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__________________________________
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
__________________________________
FORM 10/A
General Form for Registration of Securities
File No. 0-27480
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
LAHAINA ACQUISITIONS, INC.
(Exact name of registrant as specific in its charter)
Colorado 84-1325695
(State of Incorporation) (I.R.S. Employer I.D. No.)
5459 South Iris Street
Littleton, Colorado 80123
(Address of principal executive offices, including zip code)
Telephone number, including area code: (303) 904-8884
Copies to: Conrad C. Lysiak, Esq.
West 601 First Avenue, Suite 503
Spokane, Washington 99204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Exhibit Index begins on page 37.
Page 1 of 39.
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ITEM 1. BUSINESS.
HISTORY, ORGANIZATION AND CHANGE OF CONTROL
Lahaina Acquisitions, Inc. (the "Company"), was organized
under the laws of the State of Colorado, on April 5, 1989, to make
a distribution of securities to shareholders of Coyote
Acquisitions, Inc. ("Coyote"). The Company filed a Form S-18
registration statement (33-31031-D) with the United States
Securities and Exchange Commission (the "SEC") but subsequently
abandoned the same. The Company subsequently decided to make a
distribution of securities to the shareholders of St. Joseph Corp.
("St. Joe"). In May 1991, the Company gifted to the shareholders
of St. Joe on a pro rata basis, 496,500 Units. Each Unit consisted
of one share of Common Stock, two Class A Warrants and two Class B
Warrants (collectively referred to as the "Warrants"). Each Class
A Warrant entitles the holder to purchase one (1) share of Common
Stock at a price of $1.00 per share. Each Class B Warrant entitles
the holder to purchase one share of Common Stock at price of $1.50
per share. The Company has the right to redeem the Warrants upon
30 days written notice at $0.0001 per Warrant. The Warrants were
due to expire in May 1995, however, the Board of Directors extended
the exercise period until May 15, 1999.
In August 1989, the Company issued a total of 1,000,000 shares
of Common Stock. 800,000 shares were issued to Gary Agron; 50,000
shares were issued to Barry Swartz; 50,000 shares were issued to
James Eller; and, 100,000 Units were issued to Coyote Acquisitions,
Inc. Each Unit consisted of one share of Common Stock; five Class
A Warrants, exercisable at $1.00 per share; and five Class B
Warrants, exercisable at $1.50 per share.
On April 24, 1991, Mr. Swartz gratuitously reconveyed his
50,000 shares to the Company; Mr. Eller gratuitously reconveyed
50,000 shares to the Company; and, Mr. Agron gratuitously
reconveyed 400,000 shares to the Company. On the same date, the
Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000
shares of Common Stock were issued to Philip Davis, the Company's
President and to Janice Agron for services rendered.
In May 1991, the Company gifted 496,500 Units to shareholders
of St. Joe. The purpose of the distribution was to cause the
shares of the Company to be widely held, in anticipation of
creating a public market for the Company's securities. The Company
has no operating history nor any revenues or earnings from
operations. The Company has no significant assets or financial
resources. As such, the Company can be defined as a "shell"
company, who's sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
As a result of the foregoing distribution, the Company
currently has 197 shareholders.
<PAGE> 3
The Company is filing this Form 10 on a voluntary basis. It
has no obligations pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Company believes that by
filing such Form 10 and being obligated to file reports pursuant to
Section 13 of the Exchange Act, it can attract an acquisition
candidate of greater financial value with a track record of
success. While the Company believes it will be a more attractive
acquisition candidate, there is no assurance that the foregoing
assumption is correct.
The Company believes that there is a demand by non-public
corporations for shell corporations that have a public distribution
of securities, such as the Company. The Company believes that
demand for shells has increased dramatically since the Securities
and Exchange Commission (the "Commission") imposed burdensome
requirements upon "blank check" companies pursuant to Reg. 419 of
the Securities Act of 1933 (the "Act"). According to the
Commission, Rule 419 was designed to strengthen regulation of
securities offerings by blank check companies, which Congress has
found to have been a common vehicle for fraud and manipulation in
the penny stock market. See Securities Act Releases No. 6891
(April 17, 1991), 48 SEC Docket 1131 and No. 6932 (April 13, 1992)
51 Docket 0382, SEC Docket 0382. The foregoing regulation has
decreased, substantially, the number of "blank check" offerings
filed with the Commission, and as a result has stimulated an
increased demand for shell corporations. While the Company has
made the foregoing assumption, there is no assurance that the same
is accurate or correct and accordingly, no assurance that the
Company will be acquired by or acquire an existing non-public
entity.
GENERAL
The Company proposes to seek, investigate and, if warranted,
acquire an interest in one or more business opportunities ventures.
As of the date hereof the Company has no business opportunities or
ventures under contemplation for acquisition but proposes to
investigate potential opportunities in the form of investors or
entrepreneurs with a concept which has not yet been placed in
operation, or in the form of firms which are developing companies.
The Company may seek out established businesses which may be
experiencing financial or operation difficulties and are in need of
the limited additional capital the Company could provide. The
Company anticipates that it will seek to merge with or acquire an
existing business. After the merger or acquisition has taken
place, the surviving entity will be the Company (Lahaina
Acquisitions, Inc.), however, management from the acquired entity
will in all likelihood operate the Company. There is however, a
remote possibility that the Company may seek to acquire and operate
an ongoing business, in which case the existing management might be
retained. Due to the absence of capital available for investment
by the Company, the types of business seeking to be acquired by the
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Company will no doubt be smaller and higher risks types of
businesses. In all likelihood, a business opportunity will involve
the acquisition of or merger with a corporation which does not need
additional cash but which desires to establish a public trading
market for its Common Stock. Accordingly, the Company's ability to
acquire any business of substance will be extremely limited.
The Company does not propose to restrict its search for
investment opportunities to any particular industry, or
geographical location and may, therefore, engage in essentially any
business, anywhere, to the extent of its limited resources.
It is anticipated that business opportunities will be
available to the Company and sought by the Company from various
sources, throughout the United States including its Officers and
Directors, professional advisors such as attorneys and accountants,
securities broker/dealers, venture capitalists, members of the
financial community, other businesses and others who may present
solicited and unsolicited proposals. The reason for this is to
attract the most favorable business opportunities and ventures
available. Management believes that business opportunities and
ventures will become available to it, due to a number factors,
including, among others: (a) management's willingness to enter
into unproven, speculative ventures; (b) management's contacts and
acquaintances; and, (c) the Company's flexibility with respect to
the manner in which it may structure potential financing and/or
acquisitions. However, there is no assurance that the Company will
be able to structure or finance and/or acquire any business
opportunity or venture.
OPERATION OF THE COMPANY
The Company intends to search throughout the United States for
a merger/acquisition candidate, however, because of the lack of
capital, the Company believes that the merger/acquisition candidate
will be conducting business within a limited geographical area.
The Company, however, intends to maintain its corporate
headquarters and principal place of business at 5459 South Iris
Street, Littleton, Colorado 80123. All corporate records will be
maintained at said office, and it is anticipated that all
shareholders' meetings will take place in Colorado. In the event
that a merger or acquisition of the Company takes place, no
assurance can be given that the corporate records or headquarters
will continue to be maintained at Lakewood, Colorado, or that
shareholders' meetings will be held in Colorado.
