CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File No. 33-33939
LINDSEY TECHNOLOGIES, INC. (formerly L.M. CAPITAL, INC.)
_________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Colorado 84-1121635
_______________________________ __________________
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
3025 South Parker Road, Suite 109
Aurora, Colorado 80014
___________________________________________________________
(Address of principal executive offices, including zip code)
Issuer's Telephone Number: (303) 306-1988
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
___ ___
As of June 30, 1996, 14,782,400 shares of common stock were outstanding, and the
aggregate market value of the common stock of the Registrant held by
nonaffiliates was approximately $-0-.
Documents incorporated by reference: None
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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]
State Issuer's revenues for its most recent fiscal year: $-0-
This Form 10-KSB consists of 25 pages. The Exhibit Index begins on page 9.
<PAGE>
TABLE OF CONTENTS
Form 10-KSB Annual Report - 1996
Lindsey Technologies, Inc.
(formerly L.M. Capital, Inc.)
Page
Facing Page
Index
PART I
Item 1. Business 1
Item 2. Properties 2
Item 3. Legal Proceedings 2
Item 4. Submission of Matters to a Vote of Security Holders 2
PART II
Item 5. Market For Registrant's Common Equity
And Related Shareholder Matters 3
Item 6. Management's Discussion And Analysis Or Plan Of
Operations 4
Item 7. Financial Statements 5
Item 8. Disagreements On Accounting And Financial Disclosures 5
PART III
Item 9. Directors And Executive Officers Of The Registrant 6
Item 10. Executive Compensation 7
Item 11. Security Ownership Of Certain Beneficial Owners And
Management 8
Item 12. Certain Relationships And Related Transactions 8
PART IV
Item 13. Exhibits, Financial Statement Schedules, And
Reports On Form 8-K 9
SIGNATURES 10
<PAGE>
PART I
Item 1. Business
Lindsey Technologies, Inc. (formerly L.M. Capital, Inc.) (the "Company"
or the "Registrant") was organized under the laws of the state of Colorado on
August 17, 1989 for the primary purpose of engaging in a merger with, joint
venture with, or acquisition of a small number of private or public firms.
Such firms may be private or public corporations, partnerships, or sole
proprietorships. The Company's name was changed from L.M. Capital, Inc. to
Lindsey Technologies, Inc. on November 22, 1996.
On June 21, 1996 the Company entered into a joint venture with a team of
French software engineers (the "Associates") and their wholly owned French
corporation, Helvetius Ingeniere. The Company and the Associates will form
Heldol Corporation (Heldol), a United States corporation for the purpose of
developing and marketing software for industrial, medical, and commercial
business applications. (Heldol was subsequently formed on October 25, 1996).
The Company will capitalize Heldol for $70,000 at which time the Company will
own 35% of Heldol and the Associates 65%. The Company will also capitalize
Heldol with an additional 10 million French francs (approximately $2 million)
over two years at which time the Company will own 80% of Heldol. After Heldol
is fully capitalized, Heldol shall be obligated to purchase 30% of the
outstanding shares of Helvetius for 10 million French francs (approximately
$2,000,000).
Another agreement on June 21, 1996 between the Company and the Associates
allows the Associates to exchange their shares of Helvetius for shares in the
Company according to a market valuation formula, providing Helvetius attains
certain sales levels and the Company is on NASDAQ.
The Associates to date have developed software for bacteriological
identification, trade named HELLAC which is used by Institut Pasteur, software
for the management of educational and professional training institutions, trade
named HELISA currently used by French engineering and business schools such
as Ecole Normale Superieure, and inventory tracking software trade named
HAWK, developed with and used by NCR.
The Company in conjunction with the Associates plans to offer potential clients
in the fields of medicine, education and business fully integrated software
solutions to their information needs. Services will include description and
study of the project at hand, elaboration and development of a workable
software network, installation of software and hardware interfacing with all
existing platforms and technologies from a basic unit to a wide network of
computers and languages, and the training of staff and maintenance of systems
when in place.
