DAVID WAGNER & ASSOCIATES, P.C.
Attorneys and Counsellors at Law
8400 East Prentice Avenue
Penthouse Suite
Englewood, Colorado 80111
Telephone (303) 793-0304
Facsimile (303) 771-4562
February 12, 1997
Richard K. Wulff
Chief
Office of Small Business Policy
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: H.A. Spinaker, Inc. (the Company)
File No. 0-21099
Dear Mr. Wulff;
This is in response to your comment letter of February 10, 1997 concerning
the Company. The format herein corresponds to the paragraphs of your comment
letter.
Previous Blank Check Offerings.
The suggested changes have been made.
Please be advised that none of the companies listed had former names. The
Plantation which you refer to now trades as Forestry International on the NASDAQ
Bulletin Board.
The suggested changes have been made.
General
Questions concerning the accounting should be directed to Michele Giroux
Warren, (303) 695-6306. All other questions should be directed to David Wagner
(303) 793-0304.
Very truly yours,
DAVID WAGNER & ASSOCIATES, P.C.
/s/ David J. Wagner
David J. Wagner
w/enclosure
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Amendment No. 2
General Form For Registration of Securities
of Small Business Issuers Under
Section 12(b) or (g) of
the Securities Exchange Act of 1934
HA Spinnaker, Inc.
(Exact Name of Small Business Issuer as specified in its charter)
Colorado 84-112830
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)
5650 Greenwood Plaza #216
Englewood, Colorado 80111
(Address of principal executive offices) (zip code)
(303) 741-1118
(Registrant's telephone number, including area code)
Securities to be Registered Pursuant to Section 12(b) of the Act:
None
Securities to be Registered Pursuant to Section 12(g) of the Act:
Common Stock, $0.0001 per share par value
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference are found in Item 15.
<PAGE>
Item 1. Description of Business.
(a) General Development of Business
HA Spinnaker, Inc. (the "Company" or the "Registrant"), is a Colorado
corporation. The principal business address is 5650 Greenwood Plaza, #216,
Englewood, Colorado 80111.
The Company was incorporated under the laws of the State of Colorado on
September 28, 1988. Since inception, the primary activity of the Company has
been directed towards organizational efforts. During this fiscal year, the
Company plans to implement a program to identify potential acquisition
candidates. The Company filed a Form S-18 January, 1990. This filing was
withdrawn in May, 1991, because of adverse market conditions.
As of the date of this Registration Statement, the Company has not engaged
in any preliminary efforts intended to identify possible business opportunities
and has neither conducted negotiations nor entered into a letter of intent
concerning any business opportunity. The Company is a shell corporation whose
principal purpose is to locate and consummate a merger or acquisition with a
private entity. The Company is filing this Form 10SB on a voluntary basis to
become a public, reporting company under the Securities Act of 1934, as amended.
(the "Exchange Act").
The Company has not been subject to any bankruptcy, receivership or similar
proceeding.
(b) Narrative Description of the Business
General
From inception to the date of this Registration Statement, the Company has
had no activities. During this period, the Company has carried no inventories or
accounts receivable. No independent market surveys have ever been conducted to
determine demand for the Company's products and services, since the Company has
never had any products or services which it has provided to anyone. During this
period, the Company has carried on no operations and generated no revenues. The
Company's fiscal year end is November 30th.
Organization
The Company presently comprises one corporation with no subsidiaries or
parent entities and is in the developmental stage.
(c) Operations
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General
The Company proposes to implement a business plan to investigate and, if
warranted, merge with or acquire the assets or common stock of an entity
actively engaged in business which generates revenues. The Company will seek
opportunities for long-term growth potential as opposed to short-term earnings.
As of the date hereof, the Company has no business opportunities under
investigation. None of the Company's officers, directors, promoters or
affiliates have engaged in any preliminary contact or discussions with any
representative of any other company regarding the possibility of an acquisition
or merger between the Company and such other company. Further, there is no
present potential that the Company may acquire or merge with a business or
company in which the Company's promoters, management or their affiliates or
associates directly or indirectly have an ownership interest.
The Company's Board of Directors intends to provide the Company's
shareholders with complete disclosure documentation in the form of a proxy
statement concerning any potential business opportunity and the structure of the
proposed business combination prior to its consummation. While such disclosure
may include audited financial statements of such a target entity, there is no
assurance that such audited financial statements will be available. The Board of
Directors does intend to obtain certain assurances of value of the target
entity's assets prior to consummating such a transaction, with further
assurances that an audited statement would be provided within sixty days after
closing of such a transaction. Closing documents relative thereto will include
representations that the value of the assets conveyed to or otherwise so
transferred will not materially differ from the representations included in such
closing documents, or the transaction will be voidable.
As a result of its filing of this Form 10SB, the Company has become subject
to the reporting obligations under the Exchange Act. These include an annual
report under cover of Form 10KSB, with audited financial statements, unaudited
quarterly reports, and the requirement proxy statements in regard to annual
shareholder meetings. Any potential acquisition or merger candidates will be
required to meet these same requirements, including the necessity of audited
financial statements. Such requirements may have the effect of restricting the
potential pool of candidates for merger or acquisition. The Company will
voluntarily file periodic reports in the event that its obligation to file such
reports is suspended under the Exchange Act.
The Registrant has no full-time employees. The Registrant's President and
SecretaryTreasurer have agreed to allocate a portion of their time to the
activities of the Registrant, without compensation. These officers anticipate
that the business plan of the Company can be implemented by their collectively
devoting approximately twenty hours per month to the business affairs of the
Company and, consequently, conflicts of interest may arise with respect to the
limited time commitment of such officers.
