U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ X ] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required] for the fiscal year ended: May 31, 1996
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[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required] for the transition period
from ___________ to __________
Commission file number: 33-23693
VANDEN CAPITAL GROUP, INC.
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(Name of small business issuer in its charter)
Colorado 84-1090424
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1775 Sherman Street, Suite 1001
Denver, Colorado 80203
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 894-0234
Securities to be registered under Section 12(b) of the Act: None
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Securities to be registered under Section 12(g) of the Act: None
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for at least the past 90
days. Yes X No
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Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ X ]
Issuer's revenues for its most recent fiscal year: $15,498
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Aggregate market value of voting stock held by non-affiliates as of August 30,
1996: $-0-
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(There is currently no trading market for the Issuer's securities.)
Shares of common stock, $.0001 par value, outstanding as of August 30, 1996:
90,015,200
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Documents incorporated by reference: Yes
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Transitional Small Business Disclosure Format (Check one): Yes ; No X
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VANDEN CAPITAL GROUP, INC.
FORM 10-KSB
PART I
Item 1. Description of Business.
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(a) Business Development.
Vanden Capital Group, Inc. (the "Company") was organized under the laws of
the State of Colorado in June 1988, and commenced operations after it completed
its initial public offering of securities in December 1988. The Company has been
engaged in providing business management consulting services since inception,
although during the last several years, the Company has been engaged primarily
in attempting to locate a business to acquire or with which it would combine.
The Company has provided advice and assistance in evaluating and structuring
methods of financing, preparing business plans, and in developing operating
strategies and corporate goals for several clients. From time to time the
Company has assisted clients by providing equity and debt financing or assisting
its clients in obtaining financing from third parties. From time to time the
Company has accepted equity positions rather than cash as payment or partial
payment of fees for its consulting services. Decisions as to the acceptability
of such payment, in lieu of cash, are at the discretion of management.
The consulting services offered by the Company have included analysis of
prospective merger or acquisition candidates, development of financial plans,
operating strategies and corporate goals, and assistance with management
recruitment, product planning, marketing and advertising. The Company has also
assisted clients in establishing relationships with commercial and investment
bankers and other professionals, including legal counsel and independent
accountants.
Through the present, the Company has acquired interests in three separate
businesses, QuikByte Software, Inc., Buyer's Resource, Inc. and Se Tevo, in
partial payment for consulting services provided by the Company.
Subsequent to the end of the 1992 fiscal year, management determined to
modify the Company's business plan to include the identification and evaluation
of business opportunities which might be available for acquisition by the
Company. Such opportunities were to include other companies which were available
for a business combination with the Company through merger or otherwise. To date
the Company has not consummated any such acquisition or combination.
On August 11, 1993, pursuant to management's plan to enter into a business
combination, and after evaluating several potential opportunities, the Company
entered into a letter of intent with western Country Clubs, Inc., a Colorado
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corporation ("Western") to acquire all of the outstanding capital shares of
Western in exchange for "restricted" common stock of the Company which would
have equaled approximately 83.33% of the Company's total outstanding common
stock after the acquisition (the "Western Acquisition"). Subsequent to the
approval of the transaction by shareholders on October of 1993, the Board of
Directors determined that it should not proceed with the acquisition and
terminated the letter of intent.
There is currently no market for the securities of the Company and, to the
best of the Company's knowledge, there has been no market since August 31, 1989.
(b) Business of Issuer.
The Western Acquisition
- -----------------------
As noted above, on August 11, 1993, the Company entered into a letter of
intent with Western and the sole shareholder of Western to acquire all of the
outstanding capital shares of Western in exchange for "restricted" common stock
of the Company which would have approximated 83.33% of the total outstanding
common stock of the Company after the transaction. The shareholders of the
Company approved the transaction on October 22, 1993; however, subsequent to
that date the Board became aware of certain information regarding Western that
caused the Board to conclude that the Company should not complete the Western
Acquisition. The Board then terminated the letter of intent with Western and a
concurrent letter of intent with an underwriter regarding a public offering to
be underwritten following the Western Acquisition. The Board also abandoned the
capital restructuring transactions which had been authorized by the shareholders
in order to complete the Western Acquisition.
Current Operations
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The Company currently maintains an office and keeps its financial and SEC
reports current. Management is presently attempting to locate a business
opportunity to enter into a combination with the Company and will most likely
not continue to solicit consulting services clients.
Consulting and Related Services
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To date, the Company has entered into consulting contracts with two
development stage companies, and, through a subsidiary, co-managed a joint
venture (now inactive) to which it contributed its consulting expertise and
capital to develop and implement a marketing plan.
QuikByte Software, Inc.
Effective April 1, 1989, the Company entered into a consulting agreement
with and acquired an equity interest in QuikByte Software, Inc. ("QuikByte"), a
company formed to develop and market a computer "compiler," a software tool
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which is used to design computer programs. QuikByte completed its initial public
offering of securities in October 1989 and utilized the proceeds to continue
research and development efforts, but to date has not successfully commenced
commercial sales of its products. The consulting agreement was for a two year
term commencing January 1, 1990 at a fee of $1,500 per month. An initial fee of
$15,000, payable upon execution of the agreement, was paid to the Company in the
form of 3,000,000 shares of QuikByte common stock. The Company also purchased
7,000,000 shares of common stock of QuikByte for $35,000. In February 1991 the
10,000,000 shares of Common Stock of QuikByte Software, Inc. owned by the
Company were registered for public sale; however, the Company did not sell any
of the QuikByte shares. In April 1992 the broker-dealer which served as the
principal market maker for securities of QuikByte ceased operations and there
has been no market for the shares of QuikByte since that time. The company's
equity in QuikByte Common Stock was recognized as a loss and written off of the
Company's balance sheet during the fiscal year ended May 31, 1992. At the
present time, the Company has been advised that QuikByte is inactive but is
attempting to sell its computer program to third parties.
