SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
[ ] Transitional Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended November 30, 1997
Commission File No. 0-21099
ZABA INTERNATIONAL, INC.
------------------------
(Name of small business issuer in its charter)
Colorado 84-1128300
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number
20644 Eastleigh Crescent
Suite 302
Langley, British Columbia, Canada V3A 4C4
(604) 533-8318
--------------
(Address, including zip code and telephone number, including area
code, of registrant's executive offices)
Securities registered under Section 12(b) of the Exchange Act:
none
Securities registered under to Section 12(g) of the Exchange Act:
Common Stock
------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. x
---
Issuer's revenues for its most recent fiscal year: $ -0-
(Continued on Following Page)
<PAGE>
State the aggregate market value of the voting stock held by non-
affiliates, computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of
a specified date within the past 60 days: As of February 27, 1998:
$0.
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
February 27, 1998 there were 12,011,993 shares of the Company's
common stock issued and outstanding.
Documents Incorporated by Reference: Form 8-K dated July 21, 1997;
Form 8-K dated August 19, 1997; Form 8-K dated August 26, 1997;
Form 8-K dated October 30, 1997; each such Form 8-K incorporated by
reference into Part I of this report.
This Form 10-KSB consists of 34 pages.
Exhibit Index is located at Page 31.
2
<PAGE>
TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT
ZABA INTERNATIONAL, INC.
PAGE
----
Facing Page
Index
PART I
Item 1. Description of Business..................... 4
Item 2. Description of Property..................... 8
Item 3. Legal Proceedings........................... 8
Item 4. Submission of Matters to a Vote of
Security Holders........................ 9
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters......... 9
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 10
Item 7 Financial Statements........................ 11
Item 8. Changes in and Disagreements on Accounting
and Financial Disclosure................ 24
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons, Compliance with
Section 16(a) of the Exchange Act....... 24
Item 10. Executive Compensation...................... 26
Item 11. Security Ownership of Certain Beneficial
Owners and Management................... 27
Item 12. Certain Relationships and Related
Transactions............................ 28
PART IV
Item 13. Exhibits and Reports on Form 8-K........... 29
SIGNATURES............................................. 30
3
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
History
Zaba International, Inc. (the "Company"), was incorporated on
September 28, 1988 under the laws of the State of Colorado under
the name HA Spinnaker, Inc., to engage in any lawful corporate
undertaking. During this time, the Company's principal business
purpose was a "shell" corporation engaged in seeking out and
acquiring another business entity or opportunity. Between
September 1988 and January 1990, the primary activity of the
Company was directed towards organizational efforts. In January
1990, the Company filed a registration statement on Form S-18,
which the Company abandoned in May 1991 due to adverse market
conditions. In July 1996, the Company filed a registration
statement on Form 10-SB with the Securities and Exchange
Commission, which registration statement became effective in April,
1997. The purpose of the registration statement was management's
belief that the primary attraction of the Company as a merger
partner or acquisition vehicle will be its status as a public
company.
Description of Business
In August 1997, the Company executed an agreement whereby it
intended to acquire all of the issued and outstanding securities of
Zaba International Holdings USA, Inc., ("Old Zaba"), a Nevada
corporation (the "Zaba Agreement"). The terms of the transaction
involved the Company undertaking a "reverse stock split", wherein
one share of common stock was issued in exchange for every 12
shares of common stock issued and outstanding as of the Closing
Date and thereafter, issuing an aggregate of 9,628,660 shares of
its "restricted" common stock to the shareholders of Old Zaba in
exchange for all of their issued and outstanding stock of Old Zaba.
Zaba did not survive the transaction. The Company also proposed to
change its name to "Zaba International, Inc."
Subsequent to August 4, 1997, former management discovered a
material inaccuracy in the representations and warranties made by
Old Zaba and included in the Zaba Agreement. Pursuant to the terms
of said Zaba Agreement, management of the Registrant provided
notice of the same to management of Old Zaba. As a result,
management of Old Zaba had twenty (20) days from the date of such
notice to cure any and all defects. Failure of Old Zaba to
properly cure within the 20 day period would have caused the Zaba
Agreement to be terminated in accordance with its terms. Effective
October 29, 1997, the Company and Zaba did execute an Amendment to
the Zaba Agreement, the Agreement was ratified, subject however to
a right of rescission granted to former management, to be exercised
if, and only if, Old Zaba failed to close a material acquisition on
4
<PAGE>
or before December 31, 1997. This deadline has been extended, as
discussed below.
The material acquisition referenced above relates to the
Company exercising an option to purchase all of the issued and
outstanding securities of three (3) Canadian companies, including
Sweeprite Mfg. Inc. ("Sweeprite"), Rite Way Mfg. Co. Ltd. ("Rite
Way") and Patchrite Inc. ("Patchrite"), all Saskatchewan
corporations. These companies are engaged in the businesses of
manufacturing, distribution and marketing of tillage and seeding
agricultural equipment ("Riteway"), street sweepers ("Sweeprite")
and asphalt surface pothole patchers ("Patchrite") (hereinafter
jointly referred to as the "Sweeprite Companies").