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Some of the Company's officers and directors are presently involved and
plan to be involved with other "blank check" companies and, as a result,
additional potential conflicts of interest may arise. If such a conflict does
arise in the future and an officer or director of the Company is presented with
business opportunities under circumstances where there may be doubt as to
whether the opportunity should belong to the Company or another "blank check"
company with which they are affiliated, they will disclose the opportunity to
the Boards of Directors of all such companies. If a situation arises in which
more than one company desires to merge with or acquire that target company, and
the principals of the proposed target company have no preference as to which
company will merge with or acquire such target company, the company which first
filed a Registration Statement with the U.S. Securities and Exchange Commission
will be entitled to proceed with the proposed transaction.
The primary attraction of the Registrant as a merger partner or as an
acquisition vehicle will be its status as a public company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present shareholders of the Registrant.
The Company has no present plans to hire a consultant to aid the Company in
any acquisition or merger.
The Articles of Incorporation of the Company provides that the Company may
indemnify officers and/or directors of the Company for liabilities, which can
include liabilities arising under the securities laws. Therefore, the assets of
the Company could be used or attached to satisfy any liabilities subject to such
indemnification. See Part II, Item 5 below.
General Business Plan
The Company's purpose is to seek, investigate and, if such investigation
warrants, to acquire controlling interest in business opportunities presented to
it by persons or firms who or which desire to seek the perceived advantages of
an Exchange Act registered corporation. The Company will not restrict its search
to any specific business, industry, or geographical location. The Company may
participate in a business venture of virtually any kind or nature.
The Company will solicit prospective acquisitions based upon informal
contacts or relationships which management has a will develop in the future.
There are no plans to advertise for acquisitions or to hire third party
consultants to facilitate acquisitions. The Company has no way of knowing how
many individuals will be contacted before a potential acquisition may be
finalized. The Company has no plans to do any acquisition with any associates or
affiliates of management, or with management itself.
The Company may seek a business opportunity in the form of firms which have
recently commenced operations, are developing companies in need of expansion
into new products or markets, are seeking to develop a new product or service or
are established, mature businesses. The Company may also offer a controlling
interest to such business opportunity, if the situation warrants.
3
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In seeking business opportunities, the management decision of the Company
will be based upon the objective of seeking long-term appreciation in the value
of the Company. Current income will only be a minor factor in such decisions.
It is not anticipated that the Company will be able to participate in more
than one business opportunity. However, Management may, in its sole discretion,
elect to enter into more than one acquisition if it believes these transactions
can be effectuated on terms favorable to the Company. This lack of
diversification will not permit the Company to offset potential losses from one
business opportunity against profits from another and should be considered a
substantial risk to shareholders of the Company.
The analysis of new business opportunities will be undertaken by or under
the supervision of the officers and directors. The Company will have
unrestricted flexibility in seeking, analyzing and participating in business
opportunities. In its efforts, the Company will consider the following, among
other, factors:
(a) potential for growth, as indicated by new technology, anticipated
market expansion or new products;
(b) competitive position compared to other firms of similar size and
experience within the industry segment, as well as within the industry
as a whole;
(c) strength and diversity of management, either in place or scheduled for
recruitment;
(d) capital requirements and anticipated availability of required funds to
be provided by the target company from operations, through the sale of
additional securities, the formation of joint ventures or similar
arrangements, or from other sources;
(e) the cost of participation by the Company as compared to the perceived
tangible and intangible values and potential;
(f) the extent to which the business opportunity can be advanced;
(g) the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items;
and
(h) such other relevant factors as may arise from time to time, including
investor and market maker, if any, interest.
4
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In applying the foregoing criteria, no one of which is now known to be
controlling, Management will attempt to analyze all relevant factors and make a
determination based upon reasonable investigative measures and available data.
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. Because of the Company's lack of capital, 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 a substantial amount of time
after the effective date of this Registration Statement.
Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity and containing such items as: (i) a
description of product, service and company history; (ii) management resumes;
(iii) financial information (including projections and audited financial
statements, if available); (iv) available projections with related assumptions
upon which they are based; (v) an explanation of proprietary products and
services; (vi) evidence of existing patents, trademarks or service marks or
rights thereto; (vii) present and proposed forms of compensation to management;
(viii) a description of transactions between the target and its affiliates
during relevant periods; (ix) a description of present and required facilities;
(x) an analysis of risks and competitive conditions; (xi) a financial plan of
operation and estimated capital requirements; and (xii) other information deemed
relevant under the circumstances, including investor and market makers, but only
after the release of public information on the target.
As part of the Company's investigation, officers and directors will meet
personally with management and key personnel, visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel and take other
reasonable investigative measures to the extent of the Company's limited
financial resources.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, Management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and other factors.
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. The Company has no present plans to raise any
necessary capital through private placements or public offerings prior to the
location of an acquisition or merger candidate.
5
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(d) Markets
The Company's initial marketing plan will be focused completely on finding
an acquisition candidate as discussed above. No efforts toward this marketing
plan have been made as of the date of this Registration Statement.
(e) Raw Materials
The use of raw materials is not now material factor in the Company's
operations at the present time.
(f) Customers and Competition
At the present time, the Company is expected to be an insignificant
participant among the firms which engage in the acquisition of business
opportunities. There are a number of established companies, such as venture
capital and financial concerns, many of which are larger and better capitalized
than the Company and/or have greater personnel resources and technical
expertise. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's competitors.
(g) Backlog
At March 31, 1996, the Company had no backlogs.
(h) Employees
At as of the date hereof, the Company has no employees. The Company does
not plan to hire employees in the future.
(i) Proprietary Information
The Company has no proprietary information.
