SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
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, PROMOTERS 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: December 13, 2000
--------------------
C.T. Yeh
President/Director
/s/ IVAN WONG Date: December 13, 2000
--------------------
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)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
February 27,
Year Ended 1992
---------------------------- Through
December 31, December 31, December 31,
1999 1998 1999
------------ ------------ -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,086) $ (1,000) $ (14,336)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization - - -
Changes in assets and liabilities:
Increase (decrease) in accounts payable (5,528) 1,000 4,722
Increase in advances from shareholder 9,528 - 9,528
Increase in accrued interest payable 86 - 86
Net cash used in operating activities - - -
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FROM FINANCING ACTIVITIES - - -
Net Increase (decrease) in Cash - - -
CASH AT BEGINNING PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
------------ ------------ -------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Stock issued to prepay contract services $ 29,000 $ - $ 29,000
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
</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.
