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
For the fiscal year ended December 31, 1999
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 33-29139
----------------------------
TC X CALIBUR, INC.
-------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0474017
-------- -----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
181 Carlaw Avenue, Suite 300
Toronto, Ontario, Canada M4M 2S1
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
24 Queen Street East, Suite 401
Brampton, Ontario, Canada L6V 1A3
-----------
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company'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. [ ]
State Issuer's revenue for its most recent fiscal year:
December 31, 1999 - $693,354
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
May 2, 2000 - $59,015.67 There are approximately 1,259,001 shares of common
voting stock of the Company held by non-affiliates. The aggregate market value
was determined by multiplying the number of shares of common stock held by
non-affiliates by the average bid price of such stock, as of May 2, 2000, as
quoted by the National Quotation Bureau LLC.(the"NQB").
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
May 3, 2000
5,480,001
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
<PAGE>
PART I
Item 1. Description of Business.
- ---------------------------------
Business Development.
- ---------------------
Organization and Charter Amendments.
-----------------------------------
TC X Calibur, Inc., (the "Company") was organized under the laws of the
State of Nevada on October 27, 1988, under the name "Extant Investments, Inc."
Commencing on or about December 5, 1990, pursuant to a Registration
Statement on Form S-18 filed with the Securities and Exchange Commission and a
Prospectus dated as of such date, the Company offered and sold Units consisting
of common stock and warrants, closing the offering on January 31, 1989; all
unexercised warrants have expired. For further information regarding its public
offering, reference is made to the Registration Statement of the Company and its
Prospectus, copies of which have been previously been filed with the Securities
and Exchange Commission, and are incorporated herein by this reference. See Item
13.
Effective May 17, 1991, the Company acquired all of the issued and
outstanding shares of common stock of Sentinel Diagnostics, Inc., an Arizona
corporation ("Sentinel Diagnostics"), pursuant to an Agreement and Plan of
Reorganization (the "Sentinel Plan"), and changed its name to "Sentinel
Scientific, Inc." See the 8-K Current Report of the Company dated May 17, 1991,
a copy of which has been previously filed with the Securities and Exchange
Commission, and is incorporated herein by this reference. See Item 13.
Sentinel Diagnostics was organized under the laws of the State of Arizona
on January 4, 1989, for the primary purpose of developing and marketing a family
of biomedical technologies for use in early diagnosis of disease and other
medical anomalies.
Due to lack of funds, the Company was required to discontinue these
business operations in late 1992.
Effective August 10, 1993, and pursuant to a Reorganization Agreement (the
"AFC Plan") between the Company, A.F.C. Entertainment, Inc., a corporation
organized under The Companies Act of Barbados ("AFC"), and Berliner Holdings
Limited, a corporation formed pursuant to The International Companies Act, 1982,
of St. Vincent and The Grenadines ("Berliner Holdings"), which was the
beneficial owner of 100% of the issued and outstanding shares of common stock of
AFC, the Company acquired all of the issued and outstanding shares of common
stock of AFC, and changed its name to "TC X Calibur, Inc."
For information concerning the business done and intended to be done and
the proposed plan of operation of the Company following the completion of the
AFC Plan, reference is made to the 8-K Current Report of the Company dated
August 10, 1993, a copy of which has been previously filed with the Securities
and Exchange Commission, and is incorporated herein by this reference. See Item
13.
Effective December 31, 1993, the Company acquired (the "Film Opticals
Agreement") all of the outstanding common stock of Film Opticals Investments,
Limited ("Film Optical Investments"), a corporatin organized under the laws of
the Province of Ontario, Canada. See the 8-K Current Report of the Company dated
December 31, 1993, a copy of which has been previously filed with the Securities
and Exchange Commission, and is incorporated herein by this reference. See Item
13. Also, see the heading "Business" below, for information regarding the
business operations of Film Opticals Investments Limited that were succeeded to
the Company.
In 1993, the Company's subsidiary, Film Opticals of Canada Limited ("Film
Opticals"), had a dispute with a creditor pursuant to a secured promissory note.
Because management disagreed with the creditor, the Company sought court
protection by filing a Notice of Intention to Make a Proposal pursuant to
Subsection 50.4(1) of the Bankruptcy and Insolvency Act of Canada. A trustee was
appointed to oversee the Company's financial management, in the Ontario Justice
Court, General Division, case No. B163/94, and the Company continued its
operations pending a resolution of the matter.