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The Officers and Directors will personally seek
acquisition/merger candidates and/or orally contact individuals or
broker/dealers and advise them of the availability of the Company
as an acquisition candidate. The Officers and Directors will
review material furnished to them by the proposed
merger/acquisition candidates and decide if a merger/acquisition is
in the best interests of the Company and its shareholders.
The Company may employ outside consultants, however, until a
merger/acquisition candidate has been targeted by the Company,
management believes that it is impossible to consider the criteria
that will be used to hire consultants. While the Company may hire
independent consultants, it has not considered any criteria
regarding their experience, the services to be provided, or the
term of service. The Company has not had any discussions with any
consultants and there are no agreements or understandings with any
consultants.
Other than as disclosed herein, there are no other plans for
accomplishing the business purpose of the Company.
SELECTION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken
by or under the supervision of the Officers and Directors, none of
whom is a professional business analyst or has any previous
training or experience in business analysis. Inasmuch as the
Company will have no funds available to it in its search for
business opportunities and venture, the Company will not be able to
expend significant funds on a complete and exhaustive investigation
of such business or opportunity. The Company will however,
investigate, to the extent believed reasonable by its management,
such potential business opportunities or ventures.
As part of the Company's investigation, Officers and Directors
will meet personally with management and key personnel of the firm
sponsoring the business opportunity, may visit and inspect plants
and facilities, obtain independent analysis or verification of
certain information provided, check references of management and
key personnel, and conduct other reasonable measures, to the extent
of the Company's limited financial resources and management and
technical expertise.
Prior to making a decision to recommend to shareholders
participation in a business opportunity or venture, the Company
will generally request that it be provided with written materials
regarding the business opportunity containing such items as a
description of products, services and company history; management
resumes; financial information; available projections with related
assumptions upon which they are based; evidence of existing
patents, trademarks or service marks or rights thereto;
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present and proposed forms of compensation to management; a
description of transactions between the prospective entity and its
affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive
conditions; and, other information deemed relevant.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and costs
for accountants, attorneys and others. $450.00 incurred for the
audit covering the last six years was paid by the Company's
President Philip Davis. Further $2,000 in legal expenses were paid
by Mr. Davis and Mr. John Lee, the Company's Secretary. Mr. Davis
and Mr. Lee anticipate funding the Company's operations, including
providing funds necessary to search for acquisition candidates.
Mr. Davis and Mr. Lee anticipate funding such expenses until an
acquisition candidate is found, without regard to the amount
involved. Accordingly, no alternative cash resources have been
explored.
There are no loan agreements or understandings. The Company
will not make any loans to officers or directors, nor will the
Company make loans to any acquisition candidate. Money advanced by
Messrs. Davis and Lee is and will be done gratuitously without any
obligation on the part of the Company to repay the same.
The Company will have unrestricted flexibility in seeking,
analyzing and participating in business opportunities. In its
efforts, the Company will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market
expansion or new products;
(b) Competitive position as compared to other firms engaged in similar
activities;
(c) Strength of management;
(d) Capital requirements and anticipated availability of required funds from
future operations, through the sale of additional securities, through
joint ventures or similar arrangements or from other sources; and,
(e) Other relevant factors.
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Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex.
Potential investors must recognize that due to the Company's
limited capital available for investigation and management's
limited experience in business analysis, the Company may not
discover or adequately evaluate adverse facts about the opportunity
to be acquired.
The Company is unable to predict when it may participate in a
business opportunity. It expects, however, that the analysis of
specific proposals and the selection of a business opportunity may
take several months or more. The Company does not plan to raise
any capital at the present time, by private placements, public
offerings, pursuant to Regulation S promulgated under the Act, or
by any means whatsoever. Further, there are no plans, proposals,
arrangements or understandings with respect to the sale or issuance
of additional securities prior to the location of an acquisition or
merger candidate.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity
will depend upon the nature of the opportunity, the respective
needs and desires of the Company and the promoters of the
opportunity, and the relative negotiating strength of the Company
and such promoters. The exact form or structure of the Company's
participation in a business opportunity or venture will be
dependent upon the needs of the of the particular situation. The
Company's participation may be structured as an asset purchase
agreement, a lease, a license, a joint venture, a partnership, a
merger, or acquisition of securities.
As set forth above, the Company may acquire its participation
in a business opportunity through the issuance of Common Stock or
other securities in the Company. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an
acquisition is so-called "tax free" reorganization under Section
368(a)(1) of the Internal Revenue Code of 1954, as amended, may
depend upon the issuance to the shareholders of the acquired
company of at least eighty percent (80%) of the Common Stock of the
combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions
rather than other "tax free" provisions provided under the Internal
Revenue Code all prior shareholders may, in such circumstances,
retain twenty percent (20%) or less of the total issued and
outstanding Common Stock. If such a transaction were available to
the Company, it will be necessary to obtain shareholder approval to
effectuate a reverse stock split or to authorize additional shares
<PAGE> 8
of Common Stock prior to completing such acquisition. This could
result in substantial additional dilution to the equity of those
who were shareholders of the Company prior to such reorganization.
Further, extreme caution should be exercised by any investor
relying upon any tax benefits in light of the proposed new tax
laws. It is possible that no tax benefits will exist at all.
Prospective investors should consult their own legal, financial and
other business advisors.
The present management and the shareholders of the Company in
this offering will in all likelihood not have control of a
majority of the voting shares of the Company following a
reorganization transaction. In fact, it is most probable that the
shareholders of the acquired entity will gain control of the
Company. Further, management intends to make available for
purchase by shareholders of the acquired entity of up to 75% of the
shares of Common Stock owned by them. The terms of sale of the
shares presently held by officers and/or directors of the Company
will not be afforded to other shareholders of the Company. As part
of such a transaction, all or a majority of the Company's Directors
may resign and new Directors may be appointed without any vote by
shareholders.
Present stockholders have not agreed to vote their respective
shares of Common Stock in accordance with the vote of the majority
of all non-affiliated future stockholders of the Company with
respect to any business combination.
The Company may not borrow funds and use funds to make
payments to Company promoters, management or their affiliates or
associates.
The Company has an unwritten policy that it will not acquire
or merge with a business or company in which the Company's
management or their affiliates or associates directly or indirectly
have an ownership interest. Management is not aware of any
circumstances under which the foregoing policy will be changed and
management, through their own initiative, will not change said
policy.
The Company is required by the regulations promulgated under
the Securities Exchange Act of 1934 to obtain and file with the
Commission, audited financial statements of the acquisition
candidate not later than sixty days from the date the Form 8-K is
due at the Commission disclosing the acquisition/merger.
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RIGHTS OF DISSENTING SHAREHOLDERS
Under the Colorado Corporation Code, a business combination
typically requires the approval of two-thirds of the outstanding
shares of both participating companies. The Company's Articles of
Incorporation reduce the voting requirement to a majority of the
Company's outstanding Common Stock. Shareholders who vote against
any business combination in certain instances may be entitled to
dissent and to obtain payment for their shares pursuant to Sections
7-4-123 and 7-4-124 of the Colorado Corporation Code. The
requirement of approval of the Company's shareholders in any
proposed business combination is limited to those transactions
identified as a merger or a consolidation. A business combination
identified as a share exchange does not require the approval of the
Company's shareholders, nor does it entitle shareholders to dissent
and obtain payment for their shares. Accordingly, unless the
acquisition is a statutory merger, requiring shareholder approval,
the Company will not provide shareholders with a disclosure
document containing audited or unaudited financial statements,
prior to such acquisition.