Buyer's Resource, Inc.
In August 1989 the Company entered into a consulting agreement with Buyer's
Resource, Inc. (formerly known as The Buyer's Market, Ltd.), a closely held
Colorado corporation. Buyer's Resource, Inc. is engaged in franchising buyer
broker real estate offices and conducting seminars and other marketing campaigns
to promote the concept of "buyer brokerage." The buyer broker is engaged to
represent the real estate purchaser; traditionally, residential real estate
agents and brokers represented only the sellers. Buyer's Resource has received
national media attention (U.S. News and World Report, Money Magazine, Reader's
Digest, USA Today, etc.). At the time of formation of Buyer's Resource, the
Company purchased shares of Series A Preferred Stock representing 36% of the
outstanding equity in exchange for $60,000 in cash and providing a loan
guarantee of $90,000. As of May 31, 1995, Buyer's Resource was indebted to the
bank in the amount of $60,000, which remains subject to the Company's guarantee.
On March 30, 1990, the Company made a $50,000 loan to Buyer's Resource,
represented by a Promissory Note (the "Note") payable on March 15, 1992. The
Note, together with accrued interest of $1,875, was converted into an equity
interest in Buyer's Resource in May 1993, as further described below.
In March 1992, a significant ownership interest in Buyer's Resource was
acquired by a privately held venture capital company which focuses on
investments in specialty retail and consumer direct companies. This investment
provided approximately $800,000 of capital to Buyer's Resource through the
issuance by Buyer's Resource of 800,000 shares of a newly authorized Class A
Cumulative Convertible Preferred Stock (the "Class A Preferred Stock"). In
anticipation of the venture capital investment, in March 1992 Buyer's Resource
effected a recapitalization in which cumulative dividends on its then
outstanding Series A Preferred Stock (owned by the Company) were satisfied
through the issuance of shares of common stock and all outstanding shares of
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common and preferred stock (including the original Series A Preferred Stock then
owned by the Company) were converted to shares of a newly authorized single
class of common stock. The Company received a total of 47,055 shares of common
stock and warrants to purchase an additional 10,195 shares of common stock at a
per share price of $5.68 per share, which expired unexercised on March 23, 1994.
In May 1993, the private venture capital company made an additional
investment in Buyer's Resource of $300,000 through the purchase of an additional
300,000 shares of Class A Cumulative Convertible Preferred Stock. In conjunction
with this investment the Company agreed to convert the $50,000 Note plus accrued
interest into 51,875 shares of Class A Preferred Stock (the same class as those
owned by the venture capital firm). This Class A Preferred Stock is currently
convertible into common stock at the rate of 2.4231 shares of Common Stock per
share of Series A Preferred Stock.
The venture capital company has continued to make investments in Buyer's
Resource. In July 1993, it converted a $250,000 promissory note into an
additional 250,000 shares of Series A Preferred Stock and in May 1994 purchased
an additional 420,000 shares of Series A Preferred Stock for $230,000 in cash
and conversion of $190,000 in short term notes. In addition, $50,000 of cash was
paid for 50,000 shares of Series A Preferred Stock by a third party investor in
May 1994.
On a fully diluted basis (taking into account all outstanding common stock
and securities of Buyer's Resource convertible into common stock), the Company
owns an interest in Buyer's Resource equal to approximately 6.2% of that
company.
Buyer's Resource has never operated profitably; however, the Company has
been advised that Buyer's Resource may soon be profitable. Management has been
advised that Buyer's Resource is currently qualified to sell franchises in all
50 states of the U.S. and to date has sold 83 franchises, 56 of which are
currently operational.
Competition
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The Company has a limited operating history and therefore has been at a
competitive disadvantage to numerous consulting firms which are larger, better
established, have greater finan cial and other resources, more employees, and
more extensive facilities than the Company. This competitive posture can be
expected to continue in the event the Company elects to resume providing
consulting services in the future.
As the Company pursues its additional objective of acquiring business
opportunities through a combination with an operating company or otherwise, it
will face intense competition from a substantial number of businesses and
individuals, many of which will be in a much stronger position than the Company
to attract business opportunities.
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Government Regulation
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Investment Company Act of 1940. Since the Company's activities have
included the purchase of equity interests in its clients, the Company must be
careful to avoid falling within the definition of an "investment company" as set
forth in the Investment Company Act of 1940. In general, in order to avoid being
classified as an "investment company" the Company must be and remain primarily
engaged in a business other than that of investing, reinvesting, owning, holding
or trading in securities. The Company has engaged primarily in the business of
providing consulting services and anticipates that its equity investments will
not be the primary focus of its operations. In the event the Company's business
emphasis shifts to the point where it is primarily engaged in the business of
investing in or owning securities, the Company may need to take additional
precautions to avoid being classified as an "investment company" or may be
forced to register under the Investment Company Act. In summary, the Company
must avoid purchasing investment securities having a value exceeding 40% of the
Company's total assets, exclusive of government securities and cash items, on an
unconsolidated basis. These limitations could prevent the Company from acquiring
securities at times when such acquisitions would otherwise be advantageous, or
force the Company to dispose of securities held by it at times when it would not
be advantageous to do so. If the Company were deemed to be an "investment
company," its activities would be regulated by the Investment Company Act of
1940 which would severely restrict and could adversely affect the activities of
the Company.