1
<PAGE>
Item 2. Properties
The Company maintains its offices in Aurora, Colorado in office space
provided by one of the Directors of the Company.
Item 3. Legal Proceedings
The Company was involved in no legal proceedings during the fiscal year
ended June 30, 1996.
Item 4. Submission of Matters to a Vote of Security Holders
In September 1995, Lionel Mauclaire, J.M. Mauclaire, and Ronald Chadwick
were elected to the Board of Directors.
Subsequent to the date of this filing, in November of 1996 the Company's
name was changed from L.M. Capital, Inc. to Lindsey Technologies, Inc. Also in
November of 1996, Lionel Mauclaire, J.M. Mauclaire, Robert Mauclaire and
Ronald Chadwick were elected to the Board of Directors.
2
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters
(a) Principal Market or Markets: During the fiscal year ended
June 30, 1996, no separate market developed for the Company's common stock,
units, or any outstanding warrants. The Company currently has no outstanding
trading market. High and low bids for the Company's common stock units for the
previous eight quarters are shown below.
BID
Quarter Ended High Low
Units Sept. 30, 1994 No Bid
Units Dec. 31, 1994 No Bid
Units Mar. 31, 1995 No Bid
Units June 30, 1995 No Bid
Units Sept. 30, 1995 No Bid
Units Dec. 31, 1995 No Bid
Units Mar. 31, 1996 No Bid
Units June 30, 1996 No Bid
(b) Common Stock: On June 30, 1996 there were 14,782,400 shares of
common stock issued and outstanding, which were held by 34 shareholders of
record excluding individuals holding securities in street name. In addition,
there were 413,000 (A) warrants and 413,000 (B) warrants outstanding held by
30 persons.
The Company has never paid cash dividends on its common stock and currently
intends to continue its policy of retaining all of its earnings for use in its
business.
(c) Convertible Preferred Stock: Out of the authorized preferred stock,
the Company has designated a Series A Convertible Preferred Stock ("Series A").
The designated number of shares of the Series A is 5,000. One share of Series A
may be converted into 1,600 common shares of the Company at the election of the
holder anytime beginning September 1, 1994. The holders of outstanding shares of
Series A shall not be entitled to receive any dividends. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, the holder of each share of Series A shall be entitled to
receive, from the assets of the Company available for distribution to its
stockholders, before any payment or distribution shall be made on the common
stock, an amount equal per share to $100. If the assets and funds to be
distributed among the holders of the Series A shall be insufficient to permit
the payment of the full aforesaid preferential amount to such holders, then
the entire assets and funds of the Company legally available for the
distribution shall be distributed among the holders of the Series A in
proportion to the aggregate preferential amount of all shares of Series A held
by them.
3
<PAGE>
After payment has been made to the holders of the Series A, the holders of the
common stock shall be entitled to share ratably in the remaining assets on the
basis of the number of shares of common stock held by them at the time of such
liquidation. The holder of each share of Series A stock shall have the right
to 1,600 votes for each share standing in his name on the books of the Company
and shall have the right to vote at all meetings of the stockholders. These
votes will be aggregated with the votes of the holders of the Company's
common stock and will not be treated as a separate class. As if June 30, 1996
there were 4,200 Series A shares outstanding held by 2 individuals.
Item 6. Management's Discussion and Analysis or Plan of Operations
The following discussion should be read in conjunction with the Financial
Statements and notes thereto included herein.
The Company earned nominal interest in 1996 and incurred minor trading losses.
Management believes that the Company has sufficient funds to continue
operations through the end of its current fiscal year on June 30, 1997.
(a) Liquidity: The Registrant's securities are currently not liquid.
There is one market maker in the Company's securities. The Company's
management is attempting to interest market makers in the Company's
securities, so as to provide limited liquidity for holders of the free
trading units. The Company anticipates that liquidity of its stock will be
enhanced by its recent joint venture with Helvetius Ingeniere, as software
products are developed and marketed. Such liquidity, though not a certainty,
would in all likelihood stem from interest in the Company's product(s) and
business. The Company cannot insure liquidity at any time in the future,
regardless of whether or not it conducts successful future business
operations. To meet short term capital needs the Company is from time to
time lent money by its President.