(j) Government Regulation
The Company is not subject to any material governmental regulation or
approvals.
(k) Research and Development
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The Company has never spent any amount in research and development
activities.
(l) Environmental Compliance
At the present time, the Company is not subject to any costs for compliance
with any environmental laws.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Company has generated no revenues from its operations since inception.
Since the Company has not generated revenues and has never been in a profitable
position, it operates with minimal overhead. The Company's primary activity will
be to seek an acquisition candidate. As of the end of the reporting period, the
Company has concluded no acquisitions and has spoken with no potential
candidates. The attempt to seek an acquisition candidate or candidates will be
the primary focus of the Company's activities in the coming fiscal year.
Liquidity and Capital Resources
As of the end of the reporting period, the Company had no cash or cash
equivalents. There was no significant change in working capital during this
fiscal year.
Management feels that the Company has inadequate working capital to pursue
any business opportunities other than seeking an acquisition candidate. The
Company will have minimal capital requirements prior to the consummation of any
acquisition but can pursue an acquisition candidate. Until a suitable candidate
is identified, Mr. Greg Skufca will personally provide the necessary funds for
the operation of the Company, which are expected to be minimal. There is no plan
to reimburse Mr. Skufca for any advances. The Company does not intend to pay
dividends in the foreseeable future.
Item 3. Description of Properties
As of March 31, 1996, the Company's business office was located at 5650
Greenwood Plaza, #216, Englewood, Colorado 80111. The Company pays no rent for
this office space, which is occupied by Mr. Greg Scufca. There are no plans to
charge the Company for office space. The Company has no properties.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following sets forth the number of shares of the Registrant's $0.0001
par value common stock beneficially owned by (i) each person who, as of March
31, 1996, was known by the Company to own beneficially more than five percent
(5%) of its common stock; (ii) the individual Directors of the Registrant and
(iii) the Officers and Directors of the Registrant as a group.
7
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Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership (1)(2) Class
Gregory W. Skufca(3) 20,000,000 69.9%
2191 W. Dry Creek Rd.
Littleton, CO 80120
Barney E. Carlson 100,000 0.3%
433 Ridge Road
Yuba City, CA 95991
William L. Skufca(3) 7,000,000 24.5%
620 Front Range Road
Littleton, CO 80120
All Officers and Directors 27,100,000 94.7%
as a Group (three persons)
(1) All ownership is beneficial and on record, unless indicated otherwise.
(2) Beneficial owners listed above have sole voting and investment power with
respect to the shares shown, unless otherwise indicated.
(3) Gregory W. Skufca is the son of William L. Skufca.
All of the shareholders of the Company, which consist of four persons, have
signed lock up agreements which will prevent all of the common shares from being
sold or transferred, either in the open market or in a private transaction,
until the Company has consummated a merger or acquisition and is no longer
classified as a shell corporation under applicable federal or state law. The
share certificates will be held by the Company's counsel until such merger or
acquisition has been consummated. Any liquidation of the current shareholders
after the release of the shares from the lock up may have a depressive effect
upon the trading prices of the Company's securities in any future market which
may develop.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The Directors and Executive Officers of the Company, their ages and present
positions held in the Company are as follows:
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NAME AGE POSITION HELD
- ---- --- -------------
Gregory W. Skufca 38 President and Director
Barney E. Carlson 56 Vice President and
Director
William L. Skufca 66 Secretary, Treasurer
and Director
The Company's Directors will serve in such capacity until the next annual
meeting of the Company's shareholders and until their successors have been
elected and qualified. The officers serve at the discretion of the Company's
Directors. William L. Skufca is the father of Gregory W. Skufca. Otherwise,
there are no family relationships among the Company's officers and directors,
nor are there any arrangements or understandings between any of the directors or
officers of the Company or any other person pursuant to which any officer or
director was or is to be selected as an officer or director.
Messrs. Gregory W. Skufca, Barney E. Carlson and William L. Skufca should
be considered "parents" or "promoters" of the Company (as such terms are defined
under the Securities Act), inasmuch as each has taken significant initiative in
founding and organizing the business of the Company and because of the
shareholdings and control positions held by each in the Company.
Gregory W. Skufca. Mr. Skufca has been the president and a director of the
Company since its inception, and has been the president of Financial
Communications Corp. (Financial Communications) since January, 1989. Mr. Skufca,
through Financial Communications, advises public and private investors, assists
in the obtaining and structuring of venture capital financing and assists
companies in their public relations. Previous to Financial Communications, Mr.
Skufca served as a loan officer and consultant with Skufca-Meyer Financial
Corp., Lakewood, Colorado, May, 1987, until January, 1989. Skufca-Meyer was a
small, privately-held Denver area lender specializing in residential mortgages
and corporate financing, but is no longer in business. From May, 1985, until
May, 1987, Mr. Skufca was employed as an independent sales representative with
Charles Milne and Associates, Denver, Colorado, a privately-held wholesale
office furniture and supply company. Previous to that he was employed as a new
home salesman with Skufca and Shelton Company, Denver, Colorado,, between
October, 1984, and May, 1985. This entity is also no longer in business. None of
these companies or any other company with which Mr. Skufca is affiliated will
provide services for the Company. There is no written policy of the Company to
this effect. However, Mr. Skufca has indicated his intention not to have any
company with which he is or has been associated, including, but not limited to
Financial Communications Corp., provide services while he is an officer and
director. Mr. Skufca has also been involved in several blank check offerings.
See Previous Blank Check Offerings.