Federal and State Securities Regulations. In addition to the Investment
Company Act of 1940, there are a number of other provisions of the federal
securities laws which will affect the Company's proposed operations. For
example, prospective investors should be aware that restrictions imposed by the
federal securities laws, in addition to possible contractual provisions, may
adversely affect the ability of the Company to sell or otherwise distribute
securities acquired by it.
Most, if not all, of the securities which the Company might acquire will be
"restricted securities" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act") and therefore may not be resold unless a
registration statement has been declared effective by the Commission with
respect to such securities or the Company is able to rely on an exemption from
such registration requirements. The registration of securities owned by the
Company is likely to be an expensive and time-consuming process, and the Company
will bear the risk that it will be unable to resell such securities, or that it
will not be able to obtain an attractive price for the securities. The Company
intends to bargain for registration rights when possible. If such rights are not
granted, the Company may sell or distribute securities pursuant to an exemption.
The 10,000,000 shares of QuikByte Software held by the Company were registered
for public sale in February 1991; however, a strong enough market never existed
to allow the Company to sell those shares even though they were registered.
The most likely exemption available to the Company is Section 4(1) of the
Securities Act, which in effect exempts sales of securities not involving a
distribution of the securities. This exemption would permit a private sale of
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securities held by the Company, and in some cases a public sale, if the
provisions of Rule 144 under the Securities Act are satisfied. Among other
things, Rule 144 requires that public information be available on the company,
that the securities be sold in "brokers' transactions," requires a two-year
holding period prior to the sale of the restricted securities, and establishes
volume limitations on the amount of restricted securities which can be sold
within certain defined time periods. Rule 144 also permits the sale of
securities by a party who is not an affiliate of the issuer of the securities,
and who has satisfied a three-year holding period, without any quantity
limitations.
Other Governmental Regulation. Should the Company complete an acquisition
or business combination, its activities could become subject to numerous
governmental regulations, depending upon the nature of the business then being
conducted by the Company.
Employees and Consultants
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The Company's officers and directors presently serve on an as needed basis
and are not paid salaries. The Company believes that this arrangement is
adequate to meet its needs in its current mode of operations. See "Management."
Item 2. Description of Property.
------------------------
The Company currently maintains its offices in the business office of two
of its directors, at 1775 Sherman Street, Suite 1001, Denver, Colorado, for
which the Company pays $500 per month for office space, bookkeeping and clerical
services. See "Certain Transactions." The office facilities are provided to the
Company pursuant to an oral agreement. Management believes that this arrangement
is suitable for the current operations of the Company.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any legal proceedings and no such proceedings
are known to be contemplated.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
During the fourth quarter of the most recently completed fiscal year, the
Company did not submit any matter to a vote of its shareholders.
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PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
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(a) Market Information.
The Company's securities are not eligible for listing on the NASDAQ system,
and trading, if any, is limited to the over-the-counter market. The Common Stock
has been quoted from time to time in the "Pink Sheets" maintained by the
National Quotation Bureau, Inc. Since August 30, 1989, no established trading
market has existed for the Company's securities and, to the best of the
Company's knowledge, there are no market-makers for the Company's securities.
(b) Holders.
The approximate number of record holders of the Company's Common Stock,
$.0001 par value, as of August 31, 1996, was 195. This figure does not reflect
an indeterminate number of shareholders whose shares are held by brokers in
"street name."
(c) Dividends.
The Company has not paid a cash dividend with respect to its common
stock and does not intend to pay a cash dividend in the foreseeable future.
Item 6. Management's Discussion and Analysis.
-------------------------------------
Possible Business Combinations
Management believes that the Company would be attractive to an operating
business which is currently private and which desires to become public through a
reverse acquisition or other transaction. The Company has adequate funds to
carry out its current plan of operations for the foreseeable future.
Liquidity and Capital Resources
At May 31, 1996, the Company had net assets of $417,056 and working capital
of $413,016 all of which was in liquid (cash or cash equivalent) assets. A total
of $65,000 of the Company's cash is pledged as collateral under an agreement
with a bank pursuant to which the Company guaranteed a loan from the bank to
Buyer's Resource, Inc., a company in which the Company owns an equity interest.
The balance owing under that loan as of August 30, 1996, was $60,000 and the
Company is not aware of any facts that exist at this time which would make it
likely that the Company would be called upon to make any payments under this
guarantee.
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Results of Operations
During the year ended May 31, 1996, the Company had a net loss of $19,909
on total income of $15,498, all of which was interest income. The net loss
resulted primarily from expenses of $31,984 incurred by the Company in
connection with legal, accounting, rent and clerical expenses. For the 1995
fiscal year, the Company had a net loss of $2,736 on total income of $14,970,
all of which was interest income.
Due to the failure of the Company to become profitable as a business
consulting company over the years since inception, management determined in 1992
that it should devote its primary efforts to locating an attractive business
opportunity for the Company. Over the past three years, management has actively
devoted time to this end and has not committed resources to efforts to solicit
additional consulting clients for the Company. As a result, the Company has
received essentially no consulting income during 1995 and 1996. At the same
time, interest income has decreased (primarily due to lower interest rates and
secondarily as a result of lower cash balances on deposit).
Management is not aware of any known trends or uncertainties which are
likely to have a material impact upon the Company's short-term or long term
liquidity, capital commitments, net revenues or business prospects. Management
is attempting to conserve the cash assets of the Company so as to maximize the
attractiveness of the Company to potential business combination candidates.