The Company's proposal under the Notice of Intention to Make a Proposal
were ultimately accepted by the court on April 25, 2000. The Company received
notification from the trustee certifying full performance of the proposal. A
copy of the Certificate of Full Performance of Proposal is attached hereto and
incorporated herein by this reference. See Item 13. For additional information,
please see the Company's 8-K Current Report dated May 5, 2000, which has been
previously filed with the Securities and Exchange Commission and is incorporated
herein by this reference. See Item 13.
Business.
- ---------
The operations of Film Opticals, the Company's sole operating subsidiary,
consist of providing a full range of special effects to producers of Feature
Films, Documentaries, Short Films, T.V. Commercials, T.V. Shows, etc. Services
offered include digital effects, such as blue and green screen compositing, wire
removal, scratch and dust removal, and computer animation.
The Company also supplies computer animation camera services, creative
services for credits and special effects for use in commercials, theatrical
features, movies of the week and television productions. It also specializes in
16mm to 35mm blow-ups for theatrical features.
Principal Products and Services.
- --------------------------------
Film Opticals provides the following products and services:
--A full range of special effects to producers of Feature
Films, Documentaries, Short Films, T.V. Commercials, T.V. Shows, etc.;
--Digital effects, such as blue and green screen compositing;
--Wire removal;
--Scratch and dust removal;
--Computer animation;
--Supplier of computer animation camera services;
--Creative services for credits and special effects for use in
commercials, theatrical features, movies of the week and television
productions.
--The Company also specializes in 16mm to 35mm blow-ups for theatrical
features.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Products and services are distributed directly to clients. There are no
agents, distributors, or middlemen involved in the distribution of the Company's
products and services. The Company's advertising consists primarily of word of
mouth and inclusion in pre and post production "credits". In addition, the
Company does advertise in several small trade publications, located in and
around the Toronto area; however, the Company has found that the best sources of
advertising are word of mouth and "credits". The Company is currently developing
a website in order to further advertise its products and services.
Competitive Business Conditions.
- --------------------------------
There is only one other business entity in the Toronto area that provides
services similar to those of the Company. This competitor, Film Effects, is not
a public entity; therefore, there is no financial or other information available
to compare with the operations of the Company. However, the Company may
encounter competition from new competitors, as well as from the development of
new technology. No assurance can be given that the products and services
provided by the Company will not become obsolete as technology advances.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
- --------------------------------------------------------------------------
There are two major suppliers of film stock used by the Company, Eastman
Kodak and Fuji. The Company currently acquires its film stock from Eastman
Kodak. Chemicals used in the production of high contrast film, cleaning machines
and other film processing techniques are readily available from sources such as
Signal Chemical, Eastman Kodak or Exxon. None of the raw materials used by the
Company are of limited availablity.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts.
- --------------------------------------------------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
- ---------------------------------------------------------------------
None; Not applicable.
Effect of Existing or Probable Governmental Regulations on Business.
- -------------------------------------------------------------------
None; Not applicable;
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
The Company did not have any material capital expenditures for
environmental matters during the period covered by this Report nor does it
anticipate any expenditures during 2000. However, the Company's operations
involve the handling and use of substances that are subject to federal, state,
provincial and local environmental laws and regulations that impose limitations
on the discharge, storage and disposal of such materials. The Company believes
that it is in material compliance with environmental laws, but there can be no
assurances that future additional environmental compliance or remediation
obligations will not arise or that such operations could not have a material
adverse effect on the Company.
Number of Employees.
- --------------------
The Company currently has 11 full time employees, including management. The
Company's employees and job descriptions are listed below:
<TABLE>
<CAPTION>
Number of Employees Job Title
-------------------- ---------
<S> <C>
2 Management;
1 Production Supervisor;
3 Film Layout;
2 Optical Camera Operators;
1 Animation camera and contrast machine
operator;
2 Computer operators associated with creative
and digital effects and pre and post
credits.
---
11 Total Full Time Employees
</TABLE>
Item 2. Description of Property.
- ---------------------------------
The major classes of assets as of December 31, 1999, are as follows:
<TABLE>
<CAPTION>
Accumulated
Asset Class Cost Depreciation Method/Life
----------- ---- ------------ -----------
<S> <C> <C> <C>
Computer/Office Equip. $143,871 $100,093 SL/5
Film Process Equip 301,438 300,660 SL/5
---------------------
Total $445,309 $400,753
=====================
</TABLE>
In December, 1999, the Company entered into an operating lease with
unrelated parties for its facilities, located at 181 Carlaw Avenue, Suite 300,
Toronto, Ontario, Canada M4M 2S1. The lease is for a period of five years.