The purchase price to be paid by the Company for the Sweeprite
Companies is $3.35 million (Canadian). As of the date of this
report, the Company has tendered a non-refundable deposit to the
sellers of the Sweeprite Companies in the amount of $300,000. The
relevant Stock Purchase Agreement, as amended, provides for an
additional $200,000 non-refundable deposit to be tendered by the
Company on or before the earlier of (i) March 16, 1998; or (ii)
upon completion of an audit by the financing institution who has
agreed, subject to such audit, to finance a portion of the purchase
price of the Sweeprite Companies. Thereafter, an additional
payment of $500,000 shall be due 30 days after payment of the
aforesaid $200,000, with another payment of $500,000 30 days
thereafter, leaving a balance of $1.85 million due. Upon payment
of the initial $500,000 payment described above, the sellers'
securities will be assigned to the Company and placed in escrow.
However, management of the Sweeprite Companies will not change
unless and until the full purchase price is tendered, which is
scheduled to occur on or before June 15, 1998. Former management's
right of rescission remains in effect until the proposed
transaction with the Sweeprite Companies successfully closes. In
the event the Sweeprite Companies transaction does not close, the
transaction with Old Zaba shall be voided and former management
will assume control of the Company once again. In such event, the
Company will continue to attempt to implement its former business
plan of acquiring an existing business or assets. A complete
description of the Company's former business plan is included in
the Form 10-SB registration statement previously filed by the
Company, the contents of which are incorporated herein as if set
forth.
Assuming that the Company successfully exercises its option
described above, the Company will, through three (3) wholly owned
subsidiary companies, be engaged in the business of manufacturing
tillage and seeding agricultural equipment ("Riteway"), street
sweepers ("Sweeprite") and what current management views as a new
asphalt surface pothole patcher ("Patchrite"). Riteway and
Sweeprite have been engaged in its businesses since 1969.
5
<PAGE>
Both the agricultural and road maintenance markets are growing
at a rapid rate. The annual market for the Company's agricultural
equipment amounts to over $1 billion in sales. The road
maintenance industry for sweepers is in excess of $500 million per
year. On a consolidated basis, during the last fiscal year, these
companies generated annual revenues of approximately $10 million,
an increase of 30% over the previous year.
Riteway and Sweeprite's sales are made primarily to dealers,
who accounted for approximately 95% of the sales in the last fiscal
year, with the balance of 5% made as direct sales. The
relationship with its dealers are usually established at large
trade shows, as well as through efforts undertaken by in-house
representatives. Since its inception, these companies have built
up a system of distributors and dealers in 5 provinces in Canada,
13 states in the US and 10 other countries located throughout the
world.
Following is a brief description of current products, which
will be acquired by the Company if the option discussed above is
exercised, of which there can be no assurance:
Agricultural Tillage & Seeding Equipment
The agricultural equipment division has a dealership network
of 100+ dealers throughout Western canada and the US. As of the
date of this report, approximately 85% of sales are in Canada, with
the 15% balance in the US. Its principal products include (i)
jumbo harrows, which is a conventional tilling that requires
nominal tilling operations by breaking and distributing straw. This
device also incorporates herbicide more efficiently than
traditional harrows; (ii) air seeders (Accu-Seeder), which seeds,
fertilizes and packs in one operation and includes a floating shank
that delivers seek and fertilizer at a uniform depth, regardless of
the unevenness of the ground, and a rock picker. Management
believes that the market for these products is expanding and
anticipates that revenues will continue to increase during the next
few fiscal years. However, there can be no assurances that this
will occur.
Road Sweepers
Sweeprite brand sweepers have been sold to communities in
every province across Canada, as well as the Canadian Dept. of
National Defense. Approximately half of the sales of its sweepers
have been sold to US customers, including the US Dept. of Defense's
military bases throughout the world. Sales have also been made in
Australia, Taiwan, Indonesia and the Czech Republic. Sweeprite
presently produces its sweepers in a plant located in Saskatchewan,
Canada. In the event the Option is exercised, the Company intends
to also open an assembly plant in Staten Island, New York, in order
to assist the Company's planned US expansion. However, there can
6
<PAGE>
be no assurances that such a plant will be constructed in the
future.
The Company intends to increase its sweeper business through
acquisitions of contractor companies and small to mid-size sweeping
companies, especially those sweeping companies which are located in
close proximity to the Company's proposed NY plant. As of the date
of this report, the Company is negotiating to acquire three
separate sweeping companies. However, there can be no assurances
that the Company will be able to successfully consummate these
acquisitions, or that the acquisition of any or all of these
companies will result in increased profitability to the Company.
It is anticipated that the total cost of these acquisitions will be
approximately $1 million (US).
Pothole Patchers
The Company intends to market this product under the tradename
"Patchrite Pothole Patcher". As of the date of this report, only
nominal activity has been undertaken in this regard. However, based
upon minimal marketing efforts, management of the Company believes
that its concept of combining the entire process into a self-
sustaining one person unit which technology has been developed by
the Company is unsurpassed in the industry. There can be no
assurances that the Company will successfully market this product
in the future.
Competition
There are many existing companies who are engaged in similar
businesses to that of the Company, including Elgin Sweeper Company,
Johnston Sweeper, Flex-Coil and Summers Industries. These companies
have greater resources, both financial and otherwise, a larger
distribution of their products and a more recognizable product than
the Company. Management believes that the quality of the Company's
products will allow the Company to successfully compete in the
international and domestic marketplace. There are no assurances
that the Company's efforts in this regard will be successful.
Employees
As of the date of this report, the Company has 2 full time
employees, both of whom are officers and directors of the Company.
See "Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act." It is
anticipated that, upon exercise of the Sweeprite option described
above (of which there is no assurance), the number of employees of
the Company will increase significantly.