(b) Capital Resources: The Company does not anticipate expenditures
for capital goods such as plant or equipment at any time in the foreseeable
future. This expectation is subject to change based on the Company's possible
capital requirements for software development.
(c) Investments/Joint Ventures: On June 21, 1996 the Company entered
into a joint venture with a team of French software engineers
(the "Associates") and their wholly owned French corporation, Helvetius
Ingeniere. The Company and the Associates will form Heldol Corporation
("Heldol"), a United States corporation for the purpose of developing and
marketing software for industrial, medical, and commercial business
applications. (Heldol was subsequently formed on October 25, 1996). The
Company will capitalize Heldol for $70,000 at which time the Company will
own 35% of Heldol and the Associates 65%. The Company will also capitalize
Heldol with an additional 10 million French francs (approximately $2 million)
over two years at which time the Company will own 80% of Heldol. After Heldol
is fully capitalized, Heldol shall be obligated to purchase 30% of the
outstanding shares of Helvetius for 10 million French francs (approximately
$2,000,000).
4
<PAGE>
Another agreement on June 21, 1996 between the Company and the Associates
allows the Associates to exchange their shares of Helvetius for shares in
the Company according to a market valuation formula, providing Helvetius
attains certain sales levels and the Company is on NASDAQ.
(d) Plan of Operations: The Company in conjunction with a team of French
software engineers plans to offer potential clients in the fields of medicine,
education and business fully integrated software solutions to their information
needs. Services will include description and study of the project at hand,
elaboration and development of a workable software network, installation of
software and hardware interfacing with all existing platforms and technologies
from a basic unit to a wide network of computers and languages, and the
training of staff and maintenance of systems when in place.
Item 7. Financial Statements
The Report of the Independent Certified Public Accountant appearing at
page F-1 and the Financial Statements and Notes to Financial Statements
appearing at pages F-2 through F-11 are incorporated herein by reference.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
In November of 1996 the Board of Directors approved the engagement of
Larry O'Donnell, CPA, P.C. as its independent auditor for the fiscal year ended
June 30, 1996 to replace the firm of Bogner and Company, P.C., who declined to
stand for re-election in August, 1996. The decision by the Board of Directors
to change accountants was based solely on the decision by
Bogner and Company, P.C. not to stand for re-election.
There were no adverse opinions, disclaimer of opinions, or modification of
opinions as to uncertainty, audit scopes, or accounting principles issued by
Bogner and Company, P.C. for either of the two most recent fiscal years.
During the two most recent fiscal years and subsequent interim period there
were no disagreements with the former accountant on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope and
procedures.
5
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act
The Directors and Officers of the Registrant as of the date of this report are
as follows:
Served as a
Name Age Position Director Since
Lionel Mauclaire 36 President, Treasurer, Director August 17, 1989
J.M. Mauclaire 40 Director September, 1995
Robert Mauclaire 67 Director November, 1996
Ronald R. Chadwick 41 Director, Secretary August 17, 1989
Family Relationships: The Company's President and Director, Lionel Mauclaire
and J.M. Mauclaire, a Director, are brothers, and Robert Mauclaire, a
Director, is the father of Lionel Mauclaire and J.M. Mauclaire.
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 at the first
meeting of the Company's shareholders, and hold office until their death,
resignation, or removal from office.
Lionel Mauclaire. President, Treasurer, and a Director. Mr. Mauclaire has been
President, Treasurer, and a Director of the Company since August, 1989. Since
September, 1987, Mr. Mauclaire has conducted his business under the name
L.M. International, Inc., a company which was formed for the purpose of
engaging in financing, investment banking, mergers and acquisitions. From
May, 1985 to November, 1986 he was employed as a marketing executive with
I.M.M., S.A., a Paris, France based company engaged in the business of robots.