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Mr. Skufca earned a bachelor's degree from the University of Colorado at
Boulder in 1980 and has attended numerous seminars in financial planning, real
estate, and marketing. He was licensed with the NASD as a sales agent but is no
longer licensed. Mr. Skufca is currently devoting approximately 15 hours per
month to the affairs of the Company.
Barney E. Carlson. Mr. Carlson has been the vice president and director of the
Company since its inception and has been employed with Yuba College, Yuba City,
California, since 1971. Since 1980, Mr. Carlson has been an instructor in
business law, introduction to business, supervision, business math, and career
planning. He has also conducted seminars for Yuba College on business valuation,
communications skills and supervision techniques. Since 1978, Mr. Carlson has
also been employed by Western Practice Sales, a privately-held corporation, in
Yuba City, California, as a broker, appraiser and consultant to veterinary
businesses. Mr. Carlson has also been involved in several blank check offerings.
See Previous Blank Check Offerings.
Mr. Carlson served in the U.S. Army between 1963 and 1965. He earned a Mast
of Arts in Business from the University of Redlands, Redlands, California, in
1971 and a Bachelor of Science in Business from the University of Colorado at
Boulder in 1968. Mr. Carlson is involved with numerous community groups,
including the Boy Scouts, 20-30 Club International, Young Life and Right to
Life. Mr. Carlson plans to devote approximately 5 hours per month to the affairs
of the Company.
William L. Skufca. Mr. Skufca has been the secretary, treasurer and a director
of the Company since its inception and was president of Skufca-Meyer Financial
Corporation of Lakewood, Colorado, from 1986 until January, 1989. This entity is
no longer in business. Mr. Skufca is currently the president of Surety Mortgage,
a small real estate mortgage company specializing in convention, FHA and HUD
financing. Mr. Skufca was also the president of Skufca and Company, Littleton,
Colorado, from 1985 until June of 1988, when the corporation ceased business.
This corporation was a small, privately-held Denver area real estate,
construction and remodeling firm. Between 1957 and 1985, Mr. Skufca was
secretary of Skufca and Shelton Company, Inc., of Littleton, Colorado. Skufca
and Shelton was a small, privately- held Denver area custom home builder which
is no longer in business. Mr. Skufca has also been involved in several blank
check offerings. See Previous Blank Check Offerings.
Mr. Skufca holds a BSBA from the University of Denver and a Colorado real
estate broker's license. He plans to devote as much time as may be necessary to
fulfill his responsibili ties to the Company.
Previous Blank Check Offerings
Knight Natural Gas, Inc.
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From August, 1994 to August, 1996, Mr. Gregory Skufca served as the
President and a Director. This company raised no funds but acquired certain
defined assets on August 26, 1996, of Sedcore Exploration Company Limited
("Sedcore") in exchange for 5,000,000 common shares of the Company. On August
27, 1996, the Company entered into an additional acquisition of certain
additional defined assets of Sedcore in exchange for 8,500,000 common shares of
the Company. The Company's name was changed to "Kalan Gold Corporation" in
November, 1996. Mr. Skufca ceased to be an officer, director and an affiliate of
this company in August, 1996 but remains an non-affiliate shareholder.
Marantha II, Inc.
This company made a public offering in February, 1988 and raised $180,000.
Messrs. Gregory W. and William L. Skufca served as directors and as the
president and secretary, respectively, of Marantha from its inception in 1987
until its acquisition by Equity Financial Group, Inc. in 1988. They have ceased
all direct and indirect affiliations with this corporation, other than the
non-affiliate shareholdings which they continue to hold.
Parle' International, Inc.
This company made a public offering in August, 1988 and raised $200,000.
Messrs. Gregory W. Skufca, Barney E. Carlson and William L. Skufca previously
served as directors and as the president, vice president and secretary,
respectively, of Parle'. They have ceased all direct or indirect affiliations
with Parle' after its acquisition of Vision in October, 1988. None of these
individuals continue to hold shares in Parle'. This company now trades as
Indenet (trading symbol INDE) on NASDAQ.
Kiwi III, Ltd.
This company made a public offering in November, 1988 and raised $150,000.
Mr. Gregory W. Skufca was president and a director of Kiwi, Mr. Barney E.
Carlson was the vice-president and a director, and Mr. William L. Skufca was the
secretary/treasurer and a director from Kiwi's inception until its acquisition
by Beat the House in October, 1989. At that time, they ceased all direct or
indirect affiliations with the corporation and have no shareholdings. This
company now trades on NASDAQ as Petro Union (trading symbol PTRUQ).
Focus V
This company made a public offering in January, 1989 and raised $225,000.
Mr. Gregory W. Skufca was president and a director of Focus V. Mr. Barney E.
Carlson was the vice- president and a director, and Mr. William L. Skufca was
the secretary/treasurer and a director from Focus' inception until its
acquisition by Work Recover (trading symbol WRCI) in December, 1989. At that
time, they ceased all direct or indirect affiliations with the corporation and
have no shareholdings. This company currently trades in the Pink Sheets.
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Plantation
This company made a public offering in October, 1989 and raised $150,000.
Mr. Gregory Skufca previously served Plantation Capital Corp. as a director and
as president/treasurer, and has served in these capacities from the inception of
the corporation in August of 1988 to 1990. This company was acquired and Mr.
Skufca no longer has any involvement with the new entity. This company now
trades as Forestry International (trading symbol FYNI) on the NASDAQ Electronic
Bulletin Board.
Item 6. Executive Compensation
None of the Company's officers and/or directors receive any compensation
for their respective services rendered to the Company, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Registrant has generated revenues from operations. Any compensation will be
dependent upon a combination of factors, including the percentage of time a
person devotes to the business of the Registrant, experience, ability of the
Registrant to pay, and other items.