The terms of the lease provide for total rentable square feet of 4,244, and
future minimum lease payments of the following:
<TABLE>
<S> <C>
2000 29,401
2001 29,401
2002 29,401
2003 29,401
2004 29,401
</TABLE>
Total rent paid for 1999 and 1998 was $25,302 each year. In addition to the
forgoing, the Company rents, on a month-to-month basis, a storage facility for
its movie library, the cost of which is $3,983 annually,
Item 3. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
In 1993, the Company's subsidiary, Film Opticals, had a dispute with a
creditor pursuant to a secured promissory note. Because management disagreed
with the creditor, the Company sought court protection by filing a Notice of
Intention to Make a Proposal pursuant to Subsection 50.4(1) of the Bankruptcy
and Insolvency Act of Canada. A trustee was appointed to oversee the Company's
financial management and the Company continued its operations pending a
resolution of the matter.
The Company's proposal under the Notice of Intention to Make a Proposal
were ultimately accepted by the court on April 25, 2000. The Company
received notification from the trustee certifying full performance of the
proposal. A copy of the Certificate of Full Performance of Proposal is attached
hereto and incorporated herein by this reference See Item 13. For additional
information, please see the Company's 8-K Current Report dated May 5, 2000,
which has been previously filed with the Securities and Exchange Commission and
is incorporated herein by this reference. See Item 13.
Item 4. Submission of Matters to a Vote of Security Holders.
- ---------------------------------------------------------------------------
No matter was submitted to a vote of the Company's security holders during
the calendar year covered by this Report or during the two previous calendar
years.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
- ------------------------------------------------------------------
Market Information
- ------------------
Although the Company's common stock is quoted on the OTC Bulletin Board
("XCAL") of the National Association of Securities Dealers, Inc. (the "NASD"),
there is currently no established market for such shares; and there can be no
assurance that any such market will ever develop or be maintained. Any market
price for shares of common stock of the Company is likely to be very volatile,
and numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and continue
to experience, extreme price and volume fluctuations which have often been
unrelated to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely effect the market price of the Company's common stock in any market
that may develop. Sales of "restricted securities" under Rule 144 may also have
an adverse affect on any market that may develop. See the caption "Sales of
Unregistered and Restricted Securities Over the Past Three Years", Item 5, Part
II.
If the Company is unable to bring its reports current by May 17, 2000, it
will be delisted from the OTC-BB.
The following quotations were provided by the National Quotation Bureau,
LLC, and do not represent actual transactions; these quotations do not reflect
dealer markups, markdowns or commissions.
<TABLE>
<CAPTION>
STOCK QUOTATIONS
CLOSING BID
<S> <C> <C>
Quarter Ended: High Low
-------------- ---- ---
April 1, 1998 through June 30, 1998 -- --
July 1, 1998 through September 30, 1998 -- --
October 1, 1998 through December 31, 1998 -- --
January 4, 1999 through March 31, 1999 .0625 .0625
April 1, 1999 through June 30, 1999 .09375 .0625
July 1, 1999 through September 30, 1999 .09375 .0625
October 1, 1999 through December 31, 1999 .0625 .0625
January 3, 2000 through March 31, 2000 .0625 .03125
April 3, 2000 through May 2, 2000 .0625 .03125
</TABLE>
Sales of "Unregistered" and "Restricted" Securities Over the Past Three Years.
- -----------------------------------------------------------------------------
There have been no sales of "restricted securities" of the Company during
the period covered by this Report or during the past three calendar years. All
of the Company's "restricted securities" have been held for more than one year
and are available for sale under Rule 144. Sales of "restricted securities"
under Rule 144 may have an adverse effect on any market of the Company's common
stock that may develop.
Holders
- -------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 153.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future.*
*See Part III, Item 10 and 11 for information regarding executive
compensation and stock ownership.
Item 6. Management's Discussion and Analysis or Plan of Operation.
- -------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company's current plan of operation is to continue with the operations
of its sole operating subsidiary, Film Opticals. For additional information
regarding the current operations of the Company, please see Item 1, Business.
Results of Operations.
- ----------------------
During the calendar year ended December 31, 1999, the Company generated
revenues of $693,354 and net income/(loss) of $(17,134). See the Index to
Financial Statements, Item 7, Part II.
Liquidity.
