration of newly issued shares of
common stock of the Company. At this point in time, the Company has not
sought or is seeking additional monies until it determines what the future
activities of the company will be.
The following constitutes Management's summary of what it believes to be certain
significant financial data, but is limited by and is subject to the more
complete Audited Financial Statements as attached. This section should be
reviewed in conjunction with the Financial Statements and notes.
Page 7
<PAGE>
LIQUIDITY
During the years ended December 31, 1999 and 1998, the Company's working capital
increased by approximately 14,614. The Company does not currently have
sufficient capital in its accounts, nor sufficient firm commitments for
capital to assure its ability to meet its current obligations or to continue
its planned operations. The Company is continuing to pursue working capital
and additional revenue through new business acquisitions, but there is no
assurance that any of the planned activities or acquisitions will be
successful.
CAPITAL RESOURCES
As a result of its limited liquidity, the Company has limited access to
additional capital resources. The company does not have the capital to
totally fund the obligations that have matured or debts that remain currently
payable or other debts incurred during the most recent fiscal years.
The Company currently has been funded by certain entities and related
individuals. These entities and individuals have limited capital that they
can lend to the Company to meet its current obligations and fund any operating
losses. The current management of the Company is seeking additional private
financing from certain outside parties to continue to pursue the business
activities of the Company. Though the obtaining of the additional capital
is not guaranteed, the management of the company believes it will be able to
obtain the capital required to meet its current obligations and pursue its
business activities.
PLAN OF OPERATIONS
The Company is a development stage corporation, with planned operations to
engage in the business of seeking a potential business acquisition or other
business opportunities should they arise.
The Company has financed its previous operations through the sale of its
securities and incurring debt and other vendor financing. The Company will
have to seek additional outside financing due to the losses incurred in its
operations, and with no current business activities, operations will not
provide any cash flows to continue its business activities.
During the next twelve months, the Company plans to satisfy its cash
requirements by additional equity financing. There can be no assurance
that the company will be successful in raising additional equity financing
during this period. If the Company is not able to raise equity capital, it
will be able to satisfy its cash requirements for the next twelve months by
contributions or loans from its officers and directors, or affiliated
entities that they may have some control or influence. The Company may
undertake a subsequent private placement of its common stock in order to
raise future development and operating capital, but at this point in time
the Company has not authorized such activities. The Company depends upon
capital to be derived from future financing activities such as subsequent
offerings of its stock. There can be no assurance that the Company will be
successful in raising the capital it requires unless the Company identifies
and acquires a new business activity.
The Company is still considered to be a development stage company, with no
significant revenue, and is dependent upon the raising of capital through
placement of its common stock. There can be no assurance that the Company
will be successful in raising the capital it requires through the sale of
its common stock.
Page 8
<PAGE>
There are no contemplated product research and development costs the Company
will perform for the next twelve months. There is no expected purchase or
sale of any plant or significant equipment, and there are no expected
significant changes in the number of employees contemplated. The Company
has no current material commitments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
See attached audited financial statements as more fully described in Item 14.
to this 10-KSB report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On February 29, 2000, The Board of Directors of the Company approved the
engagement of David T. Thomson as its independent auditors for the fiscal
years ended December 31, 1999 and 1998 to replace the firm of Ernst & Young,
who had not audited the Company's financial statements since December 31, 1990.
The report of Ernst & Young as of and for the year ended December 31, 1990 did
not contain an adverse opinion or a disclaimer of opinion and were not qualified
or modified as to audit scope, or accounting principles.
In connection with the audit of the Company's financial statements as of and for
the year ended December 31, 1990, there were no disagreements with Ernst & Young
on any matters of accounting disclosure, or auditing scope and procedures which,
if not resolved to the satisfaction of Ernst & Young, would have caused them to
make reference to the matter in their report.
The Company, if requested will furnish a letter from Ernst & Young, addressed to
the Securities and Exchange Commission, stating that it agrees with the above
statements.
Page 9
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
<TABLE>
<CAPTION>
Name Age Principal Occupation for Past Five Years and
- ---- --- Current Public Directorships or Trusteeships
--------------------------------------------
<S> <C> <C>
C.T. Yeh 59 Director and President of the Company since 1999;
Mr. Yeh is the President of CT Yeh Consulting, a
multidiscipline business professional with
extensive experience in mining, metallurgical
engineering, project finance, international in
vestment and finance, and management. Most
recently, he served as Acting Chairman, CEO and
President of China Energy Resources Corporation,
an Amex listed company. From 1992 to 1996, Mr.