Item 7. Financial Statements.
---------------------
The Company's audited financial statements follow the signature page of
this report.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
----------------------------------------------------------------
Since inception, the Company's independent accountants have not resigned,
been dismissed or declined to stand for reelection.
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PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act
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(a)(b) Identification of Directors, Executive Officers and Significant
Employees.
The officers, directors and significant employees of the Company are listed
below. The directors of the Company are elected to hold office until the next
annual meeting of shareholders and until their respective successors have been
elected and qualified. Officers of the Company are elected by the Board of
Directors and hold office until their successors are elected and qualified.
Name Age Position
- ---- --- --------
A. Thomas Tenenbaum 44 Director, President and Treasurer;
Albert Brenman 70 Director and Secretary
Janice V. Budzen 38 Director
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Business Experience of Officers, Directors and Significant Employees.
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A. Thomas Tenenbaum has served as a director of the Company since its
formation in June 1988 and as President and Treasurer since November 1989. He
served as Vice President and Secretary of the Company from June 1988 until
November 1989. From 1976 to 1979, Mr. Tenenbaum served with the United States
Securities and Exchange Commission in the Division of Corporation Finance and
the Division of Enforcement in the New York Regional Office. From 1980 until
September 1992, Mr. Tenenbaum practiced law and was an officer, director and
shareholder in the firm of Brenman Raskin Friedlob & Tenenbaum, P.C. Thereafter
and through November 1993 Mr. Tenenbaum practiced law with the firm of A. Thomas
Tenenbaum, P.C. Since November 1993 and through the present Mr. Tenenbaum has
served as a director and general counsel of CVD Services, Ltd., a privately held
venture capital company. Mr. Tenenbaum also is presently of counsel to the firm
of Brenman Key & Bromberg, P.C. Mr. Tenenbaum's legal practice is focused
primarily on securities law with emphasis on corporate and partnership finance.
Mr. Tenenbaum received his B.A. degree (Magna Cum Laude) from Fordham University
in 1973 and graduated from Fordham University School of Law in 1976. Mr.
Tenenbaum devotes as much of his time as is necessary to the Company's business.
Albert Brenman has been Secretary and a director of the Company since
November 21, 1989. Mr. Brenman has been a practicing attorney in Denver,
Colorado since his admission to the bar in 1953. From March 1 1994 through the
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present, Mr. Brenman has served as an officer, director and principal
shareholder in the Denver, Colorado law firm of Brenman Key & Bromberg, P.C. and
practices primarily in the areas of corporate, partnership and securities law.
For more than five years prior to March 1, 1994, Mr. Brenman was an officer,
director and principal shareholder in the law firm of Brenman Raskin & Friedlob,
P.C. From September 1986 until its acquisition of Hughes Wood Products, Inc. in
June 1991, Mr. Brenman served as president and a director of Firma, Inc. a
publicly held company, continuing as a director of Hughes until January, 1994.
Mr. Brenman received his B.S.B.A. degree from the University of Denver in 1950
and his LL.B. degree from the University of Denver College of Law in 1953. He is
a member of the Colorado and Denver Bar Associations. Mr. Brenman devotes as
much of his time as is necessary to the Company's business.
Janice V. Budzen has been a director of the Company since October 1988,
also serving as Treasurer from October 1988 until November 1989. Since February
1987 Ms. Budzen has been the president of Genoa, Inc., a privately-held ski-wear
manufacturing company located in Winter Park, Colorado. From May 1986 to
February 1987, Ms. Budzen was a loan administrator with the Bank of Winter Park,
Winter Park, Colorado responsible for loan compliance with FDIC requirements.
Ms. Budzen received a Bachelor of Arts degree in hotel/restaurant management
from Michigan State University located in East Lansing, Michigan in 1981. Ms.
Budzen devotes so much of her time as is necessary to the affairs of the
Company.
(c) Family Relationships.
There are no family relationships among any of the Company's officers and
directors.
(d) Involvement in Certain Legal Proceedings.
No officer, director, significant employee, promoter or control person of
the Company has been involved in any event of the type described in Item 401(d)
of Regulation S-B during the past five years.
Item 10. Executive Compensation.
-----------------------
(a) General.
Executive Officers. No officer has received any compensation for serving in
such capacity for the Company during the fiscal year ended May 31, 1996.
Bonuses and Deferred Compensation. No executive officer of the Company
received any bonus or deferred compensation during the fiscal year ended May 31,
1996.
Proposed Compensation. No officer and/or director of the Company is
currently receiving any compensation for serving in such capacity for the
Company and no arrangements or agreements exist pursuant to which any such
person is to be compensated for services as an officer or director of the
Company.
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Stock Option Plan
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The Company has adopted a stock option plan (the "Plan") for key employees
reserving a total of 20,000,000 shares of Common Stock (to be adjusted in
accordance with subsequent changes in the capital structure of the Company) for
issuance pursuant to the exercise of stock options (the "Options") which may be
granted to employees (including officers), consultants and directors of the
Company. The maximum number of shares which may be subject to Options granted to
officers and directors as a group shall not exceed 10,000,000. The plan is
administered by the Board of Directors, or at its discretion by a stock option
committee (the "Committee") consisting of not less than three directors. Members
of the Committee are eligible to participate in the Plan. The Committee may
determine which Options may be options intended to qualify for special treatment
under the Internal Revenue Code of 1986, as amended ("Incentive Stock Options")
or non-qualified options ("Non-Qualified Stock Options") which are not intended
to so qualify. Options may be granted to employees (including officers),
consultants and directors (ehether or not they are employees) of the Company or
its subsidiaries. The Committee may take into account the duties of persons
selected, their present and potential contributions to the success of the
Company and such other considerations as the Committee deems relevant to the
purposes of the Plan. Incentive Stock Options may not be granted to consultants
and directors who are not also employees. The Board is empowered to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
The Committee has broad discretion to determine the number of shares with
respect to which Options may be granted to participants. The maximum aggregate
fair market value (determined as of the date of grant) of the shares as to which
the Incentive Stock Options become exercisable for the first time during any
calendar year may not exceed $100,000.