- ---------
As shown in the financial statements, the Company has accumulated losses
for the years ended December 31, 1999, and 1998, in the respective amounts of
($17,134), and ($61,614), and has a negative net working capital balance of
($107,215). These factors indicate that the Company may not be able to continue
as a going concer. See the Index to Financial Statements, Item 7, Part II.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
December 31, 1999 and 1998
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 1999
Consolidated Statements of Operations for the years ended
December 31, 1999 and 1998
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1999 and 1998
Consoldiated Statements of Cash Flows for the years ended
December 31, 1999 and 1998
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
Mantyla & McReynolds, Certified Public Accountants, of Salt Lake City,
Utah, have been retained to audit the financial statements of the Registrant as
of May 5, 2000. Mantyla & McReynolds have prepared audited financial statements
of the Registrant for the calendar years ended December 31, 1999 and 1998; The
Registrant has contacted its previous auditor, Malone and Bailey, PLLC, formerly
John Malone and company, Certified Public Accountants, 5444 Westheim #2080,
Houston TX 77056 (713) 840-1210, and there are no disagreements between the
Registrant and the previous auditor, Malone and Bailey, whether resolved or not
resolved, on any matter of accounting principles or practices, financial
statement disclosures or auditing scope or procedure, which would cause them to
make reference to the subject matter of a disagreement in connection with their
reports.
For additional information regarding the change of auditor, please see the
Company's Form 8-K Current Report dated May 5, 2000, which has been previously
filed with the Securities and Exchange Commission and is incorporated herein by
this reference. See Item 13.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Kenneth J. White President 8/93 *
Director 8/93 *
Michael S. Smith Secretary 8/93 *
Treasurer 8/93 *
Director 9/93 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
Kenneth White, age 65, President and Director. Since 1965, Mr. White has
been involved in numerous types of businesses as a general manager in the areas
of marketing, finance, manufacturing, planning, sales including vast experience
in internatinal business. Mr. White was a principal of Security Trading Inc., a
member of the Toronto Stock Exchange and full service stock broker and is acting
President and C.O.O. of Film Optical Investments Limited, the Company's sole
operating subsidiary, provider of negative processing and printing, transfer of
video tapes, special effects, animation and products for corporate
communications. Mr. White attended University of Western Ontario School of
Business Administration, University of Toronto and Mount Allison University, New
Brunswick.
Michael Smith, age 65, Secretary, Treasurer and Director. Mr. Smith has
been engaged in the motion picture and video industry for 35 years and was the
co-founder of M.S. Art Services, Ltd., a provider of animation and art work
producers. In addition, Mr. Smith, has been providing the industry with
processing, printing of film and transfer of film to video tapes. His extensive
background in the special effects field has earned Mr. Smith numerous
prestigeous awards.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business. For
additional information regarding the Company's employees, please see "Number of
Employees", Item 1, Part 1.
Family Relationships.
- ---------------------
There are no family relationships between any current directors or
executive officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
The Company files reports under Section 15(d) of the Securities and
Exchange Act of 1934, as amended; therefore, no such reports are required to be
filed.
Item 10. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricte dlying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth
White, 12/31/99 $60,000* 0 0 0 0 0 0
President, 12/31/98 $60,000* 0 0 0 0 0 0
Director
Michael
Smith 12/31/99 $60,000* 0 0 0 0 0 0
Secretary/ 12/31/98 $60,000* 0 0 0 0 0 0
Treasurer,
Director
</TABLE>
*All cash compensation paid as salaries to the officers and directors of
the Company were paid by the Company's sole operating entity, Film Opticals, for
services performed by the above mentioned individuals to Film Opticals.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- ---------------------------------------------------------------------------
The Company's management, Kenneth J. White and Michael S. Smith, signed
five year employment contracts with the Company in 8-93. These contracts were
renewed in 8-98 with five year extensions. See Item 10, Part II, Executive
Compensation, for information regarding compensation of the Company's Officers
and Directors.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of this Report, with the computations being based upon 5,480,001 shares of
common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Berliner Holdings LTD.* 2,100,000 38.32
181 Carlaw Ave., Suite 300
Toronto, Ontario, Canada
M4M 2S1
Barbara O'Gorman** 1,365,000 24.91
O'Gorman Family Trust** 276,000 0.05
Kingsbury Holdings Ltd.*** 400,000 7.30
Lot 18 Bay St. Kingstown
St. Vincent, The Grenadines
West Indies
--------- ----
4,141,000 75.56%
</TABLE>
*Mr. Claus Voellmecke may be deemed beneficial owner of these shares due to
his relatinship with Berliner Holdings Limited. Mr. Voellmecke is owner of
Berliner Holdings Limited.