Prior to any business combination for which shareholder
approval is required, the Company intends to provide its
shareholders complete disclosure documentation concerning the
business opportunity or target company and its business. Such
disclosure will in all likelihood be in the form of a proxy
statement which will be distributed to shareholders at least 20
days prior to any shareholder's meeting.
None of the Company's officers, directors, promoters, their
affiliates or associates have had any preliminary contact or
discussions with and there are no present plans, proposals,
arrangements or understandings with any representatives of the
owners of any business or company regarding the possibility of an
acquisition or merger transaction contemplated in this registration
statement.
NOT AN "INVESTMENT ADVISER"
The Company is not an "investment adviser" under the Federal
Investment Advisers Act of 1940, which classification would involve
a number of negative considerations. Accordingly, the Company
will not furnish or distribute advice, counsel, publications,
writings, analysis or reports to anyone relating to the purchase or
sale of any securities within the language, meaning and intent of
Section 2(a)(11) of the Investment Advisers Act of 1940, 15 U.S.C.
80b2(a)(11).
<PAGE> 10
NOT AN "INVESTMENT COMPANY"
The Company may become involved in a business opportunity
through purchasing or exchanging the securities of such business.
The Company does not intend however, to engage primarily in such
activities and is not registered as an "investment company" under
the Federal Investment Company Act of 1940. The Company believes
such registration is not required.
The Company must conduct its activities so as to avoid
becoming inadvertently classified as a transient "investment
company" under the Federal Investment Company Act of 1940, which
classification would affect the Company adversely in a number of
respects. Section 3(a) of the Investment Company Act provides the
definition of an "investment company" which excludes an entity
which does not engage primarily in the business of investing,
reinvesting or trading in securities, or which does not engage in
the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than United States
government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty percent (40%) of
the value of its total assets (excluding government securities,
cash or cash items). The Company intends to implement its business
plan in a manner which will result in the availability of this
exemption from the definition of "investment company." The Company
proposes to engage solely in seeking an interest in one or more
business opportunities or ventures.
Effective January 14, 1981, the Securities and Exchange
Commission adopted Rule 3a-2 which deems that an issuer is not
engaged in the business of investing, reinvesting, owning, holding
or trading in securities for purposes of Section 3(a)(1), cited
above, if, during a period of time not exceeding one year, the
issuer has a bona fide intent to be engaged primarily, or as soon
as reasonably possible (in any event by the termination of a one
year period of time), in a business other than that of investing,
reinvesting, owning, holding or trading in securities and such
intent is evidenced by the Company's business activities and
appropriate resolution of the Company's Board of Directors duly
adopted and duly recorded in the minute book of the Company. The
Rule 3a-2 "safe harbor" may not be relied on more than a single
time.
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COMPANY'S OFFICE
The Company's offices are located at 5459 South Iris Street,
Littleton, Colorado 90123, and the telephone number is (303) 940-8884.
The Company's office is located in the home of Philip Davis,
the Company's President and a member of the Board of Directors.
Approximately nine square feet are allocated to the Company on a
rent free basis. The office will remain at Mr. Davis's home until
an acquisition has been concluded. There are no written documents
memorializing the foregoing.
There are no preliminary agreements or understandings with
respect to the office facility subsequent to the completion of an
acquisition. Upon a merger or acquisition, the Company intends to
relocate its office to that of the acquisition candidate.
Employees
The Company is a development stage company and currently has
no employees other than certain of its Officers and Directors. See
"Management." Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does not
anticipate a need to engage any full-time employees so long as it
is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection
with the decision whether or not to acquire or participate in a
specific business opportunity.
ITEM 2. FINANCIAL INFORMATION.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected financial data presented below has been derived
from the financial statements of the Company, which financial
statements have been examined by Doran Peck, C.P.A. P.C.
independent certified public accountant, as indicated in his report
included elsewhere herein.
The following table summarized certain financial information
and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Financial Statements and related notes included elsewhere in this
Prospectus. For the reasons set forth in this Form 10 registration
statement the information shown below may not be indicative of the
Company's future results of operations.
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<TABLE>
Statement of Loss and Accumulate Deficit Data:
<CAPTION>
Years Ended September 30
1995 1994 1993 1992 1991 Six Months Ended
--------------------------------------------- 3/31/96 3/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Operating
Expenses $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Net Income
(loss) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Net Income
per Share $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Balance Sheet Data:
Working
Capital $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Total
Assets $ 600 $ 600 $ 600 $ 600 $ 600 $ 1,050 $ 600
Long-term
Debt $ -0- $ -0- $ -0- $ -0- $ -0- $ 450 $ -0-
Stockholders'
equity $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITIONS
Results of Operations - (May 1, 1991) through May 30, 1996.
The Company is considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7. There have been no
operations since incorporation.
Liquidity and Capital Resources.
The Company issued 996,500 shares of its Common Stock to officers,
directors and others. The Company has no operating history and no material
assets. The Company has $-0- in cash as of May 30, 1996.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company has no assets.
<PAGE> 13
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth as of May 30, 1996, the Common Stock
ownership of each person known by the Company to be the beneficial owner of
five percent or more of the Company's Common Stock, each director
individually and all officers and directors of the Company as a group. Each
person has sole voting and investment power with respect to the shares of
Common Stock shown, and all ownership is of record and beneficial.
Name and address Number of Percent
of owner Shares Position of Class
- ---------------------------------------------------------------------------
Philip J. Davis [1] 440,000 President and a member 44.18%
5459 South Iris Street of the Board of Directors
Littleton, CO 80123
John C. Lee [2] 440,000 Secretary and a member 44.18%
5410 E. Long Pl. of the Board of Directors
Littleton, CO 80122
Charles C. Van Gundy[3] 20,000 Treasurer and a member 2.00%
7215 Lowell Boulevard of the Board of Directors
Westminster, CO 80030
All officers and 900,000 90.36%
directors as a
group (3 persons)
[1] Does not include 380,000 Class A Warrants and 380,000 Class
B Warrants to purchase up to 760,000 shares of Common Stock.
[2] Does not include 380,000 Class A Warrants and 380,000 Class
B Warrants to purchase up to 760,000 shares of Common Stock.
[3] Does not include 40,000 Class A Warrants and 40,000 Class B
Warrants to purchase up to 80,000 shares of Common Stock.
<PAGE> 14
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
Officers and Directors.
The officers and directors of the Company are as follows:
Name Age Position
Philip J. Davis 39 President and a member of the
Board of Directors
John C. Lee 39 Secretary and a member of the
Board of Directors
Charles C. Van Gundy 43 Treasurer and a member of the
Board of Directors
All directors hold office until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The Company's officers are elected by the Board of
Directors at the annual meeting after each annual meeting of the
Company's shareholders and hold office until their death, or until
they resign or have been removed from office.
Philip J. Davis - President and a member of the Board of Directors.