The Plan provides that the purchase price per share for each Incentive
Stock Option on the date of grant may not be less than 100% of the fair market
value of the Common Stock on the date of grant. In addition, in the case of
Non-Qualified Stock Options, the Option price of such Options shall be not less
than 80% of the fair market value of the shares of Common Stock of the Company
on the date of grant of the Option, however, any option granted under the Plan
to a person owning more than ten percent of the Common Stock shall be at a price
of at least 110% of such fair market value.
If an optionee ceases to be employed by or be a director of or consultant
to the Company or its divisions or subsidiaries for any reason other than death,
disability, retirement or termination for cause, the optionee may exercise all
Options within three months following such cessation to the extent exercisable
on the date of cessation. If an optionee's employment or consulting relationship
is terminated or a director is removed for cause, all Options held by him will
terminate immediately. If an optionee dies while a director of or while employed
by, or a consultant to the Company, or during the three-month period following
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termination of the optionee's employment, directorship or consulting
relationship (other than for cause) or if the optionee retires or becomes
disabled, the optionee's Options, unless previously terminated, may be
exercised, whether or not otherwise exercisable, by the optionee or his legal
representative or the person who acquires the Options by bequest or inheritance
at any time within one year following the date of death, disability or
retirement of the optionee. An Option granted under the Plan is not transferable
by the optionee other than by will or by the laws of descent and dis tribution
and, during the lifetime of the Optionee, may be exercised only by the optionee,
his guardian or legal representative.
As of August 30, 1996, no options have been granted under the Plan.
Stock Bonus Plan
- ----------------
As an incentive to attract and keep personnel of experience and ability
with the Company, the Board of Directors, with shareholder approval, adopted a
Stock Bonus Plan, whereby all salaried employees of the Company and its
subsidiaries, other than non-salaried directors ("eligible employees"), are
eligible to periodically receive shares of the Common Stock of the Company.
Eligible employees shall not be eligible to receive shares until they have been
employed by the Company for at least one year. The aggregate fair market value
of shares which may be allocated to an employee in any year may not exceed 20%
of his salary. The value of the shares allocated each year shall be based on the
bid price of the Company's stock on the date of allocation or, if there is no
bid price quotation on that date, on the most recent bid quotation within the
prior 90 days, and, if no bid quotation has been given in that period, the Stock
Bonus Plan Committee (the "Committee") shall determine the value of the shares
on the book value of the stock on the date of allocation. A bonus share reserve
of 20,000,000 shares of Common Stock of the Company (to be adjusted in
accordance with subsequent changes in the capital structure of the Company and
at other times within the discretion of the Board of Directors) has been
established from which the distributions may be made at the discretion of the
Committee. The Committee is to be appointed by the Board of Directors and to
consist of at least three members. The Board of Directors shall act as the
Committee if no appointments are made.
Pursuant to the plan, bonus shares may be allocated to an eligible employee
at any time, but delivery of the shares to the employee does not take place
until the employee has completed two full years of employment with the Company
commencing from the date of allocation. During the two-year period, the Company
serves as custodian for the shares allocated and the shares may not be
transferred, sold, assigned or pledged (as collateral for a loan or as security
for the performance of an option or for any other purpose). In addition, if the
employee leaves the employ of the Company for any reason (including termination
of operations of the Company) during the two-year period, the shares allocated
are forfeited.
As of August 30, 1996, no share bonuses had been granted under the Bonus
Plan.
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(b) Summary Compensation Table.
No summary compensation table is included in this report as no compensation
was paid that is required to be disclosed in such a table.
(c) Option/SAR Grants Table.
Not applicable.
(d) Aggregated Option/SAR Exercise and Fiscal Year-End Option/SAR Value Table.
Not applicable.
(e) Long-Term Incentive Plan ("LTIP") Awards Table.
Not applicable.
(f) Compensation of Directors.
Standard Arrangements. The Company does not pay its employee directors for
their services in that capacity; however, officers and directors receive
reimbursement for out-of-pocket expenses incurred by them in connection with the
business of the Company. Currently, the Company does not pay any directors fees
for attendance at board meetings.
Other Arrangements. The Company has no other arrangements pursuant to which
any director of the Company was compensated during the year ended May 31, 1996,
for services as a director.
(g) Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
None.
(h) Reporting on Repricing of Options/SARs.
Not Applicable.
-14-
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth information as of August 30, 1996, as to the
beneficial ownership of shares of the Company's Common Stock (the only class of
stock outstanding) by each person who, to the knowledge of the Company at that
date, was a beneficial owner of 5% or more of the outstanding shares of Common
Stock.