7
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
Facilities. During the fiscal year ended November 30, 1997
and prior to the Zaba Agreement, the Company operated from offices
at 5650 Greenwood Plaza Blvd., Suite 216, Englewood, Colorado
80111. This space was provided to the Company on a rent free basis
by the then President of the Company. Subsequent to the closing of
the Zaba Agreement, the Company subleased interim space at 2963
Glen Drive, Suite 308, Coquitlam, British Columbia, Canada V3B 2P7,
which offices were provided by the Company's current Treasurer and
a director, Gordon Meugens, on a rent free basis. As of the date
of this report, the Company currently subleases approximately 325
square feet of office space at 20644 Eastleigh Crescent, Suite 302,
Langley, British Columbia, Canada V3A 4C4, telephone (604) 533-
6635. The Company subleases this space on a month to month basis
at a cost of $700 (Canadian) per month. It is anticipated that the
principal place of business of the Company will remain at the
aforesaid address for the foreseeable future.
In the event the Company successfully closes the Sweeprite
Companies acquisition, of which there can be no assurance, the
Company will add additional business locations in Saskatchewan,
where it will operates two facilities, including (i) a plant
including 34,000 square foot facility located on approximately 10
acres, which is fully equipped to handle all the metal fabricating,
welding, assembly and painting requirements of the Company and has
a productive capacity in excess of 200 sweepers per year; and (ii)
Imperial, Saskatchewan, where all of the Company's agricultural
equipment will be manufactured. The plant is fully equipped to
handle all of the metal fabricating, welding, assembly and painting
requirements applicable to the Company's agricultural products
described hereinabove. It's manufacturing production capacity is
in excess of $10 million in equipment per year (400 units). This
plant is located on 4.5 acres of land and consists of 32,000 square
feet, including 960 square feet of office space and a 2,400 square
foot paint shop. Management believes that this space will be
sufficient for the present, but that such space will need to be
expanded to meet the increased productions demands which management
anticipates to be occurring in the next year.
Other Property. The Company has no properties and at this
time has no other agreements to acquire any properties, other than
as disclosed hereinabove.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings which are pending or
have been threatened against the Company of which management is
aware.
8
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In August 1997, the Company's shareholders unanimously
approved the reverse merger between the Company and Old Zaba.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
(a) Market Information. There is presently no trading market
for the common or preferred equity of the Company. However, the
Company has filed an application to trade its securities on the OTC
Bulletin Board operated by the National Association of Securities
Dealer's, Inc. As of the date of this report, the Company has
received various comments to its application applicable hereto, but
no clearance has been given by the NASD to allow the Company's
common stock to commence trading. While no assurances can be so
provided, it is anticipated that the Company's common stock will
begin trading on the Bulletin Board during the initial calendar
quarter of 1998.
(b) Holders. There are thirty-three (33) holders of the
Company's Common Stock, not including those holders who hold their
shares in "street name."
As of the date of this report, 2,383,993 of the shares of the
Company's Common Stock are eligible for sale under Rule 144
promulgated under the Securities Act of 1933, as amended, subject
to certain limitations included in said Rule. In general, under
Rule 144, a person (or persons whose shares are aggregated), who
has satisfied a one year holding period, under certain
circumstances, may sell within any three month period a number of
shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144 also
permits, under certain circumstances, the sale of shares without
any quantity limitation by a person who has satisfied a two year
holding period and who is not, and has not been for the preceding
three months, an affiliate of the Company.
(c) Dividends.
(1) The Company has not paid any dividends on its Common
Stock. The Company does not foresee that the Company will have the
ability to pay a dividend on its Common Stock in the fiscal year
ended November 30, 1998.
9
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Company's audited financial statements and notes thereto
included herein. In connection with, and because it desires to
take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other
statement made by, or on the behalf of the Company, whether or not
in future filings with the Securities and Exchange Commission.
Forward looking statements are statements not based on historical
information and which relate to future operations, strategies,
financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward
looking statements.
Results of Operations
Because the Company was incorporated in 1997, there are no
comparison figures available to compare the results of operations
for the fiscal year ended November 30, 1997.
The Company has generated no revenues from its operations
since its inception. Since the Company has not generated revenues
and has never been in a profitable position, it operates with
minimal overhead. Until the end of October 1997, the Company's
primary activity was to seek out and acquire an acquisition
candidate. Relevant thereto, in October 1997, the Zaba Agreement
was executed. However, the former management of the Company
maintains a right of rescission, which it intends to exercise if
the Sweeprite Agreement does not close. See "Part I, Item 1,
Description of Business."
Liquidity and Capital Resources
The Company presently has nominal cash or cash equivalents.
The Company presently has an outstanding loan due a
shareholder in the principal amount of $270,971. A significant
portion ($214,000 US) was utilized by the Company for the initial
non-refundable deposit relating ton the Sweeprite Companies
10
<PAGE>
acquisition, with the balance for working capital. It accrues
interest at the rate of 9% per annum and is due upon demand.
The Company has no other financial resources as of the date of
this report. In order to consummate the Sweeprite Companies
transaction, the Company intends to undertake a private offering of
its securities. The Company has obtained commitments in principle
from various entities to fund this equity offering. As of the date
of this report there has been no definitive structure established
for this proposed offering, including the type of security to be
sold and the sale price thereof. Among the parties who have
verbally committed to the Company to assist in this funding is
Select Capital, Inc., Miami, Florida. However, there can be no
assurances that the Company will raise any capital, or that if such
capital is raised, that it will be sufficient to enable the Company
to acquire the Sweeprite Companies. The total purchase price of
the proposed acquisition is $3.35 million (Canadian). See "Part I,
Item 1, Description of Business" for the specific terms applicable
to the Sweeprite Companies acquisition.