Mr. Davis is President and a member of the Board of Director
of the Company. Mr. Davis held the position of Secretary/Treasurer
of the Company from May 1991 until November 1995 when resigned said
office to assume the position of President of the Company. Mr.
Davis has held the position of President since November 1995. Mr.
Davis has held the position as a member of the Board of Directors
since May 1991 of the Company. From December 1992 to the present,
Mr. Davis is a self-employed consultant. From January 1991 to
November 1992, Mr. Davis was affiliated with Private Investors
Cartel, Ltd., a securities broker/dealer, as a trader and principal
thereof. From September 1984 to December 1990, Mr. Davis was the
President and a member of the Board of Directors of Richfield
Securities, Inc., a securities broker/dealer. On January 27, 1992,
the District Business Conduct Committee of the National Association
of Securities Dealers, Inc. rendered a decision against Mr. Davis
finding that Mr. Davis, Richfield Securities, Inc. and another
individual charged unfair and fraudulent markups in connection with
the sale of securities. Further, the District Business Conduct
Committee found that Mr. Davis and Richfield Securities, Inc.
failed to establish and implement written supervisory procedures to
detect and prevent the markup violations. Richfield Securities,
Inc. was fined $30,133.97 and suspended from membership in the
National Association of Securities Dealers, Inc.
<PAGE> 15
for one year and Mr. Davis was censured, fined $30,133.97,
suspended from the National Association of Securities Dealers for
one year and required to requalify by examination prior to becoming
associated with any member of the National Association of
Securities Dealers, Inc. On January 15, 1991, Mr. Davis
voluntarily closed Richfield Securities, Inc. Further, Richfield
Securities, Inc., Mr. Davis and the third party were assessed the
costs of the action in the amount of $908.00. Mr. Davis appealed
the foregoing decision to the Securities and Exchange Commission
(the "Commission") and on November 12, 1993 the foregoing sanctions
were affirmed by the Commission. The suspensions referred to above
began on March 21, 1994 and will conclude at the close of business
on March 21, 1995. In October 1992, Mr. Davis filed for protection
under Chapter XIII of the United States Bankruptcy Act. In July
1994, the action was voluntarily dismissed by the Bankruptcy Court.
On December 2, 1994, Mr. Davis filed a petition for bankruptcy
pursuant to Chapter VII of the United States Bankruptcy Act. Mr.
Davis was granted a discharge in March 1995. Since May 1991, Mr.
Davis has been Secretary/Treasurer and a member of the Board of
Directors of Cancun Acquisitions, Inc., a shell corporation.
Cancun Acquisitions, Inc. distributed its securities to
shareholders of St. Joe in May 1991. The shares were distributed
without consideration and a Form D was filed with the Securities
and Exchange Commission. There was no offering price and no funds
were raised from the distribution. The purpose of the distribution
was to cause the securities to become widely held. No mergers or
acquisitions have occurred. From May 1991 to November 1995, Mr.
Davis was Secretary/Treasurer and a member of the Board of
Directors of Kapalua Acquisitions, Inc., a Colorado shell
corporation. From November 1994 to November 1995, Mr. Davis was
President of Kapalua Acquisitions, Inc. Kapalua's securities were
distributed to shareholders of St. Joe in May 1991. The shares
were distributed without consideration and a Form D was filed with
the Commission. There was no offering price and no funds were
raised from the distribution. The purpose of the distribution was
to cause the securities to become widely held. Mr. Davis resigned
his positions as an officer and director of Kapalua Acquisitions,
Inc. when it completed a reverse acquisition with Startech
Corporation, a Connecticut corporation engaged in the business of
waste disposal. Since May 1991, Mr. Davis has been
Secretary/Treasurer and a member of the Board of Directors of
Napili Acquisitions, Inc., a shell corporation. Napili
Acquisitions, Inc. distributed shares to shareholders of St. Joe in
May 1991. The shares were distributed without consideration and a
Form D was filed with the Securities and Exchange Commission.
There was no offering price and no funds were raised from the
distribution. The purpose of the distribution was to cause the
securities to become widely held. No mergers or acquisitions have
occurred. From May 1991 to November 1995, Mr. Davis was
Secretary/Treasurer and a member of the Board of Directors of Paia
Acquisitions, Inc., a shell corporation. Paia Acquisitions, Inc.
<PAGE> 16
distributed its securities to shareholders of St. Joe in May 1991.
The shares were distributed without consideration and a Form D was
filed with the Securities and Exchange Commission. There was no
offering price and no funds were raised from the distribution. The
purpose of the distribution was to cause the securities to become
widely held. In November 1995, Paia acquired all of the issued and
outstanding shares of common stock of Consolidated Financial
Management, Inc. d/b/a Banc-Pro, an Arizona corporation in exchange
for 3,900,000 post reverse-split restricted shares of common of
Paia and 845,000 preferred shares of Paia. Paia's common stock
began trading on the Bulletin Board operated by the National
Association of Securities Dealers, Inc. in January 1996. Mr. Davis
resigned as an officer and director of Paia in November 1995.
Since May 1991, Mr. Davis has been Secretary/Treasurer and a member
of the Board of Directors of Wailea Acquisitions, Inc., a shell
corporation. Wailea Acquisitions, Inc. distributed its securities
to shareholders of St. Joe in May 1991. The shares were
distributed without consideration and a Form D was filed with the
Securities and Exchange Commission. There was no offering price
and no funds were raised from the distribution. The purpose of the
distribution was to cause the securities to become widely held. No
mergers or acquisitions have occurred. From June 1987 to December
1992, Mr. Davis was President and a member of the Board of
Directors of Pre-Cor Corporation, which was used by Mr. Davis to
hold title to his personal investments. Pre-Cor Corporation was
dissolved in 1992. Mr. Davis will devote approximately 2% of his
time to the Company.
John C. Lee - Secretary and a member of the Board of Directors.
Mr. Lee is Secretary and a member of the Board of Directors of
the Company. Mr. Lee has held the foregoing positions since
November 1995. Since November 1992, Mr. Lee been engaged in the
practice of investing his personal funds in securities. From
November 1994 to November 1995, Mr. Lee was Vice President and a
member of the Board of Directors of Kapalua Acquisitions, Inc., a
Colorado shell corporation. Kapalua's securities were distributed
to shareholders of St. Joe in May 1991. The shares were
distributed without consideration and a Form D was filed with the
Commission. There was no offering price and no funds were raised
from the distribution. The purpose of the distribution was to
cause the securities to become widely held. Mr. Lee resigned his
positions as an officer and director when it completed a reverse
acquisition with Startech Corporation, a Connecticut corporation
engaged in the business of waste disposal. From August 1989 to
November 1992, Mr. Lee was Secretary of Private Investors Cartel,
Ltd. a securities broker/dealer. From April 1985 to August 1989,
Mr. Lee was self-employed as a financial consultant. From March
1985 to July 1986, Mr. Lee was Vice President of American Mobile
Communications in Littleton, Colorado. American Mobile
<PAGE> 17
Communications was engaged in the business of acquiring and
managing mobile home parks. From November 1984 to July 1985, Mr.