Title of Name and Address of Amount and Nature Percent
Class Beneficial Owner Beneficial Owner (1) of Class
- -------- -------------------- --------------------- --------
Common TBT Family Partners, Ltd. (2) 28,163,800 31.3%
Stock 6200 South Syracuse Way
Suite 195
Englewood, CO 80211
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting and
investment power with respect to all such shares. Under Rule 13d-3(d),
shares not outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage owned by such person,
but are not deemed outstanding for the purpose of calculating the
percentage owned by each other person listed.
(2) TBT Family Partners, Ltd. is a limited partnership of which Mr. Tenenbaum
and his wife are general partners.
-15-
<PAGE>
(b) Security Ownership of Management.
The following table sets forth information as of August 30, 1996, as to the
beneficial ownership of shares of the Company's Common Stock (the only class of
stock outstanding) by each person who is an officer and/or director of the
Company.
Title of Name and Address of Amount and Nature Percent
Class Beneficial Owner Beneficial Owner (1) of Class
- -------- -------------------- -------------------- --------
Common TBT Family Partners, Ltd. (2) 28,163,800 31.3%
Stock 6200 South Syracuse Way
Suite 195
Englewood, CO 80211
Common Albert Brenman 4,762,200 5.3%
Stock 1775 Sherman Street
Suite 1001
Denver, CO 80203
Common Janice Budzen 1,000,000 1.1%
Stock 6411 East Radcliff
Englewood, CO 80111
Common Officers and 33,926,000 37.7%
Stock Directors
as a Group
(Three persons)
- -------------
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting and
investment power with respect to all such shares. Under Rule 13d-3(d),
shares not outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage owned by such person,
but are not deemed outstanding for the purpose of calculating the
percentage owned by each other person listed.
(2) TBT Family Partners, Ltd. is a limited partnership of which Mr. Tenenbaum
and his wife are general partners.
-16-
<PAGE>
(c) Changes in Control.
No understandings. arrangements or agreements are known by management at
this time which would result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
(a)(b) Transactions with Management and Others.
Legal Representation
- --------------------
The Company currently is represented by the law firm of Brenman Key &
Bromberg, P.C. and has been so represented since March of 1994. Albert Brenman,
an officer and director of the Company, is an officer, director and principal
shareholder in the firm. A. Thomas Tenenbaum, an officer and director of the
Company, is of counsel to the firm. From October 1992 through November 1993 the
Company was represented by the law firm of A. Thomas Tenenbaum, P.C., a firm in
which Mr. Tenenbaum was an officer, director and sole shareholder.
Representation of the Company by A. Thomas Tenenbaum, P.C. and Brenman Key and
Bromberg has been at the firms' standard hourly fees for services involving
general corporate and securities law matters. Fees to the firm Brenman Key &
Bromberg, P.C. for the fiscal year ended May 31, 1996 were $10,209.
Agreement to Provide Office Space and Services
- ----------------------------------------------
The Company had an oral agreement with A. Thomas Tenenbaum, P.C. pursuant
to which the Company was provided with office space, telephone, secretarial and
clerical services for $500 per month. This arrangement was terminated in
February 1994. The Company began receiving these services from the law firm of
Brenman Key and Bromberg, P.C. for $500 per month commencing in March 1994.
Management believes that the terms of this arrangement are at least as
advantageous as those which could be obtained from an unaffiliated party.
(c) Parents of the Company.
Other than the persons named under Item 11, the Company has no "parents."
(d) Transactions with Promoters.
Not applicable.
-17-
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
(a) The following documents are filed as a part of this Form 10-KSB
immediately following the signature page:
1. Consolidated Financial Statements - the following financial statements
are filed herewith:
Report of Certified Public Accountants
Consolidated Balance Sheet - May 31, 1996
Consolidated Statements of Operations - Years Ended May 31, 1995 and 1996
Statements of Changes in Shareholders' Equity - Years ended May 31, 1995
and 1996.
Consolidated Statements of Cash Flows - Years ended May 31, 1995 and 1996
Notes to Consolidated Financial Statements - May 31, 1995 and 1996
2. Financial statement schedules have been omitted because they are not
required or the information is included in the financial statements and notes
thereto.
3. Exhibits required to be filed are listed below and, except where
incorporated by reference, immediately follow the Financial Statements.
Number Description
- ------ -----------
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4.1(a) Specimen Common Stock Certificate (1)
10.1 Stock Option Plan (1)
10.2 Stock Bonus Plan (1)
22.1 Subsidiaries of the Registrant (2)
-18-
<PAGE>
- ----------
(1) Incorporated by reference from the like numbered exhibits filed with the
Registrant's Registration Statement on Form S-1, No. 33-23693 effective
October 21, 1989.
(2) Incorporated by reference from the like numbered exhibit filed with the
Registrant's Annual report on Form 10-KSB for the fiscal year ended May 31,
1993.
(b) During the last quarter of the period covered by this report the
Company filed no reports on Form 8-K.
(c) Required exhibits are attached hereto and are listed in Item 13(a)(3)
of this Report.
(d) Required financial statement schedules are attached hereto and are
listed in Item 13(a)(2) of this Report.
- -----------------------------------------------------------------
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT:
The Registrant has not sent to its security holders any annual report or
proxy material. If such report or proxy material is furnished to security
holders subsequent to the filing of this Form 10-KSB, the Registrant shall
furnish copies of such material to the Commission when it is sent to security
holders.
-19-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: August 30 , 1996 VANDEN CAPITAL GROUP, INC.