From February, 1983 to July, 1985 he was employed by Malterie Mauclaire, S.A.,
a family business which supplied breweries with barley. Mr. Mauclaire received
his business degree in 1982 from IMAC, Paris, France.
Ronald R. Chadwick, Secretary and a Director. Mr. Chadwick has served as
Secretary and a Director since August, 1989. From 1993 until present he has
operated his own certified public accounting firm, Ronald R. Chadwick, P.C.
From 1986 until present he has been President and a Director of Petramerica
Oil, Inc., an oil and gas company. Mr. Chadwick received an MBA degree in
finance from Arizona State University in 1980 and a Bachelor of Science degree
from Oregon State University in 1979.
6
<PAGE>
J.M. Mauclaire, a Director. Mr. Mauclaire resides in Paris, France and since
1990 has been employed as a financial auditor for Lafarge Company, Paris,
France, a worldwide marker of cement products.
Robert Mauclaire, a Director. Mr. Mauclaire received his Baccalaureate degree
in 1950 and Law degree in 1954 from Paris University. From 1957 to 1968 he
served first as a sales representative at IBM France, then as International
Accounts Manager at IBM World Trade Europe and Oil Industry Debt Manager at
IBM France. From 1969 to 1987 Mr. Mauclaire served in an executive capacity
(including as CEO from 1981-1987) to the Mauclaire family malting business,
Malterie Mauclaire, S.A. From 1987 to 1993 Mr. Mauclaire was counsel to the
CEO of Soufflet Group, a French company with annual sales of approximately
$4 billion. From 1992 to present he has served as a Judge at the local
Tribunal of Commerce. For the past 20 years Mr. Mauclaire has held a number
of highly regarded civil positions including Chairman of the Finance
Committee of the Chamber of Commerce of the District of Aube, membership on
the Board of Banque Populaire de Champagne, Chairman of the Finance Committee
of the Regional Chamber of Commerce of Champagne-Ardennes, Vice President of
the National Committe of Business Legal and Fiscal Studies of the Association
of French Chambers of Commerce, membership on the Committee of Counsels of
the Banque de France, and Vice President of the Board of Banque Populaire de
Champagne.
Item 10. Executive Compensation
ompensation paid to Officers and Directors is set forth in the Summary
Compensation Table below. The Company may reimburse its Officers and
Directors for any and all out-of-pocket expenses incurred relating to the
business of the Company.
SUMMARY COMPENSATION TABLE
Name and Fiscal Other Annual
Principal Position Year Salary Bonus Compensation
Lionel Mauclaire, 1994 - - -
President 1995 - - -
1996 - - -
7
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this Report, the stock
ownership of each person known by the Registrant to be the beneficial owner
of five percent or more or the Registrant's common stock, each Officer and
Director individually and all Directors and Officers of the Registrant as a
group:
NO. OF % OF
NAME CLASS SHARES CLASS
Lionel Mauclaire Common 14,471,968 (1) 97.90
3025 S. Parker Rd (S) 109 Preferred 4,000 (2) 95.24
Aurora, Colorado 80014
Ronald Chadwick Common 200,000 1.35
3025 S. Parker Rd (S) 109
Aurora, Colorado 80014
Directors and Common 14,671,968 99.25
Officers as a Group Preferred 4,000 95.24
(1) In addition to the 14,471,968 common shares currently owned by him,
Lionel Mauclaire also owns 326,000 A warrants and 326,000 B warrants. If
exercised these warrants, each of which convert into eight shares of common
stock, would give Mr. Mauclaire ownership of an additional 5,226,560 shares
of common stock.
(2) Each share of preferred stock is convertible into 1,600 shares of the
Company's common stock anytime beginning September 1, 1994.
Item 12. Certain Relationships and Related Transactions
Subsequent to the date of this filing, on October 3, 1996 pursuant to the
requirements of the 1990 Colorado Securities Act the Company returned to
shareholders $71,000 held in escrow. The Company's President subsequently
returned to the Company $70,000.
