UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal Year ended: December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-55254-09
WASATCH PHARMACEUTICAL, INC.
(formerly UPSILON INDUSTRIES, INC.)
NEVADA 87-0434293
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number.)
5340 South Cottonwood Lane, Salt Lake City, UTAH 84117
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 424-2424
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ ] Yes [ X ] No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulations S-K (ss.229.405 of this chapter) is not 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-K or any amendment to this Form 10-K.
[ X ]
As of August 22, 1997, there is no aggregate market value of the voting
stock held by non-affiliates of the registrant.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding as of August 22, 1997
- ------------------------------------ -----------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK 1,000,000 SHARES
DOCUMENTS INCORPORATED BY REFERENCE: NONE
<PAGE>
ITEM 1. Business
The company was incorporated under the laws of the State of Utah on
April 14, 1986 and subsequently reincorporated under the laws of the State of
Nevada on December 30, 1993, and is in the development stage. The Company
intends to begin the process of investigating potential business ventures which
in the opinion of management, will provide a source of eventual profit to the
Company. Such involvement may take many forms, including the acquisition of an
existing business or the acquisition of assets to establish subsidiary
businesses. The Company's management does not expect to remain involved as
management of an acquired business; presently unidentified individuals would be
retained for such purposes.
As an unfunded venture, the Company will be extremely limited in its
attempts to locate potential business situations for investigation. However, the
Company's officers, directors and major shareholder have undertaken to make
loans to the Company in amounts sufficient to enable it to satisfy its reporting
and other obligations as a public company, and to commence, on a limited basis,
the process of investigating possible merger and acquisition candidates, and
that the Company's status as a publicly-held corporation will enhance its
ability to locate such potential business ventures.
No assurance can be given as to when the Company may locate suitable
business opportunities and such opportunities may be difficult to locate. The
Company intends not to allocate any incoming funds specifically, should there be
any in the future, to general use for the purpose of seeking, investigating and
acquiring or becoming engaged in a business opportunity. Decisions concerning
these matters may be made by management without the participation or
authorization of the shareholders.
Management anticipates that due to its lack of funds, and the limited
amount of its resources, the Company may be restricted to participation in only
one potential business venture. This lack of diversification should be
considered a substantial risk because it will not permit the Company to offset
potential losses from one venture against gains form another.
Business opportunities, if any arise, are expected to become available
to the Company principally from the personal contacts of its officers and
directors. While it is not expected that the Company will engage professional
firms specializing in business acquisitions or reorganizations, such firms may
be retained if funds become available in the future, and if deemed to be
advisable. Opportunities may thus become available from professional advisers,
securities broker-dealers, venture capitalists, members of the financial
community, and other sources of unsolicited proposals. In certain circumstances,
the Company may agree to pay a finder's fee or other form of compensation,
including perhaps one-time cash payments, payments based upon a percentage of
revenues or sales volume, and/or payments involving the issuance of securities,
for services provided by persons who submit a business opportunity in which the
Company shall decide to participate, although no contracts or arrangements of
this nature presently exist. The Company is unable to predict at this time the
costs of locating a suitable business opportunity.
The Company will not restrict its search to any particular business,
industry or geographical location, and reserves the right to evaluate and to
enter into any type of business opportunity, in any stage of their development
(including the upstart stages) in any location. In seeking business ventures.
Management can not be influenced primarily by an attempt to take advantage of
the anticipated or perceived appeal in specific industry, management group, or
product or industry, but rather will be motivated by the Company's business
objective of seeking long term capital appreciation in their real value. In
addition, the Exchange Act reporting requirements require the filing of the Form
8-K disclosing any businesses acquired and requires certified financial
statements of such companies. These reporting requirements may substantially
limit the businesses which may be available for possible acquisition candidates.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's management, none of whom is a professional
analyst and none of who have significant general business experience. Among the
factors which management will consider in analyzing potential business
opportunities are the available technical, financial and management will
consider in analyzing potential business opportunities are the available
technical, financial and managerial resources: working capital and financial
requirements. the history of operation, if any; future prospects; the nature of
present and anticipated competition; potential for further research, development
or exploration; growth and expansion potential; profit potential; the perceived
public recognition or acceptance of products or services; name identification,
and other relevant factors.
2
<PAGE>
It is not possible at present to predict the exact manner in which the
Company may participate in a business opportunity. Specific business
opportunities will be reviewed and, based upon such review, the appropriate
legal structure or method of participation will be decided upon by management.