Additionally, the Company also has a tentative commitment from
NationsCredit, New York, NY, to provide the Company with
approximately $4 million in secured loans once the Sweeprite
Companies acquisition is consummated. This loan would be utilized
for working capital, as well as "floor planning" for the Company's
distribution network throughout the US for the Sweeprite Companies
equipment. As of the date of this report, NationsBank is engaged
in an independent audit of the Sweeprite Companies in order to
insure that their due diligence related to the proposed loan is
completed in a timely manner. The terms of this proposed loan have
not been finalized as of the date of this report.
Year 2000 Disclosure
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000. As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has no assets,
including any personal property such as computers, it is not
anticipated that the Company will incur any negative impact as a
result of this potential problem. However, it is possible that
this issue may have an impact on the Company after the Company
successfully consummates the Sweeprite Companies acquisition. In
response thereto, the Company does intend to implement a new
computer system following the anticipated closing of the Sweeprite
Companies acquisition. The acquisition of this new equipment will
be undertaken with this issue in mind.
ITEM 7. FINANCIAL STATEMENTS
11
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
FINANCIAL STATEMENTS
with
Independent Auditors' Report
For The year Ended November 30, 1997
12
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Shareholder's Equity 5
Notes to the Financial Statements 6-10
13
<PAGE>
Kish, Leake & Associates P.C.
Certified Public Accountants
J.D.Kish, C.P.A., M.B.A. 7901 E Belleview Ave - Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
--------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724
Independent Auditor's Report
We have audited the accompanying balance sheet of Zaba International, Inc. (Fka
H A Spinnaker, Inc.) (a Developmental Stage Company), at November 30, 1997, and
the related statement of operations, cash flows, and shareholders' equity for
the fiscal years ended November 30, 1997. 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 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 Zaba International, Inc. (Fka
H A Spinnaker, Inc.) at November 30, 1997 and the results of its operations and
its cash flows for the fiscal years ended November 30, 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is a development stage enterprise.
The lack of sufficient working capital to operate as of November 30, 1997 raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are described in Note 6. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
s/Kish, Leake & Associates, P.C.
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
February 26, 1998
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<TABLE>
Zaba International, Inc.
(fka H A Spinnaker, Inc.)
(A Development Stage Company)
Balance Sheet
_________________________________________________________________
<CAPTION>
November
30, 1997
--------
<S> <C>
ASSETS
Current Assets - Cash $ 88
Other Assets - Acquisition Deposit 214,000
--------
TOTAL ASSETS $214,088
========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable $ 71,895
Advances From Shareholder 270,971
--------
Total Current Liabilities 342,866
--------
Long-Term Liabilities 0
--------
TOTAL LIABILITIES 342,866
--------
SHAREHOLDERS' EQUITY
Preferred Stock, $.001 Par Value
Authorized 100,000,000 Shares;
Issued And Outstanding -0- Shares 0
Common Stock, $.0001 Par Value
Authorized 1,000,000,000 Shares;
Issued And Outstanding 12,035,826 Shares 1,203
Capital Paid In Excess Of
Par Value Of Common Stock 3,517
Retained Earnings (Deficit) Accumulated During The
Development Stage ( 133,498)
--------
TOTAL SHAREHOLDERS' EQUITY ( 128,778)
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $214,088
========
<FN>
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-2-
15
<PAGE>
<TABLE>
Zaba International, Inc.
(fka H A Spinnaker, Inc.)
(A Development Stage Company)
Statement Of Operations
_________________________________________________________________
<CAPTION>
August
28, 1997
(Inception)
Year Ended Year Ended Through
November November November
30, 1997 30, 1996 30, 1997
--------- -------- ---------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
Expenses:
Consulting & Wages 10,415 0 10,415
Fees 130 0 130
Legal And Accounting 94,910 0 94,910
Office 2,938 0 2,938
Professional Fees 18,133 0 18,133
Rent 0 0 0
Travel 6,972 0 6,972
--------- -------- ---------
Total 133,498 0 133,498
--------- -------- ---------
(Loss) Before Other Income (133,498) 0 (133,498)
Other Income - Interest 0 0 0
Net (Loss) ($133,498) $ 0 ($133,498)
========= ======== =========
Net (Loss) Per Share ($0.04) $0.00 ($0.04)
========= ======== =========
Weighted Average Common
Shares Outstanding 3,187,707 0 3,187,707
========= ======== =========
<FN>
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
-3-
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<TABLE>
Zaba International, Inc.
(fka H A Spinnaker, Inc.)
(A Development Stage Company)
Statement Of Cash Flows
______________________________________________________________________
<CAPTION>
August
28, 1997
(Inception)
Year Ended Year Ended Through
November November November
30, 1997 30, 1996 30, 1997
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) ($133,498) $ 0 ($133,498)
Adjustments To Reconcile Net Loss To
Net Cash Used In Operating
Activities: 0 0 0
Debt paid by shareholder on behalf
of Company 61,617 0 61,617
Stock Issued For Services 715 0 715
Changes In Operating Assets
And Liabilities:
Increase (Decrease) In
Accounts Payable 67,754 0 67,754
-------- -------- --------
Net Flows From Operations (3,412) 0 (3,412)
-------- -------- --------
Cash Flows From Investing Activities: 0 0 0
-------- -------- --------
Net Cash Flows From Investing 0 0 0
-------- -------- --------
Cash Flows From Financing Activities:
Stock Issued By Founding Shareholders 0 0 0
Advances To Company By Shareholders 0 0 0
Funds Received As Additional Capital
Contribution 3,500 0 3,500
-------- -------- --------
Cash Flows From Financing 3,500 0 3,500
-------- -------- --------
Net Increase In Cash 88 0 88
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 88 $ 0 $ 88
======== ======== ========
Summary Of Non-Cash Investing And Financing Activities:
Debt paid by shareholder on
behalf of Company $ 61,617 $ 0 $ 61,617
======== ======== ========
Acquisition Deposit Paid By
Shareholder $214,000 $ 0 $214,000
======== ======== ========
Stock Issued For Services $ 715 $ 0 $ 715
======== ======== ========
<FN>
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
</TABLE>
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<TABLE>
Zaba International, Inc.