Lee was Secretary of Sequal Securities, Inc. a securities
broker/dealer located in Glendale, Colorado. From October 1981 to
March 1985, Mr. Lee was President of Rigel Securities, a securities
broker/dealer located in Aurora, Colorado. From February 1982 to
July 1982, Mr. Lee was a registered representative associated with
Columbine Securities, a securities broker/dealer located in Denver,
Colorado. Mr. Lee will devote approximately 2% of his time to the
operation of the Company.
Charles C. Van Gundy - Treasurer and a member of the Board of
Directors.
Mr. Van Gundy is Treasurer and a member of the Board of
Directors of the Company. Mr. Van Gundy has held the foregoing
positions since November 1995. Since January 1992, Mr. Van Gundy
has been employed by U. S. Pawn, Inc., Denver, Colorado, a NASDAQ
traded public company, first as its Assistant Controller,
subsequently as its Controller and Vice President of Accounting,
and currently as its Vice President of Finance and Chief Financial
Officer. From 1982 to January 1992, Mr. Van Gundy served as an
accounting officer for various mutual fund, high technology and
economic redevelopment organizations. Mr. Van Gundy holds a
Bachelor of Science degree in accounting and finance from
Metropolitan State College of Denver (1979), and subsequently
studied law at the University of San Diego School of Law until
1981.
There are no family relationship between any director or
executive office and any other director or executive officer.
Gary Agron and Janice Agron are friends of Philip Davis. Mr.
Agron is an attorney and renders legal services to Mr. Davis. Gary
Agron, Janice Agron and Philip Davis are or were officers and/or
directors of the shell entities described in Mr. Davis's
biographical information.
John Lee and Philip Davis are friends and former
officers/directors of Kapalua Acquisitions, Inc.
Charles VanGundy, John Lee and Philip Davis are acquaintances.
Charles Van Gundy and Gary Agron are acquaintances who met while
playing golf and are currently affiliated with U.S. Pawn.
Gary Agron and Janice Agron are no longer affiliated with the
Company in any manner.
<PAGE> 18
There are no agreements or understandings for any officer or
director to resign at the request of another person and that none
of the officers or directors are acting on behalf of or will act at
the direction of any other person. The officers and directors may
resign, however, at the time of the acquisition or merger at the
request of the management of the acquisition candidate.
The activities of each Officer and Director will be material
to the operation of the Company. No other person's activities will
be material to the operation of the Company. There are no
promoters of the Company, other than its Officers and Directors.
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers or directors currently receives
any salary from the Company. The Company does not anticipate
entering into employment agreements with any of its officers or
directors in the near future. Directors do not receive
compensation for their services as directors and are not reimbursed
for expenses incurred in attending board meetings.
Other than consulting fees and finder's fees which may be paid
to unaffiliated third parties, no other individuals will receive
any salaries or fees from the Company. The Company's officers and
directors will not receive finder's fees, consulting fees or
salaries. Officers, directors and/or principal shareholders may
receive cash or stock from the sale of their shares of the
Company's stock to the Company's merger/acquisition candidate or
principals of the merger/acquisition candidate.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company was incorporated on April 5, 1989. In August
1989, the Company issued a total of 1,000,000 shares of Common
Stock. 800,000 shares were issued to Gary Agron; 50,000 shares
were issued to Barry Swartz; 50,000 shares were issued to James
Eller; and, 100,000 Units were issued to Coyote Acquisitions, Inc.
Each Unit consisted of one share of Common Stock; five Class A
Warrants, exercisable at $1.00 per share; and five Class B
Warrants, exercisable at $1.50 per share.
On April 24, 1991, Mr. Swartz gratuitously reconveyed his
50,000 shares to the Company; Mr. Eller gratuitously reconveyed
50,000 shares to the Company; and, Mr. Agron gratuitously
reconveyed 400,000 shares to the Company. On the same date, the
Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000
shares of Common Stock were issued to Philip Davis, the Company's
President and to Janice Agron for services rendered.
<PAGE> 19
On May 10, 1991, the Company gifted 496,500 Units of
securities of the Company on a pro rata basis to shareholders of
St. Joseph Corp. ("St. Joe"), pursuant to Regulation D of the
Securities Act of 1933, as amended. Each Unit consisted of one
share of common stock, two Class A Warrants and two Class B
Warrants. Each Class A Warrant entitles the holder to purchase one
share of common stock at a price of $1.00 per share for a period of
four year from May 10, 1991 and each Class B Warrant entitled the
holder to purchase one share of common stock at a price of $1.50
per share for a period of four years from May 10, 1991. The
exercise period of the Class A and Class B Warrants was extended to
May 10, 1999 by resolution of the Board of Directors on May 1,
1995. The purpose of the distribution was to cause the shares of
the Company to be widely held, in anticipation of creating a public
market for the Company's securities. The Company has no operating
history nor any revenues or earnings from operations. The Company
has no significant assets or financial resources. As such, the
Company can be defined as a "shell" company, who's sole purpose at
this time is to locate and consummate a merger or acquisition with
a private entity. Gary Agron and Janice Puder Agron received
350,000 Units in this offering as a result of their ownership of
shares of St. Joe and Mr. Davis received 50,000 Units in this
offering as a result of his ownership of shares of St. Joe.
On November 11, 1994, Gary Agron and Janice Puder Agron
conveyed all of their right, title and interest in and to 800,000
shares of Common Stock, 700,000 Class A Warrants and 700,000 Class
B Warrant to Mr. Davis. In November 1995, Mr. Davis conveyed
440,000 shares of Common Stock, 380,000 Class A Warrants and
380,000 Class B Warrants to Mr. Lee. The foregoing was
characterized as a 4(1 1/2) transaction pursuant to Section 4(2) of
the Securities Act of 1933. In November 1995, Mr. Davis conveyed
20,000 shares of Common Stock, 40,000 Class A Warrants and 40,000
Class B Warrants to Mr. Van Gundy. The foregoing was characterized
as a 4(1 1/2) transaction pursuant to Section 4(2) of the
Securities Act of 1933.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its
knowledge, no action, suit or proceedings against it has been
threatened by any person.
<PAGE> 20
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if
developed, that it will be sustained. A shareholder in all
likelihood, therefore, will be unable to resell the securities
referred to herein should he or she desire to do so. Furthermore,
it is unlikely that a lending institution will accept the Company's
securities as pledged collateral for loans unless a regular trading
market develops.
There are no plans, proposals, arrangements or understandings
with any person with regard to the development of a trading market
in any of the Company's securities.
As of May 30, 1996, the Company has 197 holders of record of
its Common Stock, 197 holders of record of its Class A Warrants,
and 197 holders of record of its Class B Warrants.
The Company has not paid any dividends since it is inception
and does not anticipate paying any dividends on its Common Stock in
the foreseeable future.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities
issued by "blank check" or "shell" corporations. The Company may
be considered a "blank check" or "shell" corporation for the
purpose of state securities laws. Accordingly, it is possible that
current shareholders may be unable to resell their securities in
other states. The Company is unaware which particular states
prohibit such resales, other than Idaho or Indiana.
The Commission has suggested that the Company take steps to
prohibit further transfer of the securities distributed to current
shareholders, unless the Company is assured that the further
transfer would not violate the securities laws of the fifty states.