Such structures and methods may include, without limitation, leases, purchase
and sale agreements, license, joint ventures; and may involve merger,
consolidation or reorganization. The Company may act directly or indirectly
through an interest in a partnership, corporation or reorganization. The Company
may act directly or indirectly through an interest in a partnership, corporation
or other form or organization. However, it is most likely that the Company will
acquire a business venture by conducting a reorganization involving the issuance
of the Company's restricted securities. Such a reorganization may involve a
merger (or combination pursuant to state corporate statutes, where one of the
entities dissolves or is absorbed by the other), or it may occur as a
consolidation, where a new entity is formed and the Company and such other
entity combine assets in the new entity. A reorganization may also occur,
directly or indirectly, through subsidiaries, and there is no assurance that the
Company would be the surviving entity. Any such reorganization could result in
additional dilution to the book value of the shares and loss of control of a
majority of the shares. The Company's present directors may be required to
resign in connection with a reorganization.
A reorganization may be structured in such a way as to take advantage
of certain beneficial tax consequences available in business reorganizations, in
accordance with provisions of the Internal Revenue Code of 1986 (as amended).
Pursuant to such a structure, the number of shares held prior to the
reorganization by all of the Company's shareholders might be less than 20% of
the total shares to be outstanding upon completion of the transaction.
Substantial dilution of percentage equity ownership may result to the giftees,
in the discretion of management.
Generally, the issuance of securities in a reorganization transaction
would be undertaken in reliance upon one or more exemptions from the
registration provisions of applicable federal securities laws, including the
exemptions provided for non-public or limited offerings, distributions to
persons resident in only one state and similar exemptions provided by state law.
Shares issued in a reorganization transaction based upon these exemptions would
be considered "restricted" securities under the 1933 Act, and would not be
available for resale for a period of one year, in accordance with Rule 144
promulgated under the 1933 Act. However, the Company might undertake, in
consideration with such a reorganization transaction certain registration
opinions in connection with such securities.
The Company may choose to enter into a venture involving the
acquisition of or merger with a company which does not need substantial
additional capital but desires to establish a public trading market for their
securities. Such a company may desire to consolidate its operations with the
Company through a merger, reorganization, asset acquisition, or other
combination, in order to avoid possible adverse consequences of undertaking its
own public offering. (Such consequences might include expense, time delays, loss
of voting control and the necessity of complying with various federal and state
laws enacted for the protection of investors.) In the event of such a merger,
the company may be required to issue significant additional shares, and it may
be anticipated that control over the Company's affairs may be transferred to
others. It should also be noted that this type of business venture might have
the effect of depriving the giftees of the purported protection of federal and
state securities laws, which normally affect the process of a company's becoming
publicly held.
It is likely that the investigation and selection of business
opportunities will be complex, time-consuming and extremely risky. However,
management believes that even though the Company will have limited capital, the
fact that their securities will be publicly-held will make it a reasonably
attractive business prospect for other firms.
As part of their investigation of acquisition possibilities, the
Company's management may meet with executive officers of the business and its
personnel; inspect its facilities; obtain independent analysis or verification
of the information provided, and conduct other reasonable measures, to the
extent permitted by the Company's limited resources and management's limited
expertise. Generally, the Company intends to analyze and make a determination
based upon all available information without reliance upon any single factor as
controlling.
<PAGE>
In all likelihood, the Company's management will be inexperienced in
the areas in which potential businesses will be investigated and in which the
Company may make an acquisition or investment. Thus, it may become necessary for
the Company to retain consultants or outside professional firms to assist
management in-evaluating potential investments, and to hire managers to run or
oversee the operations of its acquisitions or investments. The Company can give
no assurance that it will be able to find suitable consultants or managers. The
Company intends not to employ any of its affiliates, officers, directors or
principal shareholders as consultants. The Company has no policy regarding the
use of
3
<PAGE>
consultants, however, if management, in its discretion, determines that it is in
the best interests of the Company, management may seek consultants to review
potential merger or acquisition candidates. It is anticipated that the total
amount of fees paid to any consultant would not exceed $5,000.00 per
transaction. The fee, it is anticipated, would be paid by the potential target
company. There are currently no contracts or agreements between any consultant
and any companies that are searching for "shell" companies with which to merge.