(fka H A Spinnaker, Inc.)
(A Development Stage Company)
Statement Of Shareholders' Equity
____________________________________________________________________________________________
<CAPTION>
(Deficit)
Accumulated
Number Of Number Of Capital Paid During The
Common Preferred Common In Excess Of Development
Shares Shares Stock Par Value Stage Total
---------- --------- ------ ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance At August 28, 1997 0 0 $ 0 $ 0 $ 0 $ 0
Common stock issued at
inception, as restated
for reverse acquisition 9,628,660 0 963 (963) 0 0
October 1997 For Services
Valued $.03 Per Share 23,833 - 2 713 - 715
Common Stock Issued In
Reverse Acquisition 2,383,333 - 238 (4,379) - -
Contribution To Equity - - - 8,146 - 8,146
Net (Loss) At November
30, 1997 - - - - (133,498) (133,498)
---------- --------- ------ ------------ ---------- --------
Balance At November
30, 1997 12,035,826 0 $1,203 $ 3,517 ($ 133,498)($124,637)
========== ========= ====== ============ ========== ========
<FN>
The Accompanying Notes Are An Integral Part Of These Financial Statements.
</TABLE>
-5-
18
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
(A Development Stage Company)
Notes to Financial Statements
At November 30, 1997
- --------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Organization:
- ------------
On September 28, 1988 Zaba International, Inc. (Fka H A Spinnaker, Inc.) ("the
Company") was incorporated under the laws of Colorado, for the purpose of
seeking potential business acquisitions. It has been in the development stage
since inception. Its activities to date have been limited to organizational
efforts and raising capital.
Developmental Stage:
The Company is currently in the developmental stage and has no significant
operations to date.
Reverse Acquisition:
On October 28, 1997, pursuant to the terms of a plan of merger H A Spinnaker,
Inc. acquired 100% of the stock of Zaba International Holdings USA, Inc.(Zaba)
in exchange for 9,628,660 shares of H A Spinnaker common stock and then the
Company's shareholders approved a name change to Zaba International, Inc. This
transaction was accounted for as a reverse acquisition where Zaba is treated as
the acquirer. The Historical financial statements prior to October 28, 1997 are
those of Zaba.
Fiscal Year:
The Company has selected November 30 as its fiscal year end.
Statement of Cash Flows:
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest and taxes in the period ended November 30, 1997 was $-0-.
Basic (Loss) Per Common Share:
The net (loss) per common share is computed by dividing the net (Loss) for the
period by the weighted average number of shares outstanding at November 30,
1997.
-6-
19
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
(A Development Stage Company)
Notes to Financial Statements
At November 30, 1997
- --------------------
Use Of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts. Actual results could differ from those estimates.
Foreign Exchange Rate:
The Company has recorded various assets and liabilities that were in Canadian
dollars. These have been converted to US dollars. The exchange rate at
November 30, 1997 $.71333 US for $1.00 Canadian.
Note 2 - Capital Stock
- ----------------------
Common Stock:
The Company initially authorized 1,000,000,000 shares of $.0001 par value common
stock. The Company had 28,600,000 shares of common stock. In October 1997, the
Company's shareholders approved a 12 to 1 reverse split. After the split the
Company issued 23,833 shares of $.0001 par value common stock for services
valued at $.03 per share and 9,628,660 shares in exchange for all of the
outstanding shares of Zaba International Holdings USA, Inc., also a development
stage shell.
Stock Purchase Warrants:
Class A Common Stock Purchase Warrants were issued as part of the initial
capitalization in September 1988. There are 23,833,333 after split warrants.
Each Class A Warrant entitles the holder to purchase one share of common stock
for an after split price of $.24 per share (post reverse split). The number of
shares of 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 warrants upon 30 days written
notice at an after split redemption price of $.00012 per warrant. The warrants
expire July 1, 1998.
-7-
20
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
(A Development Stage Company)
Notes to Financial Statements
At November 30, 1997
- --------------------
Note 2 - Capital Stock (Continued)
- ---------------------------------
Preferred Stock
The Company initially authorized 100,000,000 shares of $.001 par value
non-voting preferred stock, the rights and preferences of which to be determined
by the Board Of Directors at the time of issuance. As of November 30, 1997 no
preferred stock has been issued.
The Company has declared no dividends through November 30, 1997 and 1996.
Note 3 - Income Taxes
- ---------------------
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes.
Due to the Company's net operating loss in the year ended November 30, 1997 of
$133,498 there are no income taxes currently due. As of November 30, 1997 the
Company has a deferred tax asset of $26,700 primarily from its net operating
loss carry forward which has been fully reserved through a valuation allowance.
The Company has net operating loss carryforwards of $177,711 which will expire
between 2003 and 2012.