Yeh served as a Managing Director for Ridgewood
Partners Ltd., a New York based investment
banking concern. Mr. Yeh holds a Bachelor of
Science Degree from Cheung Kung University in
Taiwan, and a Master of Science degree in
Metallurgical Engineering from Michigan
Technological University, and an M.B.A. with
honors from University of Delaware.
Ivan Wong 30 Director and Secretary of the Company since 1999;
Mr. Wong is currently a registered Pharmacist and
Professional Consultant. He was employed at
Walgreen's Corp since 1995. Mr. Wong also is a
Director of WB GROWTH FUND, LLC., an investment
fund that finances companies mainly in the
pharmaceutical, biotech, internet and tele-
communications areas. Mr. Wong holds a
Doctorates Degree in Pharmacy from the University
of Arizona.
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 1999, the Company had not paid any salary or other
remuneration to its President and Secretary, who are the company's only
executive officers and employees. The Company has not accrued any
compensation to any officer or director for services rendered through
December 31, 1999.
Page 10
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 15, 2000, the names, addresses
and number of shares of Common Stock beneficially owned by all persons known
to the management of the Company to be beneficial owners of more than 5% of
the outstanding shares of Common Stock, and the names and number of shares
beneficially owned by all directors of the Company and all executive officers
and directors of the Company as a group (except as indicated, each beneficial
owner listed exercises sole voting power and sole dispositive power over the
shares beneficially owned):
<TABLE>
<CAPTION>
Shares Percent of
Benficially Outstanding
Name and Address Owned Common Stock
- ---------------- ----------- ---------------
<S> <C> <C>
CT Yeh (1)....................... 1,000,000 .8%
7 Old Lantern Rd.
Norwalk, CT 06851
Hyperzone Holding Corp. .......... 54,000,000 45.00%
260 W. 52nd St. #7J
NY, NY 10019
Ivan Wong (3) .................... 10,000,000 8.33%
Zoom2net Corp. ................... 29,000,000 24.16%
All directors and executive ...... 11,000,000 9.13%
Officers of the Company as a
Group (three individuals)
__________________
* Less than 1%.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In August 1999, the Company entered into an agreement with WB GROWTH FUND, LLC.
to loan the Company working capital as needed. In November 1999, the Company
additionally had received an agreement with an individual to put in working
capital as needed with an overall limit of $40,000. As of December 31, 1999,
$1,700 and $7,828 respectively were lent to the Company. As of March 14,
2000, WB GROWTH FUND, LLC. and the individual lent the Company $5,400 and
$8,828, respectively. For any moneys lent by the above Corporation or
individual, an interest rate of 8% per annum will be paid.
CT Yeh, a director, is the President and Director of the Company.
Ivan Wong, a director and Secretary of the Company, is the President of
WB GROWTH FUND, LLC.
The Company believes that all purchases from or transactions with affiliated
parties were on terms and at prices substantially similar to those available
from unaffiliated third parties.
Page 11
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this Report:
1. Financial Statements (at pp. 13-20)
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act,
the registrant has duly caused this report to be signed by the
undersigned, "hereunto duly authorized".
Vestex, Inc.
(Registrant)
/s/ C.T. YEH Date: April 17, 2000
C.T. Yeh
President/Director
/s/ IVAN WONG Date: April 17, 2000
Ivan Wong
Secretary/Director
Page 12
<PAGE>
Independent Auditor's Report
Board of Directors and Stockholders
VESTEX, INC.