There have been no preliminary discussions or understandings between the Company
and any market maker regarding the participation of any such market maker in the
aftermarket for the Company's securities inasmuch as no market for the
securities is expected to arise due to the lack of transferability on the
Company's shares until an acquisition is made and a Form 8-K is filed with the
Commission.
It may be anticipated that the investigation of specific business
opportunities and the negotiation time and execution of relevant agreements,
disclosure documents and other instruments will require substantial management
time and attention, and substantial costs of accountants, attorneys and others.
Should a decision thereafter be made not to participate in a specific business
opportunity, it is likely that costs already expended would not be recoverable.
It is also likely, in the event a transaction should eventually fail to be
consummated, for any reason, that the costs incurred by the Company would not be
recoverable. The Company's officers and directors are entitled to reimbursement
for all expenses incurred in their investigation of possible business ventures
on behalf of the Company, and no assurance can be given that if the Company has
available funds they will not be depleted in such expenses.
In addition to the severe limitations placed upon the Company by virtue
of its unfunded status, the Company will also be limited, in its investigation
of possible acquisitions, by the reporting requirements of the Securities
Exchange Act of 1934, pursuant to which certain information must be furnished in
connection with any significant acquisitions. The Company would be required to
furnish, with respect to any significant acquisition, certified financial
statements for the acquired company, covering one, two or three years (depending
upon the relative size of the acquisition). Consequently, acquisition prospects
which do not have the requisite certified financial statements, or are unable to
obtain them, may be in appropriate for acquisition under the present reporting
requirements of the 1934 Act.
The Company does not intend to take any action which would render it an
investment company under The Investment Companies Act of 1940 (the "1940 Act").
the 1940 Act defines an investment company as one which (1) invests, reinvests
or trades in securities as its primary business, (2) issues face-amount
certificates of the installment type or (3) invests, reinvests, owns, holds or
trades securities or owns or acquires investment securities having a value
exceeding 40 percent of the value of its total assets (exclusive of Government
securities and cash items) on an unconsolidated basis. The above 40 percent
limitation may be exceeded so long as a company is primarily engaged, directly
or through wholly-owned subsidiaries, in a business or businesses other than
that of investing, reinvesting, owning, holding or trading in securities. A
wholly-owned subsidiary is defined as one which is at least 95% owned by the
company.
Neither the Company nor any of its officers or directors are registered
as investment advisers under the Investment Advisers Act of 1940 (the "Advisers
Act"), and so there is no authority to pursue any course of business or
activities which would render the Company or its management "investment
advisers" as defined in the Advisers Act. Management believes that registration
under the Advisers Act is not required and that certain exemptions are
available, including the exemptions for person who may render advice to a
limited number or other persons and who may advise other persons located in one
state only.
The Company expects to encounter intense competition in its efforts to
locate suitable business opportunities in which to engage. The primary
competition for desirable investments may come from other small companies
organized and funded for similar purposes, from small business development
corporations and from public and private venture capital organizations. As the
Company will be completely unfunded, it can fairly be said that all of the
competing entities will have significantly greater experience, resources,
facilities, contacts and managerial expertise than the Company and will,
consequently, be in a better position than the Company to obtain access to, and
to engage in, business opportunities. Due to the lack of funds, the Company may
not be in a position to compete with larger and more experienced entities for
business opportunities which are low-risk. Business opportunity in which the
Company may ultimately participate are likely to be highly risky and extremely
speculative.
4
<PAGE>
ITEM 2. Properties.
The Company owns no properties and utilizes space on a rent-free basis.
This arrangement is expected to continue until such earlier time as the Company
become involved in a business venture which necessitates its relocation, as to
which no assurances can be given. The Company has no agreements with respect to
the maintenance or future acquisition of office facilities, however, if a
successful merger/acquisition is negotiated, it is anticipated that the office
of the Company will be moved to that of the acquired company.
ITEM 3. Legal Proceedings.
Other than the matter discussed in Form 10-K, dated December, 1994,
which was settled on September, 1994, no legal proceedings have been filed or
are expected to be filed against the Company.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to the Company's security holders for a vote
during the fiscal year ending December 31, 1996.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
There currently is not a trading market for the Company's $.001 par
value common stock nor has there been a trading market for the Company's stock
since its inception.
As of December 31, 1996, there were 749 record holders of the Company's
common stock. The Company has not previously declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in the
foreseeable future.
ITEM 6. Selected Financial Data.