**Ms. Barbara O'Gorman may be deemed beneficial owner of these shares due
to her relationship with the O'Gorman Family Trust. Ms. O'Gorman is trustee of
the O'Gorman Family Trust.
***Mr. Michael S. Smith may be deemed beneficial owner of these shares due
to his relationship with Kingsbury Holdings Limited. Mr. Smith is owner of
Kingsbury Holdings Limited.
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class
- ---------------- ------------------------- --------
<S> <C> <C>
Kenneth J. White
Casablanca Holdings Ltd.* 80,000 0.01
Lot 18 Bay St. Kingstown
St. Vincent, The Grenadines
West Indies
Michael S. Smith
Kingsbury Holdings Ltd.** 400,000 7.30
Lot 18 Bay St. Kingstown
St. Vincent, The Grenadines
West Indies
------- ------
All directors and
executive officers 480,000 7.31%
as a group (2 persons)
</TABLE>
*Mr. Kenneth White may be deemed beneficial owner of these shares due to
his relationship with Casablanca Holdings Limited. Mr. White is the owner of
Casablance Holdings Limited.
*Mr. Michael Smith may be deemed beneficial owner of these shares due to
his affiliation with Kingsbury Holdings Limited. Mr. Smith is the owner of
Kingsbury Holdings Limited.
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
During the past two years, there have been no material transactions with
any director, executive officer, 5% beneficial shareholder or promoter.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
- -------------------
Form 8-K Current Report dated May 5, 2000, for information relating to the
Company's court protection, change in the Compay's auditors, and other matters,
as described in Item I, Item 3 and Item 8, Part I, above.*
*Summaries of all exhibits contained in this Report are modiified in their
entirety by reference to these Exhibits.
Exhibits
- --------
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ -----------
<S> <C>
99 Certificate of Full Performance of Proposal.
27 Financial Data Schedule
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
Form S-18 Registration Statement as filed with the Securities and Exchange
Commission on or about December 3, 1990, as described in Item I, Part I above.*
Form 8-K Current Report dated May 17, 1991, for information relating to the
Company's acquisitin of Sentinel Diagnostics, as described in Item I, Part I,
above.*
Form 8-K Current Report dated August 10, 1993, for information concerning
the business done and intended to be done and the proposed plan of operation of
the Company following the completion of the AFC Plan, as described in Item I,
Part I, above.*
Form 8-K Current Report, dated December 31, 1993, for information concering
the acquisition of Film Opticals Investments Limited, and subsitiaries, as
described in Item I, Part I, above.*
Form 8-K Current Report dated May 5, 2000, for information relating to the
Company's court protection, change in the Compay's auditors, and other matters,
as described in Item I, Part I and Item 8, Part II, above.*
*Summaries of all exhibits contained in this Report are modiified in their
entirety by reference to these Exhibits.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TC X CALIBUR, INC.
Date: 5-16-00 By/S/Kenneth J. White
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
TC X CALIBUR, INC.
Date: 5-16-00 By/S/ Kenneth J. White
Kenneth J. White
President and Director
Date: 5-16-00 By/S/Michael S. Smith
Michael S. Smith
Secretary/Treasurer and Director
<PAGE>
TC X CALIBUR, INC.
Including the accounts of its wholly-owned subsidiary
Financial Statements
and
Independent Auditors' Report
December 31, 1999
<PAGE>
TC X Calibur, Inc.
Including the accounts of its wholly-owned subsidiary
TABLE OF CONTENTS
Page
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . 1
Colsolidated Balance Sheet - December 31, 1999. . . . . . . . . . 2
Consolidated Statements of Operations for the years ended
December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Stockholders' Equity/(Deficit)
for the years ended December 31, 1999 and 1998. . . . . . . . . . 4
Consolidated Statements of Cash Flows for the years ended
December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . 6-10
<PAGE>
INDEPENDENT AUDITORS REPORT
The Board of Directors and Shareholders
TC X Calibur, Inc.
We have audited the accompanying consolidated balance sheets of TC X
Calibur Inc,(a Nevada Corporation)and its wholly-owned subsidiary, Film Optical
Investment Limited, (a Canadian corporation) as of December 31, 1999, and the
related consolidated statements of operations, stockholders' (deficit) equity,
and cash flows for the years ended December 31, 1999 and December 31, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of TC X Calibur, Inc, as of
December 31, 1999, and the results of operations and cash flows for the years
ended December 31, 1999 and 1998, in conformity with generally accepted
accounting principles.