The Company believes that the Commission has no authority to cause
the Company to place restrictions on the securities it previously
distributed and which it currently does not own. Such action by
the Company would legally be construed as a unilateral modification
of a fully executed contract and would be considered as a breach
thereof. Further, the Company believes that such action by the
Commission would be a usurpation of the authority granted it by
Congress.
Further, because each state has a series of exempt securities
transaction predicated upon the particular facts of each
transaction, it is impossible to determine if a contemplated
transaction by an existing shareholder would possibly violate the
securities laws of any particular state.
<PAGE> 21
In the event a current shareholder or broker/dealer resells
its securities in a state where such resale is prohibited, the
Company believes that the seller thereof may be liable criminally
or civilly under that particular state's laws. The Company
believes that it will not be liable for such improper secondary
sales.
Existing shareholders should exercise caution in the resale of
their shares of common stock in light of the foregoing.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The Company was incorporated on April 5, 1989. In August
1989, the Company issued a total of 1,000,000 shares of Common
Stock. 800,000 shares were issued to Gary Agron; 50,000 shares
were issued to Barry Swartz; 50,000 shares were issued to James
Eller; and, 100,000 Units were issued to Coyote Acquisitions, Inc.
Each Unit consisted of one share of Common Stock; five Class A
Warrants, exercisable at $1.00 per share; and five Class B
Warrants, exercisable at $1.50 per share.
On April 24, 1991, Mr. Swartz gratuitously reconveyed his
50,000 shares to the Company; Mr. Eller gratuitously reconveyed
50,000 shares to the Company; and, Mr. Agron gratuitously
reconveyed 400,000 shares to the Company. On the same date, the
Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000
shares of Common Stock were issued to Philip Davis, the Company's
President and to Janice Agron for services rendered.
On May 10, 1991, the Company gifted 496,500 Units of
securities of Company on a pro rata basis to shareholders of St.
Joe Corp. ("St. Joe"), pursuant to Regulation D of the Securities
Act of 1933, as amended. Each Unit consisted of one share of
common stock, two Class A Warrants and two Class B Warrants. Each
Class A Warrant entitles the holder to purchase one share of common
stock at a price of $1.00 per share for a period of four years from
May 10, 1991 and each Class B Warrant entitled the holder to
purchase one share of common stock at a price of $1.50 per share
for a period of four years from May 10, 1991. The exercise period
of the Class A and Class B Warrants was extended to May 10, 1999 by
resolution of the Board of Directors on May 1, 1995. The purpose
of the distribution was to cause the shares of the Company to be
widely held, in anticipation of creating a public market for the
Company's securities. The Company has no operating history nor any
revenues or earnings from operations. The Company has no
significant assets or financial resources. As such, the Company
can be defined as a "shell" company, who's sole purpose at this
time is to locate and consummate a merger or acquisition with a
private entity. Gary Agron and Janice Puder Agron received 350,000
Units as a result of their ownership of shares of St. Joe and Mr.
Davis received 50,000 Units as a result of his ownership of St.
Joe.
<PAGE> 22
On November 11, 1994, Gary Agron and Janice Puder Agron
conveyed all of their right, title and interest in and to 800,000
shares of Common Stock, 700,000 Class A Warrants and 700,000 Class
B Warrant to Mr. Davis. In November 1995, Mr. Davis conveyed
440,000 shares of Common Stock, 380,000 Class A Warrants and
380,000 Class B Warrants to Mr. Lee. The foregoing was
characterized as a 4(1 1/2) transaction pursuant to Section 4(2) of
the Securities Act of 1933. In November 1995, Mr. Davis conveyed
20,000 shares of Common Stock, 40,000 Class A Warrants and 40,000
Class B Warrants to Mr. Van Gundy. The foregoing transactions were
characterized as a 4(1 1/2) transactions pursuant to Section 4(2)
of the Securities Act of 1933.
ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE
REGISTERED.
UNITS
The Units consisted of one share of Common Stock, two A
Warrants and two B Warrants. Each A Warrant entitles the holder to
purchase one share of Common Stock at a price of $1.00 per share.
Each B Warrant entitles the holder to purchase one share of Common
Stock at a price of $1.50 per share. The A and B Warrants were due
to expire four years from May 1, 1991. On May 1, 1995 the Board of
Directors of the Company extended the exercise period of the Class
A and Class B Warrants until May 10, 1999. The Units were validly
issued, fully paid and nonassessable.
COMMON STOCK
The authorized Common Stock of the Company consists of
800,000,000 shares of no par value Common Stock. All shares have
equal voting rights and are not assessable. Voting rights are not
cumulative and, therefore, the holders of more than 50% of the
Common Stock could, if they chose to do so, elect all of the
directors of the Company.
Upon liquidation, dissolution or winding up of the Company,
the assets of the Company, after the payment of liabilities, will
be distributed pro rata to the holders of the Common Stock. The
holders of the Common Stock do not have preemptive rights to
subscribe for any securities of the Company and have no right to
require the Company to redeem or purchase their shares. The shares
of Common Stock presently outstanding are fully paid and
nonassessable.
<PAGE> 23
WARRANTS
Each Unit consisted of one share of Common Stock, two A
Warrants and two B Warrants. Each A Warrant entitles the holder to
purchase one share of Common Stock at $1.00 per share during the
four year period commencing on May 10, 1991. Each B Warrant
entitles the holder to purchase one share of Common Stock at $1.50
per share during the four year period commencing on May 10, 1991.
On May 1, 1995, the Board of Directors of the Company extended the
exercise period of the Class A and Class B Warrants until May 10,
1999. The A Warrants and B Warrants are referred to collectively
as the "Warrants." At any time, the Company may redeem the
Warrants at $0.0001 per Warrant upon 30 days' written notice to
warrant holders. The Company may redeem all or a portion of either
of the Warrants and the Company may redeem the A Warrants and the
B Warrants at different times. Any warrant holder who does not
exercise his or her warrants prior to the redemption date, as set
forth in the Company's notice of redemption, will forfeit the right
to purchase the shares of Common Stock underlying the Warrants and,
after the redemption date, any outstanding Warrants will be void
and of no further force and effect, except that they will have the
right to receive the redemption price of $0.0001 per Warrant until
the conclusion of the exercise period. If the Company does not
redeem the Warrants, the Warrants will expire, become void and be
of no further force or effect on conclusion of the exercise period,
unless extended by the Company's Board of Directors.
The Warrants will be issued pursuant to a warrant agreement
between the Company and Corporate Stock Transfer, Inc., Denver,
Colorado (the "Warrant Agent"). The Company has authorized and
reserved for issuance the shares of Common Stock issuable upon
exercise of the Warrants.
The Warrants contain anti-dilution provisions so as to avoid
dilution of the equity interest represented by the underlying
Common Stock upon the occurrence of certain events such as share
dividends or splits. The anti-dilution provisions will not apply
in the event a merger or acquisition is undertaken by the Company.
In the event of the liquidation, dissolution or winding up of the
Company, holders of the Warrants will not be entitled to
to participate in the assets of the Company. Holders of the
Warrants will have no voting, preemptive, liquidation or other
rights of a shareholder, and no dividends will be declared on the
Warrants.