-----
By /s/ A. Thomas Tenenbaum
-------------------------------
A. Thomas Tenenbaum, 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 and on the dates indicated.
Date: August 30 , 1996 /s/ A. Thomas Tenenbaum
----- --------------------------
A. Thomas Tenenbaum, President,
Principal Executive Officer,
Principal Accounting Officer,
Principal Financial Officer and
Director
Date: August 30 , 1996 /s/ Albert Brenman
----- -----------------------------
Albert Brenman, Secretary and
Director
Date: August , 1996 -------------------------------
----- Janice V. Budzen, Director
-20-
<PAGE>
INDEX TO FINANCIAL STATEMENTS
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
May 31, 1995 and May 31, 1996
Report of Independent Certified Public Accountants F-2
Consolidated Financial Statements:
Consolidated Balance Sheet F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Changes in F-5
Stockholders' Equity
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors
Vanden Capital Group, Inc.
Denver, CO 80202
We have audited the accompanying consolidated balance sheet of Vanden Capital
Group, Inc. and Consolidated Subsidiaries as of May 31, 1996, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the two years ended May 31, 1996. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements, referred to above,
present fairly, in all material respects, the financial position of Vanden
Capital Group, Inc. and Consolidated Subsidiaries as of May 31, 1996, and the
results of its operations, changes in its stockholders' equity and its cash
flows for the two years ended May 31, 1996, in conformity with generally
accepted accounting principles.
/S/ SCHUMACHER & ASSOCIATES, INC.
----------------------------------
SCHUMACHER & ASSOCIATES, INC.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80012
August 26, 1996
F-2
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED BALANCE SHEET
ASSETS
MAY 31, 1996
Current Assets:
Cash (Note 5) $ 412,816
Accrued interest receivable 4,240
----------
Total Current Assets 417,056
----------
TOTAL ASSETS $ 417,056
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 4,040
---------
Contingency and commitment (Note 5) -
Stockholders' Equity (Notes 2 and 3):
Preferred stock, $.0001 par value,
100,000,000 shares authorized,
none issued and outstanding -
Common stock $.0001 par value
300,000,000 shares authorized
90,015,200 shares issued and
outstanding 9,002
Additional paid-in capital 687,469
Accumulated deficit (283,455)
---------
TOTAL STOCKHOLDERS' EQUITY 413,016
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 417,056
=========
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended
May 31 May 31
1995 1996
---------- ---------
Revenue $ - $ -
---------- ---------
Expenses:
Legal and accounting (Note 4) 10,209 25,984
Rent and clerical expense (Note 4) 6,000 6,000
Other expenses 1,497 3,423
---------- ---------
17,706 35,407
---------- ---------
Net loss from operations (17,706) (35,407)
Other income (expense):
Interest income 14,970 15,498
---------- ---------
Net (Loss) $ (2,736) $ (19,909)
========== ==========
Per Share $ nil $ nil
========== ==========
Weighted Average Shares Outstanding 90,015,200 90,015,200
========== ==========
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the years ended May 31, 1995 and 1996
Additional Retained
Number of Common Paid-in Earnings
Shares Stock Capital (Deficit) Total
----------- ---------- ----------- ---------- - --------
<S> <C> <C> <C> <C> <C>
Balance, May 31, 1994 90,015,200 $ 9,002 $ 687,469 $ (260,810) $ 435,661
Net loss for the year ended May 31, 1995 - - - (2,736) (2,736)
----------- ---------- ----------- ---------- ---------
Balance, May 31, 1995 90,015,200 9,002 687,469 (263,546) 432,925
Net loss for the year ended May 31, 1996 - - - (19,909) (19,909)
----------- ---------- ----------- ---------- ---------
Balance, May 31, 1996 90,015,200 $ 9,002 $ 687,469 $ (283,455) $ 413,016
=========== ========== =========== ========== =========
The accompanying notes are an integral part of the financial statements.
F-5
</TABLE>
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
May 31 May 31
1995 1996
----------- ----------
Cash Flows Operating Activities:
Net (Loss) $ (2,736) $ (19,909)
Adjustments to reconcile net
(loss) to net cash (used in)
operating activities:
Increase (decrease) in
accounts payable 1,205 2,835
(Increase) in accrued interest (2,925) 4,536
---------- ----------
Net Cash (used in) Operating
Activities (4,456) (12,538)
---------- ----------
Cash Flows from Investing Activities - -
---------- ----------
Cash Flows from Financing Activities - -
---------- ----------
(Decrease) in Cash (4,456) (12,538)
Cash, Beginning of Period 429,810 425,354
---------- ----------
Cash, End of Period $ 425,354 $ 412,816
========== ==========
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 1995 and May 31, 1996
(1) Summary of Accounting Policies
------------------------------
A summary of the significant accounting policies consistently applied in
the preparation of the accompanying financial statements follows:
General
-------
Vanden Capital Group, Inc. (The Company), was incorporated under the laws
of Colorado on June 21, 1988. The Company was formed for the purpose of
engaging in any lawful business, but has been in the business of providing
management consulting services. On November 14, 1990 the Company formed a
wholly-owned subsidiary with the name of VCG Holding Corp. (VCG). On May
16, 1989 the Company formed Vanden Ventures I, Inc., (VVI) a Colorado
Corporation. The consolidated financial statements include the accounts and
balances of the Company since its inception on June 21, 1988, the accounts
of VCG since inception on November 14, 1990 and the accounts of VVI since
inception on May 16, 1989. All intercompany accounts and balances have been
eliminated. The Company has selected May 31, as its fiscal year end.
Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
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 revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
(2) Stockholders' Equity
---------------------
The Company was originally capitalized by the issuance of a total of
39,200,000 shares of $.0001 par value common shares to three individuals in
exchange for $39,200. The Company subsequently issued 12,000,000 shares of
$.0001 par value common shares for $24,000. See Note 3, related to
successful completion of public securities offering.
F-7
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
May 31, 1995 and May 31, 1996
(3) Securities Offering
-------------------
During December, 1988 the Company successfully completed a public offering
of 38,815,000 units at the price of $.02 per unit. Each unit consisted of 1
share of the Company's $.0001 par value common stock and 3 common stock
purchase warrants, which have expired.
The underwriting included the sale to the underwriter of common stock
purchase warrants entitling the underwriter to purchase one share of the
Company common stock for each ten units sold in the public offering. The
underwriter acquired the warrants at a total price of $100.
(4) Related Party Transactions
--------------------------
The Company has retained the law firm of Brenman, Key & Bromberg. Mr.
Albert Brenman, an owner of the law firm, is an officer, director and
stockholder of the Company. Mr. A. Thomas Tenenbaum, who has been an
officer, director and stockholder of the Company since its formation, is
council to the law firm. The Company has paid legal fees to this firm.
The Company has entered into an oral agreement with the law firm pursuant
to which the Company uses office space provided by the firm at $500 per
month on a month to month basis. Certain clerical and bookkeeping services
are included at no additional cost.
(5) Securities of Other Companies
-----------------------------
During March, 1989 the Company purchased $35,000 in restricted common stock
of QuikByte Software, Inc. (QuikByte), a development-stage enterprise, and
provided consulting services valued at $15,000 to this new enterprise for
an additional 3,000,000 shares of restricted common stock. Effective
October 11, 1989, QuikByte successfully completed a public securities
offering. The Company's 7% ownership interest in QuikByte was carried at
its cost of $50,000 at May 31, 1991, which was the lower of its cost or
estimated market. During April, 1992 the market maker for securities of
QuikByte ceased operations and there has been no market for the shares of
QuikByte since that time. Therefore the carrying value of the QuikByte
securities has been reduced to zero.
F-8
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
May 31, 1995 and May 31, 1996
(5) Securities of Other Companies, Continued
----------------------------------------
The Company also purchased $60,000 of equity securities of Buyer's
Resource. Inc. (Buyer's), which resulted in a 36% ownership of Buyer's. The
Company's equity interest in Buyer's is carried on the equity method of
accounting. The Company's shares of Buyer's net losses since acquisition
have been recorded as an expense in the statement of operations and the
carrying value of an asset has been reduced by such losses. At May 31,
1995, the Company's investment in Buyer's is carried at zero. On December
21, 1989 the Company signed a pledge agreement guaranteeing a $90,000 loan
from a bank to Buyer's. The Company pledged a $100,000 certificate of
deposit as security for this loan. In June of 1992, Buyer's paid down the
principal balance of the loan to $60,000 and the Company obtained a release
of $35,000 of the collateral it had pledged to secure the loan, resulting
in the collateral currently pledged by the Company as security for the loan
to be $65,000. A contingency exists with respect to this loan guarantee and
collateral agreement. The amount of loss, if any, related to this matter
cannot presently be determined. During April, 1990, the Company loaned
$50,000 to Buyer's with a maturity date of March 15, 1992. The note
required quarterly interest only payments at 9.5% per annum. At May 31,
1991 the Company had not collected any interest or principal on the note
and the Company provided an allowance for write down of this note, for the
total $50,000. The principal of the note was convertible at any time at the
Company's option into shares of Buyer's Series A 12% Cumulative Preferred
Stock. During the years ended May 31, 1993 Buyer's made an interest payment
to the Company in the amount of $6,125. Effective May 21, 1993 the $50,000
note plus accrued interest of $1,875 were converted into 51,875 shares of
preferred stock. The Class A Preferred Stock is convertible into common
stock and on a fully diluted basis (taking into account all outstanding
common stock and securities of Buyer's Resource convertible into common
stock, the Company owns an interest in Buyer's Resource equal to
approximately 6.2% of that company.)
F-9
<PAGE>
VANDEN CAPITAL GROUP, INC. AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
May 31, 1995 and May 31, 1996
(6) Income Taxes
------------
As of May 31, 1996 loss carryforwards of approximately $193,000 that expire
in 2003 through 2011 are available to offset future income. Change in
ownership of 50% of the Company may result in the inability of the Company
to utilize the carryovers.
As of May 31, 1996, the Company has total deferred tax assets of
approximately $39,000 due to operating loss carryforwards. However, because
of the uncertainty of potential realization of these tax assets, the
Company has provided a valuation allowance for the entire $39,000. Thus, no
tax assets have been recorded in the financial statements as of May 31,
1996.
(7) Concentration of Credit Risk
----------------------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of cash investments. The
Company places its cash investments with financial institutions. As of May
31, 1996 the Company had a concentration of credit risk since it had cash
investments in bank accounts totalling approximately $14,200 in excess of
the FDIC insured amounts.
F-10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Company's audited financial statements for the year ended Mary 31, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 412,816
<SECURITIES> 0
<RECEIVABLES> 4,240
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 417,056
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 417,056
<CURRENT-LIABILITIES> 4,040
<BONDS> 0
0
0
<COMMON> 9,002
<OTHER-SE> 404,014
<TOTAL-LIABILITY-AND-EQUITY> 417,056
<SALES> 0
<TOTAL-REVENUES> 15,498
<CGS> 0
<TOTAL-COSTS> 35,407
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (19,909)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,909)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,909)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