The Company has no retirement, pension, profit sharing, stock option,
insurance or other similar programs.
Item 7. Certain Relationships and Related Transactions
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Item 8. Legal Proceedings.
No legal proceedings of a material nature to which the Company is a party
were pending during the reporting period, and the Company knows of no legal
proceedings of a material nature pending or threatened or judgments entered
against any director or officer of the Company in his capacity as such.
Item 9. Market for Common Equity and Related Stockholder Matters.
(a) Principal Market or Markets
The Company's securities have never been listed for trading on any market
and are not quoted at the present time. At the present time, the Company does
not know where secondary trading will eventually be conducted. The place of
trading, to a large extent, will depend upon the size of the Company's eventual
acquisition. To the extent, however, that trading will be conducted in the
over-the-counter market in the so-called "pink sheets" or the NASD's "Electronic
Bulletin Board," a shareholder may find it more difficult to dispose of or
obtain accurate quotations as to price of the Company's securities. In addition,
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure related to the market for penny stock and for trades in
any stock defined as a penny stock.
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(b) Approximate Number of Holders of Common Stock
As of the date hereof, a total of 28,600,000 of shares of the Company's
Common Stock were outstanding and the number of holders of record of the
Company's common stock at that date was four. All of the Company's shareholders
acquired their respective shares in the Company during the Company's initial
capitalization in 1988 and 1989. All of the issued and outstanding shares of the
Company's common stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933, as amended.
All of the shareholders of the Company have signed lock up agreements which
will prevent all of the common shares from being sold or transferred, either in
the open market or in a private transaction, until the Company has consummated a
merger or acquisition and is no longer classified as a shell corporation under
applicable federal or state law. The share certificates will be held by the
Company's counsel until such merger or acquisition has been consummated. Any
liquidation of the current shareholders after the release of the shares from the
lock up may have a depressive effect upon the trading prices of the Company's
securities in any future market which may develop.
(c) Dividends
Holders of common stock are entitled to receive such dividends as may be
declared by the Company's Board of Directors. No dividends on the common stock
were paid by the Company during the periods reported herein nor does the Company
anticipate paying dividends in the foreseeable future.
(d) The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny stock
and for trades in any stock defined as a penny stock. Unless the Company can
acquire substantial assets and trade at over $5.00 per share on the bid, it is
more likely than not that the Company's securities, for some period of time,
would be defined under that Act as a "penny stock." As a result, those who trade
in the Company's securities may be required to provide additional information
related to their fitness to trade the Company's shares. These requirements
present a substantial burden on any person or brokerage firm who plans to trade
the Company's securities and would thereby make it unlikely that any liquid
trading market would ever result in the Company's securities while the
provisions of this Act might be applicable to those securities.
13
<PAGE>
(e) Blue Sky Compliance
The trading of blank check companies may be restricted by the securities
laws ("Blue Sky" laws) of the several states. Management is aware that a number
of states currently prohibit the unrestricted trading of blank check companies
absent the availability of exemptions, which are in the discretion of the
states' securities administrators. The effect of these states' laws would be to
limit the trading market, if any, for the shares of the Company and to make
resale of shares acquired by investors more difficult.
The impact of these Blue Sky laws is considered to be minimal since the
Company does not intend to qualify the Company's outstanding securities for
secondary trading in any state until such time as an acquisition or merger has
been consummated.
(f) Investment Company Act of 1940
The Company does not intend to engage in any activities which would cause
it to be classified as an "investment company" under the Investment Company Act
of 1940, as amended. However, to the extent that the Company would inadvertently
become an investment company because of its activities, the Company would be
subjected to additional, costly and restrictive regulation.
Item 10. Recent Sales of Unregistered Securities.
The Company has not issued any of its common stock in the three year period
preceding the date of this Registration Statement. All of the shares of common
stock of the Registrant previously issued have been issued for investment
purposes in a "private transaction" and are restricted securities as defined
under the Securities Act of 1933, as amended. These shares may not be offered
for public sale except if registered or pursuant to an exemption from
registration, such as Rule 144. The Company has issued stop transfer orders
concerning the transfer of certificates representing all the common stock issued
and outstanding.
Item 11. Description of Securities.
The Company is authorized to issue 1,000,000,000 shares of Common Stock,
par value $0.0001 per share, and 100,000,000 shares of non-voting Preferred
Stock, par value $0.001 per share. As of March 31, 1996, 28,600,000 shares of
Common Stock were outstanding. As of the same date, no Preferred Stock was
issued or outstanding.
Common Stock
The holders of Common Stock have one vote per share on all matters
(including election of Directors) without provision for cumulative voting. Thus,
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors, if they choose to do so. The Common Stock is not
redeemable and has no conversion or preemptive rights.
14
<PAGE>
The Common Stock currently outstanding is validly issued, fully paid and
non-assessable. In the event of liquidation of the Company, the holders of
Common Stock will share equally in any balance of the Company's assets available
for distribution to them after satisfaction of creditors and the holders of the
Company's senior securities, whatever they may be. The Company may pay
dividends, in cash or in securities or other property when and as declared by
the Board of Directors from funds legally available therefor, but has paid no
cash dividends on its Common Stock.
Preferred Stock
Under the Articles of Incorporation, the Board of Directors has the
authority to issue non-voting Preferred Stock and to fix and determine its
series, relative rights and preferences to the fullest extent permitted by the
laws of the State of Colorado and such Articles of Incorporation. As of the date
of this Registration Statement, no shares of Preferred Stock are issued or
outstanding. The Board of Directors has no plan to issue any Preferred Stock in
the foreseeable future.