8
<PAGE>
PART IV
Item 14. Exhibits and Reports on Form 8-K
(a) Exhibits
-- The following Exhibits were filed with the Securities and Exchange
Commission in the Exhibits to Form S-18 on March 26, 1990, and are
incorporated by reference herein:
3.1 Articles of Incorporation
3.2 By Laws
(b) Reports on Form 8-K
N/A
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, on January 24, 1997.
LINDSEY TECHNOLOGIES, INC.
(formerly L.M. Capital, Inc.)
By: /s/Lionel Mauclaire
Lionel Mauclaire, 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 in
the capacities indicated, on January 24,1997.
Principal Executive Officer, Financial Officer, Accounting Officer and Director:
/s/Lionel Mauclaire
Lionel Mauclaire
Directors:
/s/Ronald R. Chadwick
Ronald R. Chadwick
/s/J.M. Mauclaire
J.M. Mauclaire
/s/Robert Mauclaire
Robert Mauclaire
10
<PAGE>
Lindsey Technologies, Inc.
(Formerly L.M. Capital, Inc.)
(A Development Stage Company)
Financial Statements
June 30, 1996
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Financial Statement
Table of Contents
Page
Independent Auditor's Report F-1
Financial Statements
Balance sheet F-2
Statements of operations F-3
Statements of cash flows F-4-F-5
Statements of stockholders' equity F-6
Notes to Financial Statements F-7-F-11
<PAGE>
Larry O'Donnell, CPA, P.C.
2851 South Parker Road Telephone 745-4545
Suite 1040
Aurora, Colorado 80014
Board of Directors
Lindsey Technologies, Inc.
Denver, Colorado
Independent Auditor's Report
I have audited the accompanying balance sheet of Lindsey Technologies, Inc.
(formerly L.M. Capital, Inc.) as of June 30, 1996 and the related statements of
operations, stockholders' equity and cash flows for the year then ended These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on my audit. The financial statements of Lindsey Tecnologies, Inc.
(formerly LM Capital, Inc.) as of June 30, 1995, were audited by other
auditors whose report dated September 14, 1995, expressed and unqualified
opinion on those statements.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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 their accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
resonable basis for my opinion.
In my opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Lindsey Technologies, Inc.
(formerly L.M. Capital, Inc.) as of June 30, 1996, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Larry O'Donnell, CPA, P.C.
November 22, 1996
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Balance Sheet
June 30, 1996
Assets
Current assets
Cash in Bank $ 2,797
Cash in escrow 84,817
----------
Total current assets 87,614
----------
$ 87,614
======
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 4,217
Notes payable-major shareholder 25,994
----------
Total current liabilities 30,211
----------
Stockholders' equity
Preferred stock, no par value, 20,000,000
total; 5,000 Series A shares authorized
4,200 issued and outstanding 304,257
Common stock, no par value,
100,000,000 shares authorized,
14,782,400 issued and outstanding 109,429
Underwriter's warrants 20,000 issued, and
outstanding 120
Deficit Accumulated during the
development stage (356,403 )
-----------
57,403
-----------
$ 87,614
======
See Notes to Financial Statements.
F-2
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Statements of Operations
Year Year August 17,1989
June 30, June 30, to June 30,
1996 1995 1996
General & administrative expenses $ 16,868 $ 17,508 $ 378,616
--------- --------- ----------
Net (loss)-from operations ( 16,868) (17,508) (378,616)
--------- --------- ----------
Other income (expense):
Loss on stock disposal - - (30,000)
Gain (loss) on sale of trade securities - (400) 11,395
Loss on market decline of trade securities - (153) (1,341)
Interest income 3,003 2,137 42,159
--------- -------- ----------
3,003 1,584 22,213
--------- -------- ----------
Net income (loss) $ (13,865) $ (15,924) $(356,403)
======= ======= =======
Net encome (loss) per share (*) (*) $( .01)
Weighted average number of
common shares and equivalent
units outstanding 28,308,240 28,308,240 28,308,240
======== ======== ========
*Less than $(.01) per share
See Notes to Financial Statements.