WASATCH PHARMACEUTICAL, INC.
SUMMARY OF OPERATIONS
DECEMBER, 1996 (000'S)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Total Assets 0 0 0 0 0 0
Revenues 0 0 0 0 0 0
Operating Expenses 0 0 0 0 0 (10)
Net Earnings (Loss) 0 0 0 0 0 (10)
Per Share Data Earnings (Loss) 0 0 0 0 0 0
Average Common
Shares Outstanding 1,000 1,000 1,000 1,000 1,000 1,000
</TABLE>
5
<PAGE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
The Company has had no operational history and has yet to engage in
business of any kind. All risks inherent in new and inexperienced enterprises
are inherent in the Company's business. The Company has not made a formal study
of the economic potential of any business. At the present the Company has not
identified any assets or business opportunities for acquisition.
The Company has no liquidity and no presently available capital
resources, such as credit lines, guarantees, etc. and should a merger or
acquisition prove unsuccessful, it is possible that the Company may be dissolved
by the State of Nevada for failing to file reports. Should management decide not
to further pursue its acquisition activities, management may abandon its
activities and the shares of the Company would become worthless.
Based on current economic and regulatory conditions. Management
believes that it is possible, if not probable, for a company like the Company,
without assets or liabilities, to negotiate a merger or acquisition with a
viable private company. The opportunity arises principally because of the high
legal and accounting fees and the length of time associated with the
registration process of "going public". However, should any of these conditions
change, it is very possible that there would be little or no economic value for
anyone taking over control of the Company.
ITEM 8. Financial Statements and Supplementary Data.
See Item 14.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
During July of 1996, the Company appointed Andersen, Andersen, &
Strong, L.C. as its independent auditors. There were no disagreements during the
most recent two fiscal years and up to the date of dismissal of the predecessor
auditor, Smith & Company. The decision was made by the Board of Directors. No
other information in Section 229.304 of Regulation S-K is applicable. In August
of 1997, the Company reappointed Smith & Company as its independent auditors.
There were no disagreements during the most recent two fiscal years and up to
the date of dismissal of the predecessor auditor, Andersen, Andersen, & Strong,
L.C. The decision was made by the Board of Directors.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The following table shows the positions held by the Company's officer
and director. The director was appointed in September, 1994 and will serve until
the next annual meeting of the Company's stockholders, and until his successor
has been elected and has qualified. The officer was appointed to his position,
and continues in such position, at the discretion of the director.
Name Age Position
Mark Timothy 39 President, Director
MARK TIMOTHY, has been Director of the Company since September, 1994.
In addition to his management position with the Company, he has been an officer
of Timothy Chrysler Ford, Inc., a Utah-based automobile dealership.
ITEM 11. Executive Compensation
The Company has made no arrangements for the remuneration of its
officers and directors, except that they will be entitled to receive
reimbursement for actual, demonstrable out-of-pocket expenses, including travel
expenses if any, made on the Company's behalf in the investigation of business
opportunities. No remuneration has been paid to the Company's officers or
directors prior to the filing of this form. There are no agreements or
understandings with respect to the amount or remuneration that officers and
directors are expected to receive in the future. Management takes no salaries
from the Company and does not anticipate receiving any salaries in the
foreseeable future. No present prediction or representation can be made as to
the compensation or other remuneration which may ultimately be paid to the
Company's
6
<PAGE>
management, since upon the successful consummation of a business opportunity,
substantial changes may occur in the structure of the Company and its
management. At such time, contracts may be negotiated with new management
requiring the payment of annual salaries or other forms of compensation not
which cannot presently be anticipated. Use of the term "new management" is not
intended to preclude the possibility that any of the present officers or
directors of the Company might be elected to serve in the same or similar
capacities upon the Company's decision to participate in one or more business
opportunities.
The Company's management may benefit directly or indirectly by payments
of consulting fees, payment of finders fees to others, sales of insiders' stock
positions in whole or in part to a private company, the Company or management of
the Company or through the payment of salaries, or any others methods of
payments through which insiders or current investors receive funds, stock, other
assets or anything of value whether tangible or intangible. There are no plans,
proposals, arrangements or understandings with respect to the sale of additional
securities to affiliates, current shareholders or others prior to the location
of a business opportunity.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of December 31, 1994, information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding shares, by each of the directors
and by the officers and directors as a group.