Warrants
Class A Warrants
The Warrants are currently of one class, which entitle the holder to
subscribe for one share of Common Stock at an exercise price of $0.02. A total
of 286,000,000 Warrants are issued and outstanding. These Warrants were titled
"Class A Warrants" at the closing of the Offering. The Class A Warrants are each
exercisable until July 1, 1998. The number of shares of Common Stock issuable
upon exercise of the Class A Warrants are adjustable upon the occurrence of
certain events, including shareholder distributions, stock splits, combinations,
recapitalization, mergers or reorganizations. No fractional shares will be
issued upon the exercise of the Class A Warrants, but the Company would pay the
cash value (based on the exercise price) of any such fractional shares otherwise
issuable.
All or any portion of the Class A Warrants can be called for redemption at
a redemption price of $0.00001 per Warrant at any time during their exercise
term upon a minimum of thirty (30) days' prior written notice mailed to the
registered holders of the Class A Warrants. Any redemption would be subject to
the right of the holders of the Class A Warrants to exercise their purchase
rights between the date of any notice of redemption up to and including the
redemption date given by the Company. Any holders who do not exercise their
Class A Warrants prior to the date set for call will receive the call price and
will forfeit their rights to purchase the Common Stock underlying the Class A
Warrants.
15
<PAGE>
The Company will not extend the term of the Class A Warrants, nor does it
intend to redeem the Class A Warrants at this time. Holders of the Class A
Warrants will not have any of the rights or privileges of shareholders of the
Company prior to the exercise of the Class A Warrants.
Item 12. Indemnification of Directors and Officers.
The Company's Articles of Incorporation authorize the Board of Directors,
on behalf of the Company and without shareholder action, to exercise all of the
Company's powers of indemnification to the maximum extent permitted under the
applicable statute. Title 7 of the Colorado Revised Statutes, 1986 Replacement
Volume ("CRS"), as amended, permits the Company to indemnify its directors,
officers, employees, fiduciaries, and agents as follows:
Section 7-109-102 of CRS permits a corporation to indemnify such persons
for reasonable expenses in defending against liability incurred in any legal
proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(1) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the corporation's best
interests; and
(2) In all other cases, that his or her conduct was at least not
opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no reasonable
cause to believe that his or her conduct was unlawful.
A corporation may not indemnify such person under this Section 7-109-102 of CRS:
(a) In connection with a proceeding by or in the right of the corporation
in which such person was adjudged liable to the corporation; or
(b) In connection with any other proceeding charging that such person
derived an improper benefit, whether or not involving action in an official
capacity, in which proceeding such person was adjudged liable on the basis that
he or she derived an improper personal benefit.
Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 7-109-103 of CRS requires that
the corporation shall indemnify such a person against reasonable expenses who
was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which the person was a party because of his status with the
corporation.
16
<PAGE>
Under Section 7-109-104 of CRS, the corporation may pay reasonable fees in
advance of final disposition of the proceeding if:
(a) Such person furnishes to the corporation a written affirmation of the
such person's good faith belief that he or she has met the Standard of Conduct
described in Section 7-109-102 of CRS;
(b) Such person furnishes the corporation a written undertaking, executed
personally or on person's behalf, to repay the advance if it is ultimately
determined that he or she did not meet the Standard of Conduct in Section
7-109-102 of CRS; and
(c) A determination is made that the facts then known to those making the
determination would not preclude indemnification.
Under Section 7-109-106 of CRS, a corporation may not indemnify such
person, including advanced payments, unless authorized in the specific case
after a determination has been made that indemnification of such person is
permissible in the circumstances because he met the Standard of Conduct under
Section 7-109-102 of CRS and such person has made the specific affirmation and
undertaking required under the statute. The required determinations are to be
made by a majority vote of a quorum of the Board of Directors, utilizing only
directors who are not parties to the proceeding. If a quorum cannot be obtained,
the determination can be made by a majority vote of a committee of the Board,
which consists of at least two directors who are not parties to the proceeding.
If neither a quorum of the Board nor a committee of the Board can be
established, then the determination can be made either by the Shareholders or by
independent legal counsel selected by majority vote of the Board of Directors.
The corporation is required by Section 7-109-110 of CRS to notify the
shareholders in writing of any indemnification of a director with or before
notice of the next shareholders' meeting.
Under Section 7-109-105 of CRS, such person may apply to any court of
competent jurisdiction for a determination that such person is entitled under
the statute to be indemnified from reasonable expenses.
Under Section 7-107(1)(c) of CRS, a corporation may also indemnify and
advance expenses to an officer, employee, fiduciary, or agent who is not a
director to a greater extent than the foregoing indemnification provisions, if
not inconsistent with public policy, and if provided for in the corporation's
bylaw, general or specific action of the Board of Directors, or shareholders, or
contract.
Section 7-109-108 of CRS permits the corporation to purchase and maintain
insurance to pay for any indemnification of reasonable expenses as discussed
herein.
17
<PAGE>
The indemnification discussed herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under the Articles of
Incorporation, any Bylaw, agreement, vote of shareholders, or disinterested
directors, or otherwise, and any procedure provided for by any of the foregoing,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of
heirs, executors, and administrators of such a person.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expense incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 13. Financial Statements.
For financial information, please see the financial statements included at
Item 15 and hereby incorporated by this reference and made a part hereof.
Item 14. Changes In and Disagreements With Accountants On Accounting and
Financial Disclosure.
The Company did not have any disagreements on accounting and financial
disclosures with its accounting firm during the reporting period.
Item 15. Financial Statement and Exhibits.
The following financial information is filed as part of this report:
(1) Financial Statements
(2) Schedules
The financial statements schedules listed in the accompanying
index to financial statements are filed as a part of this annual
report.