Note 4 - Related Party Events
- -----------------------------
During the fiscal year ended November 30, 1997 the Company maintained its
principal offices at an address provided by an officer and director on a cost
free basis. This office was located at 2963 Glen Drive, Suite 308, Coquitlam
B.C. V3B 2P7. No expense has been recorded as the value of the address is
considered immaterial.
-8-
21
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
(A Development Stage Company)
Notes to Financial Statements
At November 30, 1997
- --------------------
Note 4 - Related Party Events (continued)
- ----------------------------------------
The Company received funds from a shareholder and shareholders made advances on
behalf of the Company to pay expenses and make the acquisition deposit. $8,146
of the advances were contributed to equity. $270,971 of the monies were treated
as advances due back to the shareholders. Commencing December 31, 1997,
interest will accrue at 9% per annum.
Note 5 - Acquisition Deposit
- ----------------------------
In April 1997 and October 1997 a shareholder, on behalf of the Company, advanced
funds to the shareholder of Sweeprite Mfg., Inc., Patchrite, Inc., and Rite Way
Mfg. Co. Ltd. (hereinafter referred to as the "Sweeprite Companies") in the form
of a nonrefundable $300,000 (Canadian) deposit ($214,000 US). The relevant
terms provide for the Company to tender additional payment of the $3,000,000
(Canadian) to the sellers on or before January 31, 1998. In the event the
acquisition of the Sweeprite Companies fails to close on or before the aforesaid
date (or any extension granted to the Company by the sellers), prior management
of the Company may provide notice to the current management that they will
rescind the Zaba transaction and thereafter assume all future control of the
Company. (See Note 7 - Subsequent Events).
Note 6 - Basis Of Presentation
- ------------------------------
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its inception through November
30, 1997. It has not established revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The Company needs to
complete a merger that will allow it to work toward profitability and positive
cash flow.
-9-
22
<PAGE>
Zaba International, Inc.
(Fka H A Spinnaker, Inc.)
(A Development Stage Company)
Notes to Financial Statements
At November 30, 1997
- --------------------
Note 7 - Subsequent Events
- --------------------------
In January 1998 the Company entered into a oral agreement to rent office space
on a month to month basis for $700 per month.
In January 1998 the option to purchase the Sweeprite Companies was extended and
the agreement amended as follows: The purchase price was increased to
$3,335,000 (Canadian). An additional $200,000 (Canadian) nonrefundable deposit
is due the earlier of March 16, 1998 or when financing for the acquisition is
obtained. The relevant terms provide for the Company to tender an additional
payment of $500,000 (Canadian) 30 days after payment of the aforementioned
$200,000 and $500,000 (Canadian) 30 days after that leaving $1,850,000
(Canadian) due to the sellers on or before June 15, 1998.
-10-
23
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
In January, 1998, the Company filed a Form 8-K, advising of
the change in independent certified accountants, changing from
Comiskey & Company to Kish, Leake & Associates, who have audited
the Company's financial statements appearing elsewhere in this
report. There were no disagreements with Comiskey & Company on
accounting and financial disclosure.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected for one-year terms or until the next
annual meeting of shareholders and until their successors are duly
elected and qualified. Officers continue in office at the pleasure
of the Board of Directors.
The Directors and Officers of the Company as of the date of
this report are as follows:
Name Age Position
________________ ___ _________________________
Robert Zaba 40 Chairman of Board,
President and Director
Michael D. Cohen 58 Vice President, Director
Carmine Montemariano 48 Vice President - Operations
and Director
Deeran Rambaran 35 Vice President - Marketing
and Director
Gordon A. Meugens 43 Treasurer and Director
Ronald M. Bell 61 Director
All Directors of the Company will hold office until the next
annual meeting of the shareholders and until successors have been
elected and qualified. Officers of the Company are elected by the
Board of Directors and hold office until their death or until they
resign or are removed from office.
There are no family relationships among the officers and
directors. There is no arrangement or understanding between the
Company (or any of its directors or officers) and any other person
pursuant to which such person was or is to be selected as a
director or officer.
24
<PAGE>
(b) Resumes:
Robert S. Zaba, Chairman of the Board, President and a
Director of the Company, assumed his positions with the Company in
October 1997. Prior, since June 1997 he held similar positions
with Old Zaba. From January 1990 to June 1992, Mr. Zaba was
President of Trout Lake Enterprises, a technology company related
to the wood industry. From July 1992 through January 1993, Mr.
Zaba was unemployed. From February 1993 to September 1996, he was
President of Canadian Georgian Corp., which was engaged in the
development of new business in the former Soviet Union.
Additionally, from January 1996 to June 1997, Mr. Zaba was a
consultant with Canadian Northern Lites, Inc., a United States
reporting company engaged in opal mining operations. Mr. Zaba has
also been engaged in private consulting to various other companies,
assisting in fund raising activities and also owns and manages his
own standardbred horse racing operation in Canada and the United
States. He devotes substantially all of his time to the business
of the Company.
Michael D. Cohen, Vice President and a Director. Prior, since
June 1997 Mr. Cohen held these positions with Old Zaba. From 1985
through January 1997, Mr. Cohen was the agent for the Government of
Saskatchewan, Canada in New York City, where his responsibilities
included raising the visibility of Saskatchewan in relation to
tourism, investment opportunities and other economic factors. Mr.
Cohen received a Bachelor of Arts degree from S.W. Essex
University, Chingford, England in 1960. He devotes substantially
all of his time to the business of the Company.