F-3
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Statements of Cash Flows
August 17, 1989
Year ended Year ended (inception)
June 30, 1996 June 30, 1995 to June 30,1996
Cash flows from operating
activates
Net income (loss) $(13,865) $(15,924) $(356,403)
Adjustments to reconcile
net income to net cash provided by operations:
Amortization - - 50
Decline in market value
of trading securities - 153 1,341
Loss on sale of trading
securities - 400 400
(Increase) decrease in:
Cash in escrow (2,997) (2,357) (84,817)
Accrued interest receivable 186 (60) -
Organization costs - - (50)
Trading securities 44 5,353 5,397
Increase (decrease) in:
Accounts payable - (2,373) 4,217
--------- --------- --------
Net cash used in operating
activities (16,632) (14,808) (429,865)
--------- --------- --------
Cash flows from investing
activities:
Purchase of trading
securities - - (7,138)
--------- --------- --------
Net cash used in investing
activities - - (7,138)
--------- --------- --------
Cash flows from financing
activities:
Due to shareholder 7,182 15,849 23,031
Increase in note payable - - 442,447
Payments of note payable - - (135,227)
Sale of common stock - - 141,900
Sale of underwriter's warrants - - 120
Deferred stock offering costs - - (32,471)
--------- --------- --------
Net cash flow used in financing
activities 7,182 15,849 439,800
--------- --------- --------
Net increase (decrease) in
cash equivalents (9,450) 1,041 2,797
Cash at beginning of year 2,797 11,206 -
--------- --------- -------
Cash at end of year $ 2,797 $ 12,247 $ 2,797
======= ======= ======
F-4
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Statement of Cash Flows (continued)
August 17, 1989
Year ended Year ended (inception)
June 30, 1996 June 30, 1995 to June 30, 1996
Supplemental disclosures of cash flow information:
Noncash financing activities during the year:
Preferred stock issued for notes payable stockholder $304,257
========
See Notes to Financial Statements
F-5
<PAGE>
Lindsey Technologies, Inc.
(Formerly L.M. Capital, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity
For the period August 17, 1989 (inception) to June 30, 1996
<TABLE>
<S> <C> <C> <C>
Common Stock Preferred Stock Accumulated
Shares Amount Shares Amount Deficit
Stock issued to initial stockholders for
cash, August, 1989 at $.01125 per share
after 8 to 1 split on August 27, 1992 12,800,000 $ 18,000
Net loss for the period ended June 30, 1990 $ (6,136)
---------- -------- --------
Balance, June 30, 1990 12,800,000 18,000 (6,136)
Sale of units in public offering after
8 to 1 split on August 27, 1992 1,982,400 123,900
Cost of public offering (32,471)
Underwriter's warrants issued for cash 120
Net income for the year ended June 30, 1991 1,145
---------- ------- --------
Balance, June 30, 1991 14,782,400 109,549 (4,991)
Preferred stock issued for debt April, 1992 4,200 304,257
Net loss for the year ended June 30, 1992 44,542)
---------- ------- ------ ------- --------
Balance, June 30, 1992 14,782,400 109,549 4,200 304,257 (49,533)
Net loss for the year ended June 30, 1993 (252,463)
---------- ------- ------ ------- --------
Balance, June 30, 1993 14,782,400 109,549 4,200 304,257 (301,996)
Net loss for the year ended June 30, 1994 (24,618)
---------- ------- ------ ------- --------
Balance, June 30, 1994 14,782,400 109,549 4,200 304,257 (326,614)
Net loss for the year ended June 30, 1995 (15,924)
---------- ------- ------ ------- --------
Balance, June 30, 1995 14,782,400 109,549 4,200 304,257 (342,538)
Net loss for the year ended June 30, 1996 (13,865)
---------- ------- ------ ------- ---------
Balance, June 30, 1996 14,782,400 $109,549 4,200 $304,257 $(356,403)
======== ======= ==== ======= =======
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE>
Lindsey Technologies, Inc.
(Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Notes to Financial Statements
1. Organization and Summary of Significant Accounting Policies:
Organization - L.M. Capital, Inc. (the Company) was organized under the laws of
the state of Colorado on August 17, 1989. On November 8, 1996, the Company
changed its name to Lindsey Technologies, Inc. The Company has not commenced
planned principle operations and is a development stage company. The
company intends to engage in all aspects of review and evaluation of private
companies, partnerships and sole proprietorships for the purpose of
completing mergers with or acquisitions by the Company.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results differ from those estimates.
Loss Per Common Share - Loss per common share is computed on the basis of the
weighted average number of common shares during the respective periods.
Cash Equivalents - For the purposes of reporting cash flow, the company
considers cash and savings deposits to be cash equivalents.
Stock Offering Costs - Expenditures incident to the public offering, which
consist primarily of legal, accounting, commissions and printing expenses,
have been charged against proceeds of the offering.
2. Joint Venture Agreement
On June 21, 1996, the Company entered into a joint venture with a team of
French software engineers (the Associates) and their wholly owned French
corporation, Helvetius Ingeniere. The Company and the Associates will form
Heldol Corporation (Heldol) a United States corporation, (Heldol was
formed October 25, 1996). The Company will capitalize Heldol for $70,000 at
which time the Company will own 35% of Heldol and the Associates 65%. The
Company will also capitalize Heldol with an additional 10 million French
francs (approximately $2 million) over two years at which time the Company
will own 80% of Heldol.
F-7
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Notes to Financial Statements (continued)
2. Joint Venture Agreement (continued)
After Heldol is fully capitalized, Heldol shall be obligated to purchase 30% of
the outstanding shares of Helvetius for 10 million French francs (approximately
$2 million). Another agreement on June 21, 1996 between the Company and the
Associates allows the Associates to exchange their shares of Helvetius for
shares in the Company according to a market valuation formula, providing
Helvetius attains certain sales levels and the Company in on NASDAQ.
3. Related Party Transactions
The initial shareholders of the Company, including officers, directors and
founders, have acquired their controlling interest in the company an
average cost per share $.01125 that is substantially less than the public
offering price.
On September 1, 1989 the Company entered into an oral agreement with the
secretary of the Company to utilize office space provided by the secretary free
of charge. A company wholly owned by the secretary was reimbursed for out of
pocket expenses in the amount of $12,890 and $6,367 for the years ended
June 30, 1996 and 1995 respectively.
The Company has borrowed and paid back funds from the major shareholders
wholly owned company. These loans are at zero percent interest to the
Company.
In April, 1992, the Company exchanged a promissory note, due April 15, 1996 in
the amount $304,257 from its president and major shareholder for 4,000 shares of
Series A Convertible Preferred stocks.
F-8
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Notes to Financial Statement (continued)
4. Public Offering
The Company successfully completed a public offering of 20,650 units at $6.00
per unit in March 1991, with gross proceeds of $123,900. Each unit consisted
of twelve common shares, no par value, plus twenty Class A and Class B
warrants to purchase common stock. The Class A warrants expired twelve
months after the date of the prospectus on September 13, 1990. The Board
of Directors had extended the time to exercise these warrants until
June 30, 1996. However, these warrants have not been exercised. These
warrants allowed the holder to purchase eight common shares of stock at
an exercised price of twelve and one-half cents per share. As of June 30,
1996, 413,000 warrants were issued and outstanding. The other class of
warrants, Class B, has expired on September 13, 1992 twenty-four months
after the date of the prospectus on September 13, 1990. The Board of
Directors extended the period to exercise the warrants through June 30,
1996. However these warrants have not been exercised. The holder of
these warrants could purchase eight common shares of stock at an
exercised price of eighteen and three-quarter cents per share. As of
June 30, 1996, 413,000 warrants were issued and outstanding.
The Company has the right to redeem these warrants upon a thirty day written
notice at a price of $.0001 per warrant commencing three months from the data
the prospectus becomes effective. As of June 30, 1996, the Company has redeemed
no warrants.