The accompanyting financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has accumulated losses from
operations and has a net working capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Managements's plans in regard
to these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/S/ MANTYLA McREYNOLDS
------------------------------------
MANTYLA McREYNOLDS
Salt Lake City, Utah
April 28, 2000
<PAGE>
<TABLE>
<CAPTION>
TC X CALIBUR, INC
Consolidated Balance Sheet
December 31, 1999
ASSETS
<S> <C> <C>
Current Assets
Cash $ 4,715
Accounts receivable-net of allowance
for doubtful accunts of $25,005 72,435
Prepaid expenses 5,092
-------------
Total Current Assets 82,242
Property and equipment - Note 445,309
Less: Accumulated depreciation (400,753)
-------------
Net Property and equipment 44,556
Total Assets $ 126,798
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current Liabilities
Accounts payable $ 171,534
Accrued liabilities 4,066
Notes Payable - Note 13,857
------------
Total Current Liabilities 189,457
------------
Total Liabilities 189,457
Stockholders' Equity:
Common stock--50,000,000 shares authorized, $.001 par
value; 5,480,000 shares issued outstanding 5,480
Additional Paid-In Capital 1,566
Accumulated Deficit (69,480)
Accumulated Foreign Currency Translation Adjustment (225)
-----------
Total Stockholders' Equity (62,659)
-----------
Total Liabilities and
Stockholders Equity $ 126,798
===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
TC X CALIBUR, INC.
Consolidated Statements of Operations
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
<S> <C> <C> <C> <C>
Revenues $ 693,354 $ 525,034
Cost of Sales 434,550 304,336
--------- ---------
Gross Profit 258,804 220,698
General and Administrative
Expenses 275,938 282,312
--------- ---------
Net Loss from Operations (17,134) (61,614)
--------- ---------
Net Loss Before Income Taxes (17,134) (61,614)
Provision for Income Taxes
-Notes 1&3 -0- -0-
--------- ---------
Net Loss $ (17,134) $ (61,614)
========= =========
Loss Per Share $ (.01) $ (.01)
========= =========
Weighted Average Shares
Outstanding 5,480,000 5,480,000
========= =========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
<TABLE>
<CAPTION>
TC X CALIBUR, INC.
Consolidated Statements of Stockholders' Equity/(Deficit)
For the Years Ended December 31, 1999 and 1998
Additional Net
Number of Common Paid in Accumulated Stockholders'
Shares Stock Capital Deficit Equity
------ ----- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 5,480,000 5,480 1,566 9,043 16,089
Net loss for the year ended
December 31, 1998 (61,614) (61,614)
---------- ------- ------------- ------------- --------
Balance, December 31, 1998 5,480,000 5,480 1,566 (52,571) (45,614)
Net loss for the year ended
December 31, 1999 (17,134) (17,134)
---------- ------- ------------- ------------- --------
Balance, December 31, 1999 5,480,000 5,480 1,566 (69,705) (62,659)
========== ======= ============= ============= ========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
<TABLE>
<CAPTION>
TC X CALIBUR, INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998
1999 1998
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
- -------------------------------------
Net Loss $ (17,134) $ (61,614)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 5,604 3,314
(Increase) decrease in:
Current assets (25,936) (89,934)
Current liabilities 47,193 (36,556)
---------- ----------
Net Cash Provided by/(Used for)
in Operating Activities 9,727 (4,922)
Cash Flows from Investing Activities
- ------------------------------------
Purchases of property and equipment (46,166) (3,469)
---------- ----------
Net Cash Used for Investing Activities (46,166) (3,469)
Cash Flows Provided by Financing Activities
- -------------------------------------------
Borrowing from Stockholders 17,924 0
---------- ----------
Net Cash Provided by Financing Activities 17,924 0
Effect of Exchange Rate on cash and
cash Equivalents 16,846 3,015
Net Increase(decrease) in cash (1,669) (5,376)
Beginning Cash Balance 6,384 11,760
--------- ----------
Ending Cash Balance 4,715 6,384
========= ==========
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
TC X Calibur, Inc.