<TABLE>
<CAPTION>
Name & address Amount of Percent
Title of Class of beneficial owner beneficial ownership of Class
- ------------------ --------------------- ---------------------- -----------
<S> <C> <C> <C>
Common Mark Timothy 800,000 80%
5340 South Cottonwood
Salt Lake City, Utah 841
</TABLE>
ITEM 13. Certain Relationships and Related Transactions
No officer, director, nominee for election as a director, or associate
of such officer, director or nominee is or has been in debt to the Company
during the last fiscal year. However, the Company's officer, director, and major
shareholder, has made an oral undertaking to make loans to the Company in
amounts sufficient to enable it to satisfy its reporting requirements and other
obligations incumbent on it as a public company, and to commence, on a limited
basis, the process of investigating possible merger and acquisition candidates.
The Company's status as a publicly-held corporation may enhance its ability to
locate potential business ventures. The loans will be interest free and are
intended to be repaid at a future date, if or when the company shall have
received sufficient funds through any business acquisition. The loans are
intended to provide for the payment of filing fees, professional fees, printing
and copying fees and other miscellaneous fees.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Financial Statements and Financial Statement Schedules.
Financial Statements - December 31, 1996
Reports on Form 8-K
There were no reports on Form 8-K filed during the fiscal year ending
December 31, 1996
7
<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.
WASATCH PHARMACEUTICAL, INC.
Dated: August 27, 1997 By: /s/
Mark Timothy, President and Director
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.
Dated: August 27, 1997 By: /s/
Mark Timothy, President and Director
8
<PAGE>
SMITH & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: 10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF SALT LAKE CITY, UTAH 84101
CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE: (801) 575-8297
UTAH ASSOCIATION OF FACSIMILE: (801) 575-8306
CERTIFIED PUBLIC ACCOUNTANTS E-MAIL: [email protected]
- -------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Wasatch Pharmaceutical, Inc. (A Development Stage Company)
We have audited the accompanying balance sheets of Wasatch Pharmaceutical, Inc.
(a development stage company) as of December 31, 1996 and 1995, and the related
statements of operations, changes in stockholders' equity, and cash flows for
the years ended December 31, 1996, 1995 and 1994 and for the period of April 14,
1986 (date of inception) to December 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 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 audits provide 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 Wasatch Pharmaceutical, Inc. (a
development stage company) as of December 31, 1996 and 1995 and the results of
its operations, changes in stockholders' equity and its cash flows for the years
ended December 31, 1996, 1995 and 1994 and for the period of April 14, 1986
(date of inception) to December 31, 1996 in conformity with generally accepted
accounting principles.
/s/ Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
August 5, 1997
F-1
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
12/31/96 12/31/95
----------------- -----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 0 $ 0
----------------- -----------------
TOTAL CURRENT ASSETS 0 0
OTHER ASSETS
Organization costs (Note 1) 0 0
----------------- -----------------
0 0
----------------- -----------------
$ 0 $ 0
================= =================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 0 $ 0
----------------- -----------------
TOTAL CURRENT LIABILITIES 0 0
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding
1,000,000 shares 1,000 1,000
Additional paid-in capital 1,000 1,000
Deficit accumulated during
the development stage (2,000) (2,000)
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 0 0
----------------- -----------------
$ 0 $ 0
================= =================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
4/14/86
Year Year Year (Date of
ended ended ended inception) to
12/31/96 12/31/95 12/31/94 12/31/96
---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0
---------------- -------------- -------------- --------------
GROSS PROFIT 0 0 0 0
General & administrative
expenses 0 0 0 2,000
---------------- -------------- -------------- --------------
NET LOSS $ 0 $ 0 $ 0 $ (2,000)
================ ============== ============== ==============
Net income (loss) per weighted
average share $ .00 $ .00 $ .00
================ ============== ==============
Weighted average number of
common shares used to compute
net income (loss) per weighted
average share 1,000,000 1,000,000 1,000,000
=============== ============= =============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During
Par Value $0.001 Paid-in Development
Shares Amount Capital Stage
-------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C>
Balances at 4/14/86 (Date of inception) 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.002 per share at 4/14/86 1,000,000 1,000 1,000
Net loss for period (1,950)
-------------- -------------- ----------------- --------------
Balances at 12/31/86 1,000,000 1,000 1,000 (1,950)