(3) Exhibits
The exhibits listed on the accompanying index to financial
statements are filed as part of this annual report.
18
<PAGE>
H A SPINNAKER, INC.
(A Development Stage Company)
Financial Statements
November 30, 1995 (audited)
August 31, 1996 (unaudited)
<PAGE>
CONTENTS Page
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT F-3
STATEMENTS OF CASH FLOWS F-4
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) F-5
NOTES TO FINANCIAL STATEMENTS F-6 to F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
of H A Spinnaker, Inc.
We have audited the accompanying balance sheet of H A Spinnaker,(a development
stage company) as of November 30, 1995, and the related statements of loss and
accumulated deficit, cash flows,and stockholders' equity (deficit) for the two
years then ended, and for the period from Inception (September 28, 1988) to
November 30, 1995. 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 positionof H A Spinnaker, Inc. as of
November 30, 1995, and the results of its operations and its cash flows for the
two years then ended, and for the period from inception (September 28, 1988) to
November 30, 1995, in conformity with generally accepted accounting principles.
As discussed in Note 6, there is substantial doubt about the Company's ability
to continue as a going concern. The Company has no working capital with which to
fund its activities and evaluate merger candidates. Management's plans with
respect to funding future operations are also discussed in Note 6. These
financial statements do not include any adjustments which may be necessary if
the Company is unable to continue in existence.
Aurora, Colorado
June 26, 1996
PROFESSIONAL CORPORATION
COMISKEY & COMPANY
F-1
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
BALANCE SHEET
August 31, November 30,
1996 1995
(unaudited) (audited)
----------- ----------
ASSETS
CURRENT ASSETS $ - $ -
OTHER ASSETS - -
-------- --------
TOTAL ASSETS $ - $ -
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party $ 2,879 $ 525
Accounts payable - 2,747
-------- --------
Total current liabilities 2,879 3,272
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.0001 par value, 1,000,000,000
shares authorized; 28,600,000 shares issued
and outstanding 2,860 2,860
Preferred stock, $0.001 par value, 100,000,000
shares authorized; no shares issued and
outstanding - -
Additional paid-in capital 37,212 37,212
Deficit accumulated during the development stage (42,951) (43,344)
-------- --------
Total stockholders' equity (deficit) (2,879) (3,272)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ - $ -
======== ========
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Period Nine
September months Year Year
28, 1988 ended ended ended
(Inception) August November November
to August 31, 31, 1996 30, 1995 30, 1994
1996 (unaudited) (audited) (audited)
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Investment income $ 393 $ - $ - $ -
EXPENSES
Wages 25,000 - - -
Rent 7,200 - - -
Legal and accounting 10,644 (393) 2,747 525
Amortization 500 - - -
--------- --------- -------- -------
Total expenses 43,344 (393) 2,747 525
--------- --------- -------- -------
NET LOSS (42,951) 393 (2,747) (525)
Accumulated deficit
Balance, beginning of period - (43,344) (40,597) (40,072)
--------- --------- --------- -------
Balance, end of period $ (42,951) $ (42,951) $ (43,344) $(40,597)
========= ========= ========= =======
NET LOSS PER SHARE $ (NIL) $ (NIL) $ (NIL) $ (NIL)
========= ========= ========= =======
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 28,600,000 28,600,000 28,600,000 28,600,000
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period Six
September months Year Year
28, 1988 ended ended ended
(Inception) August November November
to August 31, 31, 1996 30, 1995 30, 1994
1996 (unaudited) (audited) (audited)
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (42,951) $ 393 $ (2,747) $ (525)
Noncash items included in
net loss:
Amortization 500 - - -
Rent 2,918 - - -
Wages 23,054 - - -
Stock issued for services 2,000 - - -
Changes in:
Current liabilities 2,879 (393) 2,747 525
-------- --------- ------- -------
Net cash used by operating
activities (11,600) - - -
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs (500) - - -
-------- --------- ------- -------
Net cash used by investing
activities (500) - - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock to
founding shareholders 12,100 - - -
-------- --------- ------- -------
Net cash provided by financing
activities 12,100 - - -
-------- --------- ------- -------
Net change in cash - - - -
Cash, beginning of period - - - -
-------- --------- ------- -------
Cash, end of period $ - $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) For the
period from inception (September 28, 1988) to August 31, 1996
<TABLE>
<CAPTION>
Deficit Total
Common stock accumulated stock-
----------------- Additional Stock during the holders'
Number of paid-in subscriptions development equity
shares Amount capital receivable stage (deficit)
---------- ------ ---------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Issuance of
common stock
for services,
September 28,
1988 ($0.0001
per share) 20,000,000 $ 2,000 $ - $ - $ - $ 2,000
Net loss for
the period
ended November
30, 1988 - - - - (4,825) (4,825)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November 30,
1988 20,000,000 2,000 - - (4,825) (2,825)
Issuance of
common stock
for cash,
November 1,
1989 ($0.001
per share) 7,100,000 710 6,390 (100) - 7,000
Issuance of
common stock
for cash,
November 6,
1989 ($0.003333
per share) 1,500,000 150 4,850 (5,000) - -
Net loss
for the year
ended November
30, 1989 - - - - (16,900) (16,900)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1989 28,600,000 2,860 11,240 (5,100) (21,725) (12,725)
Receipt of
stock
subscriptions - - - 5,100 - 5,100
Related party
services forgiven - - 25,972 - - 25,972
Net loss
for the
year ended
November
30, 1990 - - - - (17,265) (17,265)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1990 28,600,000 2,860 37,212 - (38,990) 1,082
Net loss
for the
year ended
November
30, 1991 - - - - (907) (907)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1991 28,600,000 2,860 37,212 - (39,897) 175
Net loss
for the
year ended
November
30, 1992 - - - - (100) (100)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1992 28,600,000 2,860 37,212 - (39,997) 75
Net loss
for the
year ended
November
30, 1993 - - - - (75) (75)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1993 28,600,000 2,860 37,212 - (40,072) -
Net loss
for the
year ended
November
30, 1994 - - - - (525) (525)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1994 28,600,000 2,860 37,212 - (40,597) (525)
Net loss
for the
year ended
November
30, 1995 - - - - (2,747) (2,747)
---------- ------ ---------- ------------- ----------- ---------
Balances,
November
30, 1995 28,600,000 2,860 37,212 - (43,344) (3,272)
Net loss
for the
period ended
August 31,
1996 - - - - - -
---------- ------ ---------- ------------- ----------- ---------
Balance,
August 31,
1996
(unaudited) 28,600,000 $ 2,860 $ 37,212 $ - $ (43,344) $ (3,272)
========== ====== ========== ============= =========== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
1. Summary of Significant Accounting Policies
Development stage activities
The Company was incorporated under the laws of the State of Colorado on
September 28, 1988 and has been in the development stage since its formation.