Notes to Consolidated Financial Statements
December 31, 1999
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------
(a) Organization
TC X Calibur, Inc. ("the Company") was incorporated in Nevada in October,
1988, as Extant Investments, Inc. In 1991, the Company merged with and changed
its name to Sentinel Scientific, Inc. From 1991 to 1993, the Company was
involved with research and development of biomedical technologies, but ceased
active operations due to lack of operating calital. In August, 1993, the Company
merged with A.F.C. Entertainment, Inc. ("A.F.C."), a Barbados corporation, which
was involved with the foreign film industry. In December, 1993, the Company
purchased all of the shares of Film Opticals Investments Limited, a corporation
organized in the Province of Ontario, Canada ("Film Opticals") in exchange for
480,000 of its common shares. Since the acquisition of Film Opticals, the
Company has been engaged in the business of providing a full range of motion
picture printing services and creative titles, credits and optical effects for
features, commercials, theatrical and television programs. The foreign film
library, acquired with the merger of A.F.C., remains intact, but funding
constraints have curtailed the Company's ability to develop and market this
segment of the business.
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles. The consolidated financial
statements of the Company include the accounts of TC X Calibur, Inc. and its
wholly-owned subsidiary, Film Opticals Investments Limited. All significant
intercompany transactions have been eliminated. The following summarizes the
more significant of such policies:
(b) Income Taxes
The Company complies with the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income Taxes. The
Statement requires an asset and liability approach for financial accounting and
reporting for income taxes, and the recognition of deferred tax assets and
liabilities for the temporary differences between the financial reporting bases
and tax bases of the Company's assets and liabilities at enacted tax rates
expected to be in effect when such amounts are realized or settled. The
cumulative effect of this change in accounting for income taxes as of December
31, 1999 is $0 due to the valuation allowance extablished as described below.
(c) Net Loss Per Common Share
Net loss per common share is based on the weighted-average number of shares
outstanding. In accordance with Financial Accounting Standards No. 128, Earnings
Per Share, basic loss per common share is computed using the weighted average
number of common shares outstanding.
<PAGE>
TC X CALIBUR, INC.
Notes to Consolidated Financial Statemetns
December 31, 1999
[Continued]
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------
[continued]
(d) Statement of Cash Flows
For the Purposes of the statements of cash flows, the Company considers
cash and cash equivalents as deposits in commercial banks. The Company had
$4,715 in cash at December 31, 1999.
(e) Use of Extimates in Preparing 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 amount 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.
(f) Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using
the straight-line basis over the useful lives of the related assets.
Expenditures for maintenance and repairs are charged to expense as incurred.
(g) Revenue Recognition
Revenue is recognized as products or projects are delivered or servides are
provided to customers.
(h) Foreign Currency Translation
Foreign currency exchange transactions and translation are accounted for
pursuant to Statement of Financial Accounting Standards (SFAS) No. 52, Foreign
Currency Translation. The functional currency of the operating entity, Film
Opticals, is the Canadian Dollar.
<PAGE>
TC X CALIBUR, INC
Notes to Consolidated Financial Statements
December 31, 1999
[Continued]
NOTE 2 LIQUIDITY/GOING CONCERN
- -------------------------------
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal couse of business. As shown in the financial
statements, the Company has accumulated losses for the years ended December 31,
1999, and 1998, in the respective amounts of $17,134, and $61,614, and has a
negative net working capital balance of $107,215. These factors indicate that
the Company may not be able to continue as a going concer.
The Company's ability to achieve a level of profitable operations and/or
additional financing may impact the Company's ability to continue as presently
organized. Resolution of these issues is dependent on the success of
management's plans to raise funds through the sale of its equity securities in
private placement or a public offering. The Company may also seek a merger with
a better financed partner to continue its operations and develop its library of
foreign films. The consolidated financial statements do not include any
adjustments that might result from the outcome of this undertainty.
NOTE 3 INCOME TAXES
- --------------------
The Company complies with the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income Taxes. No
provision has been made for income taxes in the consolidated financial
statements because the Company has incurred losses. The tax effects of temporary
differences that give rise to significant portions of the deferred tax asset at
December 31, 1999 are summarized below.
Deferred tax assets Balance Tax Rate
------------------------------------------------------------------------
Loss carryforward(expires 2015) $69,264 $16,623 24%
Valuation allowance ($16,623)
---------
Deferred tax asset $0
=========
A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized. Because of the lack of
taxable earnings history, the Company has established a valuation allowance for
all future deductible temporary differences.
NOTE 4 PAYABLE TO SHAREHOLDERS
- -------------------------------
The Company borrowed $13,857 ($20,000 CDN) in December, 1999 from two of
its officers/shareholders to finance operations. The promissory notes are due on
or about April 30, 2000 and bear simple interest of eighteen percent (18%)
annually.