<PAGE> 24
PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of
Preferred Stock, no par value. The Preferred Stock may be issued
in series from time to time with such designation, rights,
preferences and limitations as the Board of Directors of the
Company may determine be resolution. The rights, preferences and
limitations of separate series of Preferred Stock may differ with
respect to such matters as may be determined by the Board of
Directors, including, without limitation, the rate of dividends,
method and nature of payment of dividends, terms of redemption,
amounts payable on liquidation, sinking fund provisions (if any),
conversion rights (if any) and voting rights. No Preferred Stock
has been issued by the Company.
DIVIDENDS
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is
contemplated in the foreseeable future.
TRANSFER AGENT
Corporate Stock Transfer, Inc., 370 Seventeenth Street, Suite
2300, Denver, Colorado 80202, is the Company's transfer and warrant
agent.
ISSUANCE OF ADDITIONAL SECURITIES
The Company has not considered and does not know, at the
present time, of circumstances which may result in the issuance to
management, promoters or their affiliates or associates of
securities of the Company, other than the possible issuance of
securities to a finder of the acquisition/merger candidate. The
Company will not, however, issue securities to a finder who is an
Officer, Director or affiliate of the Company. Currently, there
are no agreements nor have there been any discussions with anyone
to pay a finder's fee in cash or securities.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-3-10(o) of the Colorado Revised Statutes and certain
provisions of the Company's Articles of Incorporation under certain
circumstances provide for indemnification of the Company's
Officers, Directors and controlling persons against liabilities
which they may incur in such capacities. A summary of the
circumstances in which such indemnification is provided for is
contained herein, but this description is qualified in its entirety
by reference to the Company's Articles of Incorporation and to the
statutory provisions.
<PAGE> 25
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments
arising in connection with a legal proceeding to which such person
is a party, if that person's actions were in good faith, were
believed to the be in the Company's best interest, and were not
unlawful. Unless such person sis successful upon the merits in
such an action, indemnification may be awarded only after a
determination by independent decision of the Board of Directors, by
legal counsel, or by a vote of the shareholders, that the
applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is
generally the same as those set forth above; however, with respect
to such actions, indemnification is granted only with respect to
expenses actually incurred in connection with the defense or
settlement of the action. In such actions, the person to be
indemnified must have acted in good faith and in a manner believed
to have been in the Company's best interest, and have not been
adjudged liable for negligence or misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered in the future or pursuant to a vote
of shareholders or Directors. The statutory provision cited above
and the Company's Articles of Incorporation also grant the power to
the Company to purchase and maintain insurance which protects its
Officers and Directors against any liabilities incurred in
connection with their service in such a position, and such a policy
may be obtained by the Company.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements are included on Pages F-1 through F-13 herein.
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of
this Registration Statement.
<PAGE> 26
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1995, 1994, 1993 1992, 1991 AND 1990
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE> 27
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
Lahaina Acquisitions, Inc.
(A development stage Company)
5459 South Iris Street
Littleton, Colorado 80123
We have audited the accompanying balance sheets of Lahaina
Acquisitions, Inc. as of September 30, 1995, 1994 1993, 1992,
1991 and 1990 and the related statements of operations cash flows
and changes in stockholders' equity for the years then ended.
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 Lahaina Acquisitions, Inc. as of September 30, 1995, 1994
1993, 1992, 1991 and 1990, and the results of its operations for
the years then ended, in conformity with generally accepted
accounting principles.
/s/ Doran Peck, C.P.A., P.C.
Denver, Colorado
June 6, 1996
<PAGE> 28
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
BALANCE SHEETS
September 30, 1995, 1994, 1993, 1992, 1991 and 1990
<TABLE>
ASSETS
<CAPTION>
1995 1994 1993 1992 1991 1990
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
ORGANIZATION COSTS 600 600 600 600 600 500
==== ==== ==== ==== ==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
NONE -0- -0- -0- -0- -0- -0-
Stockholders' Equity:
Common Stock,
800,000,000 shares
authorized no par
value; 996,500 shares
issued and outstanding
(see note A) 600 600 600 600 600 500
Preferred stock.
10,000,000 shares
authorized, -0- -0- -0- -0- -0- -0-
no par value
Net income (deficit)
accumulated during the
development stage -0- -0- -0- -0- -0- -0-
____ ____ ____ ____ ____ ____
600 600 600 600 600 500
==== ==== ==== ==== ==== ====
</TABLE>
See accompanying notes to financial statements.
<PAGE> 29
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
STATEMENTS OF OPERATIONS
years ending September 30, 1995, 1994,
1993, 1992, 1991 and 1990
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Revenues -0- -0- -0- -0- -0- -0-
Expenses -0- -0- -0- -0- -0- -0-
Net Income -0- -0- -0- -0- -0- -0-
</TABLE>
See accompanying notes to the financial statements.
<PAGE> 30
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
STATEMENT OF CASH FLOWS
years ending September 30, 1995, 1994,
1993, 1992, 1991 and 1990
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Cash flows from
investment activities -0- -0- -0- -0- 100 500
Cash flows from operating and
financing activities -0- -0- -0- -0- (100) (500)
Beginning cash balance -0- -0- -0- -0- -0- -0-
____ ____ ____ ____ ____ ____
Ending cash balance -0- -0- -0- -0- -0- -0-
==== ==== ==== ==== ==== ====
</TABLE>
See accompanying notes to the financial statements.
<PAGE> 31
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From August 1989 (date of inception) to September 30, 1995
<TABLE>
<CAPTION>
Total
Common Stock Paid-in Stockholders'
Shares Warrants Amounts Capital Equity
<S> <C> <C> <C> <C> <C>
8/89 shares issued
to Mr. Agron,
Swartz & Eller 900,000 $ 450 $ 450
8/89 shares issued
to Coyote
Acquisitions 100,000 1,000,000 50 50
_________ _________ ____ ____
Balance
9/30/89 1,000,000 1,000,000 500 500
4/24/91 shares
gratuitously
reconveyed to
the Company:
Swartz & Eller (100,000) ( 50) 50
Mr. Agron (400,000) (200) 200
4/24/91 shares
of Coyote
cancelled (100,000) (1,000,000) ( 50) 50
4/24/91
shares issued
to Mr. Davis &
Mrs. Agron 100,000 100 100
5/10/91 shares
issued to St.
Joseph Corp.
shareholders:
Agron 312,500 1,250,000
Agron 37,500 150,000
Davis 50,000 200,000
Other Share-
holders 96,500 386,000
_________ _________ ____ ___ ____
Balances 9/30
1991, 1992, 1993
1994 & 1995 996,500 1,986,000 $ 600 $-0- $ 600
========= ========= ==== === ====
</TABLE>
NOTE: There was no deficit accumulated during the development stage.
<PAGE> 32
LAHAINA ACQUISITIONS, INC.
(A development stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1995, 1994, 1993, 1992, 1991 and 1990
Note A - Summary of Significant Accounting Policies
ORGANIZATION
Lahaina Acquisitions, Inc. was incorporated under the laws of the
State of Colorado in April 1989. The Company is in the
development stage and has had no operations.
The Company is in the development stage as more fully defined in
Statement no. 7 of the Financial Accounting Standards Board. The
Company intends to actively seek, locate, evaluate, structure and
complete mergers with or acquisitions of private companies,
partnerships or sole proprietorships.