It has been formed to seek potential business acquisitions. Its activities to
date have been limited to organizational efforts and raising capital. At the
present time, the Company has not selected any business or property in which
to invest.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal Year
The Company has selected a November 30 fiscal year end.
Deferred Offering Costs
Costs associated with an abandoned public offering have been charged to
operations during fiscal year end 1991.
Loss Per Share
Loss per share was computed assuming all shares outstanding at the end of the
period were outstanding during the entire period.
Organization Costs
The Company amortized organization costs over a sixty-month period.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers highly
liquid debt instruments purchased with an original maturity of three months
or less to be cash equivalents.
2. Stockholders' Equity
As of November 30, 1994, 28,600,000 shares of the Company's $0.0001 par value
common stock were issued to the Company's initial shareholders, along with
286,000,000 Class A common stock purchase warrants. Each Class A warrant
entitles the holder to purchase one share of common stock for $0.02. The
number of shares of common stock issuable upon exercise of the Class A
warrants are adjustable upon the occurrence of certain events, including
shareholder distributions, stock splits, combinations, recapitalization,
mergers, or reorganizations. The Company reserves the right to call any or
all of the warrants upon 30 days written notice at a redemption price of
$0.00001 per warrant. The warrants expire July 1, 1998.
The Company is authorized to issue up to 100,000,000 shares of its $0.001 par
value, preferred stock. The preferred stock may be issued in series, from
time to time with such designation, rights, preferences and limitations as
the Board of Directors may determine by resolution. As of November 30, 1994,
no preferred stock has been issued.
F-6
<PAGE>
H A Spinnaker, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
3. Related Party Transactions
The Company's three directors are also the Company's principal shareholders.
The directors own 27,100,000 shares (94.8% of the outstanding shares) and
271,000,000 Class A warrants. See Note 2.
A salary of $23,000 was accrued for wages owed the Company's President and
director from inception to August 1990 for his services associated with an
abandoned public offering. A total of $4,228 was paid during fiscal year
ended November 30, 1991. The balance has been designated as additional
paid-in capital.
The Vice-president of the Company is providing office space at no charge to
the Company. For purposes of the financial statements, the Company has
accrued $400 per month as additional paid-in capital for this use through
March 31, 1990. No accrual has been made since that time as the Company was
inactive.
4. Supplemental Disclosure of Non-cash Financing Activities
As mentioned in Note 3, the Company has incurred $7,200 since inception in
rent expense and $18,772 in unpaid wages, both of which have been
designated as additional paid-in capital.
The Company issued 20,000,000 shares of its common stock and 200,000,000
Class A warrants to its president at inception for services provided which
have been valued at $2,000.
5. Registration of Securities
The Company plans to register its common shares under Section 12(g) of the
1934 Exchange Act.
6. Going Concern
The Company has no assets with which to fund its operations, creating
substantial doubt about the Company's ability to continue as a going concern.
The Company's business plan calls for the registration of its common stock
and the subsequent search for and evaluation of potential merger candidates.
Management intends to advance funds to the Company for the costs of
registration and evaluation of candidates until such time as a merger
candidate may be located.
7. Income Taxes
The Company has net operating loss carryforwards of approximately $40,000
expiring between 2003 and 2008. The tax benefit of these net operating
losses, which total approximately $7,500, has been offset by a full allowance
for realization. This carryforward may be limited upon the consummation of a
business combination under IRC Section 381.
F-7
<PAGE>
SIGNATURES
In accordance with Section 12 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.
HA Spinnaker, Inc.
Dated: 2/12/97 By: /s/ Gregory W. Skufca
----------------------
Gregory W. Skufca
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL OFFICER
Dated: 2/12/97 By: /s/ William L. Skufca
----------------------
William L. Skufca
Treasurer
SECRETARY
Dated: 2/12/97 By: /s/ William L. Skufca
----------------------
William L. Skufca
Secretary
19
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
EXHIBITS
TO
HA Spinnaker, Inc.
<PAGE>
INDEX TO EXHIBITS
Exhibit Page or
Number Description Cross Reference
3A Articles and Bylaws +
3B Articles of Amendment +
10A Lock Up Agreement (G Skufca) +
10B Lock Up Agreement (R. Johnson) +
10C Lock Up Agreement (W. Skufca) +
10D Lock Up Agreement (B Carlson) +
+ Previously filed.