I have audited the accompanying balance sheets of Vestex, Inc. (a development
stage company) as of December 31, 1999 and 1998 and the related statements of
operations, stockholders' equity and cash flows for the years then ended and
from January 1, 1997 to December 31, 1999. These financial statements are
the responsibility of the Company's management. My responsibility is to
express an opinion on the financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I 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 significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provided a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Vestex, Inc. of December 31, 1999
and 1998, and the results of its operations and its cash flows for the years
then ended 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 Notes 3 and 4, the
Company is in the development stage and has sustain significant losses from
inception to date and there is no assurance that the Company can realize
sufficient revenues from its products and services to attain profitable
operations. These matters raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans regarding those matters is
also discussed in Note 3 and 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Salt Lake City, Utah
April 4, 2000
Page 13
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ - $ -
Prepaid expenses 29,000 -
------------ ------------
Total Current Assets 29,000 -
------------ ------------
TOTAL ASSETS $ 29,000 $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 4,772 $ 10,300
Advances from shareholders and related parties 9,528 -
Accrued interest payable 86 -
------------ -----------
Total Current Liabilities 14,386 10,300
------------ -----------
STOCKHOLDERS' EQUITY/(DEFICIT):
Capital stock, $.001 par value; 120,000,000
shares authorized; 109,000,000 and 80,000,000
shares issued and outstanding at December 31, 1999
and 1998 respectively 109,000 80,000
Additional paid-in capital 420,167 420,167
Retained earnings/(loss) (500,167) (500,167)
Deficit accumulated during the development stage (14,386) (10,300)
------------ -----------
Total Stockholders' Equity/(Deficit) 14,614 (10,300)
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY/(DEFICIT) $ 29,000 $ -
============ ===========
</TABLE>
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
February 27,
Year Ended 1992
---------------------------- Through
December 31, December 31, December 31,
1999 1998 1999
------------ ------------ -------------
<S> <C> <C> <C>
SALES, Net of Returns,
Allowances and Discounts $ - $ - $ -
COST OF SALES - - -
------------ ------------ ------------
Gross margin - - -
------------ ------------ ------------
EXPENSES:
Depreciation and amortization - - -
General and administrative expenses 3,000 - 6,472
------------ ------------ ------------
Total expenses 3,000 - 6,472
------------ ------------ ------------
TOTAL OPERATING INCOME (EXPENSE) (3,000) - (6,472)
OTHER INCOME (EXPENSE)
Interest expense (86) - (86)
------------ ------------ ------------
NET (LOSS) BEFORE TAXES (3,086) - (6,558)
PROVISIONS FOR INCOME TAXES (1,000) (1,000) (7,828)
------------ ------------ ------------
NET (LOSS) $ (4,086) $ (1,000) $ (14,386)
============ ============ ============
EARNINGS (LOSS) PER COMMON SHARE $ (0.00) $ (0.00) $ (0.00)
============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 80,397,260 80,000,000 80,050,664
============ ============ ============
</TABLE>
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)
FROM FEBRUARY 27, 1992 TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital Stock Additional Retained During the
-------------------------- Paid-in Earnings/ Development
Shares Amount Capital (Loss) Stage Total
------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance-February 27, 1992 80,000,000 $ 80,000 $ 20,167 $ (500,167) $ - $ -
Net loss from February 27,
1992 through December 31, 1997 - - - - (9,300) (9,300)
------------ ------------ ------------ ---------- ------------ ----------
Balance-December 31, 1997 80,000,000 80,000 420,167 (500,167) (9,300) (9,300)
Net loss for the year ended
December 31, 1998 - - - - (1,000) (1,000)
------------ ------------ ------------ ---------- ------------ ----------
Balance-December 31, 1998 80,000,000 80,000 420,167 (500,167) (10,300) (10,300)
Stock issued for contract services,
at par value, December 27, 1999 29,000,000 29,000 - - - 29,000
Net loss for the year ended
December 31, 1999 - - - - (4,086) (4,086)
------------ ---------- ------------ ---------- ------------ ----------
Balance-December 31, 1999 109,000,000 $ 109,000 $ 420,167 $ (500,167) $ (14,386) $ 14,614
============ ========== ============ ========== ============ ==========
</TABLE>
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Vestex, Inc. (the Company), a development stage company, was organized on
June 22, 1988 and became a public company on March 15, 1989. On November 21,
1990, Vestex acquired all the issued and outstanding shares of common stock
of Nuvision Entertainment, Inc. As a result of the acquisition, Nuvision
became a wholly-owned subsidiary of Vestex. Nuvision created, developed and
marketed interactive entertainment products and video game software for the
use with emerging interactive entertainment platforms.
On February 26, 1992, Vestex filed a Form 8-K that due to lack of working
capital, the company ceased operations and liquidated any assets to pay off
existing liabilities. Vestex has let Nuvision dissolve and is the sole
remaining entity.
Vestex reentered the development stage, and as originally organized, is
evaluating business opportunities to structure and complete an acquisition
of a business, which it believes has the potential for successful development.
Vestex will need to raise additional capital to continue its efforts and is
currently evaluating financing alternatives available to complete its business
activities.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Vestex, Inc.(the Company) is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management,
which is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Accounting method - The Company's financial statements are prepared using the
accrual method of accounting.