Net loss for year (10)
-------------- -------------- ----------------- --------------
Balances at 12/31/87 1,000,000 1,000 1,000 (1,960)
Net loss for year (10)
-------------- -------------- ----------------- --------------
Balances at 12/31/88 1,000,000 1,000 1,000 (1,970)
Net loss for year (10)
-------------- -------------- ----------------- --------------
Balances at 12/31/89 1,000,000 1,000 1,000 (1,980)
Net loss for year (10)
-------------- -------------- ----------------- --------------
Balances at 12/31/90 1,000,000 1,000 1,000 (1,990)
Net loss for year (10)
-------------- -------------- ----------------- --------------
Balances at 12/31/91 1,000,000 1,000 1,000 (2,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/92 1,000,000 1,000 1,000 (2,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/93 1,000,000 1,000 1,000 (2,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/94 1,000,000 1,000 1,000 (2,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/95 1,000,000 1,000 1,000 (2,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/96 1,000,000 $ 1,000 $ 1,000 $ (2,000)
============== ============== ================= ==============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
4/14/86
Year Year Year (Date of
ended ended ended Inception) to
12/31/96 12/31/95 12/31/94 12/31/96
-------------- -------------- -------------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income (loss) $ 0 $ 0 $ 0 $ (2,000)
Adjustments to reconcile
net income (loss) to
cash used by operating
activities:
Amortization 0 0 0 50
-------------- -------------- -------------- --------------
NET CASH USED BY
OPERATING ACTIVITIES 0 0 0 (1,950)
INVESTING ACTIVITIES
Organization costs 0 0 0 (50)
-------------- -------------- -------------- --------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 (50)
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 0 2,000
-------------- -------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 2,000
-------------- -------------- -------------- --------------
INCREASE IN CASH
AND CASH EQUIVALENTS 0 0 0 0
Cash and cash equivalents
at beginning of year 0 0 0 0
-------------- -------------- -------------- --------------
CASH & CASH EQUIVALENTS
AT END OF YEAR $ 0 $ 0 $ 0 $ 0
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy:
The Company has not yet adopted any policy regarding payment of
dividends.
Organization Costs:
The Company amortized its organization costs over a five year period.
Income Taxes:
The Company records the income tax effect of transactions in the same
year that the transactions enter into the determination of income,
regardless of when the transactions are recognized for tax purposes.
Tax credits are recorded in the year realized. Since the Company has
not yet realized income as of the date of this report, no provision for
income taxes has been made.
In February, 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which supersedes substantially all existing authoritative
literature for accounting for income taxes and requires deferred tax
balances to be adjusted to reflect the tax rates in effect when those
amounts are expected to become payable or refundable. The Statement was
applied in the Company's financial statements for the fiscal year
commencing January 1, 1993.
At December 31, 1996 a deferred tax asset has not been recorded due to
the Company's lack of operations to provide income to use the net
operating loss carryover of $2,000 which expires as follows:
Year Ended Expires Amount
December 31, 1986 December 31, 2001 $ 1,950
December 31, 1987 December 31, 2002 10
December 31, 1988 December 31, 2003 10
December 31, 1989 December 31, 2004 10
December 31, 1990 December 31, 2005 10
December 31, 1991 December 31, 2006 10
--------------------
$ 2,000
====================
NOTE 2: DEVELOPMENT STAGE COMPANY
The Company was incorporated as Upsilon, Inc. under the laws of the
State of Utah on April 14, 1986 and has been in the development stage
since incorporation. On December 30, 1993, the Company was dissolved as
a Utah corporation and reincorporated in Nevada as Upsilon Industries,
Inc. On July 21, 1995, the Company changed its name to TTN Capitol,
Inc. and subsequently, on October 15, 1995, the Company changed its
name to Wasatch Pharmaceutical, Inc.
NOTE 3: CAPITALIZATION
On the date of incorporation, the Company sold 1,000,000 shares of its
common stock to Capital General Corporation for $2,000 cash for an
average consideration of $.002 per share. The Company's authorized
stock includes 100,000,000 shares of common stock at $.001 par value.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Office services
are provided, without charge, by a principal shareholder. Such costs
are immaterial to the financial statements, and, accordingly, have not
been reflected therein. The officer and director of the Company are
involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such person may face a conflict in
selecting between the Company and his other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
F-6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Wasatch Pharmaceutical, Inc. December 31, 1996 financial
statements and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000853465
<NAME> Wasatch Pharmaceutical, Inc.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (1,000)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