The public offering was subject to the provisions of 1990 Colorado Securities
Act. These provisions required that at least 80% of the net proceeds be placed
into a separate escrow bank account. The Colorado Securities Commissioner
will authorize the release of these funds provided the Company has committed
50% of gross proceeds to acquire or merge with a business and approved
information of the acquisition or merger to the commission.
The warrants will also be subject to the same provisions of the 1990 Colorado
Securities Act. The Company must escrow net proceeds from sale of warrants
unless at least 75% these moneys are committed to acquire or merge a business.
As of June 30, 1996, $84,817 of the remaining proceeds including interest of
the public offering are currently set aside and held in escrow until the 1990
Colorado Securities Act is satisfied. No shares are subject to redemption upon
a consummated merger.
F-9
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Notes to Financial Statement (continued)
4. Public Offering (continued)
On October 3, 1996, the Company returned $71,000 of the proceeds to its
shareholders and retained $14,536 for its use. Certain shareholders returned
$70,000 to the Company.
5. Common Stock Split
In April 1992, the Board of Directors voted to forward split each currently
outstanding common share of stock by a ratio of 8 to 1, one common share
shall become eight common shares. In addition, the conversion rate of the
convertible stock is increased to 1,600 shares per 1 share of preferred from
the previous rate of two hundred common shares per one share of preferred
stock. The statement of shareholders' equity has been restated to reflect this
change.
6. Preferred Stock Series A
Out of the authorized preferred stock, the Company has designated a
"Series A Convertible Preferred Stock" (Series A) with 5,000 as the
designated number of shares. The Series A holders are not entitled to
receive dividends but can convert one share of Series A into 1,600 shares of
common stock.
As a provision of the Series A - " In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Company, the holder of each share of Series A shall be entitled to receive,
of the assets of the Company available for distribution shall be make on
the common stock, an amount per share equal to $100."
If the assets and funds to be distributed among the holders of the Series A
shall be insufficient to permit the payment of the full foresaid
preferential amount to such holders then the entire assets and funds of the
company legally available for distribution shall be distributed among the
holders of the Series A in proportion to the aggregate preferential amount
of all shares held by them.
After payment has been made of the holders of the Series A, the holders of the
common stock shall be entitled to share ratably in the remaining assets on the
basis of the number or shares held by them.
F-10
<PAGE>
Lindsey Technologies, Inc.
( Formerly L.M. Capital, Inc.)
( A Development Stage Company)
Notes to Financial Statement (continued)
6. Preferred Stock Series A (continued)
The holder of each share of Series A shall have the right to two hundred votes
for each share standing in his name on the books of the Company. The
holders shall have the right to vote at all meetings of the stockholders
held in respect to any matter upon which his required, including the
election of directors. These votes will be aggregated with the votes of
the holders of the Company's common stock and will not be treated as a
separate class.
7. Incentive Stock Option Plan
On August 17, 1989, the Company adopted an Incentive Stock Option Plan under
which options are intended to qualify as "incentive stock options' under
Section 422A of the Internal Revenue Code of 1954 as amended. The options
to purchase up to 500,000 shares of the Company's Common Stock may be
granted to the employees of the Company. The plan is administered by the
Board of Directors, which are empowered to determine the terms and
conditions of each option, subject to the limitation the exercise price
cannot be less than the market value of the Common Stock on the date of
grant (110% of the market value in the case of options granted to an
employee who owns of the Company's outstanding Common Stock) and no
option can have a term in excess of 10 years (5 years in the case of options
granted to employees who own 10% or more of the Company's Common Stock). As
of June 30, 1996 no options have been granted.
8. Income taxes
Deferred income taxes arise from the temporary differences between financial
statement and income tax recognition of net operating losses. These loss
carryovers are limited under the Internal Revenue Code should a significant
change in ownership occur.
A deferred tax asset arising from the net operating loss carryover of
approximately $100,000 has been offset by valuation allowance.
At June 30, 1996, the Company has approximately $356,000 of unused Federal net
operating loss carryforwards, which expire in the year principally in 2008.
F-11
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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