In September 1989, the Company filed a Registration Statement
with the United States Securities and Exchange Commission to
register 100,000 Units of its securities sold to Coyote
Acquisitions, Inc. Each Unit consists of one share of Common
Stock, five A Warrants and five B Warrants. In April 1991, the
Company cancelled the 100,000 Units of its securities issued to
Coyote Acquisitions, Inc. since the Securities and Exchange
Commission failed to clear the Registration Statement.
In May 1991, the Company distributed 496,500 Units of its
securities under the provisions of Regulation D, Rule 504 on a
pro rata basis to the shareholders of St. Joseph Corp. Each Unit
consists of:
1 Share of common no par stock
2 Class A common stock purchase warrants
2 Class B common stock purchase warrants
Each Class A warrant entitles the holder to purchase one share of
common stock at $1.00 per share.
Each Class B warrant entitles the holder to purchase one share of
common stock at $1.50 per share.
These common stock purchase warrants expire May 10, 1999. The
Company has the right to redeem the warrant upon 30 days written
notice at $.0001 per share.
Professional fees of $450 were incurred in December 1995 for the
audit for the years ending September 30, 1995, 1994, 1993, 1992,
1991 and 1990. This expense was paid by the President of the
Company. Additional accounting fees of $650 were incurred in May
1996 and were paid by the President of the Company.
<PAGE> 33
LAHAINA ACQUISITIONS, INC.
INTERIM OPERATING RESULTS
(Unaudited)
<PAGE> 34
LAHAINA ACQUISITIONS, INC.
BALANCE SHEET
<TABLE>
ASSETS
<CAPTION>
March September
31, 1996 30, 1995
________ ________
(Unaudited)
<S> <C> <C>
Organization Costs $ 1,050 $ 600
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities
Loan payable officer 450 -0-
Stockholders equity:
Common stock, 800,000,000
shares authorized no par
value; 996,500 shares issued
and outstanding (Note A) 600 600
Preferred stock,
10,000,000 authorized,
no par value -0- -0-
Accumulated deficit -0- -0-
______ _____
Total $ 1,050 $ 600
====== =====
</TABLE>
See accompanying notes to the financial statements.
<PAGE> 35
LAHAINA ACQUISITIONS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
1996 1995 1996 1995
------------------ ----------------
<S> <C> <C> <C> <C>
Revenues: -0- -0- -0- -0-
Expenses: -0- -0- $ -0- -0-
Net Income
(loss): -0- -0- $ -0- -0-
=== === ==== ===
</TABLE>
See accompanying notes to the financial statements.
<PAGE> 36
LAHAINA ACQUISITIONS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31
1996 1995
<S> <C> <C>
Cash flows from operations:
Net income (loss) $ -0- -0-
----- ---
Net cash (Used) from
operating activities: $ -0- -0-
===== ===
Cash flows from investing
activities: 450 -0-
----- ---
Net cash (Used) by
investing activities: 450 -0-
===== ===
Cash Flows from financing
activities:
Loan - officer $ (450) -0-
Net cash (Used) by financing
activities: $ (450) -0-
===== ===
Beginning cash balance -0- -0-
Ending cash balance -0- -0-
</TABLE>
See accompanying notes to the financial statements.
<PAGE> 37
LAHAINA ACQUISITIONS, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
Note A - Summary of Significant Accounting Policies
ORGANIZATION
Lahaina Acquisitions, Inc. was incorporated under the laws of the
State of Colorado in April 1989. The Company is in the development
stage and has had no operations.
The Company is in the development stage as more fully defined in
Statement No. 7 of the Financial Accounting Standards Board. The
Company intends to actively seek, locate, evaluate, structure and
complete mergers with or acquisitions of private companies,
partnerships or sole proprietorships.
In September 1989, the Company filed a Registration Statement with
the United States Securities and Exchange Commission to register
100,000 Units of its securities sold to Coyote Acquisitions, Inc.
Each Unit consists of one share of Common Stock, five A Warrants
and five B Warrants. In April 1991, the Company cancelled the
100,000 Units of its securities issued to Coyote Acquisitions, Inc.
since the Securities and Exchange Commission failed to clear the
Registration Statement.
In May 1991, the Company distributed 496,500 Units of its
securities under the provisions of Regulation D, Rule 504 on a pro
rata basis to the shareholders of St. Joseph Corp. Each Unit
consists of:
1 Share of common no par stock
2 Class A common stock purchase warrants
2 Class B common stock purchase warrants
Each Class A warrant entitles the holder to purchase one share of
common stock at $1.00 per share.
Each Class B warrant entitles the holder to purchase one share of
common stock at $1.50 per share.
These common stock purchase warrants expire May 10, 1999. The
Company has the right to redeem the warrant upon 30 days written
notice at $.0001 per share.
Professional fees of $450 were incurred in December 1995 for the
audit for the years ending September 30, 1995, 1994, 1993, 1992,
1991 and 1990. This expense was paid by the President of the
Company. Additional accounting fees of $650 were incurred in May
1996 and were paid by the President of the Company.
<PAGE> 38
EXHIBITS
Exhibit No. Description Page No.
3.1 Articles of Incorporation. *
3.2 Bylaws of the Company. *
4.1 Specimen Stock Certificate. *
4.2 Specimen Class A Warrant Certificate. *
4.3 Specimen Class B Warrant Certificate. *
24.1 Consent of Doran Peck, C.P.A., P.C. 39
28.1 Private Placement Memorandum. *
28.2 Notice of Distribution Pursuant to
Regulation D. *
28.3 Warrant Agreement. *
* Filed previously.
<PAGE> 40
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this Amendment No. 2 to the Form 10
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in Denver, Colorado on this 6th day of June, 1996.
LAHAINA ACQUISITIONS, INC.
/s/ Philip J. Davis, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitues and appoints Philip J. Davis, as true and lawful attorney-in-
fact and agent, with full power of substitution, for his and in his name, place
and stead, in any and all capacitiies, to sign any and all amendments to this
registration statement, and to file the same, therewith, wtih the Securities
and Exchange Commission, and to make any and all state securities law or blue
sky filings, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in about the premises, as fuly to all intends and purposes as he
might or could do in person, hereby ratifying the confirming all that said
attorney-in-fact and agent, or any substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 2 to the Form 10 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Philip J. Davis President and member of the June 6, 1996
Board of Directors
/s/ John C. Lee Secretary and member of the June 6, 1996
Board of Directors
/s/ Charles C. Van Gundy Treasurer, Chief Financial June 6, 1996
Officer, Principal Accounting
Officer and member of the
Board of Directors
DORAN PECK, C.P.A., P.C.
2121 South Oneida Street, Suite 636
Denver, Colorado 80224
Bus (303) 758-1796 FAX (303) 758-1825
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in this Form 10 of Lahaina Acquisitions,
Inc. of our report dated June 6, 1996, accompanying the financial
statements of Lahaina Acquisitions, Inc. contained in such Form
10, and to the use of our name and the statements with respect to
us, as appearing under the heading "Experts" in this Form 10.
/s/ Doran Peck, C.P.A. P.C.
Doran W. Peck, C.P.A. P.C.
Certified Public Accountants
Denver, Colorado
June 6, 1996