Carmine A. Montemariano, Vice President - Operations and a
Director. Prior, since July 1997 mr. Montemariano held similar
positions with Old Zaba. In addition, since September 1994, Mr.
Montemariano has been a liaison to the New York City and Tri-State
area for Sweeprite Products, Inc., where his responsibilities
included expansion of trade relations. From January 1968 through
July 1991, he was project manager and, in 1993, owner and vice
president of Street King of New York, where his responsibilities
included modifying sweepers for New York end distribution. Mr.
Montemariano obtained a degree from Empire State University in
labor relations. He devotes substantially all of his time to the
business of the Company.
Deeran Rambaran, Vice President of Marketing, Secretary and a
Director. Mr. Rambaran held similar positions with Old Zaba since
July 1997. From July 1986 through July 1997, he was president and
founder of J.C.C. International, Inc., a British Columbia
corporation engaged in manufacturing, wholesale and retail jewelry
business. He is also a director of Canadian Northern Lites, Inc.,
a public reporting company in the US. He obtained a Bachelor of
Arts degree in Business Administration from the University of
25
<PAGE>
London in 1980. He devotes substantially all of his time to the
business of the Company.
Gordon A. Meugens, Treasurer and a Director. Since June 1997,
Mr. Meugens held similar positions with Old Zaba. In addition, for
the past 18 years he has been a practicing attorney in British
Columbia, Canada, emphasizing business law. He received a Bachelor
of Law degree from the University of British Columbia in 1978. He
devotes only such time as necessary to the business of the Company,
which time is not expected to exceed 20 hours per month.
Ronald M. Bell, Director. Mr. Bell held a similar position
with Old Zaba since May 1997. Mr. Bell is currently retired.
Prior, from 1965 through August 1995, Mr. Bell was an airline
captain for Canadian Airlines. Mr. Bell served in the Royal
Canadian Air Force University Reserve from 1956 through 1958. He
devotes only such time as necessary to the business of the Company,
which is not expected to exceed 20 hours per month.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and person who own more than 10%
of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
All of the aforesaid persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they
file.
There were no changes in the securities holdings of any
officer, director or principal shareholder.
ITEM 10. EXECUTIVE COMPENSATION.
Remuneration
The following table reflects all forms of compensation for
services to the Company for the year ended November 30, 1997 of the
chief executive officer of the Company.
26
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
____________________________
Annual Compensation Awards Payouts
_____________________ ____________________ _______
Securities
Other Under- All
Name Annual Restricted lying Other
and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
__________ ____ ______ _____ ______ ________ _______ _______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert Zaba,
President & (1)(2)
Director 1997 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
_________________________
<F1>
(1) Mr. Zaba did not receive any salary during the fiscal year ended November
31, 1997 from the Company.
<F2>
(2) It is not anticipated that any executive officer of the Company will
receive compensation exceeding $100,000 during 1998.
</TABLE>
The Company maintains a policy whereby the directors of the
Company may be compensated for out of pocket expenses incurred by
each of them in the performance of their relevant duties. The
Company did not reimburse any director for such expenses during the
fiscal year ended November 30, 1997.
In addition to the cash compensation set forth above, the
Company reimburses each executive officer for expenses incurred on
behalf of the Company on an out-of-pocket basis. The Company
cannot determine, without undue expense, the exact amount of such
expense reimbursement. However, the Company believes that such
reimbursements did not exceed, in the aggregate, $1,000 during
fiscal year 1997.
There are no bonus or incentive plans in effect, nor are there
any understandings in place concerning additional compensation to
the Company's officers.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) and (b) Security Ownership of Certain Beneficial Owners
and Management.
27
<PAGE>
The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company to
be the beneficial owner of more than 5% of such securities, as well
as by all directors and officers of the issuer. Unless otherwise
indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
Name and Amount and
Address of Nature of
Title Beneficial Beneficial Percent of
of Class Owner Owner Class
________ _________________________ __________ __________
Common Robert Zaba 7,154,995 59.0%
2963 Glen Dr.
Coquitlam, B.C.
Canada
Common Deeran Rambaran 2,407,165
20.0%
308-2941 Delahaye Dr.
Coquitham, B.C.
Canada
Common All Directors 9,562,160
79.0%
and Officers as a
Group (6 persons)
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company presently has an outstanding loan due a
shareholder in the principal amount of $270,971. A significant
portion ($214,000 US) was utilized by the Company for the initial
non-refundable deposit relating ton the Sweeprite Companies
acquisition, with the balance for working capital. It accrues
interest at the rate of 9% per annum and is due upon demand.
During the fiscal year ended November 30, 1997, the Company's
former President and a director of the Company provided the Company
with office space, without cost. This situation terminated in
October 1997, with the effectiveness of the Zaba Transaction.
There have been no other related party transactions, or any
other transactions or relationships required to be disclosed
pursuant to Item 404 of Regulation S-B.
28
<PAGE>
PART IV
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.1* Certificate and Articles of Incorporation
3.2* Bylaws
3.3 Articles of Merger
EX-27 Financial Data Schedule
* Filed with the Securities and Exchange Commission in the Exhibits
to Form 10-SB, filed in July 1996 and are incorporated by reference
herein.
(b) Reports on Form 8-K
In the last fiscal quarter of the fiscal year ended November
30, 1997, the Company filed one report on Form 8-K, advising of the
effectiveness of the Zaba Transaction and the Company's right of
rescission thereto. The contents of this Form 8-K is incorporated
into this report as if set forth.
29
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on
February 27, 1998.