<PAGE>
TC X CALIBUR, INC
Notes to Consolidated Financial Statements
December 31, 1999
[Continued]
NOTE 5 FOREIGN FILM LIBRARY
- ----------------------------
The Company acquired approximately 125 movies in foreign languages
(primarily Chinese), from a shareholder in 1991. The movies are in the martial
arts genre. If the Company can obtain sufficient profits or financing, it
intends to complete the dubbing and limited editing and to release the films
into world-wide markets. Although the Company believes that the library is
valuable and could generate substantial revenues, the Company has elected not to
assign a value to them on the basis of the lower of cost or market. Since the
films have not generated any revenues to date, for the purposes of these
financial statements the Company has determined a current net realizable value
of $-0-.
NOTE 6 PROPERTY AND EQUIPMENT
- -------------------------------
The major classes of assets as of the balance sheet date are as follows:
<TABLE>
<CAPTION>
Accumulated
Asset Class Cost Depreciation Method/Life
<S> <C> <C> <C>
Computer/Office Equip. $143,871 $100,093 SL/5
Film Process Equip 301,438 300,660 SL/5
---------------------
Total $445,309 $400,753
=====================
</TABLE>
NOTE 7 OFFICE LEASE
- --------------------
In December, 1999, the Company entered into an operating lease with
unrelated parties for its facilities. The lease is for a period of five years.
The terms of the lease provide for total rentable square feet of 4,244, and
future minimum lease payments of the following:
<TABLE>
<S> <C>
2000 29,401
2001 29,401
2002 29,401
2003 29,401
2004 29,401
</TABLE>
Total rent paid for 1999 and 1998 was $25,302 each year. In addition to the
forgoing, the Company rents, on a month-to-month basis, a storage facility for
its movie library, the cost of which is $3,983 annually,
<PAGE>
TC X CALIBUR, INC
Notes to Consolidated Financial Statements
December 31, 1999
[Continued]
NOTE 8 SIGNIFICANT CONCENTRATION OF CREDIT RISK
- ------------------------------------------------
The Company has no single customer that represents a significant portion of
total revenues. The Company's activities are not limited to geographic
boundaries.
NOTE 9 BANKRUPTCY
- ------------------
In 1993, the Company's subsidiary, Film Opticals, had a dispute with a
creditor pursuant to a secured promissory note. Because management disagreed
with the creditor, the Company sought court protection by filing a Notice of
Intention to Make a Proposal pursuant to Subsection 50.4(1) of the Bankruptcy
and Insolvency Act of Canada. A trustee was appointed to oversee the Company's
financial management and the Company continued its operations pending a
resolution of the matter.
The Company's proposal under the Notice of Intention to Make a Proposal
were ultimately accepted by the court and on April 25, 2000, the Company
received notification from the trustee certifying full performance of the
proposal.
<PAGE>
District of
Division NO.
Court No. 31-280016
Estate No. 31-280016
CERTIFICATE OF FULL PERFORMANCE OF PROPOSAL
IN THE MATTER OF THE PROPOSAL OF
FILM OPTICALS OF CANADA LIMITED
The Undersigned, Beallor & Partners Inc., the Trustee acting in the proposal of
FILM OPTICALS OF CANADA LIMITED, certifies that the proposal, as filed with the
official receiver on the 24th day of January 1994 and as amended for the second
time on the 24th day of September 1999 has been fully performed as of the 25th
day of April 2000.
Dated at Toronto this 25th day of April, 2000.
BEALLOR & PARTNERS INC.,
TURSTEE FOR THE EXTATE OF
FILM OPTICALS OF CANADA LTD.,
By/S/ E.C. White
- ---------------------
E.C. WHITE, C.A., CIP
Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000847015
<NAME> TC X Calibur, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 4,715
<SECURITIES> 0
<RECEIVABLES> 97,440
<ALLOWANCES> 25,005
<INVENTORY> 0
<CURRENT-ASSETS> 82,242
<PP&E> 445,309
<DEPRECIATION> (400,753)
<TOTAL-ASSETS> 126,798
<CURRENT-LIABILITIES> 189,457
<BONDS> 0
0
0
<COMMON> 5,480
<OTHER-SE> (67,480)
<TOTAL-LIABILITY-AND-EQUITY> 126,798
<SALES> 693,354
<TOTAL-REVENUES> 693,354
<CGS> 434,550
<TOTAL-COSTS> 434,550
<OTHER-EXPENSES> 275,938
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17,134)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,130)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