Earnings (Loss) Per Share - The Company adopted Statement of Financial
Accounting Standard No. 128, "Earnings per Share"("SFAS No. 128"), which is
effective for annual periods ending after December 15, 1997. Earnings (loss)
per share are computed based on the weighted average number of shares
outstanding.
No changes in the computations of diluted earnings per share amounts are
presented since there were no capital stock transactions that would serve
to dilute common shares.
Income Taxes - The Company accounts for income taxes using the asset and
liability method. The differences between the financial statement and tax
bases of assets and liabilities is determined annually. Deferred income tax
assets and liabilities are computed for those differences that have future
tax consequences using the currently enacted tax laws and rates that apply to
the period in which they are expected to affect taxable income. Valuation
allowances are established, if necessary, to reduce deferred tax asset
accounts to the amounts that will more likely than not be realized. Income
tax expense is the current tax payable or refundable for the period, plus or
minus the net change in the deferred tax asset and liability accounts.
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
Statement of Cash Flows - The Company considers (if and when they have any) all
highly liquid investments with maturities of three months or less to be cash
equivalents. The Company had no noncash investing and financing transactions
during 1999 and 1998.
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 amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Comprehensive Income - The Company adopted Statement of Financial Accounting
Standard No. 130, "Comprehensive Income"("SFAS No. 130"), which is effective
for annual periods ending after December 15, 1997. As provided by SFAS
No. 130, reclassification adjustments to prior year amounts are reported in a
separate statement of comprehensive income along with current year components
of comprehensive income. For all periods presented in these financial
statements, comprehensive income(loss) was equal to net income(loss),
therefore, no separate statement has been presented.
Reclassifications - Certain prior year amounts have been reclassified to conform
with 1999 classifications.
Issuance of Shares for Services - Valuation of shares for services and other
acquired assets were based on the fair market value of services received.
NOTE 3 - BASIS OF PRESENTATION AND CONSIDERATIONS RELATED TO CONTINUED EXISTENCE
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company incurred net
losses of $4,086, $1,000 and $14,386 for the years ended December 31, 1999
and 1998 and for the period from February 27, 1992 through December 31, 1999,
respectively. Additionally, the Company has incurred losses of $514,553 from
inception through December 31, 1999. These factors, among others, raise
substantial doubt as to the Company's ability to obtain debt and/or equity
financing and achieve profitable operations.
The Company's management intends to raise additional operating funds through
equity and/or debt offerings. However, there can be no assurance management
will be successful in its endeavors. Ultimately, the Company will need to
achieve profitable operations in order to continue as a going concern.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial Accounting
Standards Board Statement No. 7. It had commenced full-scale operations until
February 26, 1992. On February 26, 1992, it ceased operations, wound down its
business affairs and reentered the development stage. From February 26, 1992
through the date of these financial statements, the Company did not have any
earnings from operations.
NOTE 5 - INCOME TAXES
Deferred income taxes arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending
on the classification of the assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an
asset or liability are classified as current or non-current depending on the
periods in which the temporary differences are expected to reverse.
Amounts for deferred tax assets are as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Deferred tax asset, net of valuation
allowances as per below $ - $ -
============ ============
</TABLE>
The following temporary differences gave rise to the deferred tax asset at
December 31, 1999 and December 31, 1998.
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Tax benefit of net operating loss
carryforward $ 174,948 $ 173,558
Valuation allowance for judgment of
realizability of net operating loss
carryforward in future years (174,948) (173,558)
</TABLE>
<PAGE>
VESTEX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Because the Company has not generated taxable income since its inception, no
provision for income taxes has been made. The Company can carryforward
$514,533 in net operating losses as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
------------
<S> <C>
2005 $ 466,250
2006 33,917
2007 9,300
2008 1,000
2014 4,086
----------
$ 514,533
</TABLE>
NOTE 6 - RELATED PARTY TRANSACTION
The Company currently utilizes office space on a rent free basis from an officer
and director of the Company until revenue generating operations commence. The
value of the rent has been deemed to be of nominal value.
The same officer and director and shareholders have made certain advances to the
company. The advances have an interest rate of 8% are unsecured and are to be
repaid within two years. The above have a right of conversion to convert debt
to equity.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
At December 31, 1999, the Company had no significant commitments and
contingencies.
NOTE 8 - STOCKHOLDERS' EQUITY
Subsequent to year end, the Company issued 11,000,000 shares of its common
stock to shareholders, officers and directors for monies loaned and for other
services rendered to the Company.