ZABA INTERNATIONAL, INC.
(Registrant)
By:/s/ Robert Zaba
-------------------------------
Robert Zaba, President
By:/s/ Gordon A. Meugens
-------------------------------
Gordon A. Meugens, Treasurer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities indicated on February 27, 1998.
/s/ Robert Zaba
------------------------------
Robert Zaba, Director
/s/ Michael D. Cohen
------------------------------
Michael D. Cohen, Director
------------------------------
Carmine Montemariano, Director
/s/ Deeran Rambaran
------------------------------
Deeran Rambaran, Director
/s/ Gordon A. Meugens
------------------------------
Gordon A. Meugens, Director
------------------------------
Ronald M. Bell, Director
30
<PAGE>
ZABA INTERNATIONAL, INC.
Exhibit Index to Annual Report on Form 10-KSB
For the Fiscal Year Ended November 30, 1997
EXHIBITS Page No.
EX-3.3 Articles of Merger 32
EX-27 Financial Data Schedule 34
31
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA ARTICLES OF MERGER
JAN 14 1998
No. C 18449-97
s/Dean Heller
Dean Heller, Secretary of State
THIS IS TO CERTIFY:
1. Parties. Pursuant to the terms of that certain definitive Agreement
and Plan of Merger dated August 4 , 1997 (the "Agreement"), HA
Spinnaker, Inc. ("HAS"), a corporation formed pursuant to the laws of the
State of Colorado, has acquired all of the issued and outstanding common
voting stock of Zaba International Holdings USA, Inc. ("Zaba"), a corporation
formed pursuant to the laws of the State of Nevada, effective August 4, 1997
(the "Effective Date").
2. Approval. The terms of the Agreement were approved by the
affirmative vote sufficient for approval of the Boards of Directors and
Shareholders of both HAS and Zaba, respectively, on August 4, 1997, pursuant
to unanimous consents or meetings of the same held pursuant to proper notice
(or waiver thereof).
3. Share Exchange. The Agreement provides that all of the shareholders
of Zaba, representing 100 issued and outstanding common shares, shall exchange
their respective shares for an aggregate of 9,628,660 shares of HAS common
stock, to be distributed to each Zaba shareholder pro rata to their respective
ownership in Zaba at the Effective Date. Immediately prior to the Effective
Date, there were 2,407,165 common shares of HAS issued and outstanding.
4. Surviving Entity. Pursuant to the terms of the Agreement, HAS shall
be the surviving entity and, upon the Effective Date and upon filing of these
Articles of Merger with the Nevada Secretary of State, Zaba shall cease to
exist as a bona fide Nevada corporation.
5. Undertakings of Foreign Surviving Corporation. Upon the Effective
Date, HAS, as the surviving corporation:
(a) hereby agrees that it will promptly pay to the dissenting
owners of Zaba the amounts, if any, to which they may be entitled under or
created pursuant to NRS 92A.300 to 92A.500 inclusive; and
(b) hereby appoints the Secretary of State of the State of Nevada
as its agent for service of process in any proceeding to enforce any
obligation or the rights of dissenting owners of Zaba. For purposes herein,
all notices and service of process may be tendered to Andrew I. Telsey, Esq.,
Andrew I. Telsey, P.C., 2851 South Parker Road, Suite 720, Aurora, Colorado
80014, legal counsel to HAS.
6. Name Change. Pursuant to the affirmative vote of the shareholders of
HAS, the HAS Articles of Incorporation shall be amended to reflect a change in
HAS's name to "Zaba International, Inc."
7. Agreement and Plan of Merger. A complete, executed copy of the
Agreement and Plan of Merger is on file at the offices of HAS, the surviving
corporation, at 5650 Greenwood Plaza Blvd., Suite 216, Englewood, Colorado
80111.
7. Counterparts. This Articles of Merger may be executed in
counterparts, each of which shall be deemed to be an original document, but
together shall be deemed to constitute
32
<PAGE>
only one agreement.
Executed this 4th day of August , 1997.
HA SPINNAKER, INC.
By s/Gregory W. Skufca
----------------------------------------------
Gregory W. Skufca, President
And s/William L. Skufca
---------------------------------------------
William L. Skufca, Secretary
ZABA INTERNATIONAL HOLDINGS USA, INC.
By s/Robert Zaba
----------------------------------------------
Robert S. Zaba, President
And s/Deeran Rambaran
---------------------------------------------
Deeran Rambaran, Secretary
STATE OF COLORADO )
: ss.
COUNTY OF )
This instrument was acknowledged before me on July 31 , 1997, by Gregory
W. Skufca and William L. Skufca, as President and Secretary, respectively, of HA
Spinnaker, Inc.
My commission expires: 3-10-98
s/Don Seybold
------------------------------------
Notary Public
PROVINCE OF BRITISH COLUMBIA )
: ss.
CITY OF )
This instrument was acknowledged before me, a Commissioner/Notary Public in
and for the Province of British Columbia this 1 day of Aug , 1997, by
Robert S. Zaba and Deeran Rambaran, as President and Secretary, respectively, of
Zaba International Holdings USA, Inc.
s/G. A. Meugens
------------------------------------
Commissioner/Notary Public
33
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<CASH> 214,088
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 214,088
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 214,088
<CURRENT-LIABILITIES> 342,866
<BONDS> 0
0
0
<COMMON> 1,203
<OTHER-SE> (129,981)
<TOTAL-LIABILITY-AND-EQUITY> 214,088
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 133,498
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (133,498)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (133,498)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> 0
</TABLE>
