<PAGE>
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 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1995
[ ] 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. 33-55254-04
ENERGY SYSTEMS, INC.
(Name of small business issuer in its charter)
NEVADA 87-0394314
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1111 CAROLINE, SUITE 2905, HOUSTON, TEXAS 77010
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Include Area Code: (713) 655-0015
Securities Registered Pursuant to Section 13 of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
None None
Securities Registered Pursuant to Section 15(d) of the Act:
COMMON STOCK, $0.001 PAR VALUE
(Title of Class)
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 twelve (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 ninety (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 will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
The issuer's revenues for its most recent fiscal year were $0.00.
As of March 31, 1996, 1,000,000 shares of Common Stock of the Registrant
were outstanding. There was no market for the stock and accordingly there is no
aggregate market value.
DOCUMENTS INCORPORATED BY REFERENCE
No annual reports to security holders, proxy or information statements, or
prospectuses filed pursuant to Rule 424(b) or (c) have been incorporated by
reference in this report.
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
ITEM 1. DESCRIPTION OF BUSINESS.................................... 3
ITEM 2. DESCRIPTION OF PROPERTIES.................................. 3
ITEM 3. LEGAL PROCEEDINGS.......................................... 3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS........................................ 3
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS................................ 4
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS....................... 4
ITEM 7. FINANCIAL STATEMENTS....................................... 4
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE..................... 11
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT.......................... 11
ITEM 10. EXECUTIVE COMPENSATION..................................... 11
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT...................................... 11
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............. 12
ITEM 13. EXHIBITS AND REPORTS OF FORM 8-K........................... 12
SIGNATURES................................................................ 13
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
The Company was incorporated under the laws of Nevada on May 4, 1988. The
Company has had no operations to date. The Company was formed to review and
make investments or seek business opportunities in any industry. There are no
present plans or commitments with respect to any given business or industry and
no assurance can be given that the Company will be able to acquire suitable
business opportunities or that such business opportunities, if acquired, will be
successful. Investors should be aware of the scarcity of and competition for
business opportunities, as well as the lack of capital of the Company. The
Company has not yet engaged in any business operations in the sense that it has
generated any sales or profits. The Company is attempting to acquire assets and
properties in a variety of businesses by evaluating business plans submitted by
interested parties, but presently has no specific type of business, asset or
property which it contemplates acquiring.
The success of the Company is dependent upon management's ability to find
business opportunities on behalf of the Company. In merger/acquisition
transactions similar to those contemplated by the Company, present management
would be replaced by new management and additional shares would be issued as
consideration for the new assets being transferred into the Company. There may
be possible conflicts of interest in that all of the principal shareholders of
the Company are involved in other similar companies.
It is anticipated that the shareholders of the Company will be unable to
pass upon the merits of assets required under applicable law, the shareholders
may not be entitled to Dissenter's Rights or Rights to Appraisal upon a merger
or acquisition. Although the Company has been in existence since May 4, 1988,
it has no operational history and has yet to engage in business of any kind.
Management of the Company does not have any specific assets, business or
properties contemplated for purchase and therefore, an investment in the shares
of the Company involves an extremely high degree of risk. All risks inherent in
a new and inexperienced enterprise are inherent in the Company's business.
Furthermore, the Company will be subject to extensive regulatory obligations
under the Securities Exchange Act of 1934.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company had no operating business and therefore can report no financial
information on industry segments.
ITEM 2. DESCRIPTION OF PROPERTIES
None
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's shareholders through
the solicitation of proxies, during the fourth quarter of the Company's fiscal
year ended December 31, 1995.
PART II
3
<PAGE>
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is available for trading in the over-the-counter
market. The following table sets forth the high and low bid price per share for
the Company's Common Stock for each full quarterly period within the two most
recent fiscal years.
1994 1995
--------------------- --------------------
High Low High Low
---- --- ---- ---
First Quarter No Quote No Quote No Quote No Quote
Second Quarter No Quote No Quote No Quote No Quote
Third Quarter No Quote No Quote No Quote No Quote
Fourth Quarter No Quote No Quote No Quote No Quote
As of March 31, 1996, there was no quote for the stock
As of March 31, 1996, there were approximately 251 holders of record of the
Common Stock of the Company.
The Company has never declared or paid any cash dividend on its Common
Stock and does not expect to declare or pay any dividends in the foreseeable
future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
As discussed above (see "ITEM 1. Description of Business"), the Company has
been in existence since May 4, 1988. It has no operational history and has yet
to engage in business of any kind. All risks inherent in a new and
inexperienced enterprise are inherent in the Company's business. The Company
has not made a formal study of the economic potential of any business. The
Company has no assets and liabilities of $8,000 and no business opportunities
are presently contemplated for acquisition. In addition, the Company has no
liquidity and no presently available capital resources, such as credit lines,
guarantees, etc. All expenses have been paid by loans from shareholders.
Based on current economic and regulatory conditions, management believes
that it is possible, if not probable, for a company like the Company's without
assets or liabilities, to negotiate a merger or acquisition with a viable
private company. The opportunity arises principally because of the expense of
legal and accounting fees, and the length of time associated with the
registration process of "going public". However, should any of these conditions
change, it is very possible that there would be little or no economic value for
anyone taking over control of the Company.
ITEM 7. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor Report 5
Balance Sheet 6
Statement of Operations 7
Statement of Stockholders' Equity 8
Statement of Cash Flows 9
Notes to Financial Statements 10
4
<PAGE>
D. BRIAN MACBETH
CERTIFIED PUBLIC ACCOUNTANT
16610 ALDENAHM DRIVE
SPRING, TEXAS 77379
The Board of Directors and Stockholders
Energy Systems, Inc.
I have audited the balance sheet of Energy Systems, Inc., a development
stage enterprise, as of December 31, 1995 and the related statements of
operations, stockholders' equity and cash flows for the year ended December 31,
1995, and for the year ended December 31, 1995 included in the statements of
operations, stockholders' equity and cash flows for the period from May 4, 1988
(inception) to December 31, 1995. 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.
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 the 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 reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Energy Systems, Inc. as of
December 31, 1995, and the results of its operations and its cash flows for the
year ended December 31, 1995 in conformity with generally accepted accounting
principles. For the year-ended December 31, 1992, I have relied on the
statement of Smith & Company who performed the audit.
/s/ D. BRIAN MACBETH
--------------------------------------
D. BRIAN MACBETH
Certified Public Accountant
June 25, 1996
5
<PAGE>
ENERGY SYSTEMS, INC.
(A Development Stage Company)
Balance Sheets
As of December 31, 1995
ASSETS
12-31-95 12-31-94
-------- --------
Current Assets
Cash $ 0 $ 0
-------- ---------
Total Current Assets 0 0
-------- ---------
Other Assets 0 0
-------- ---------
Organization Costs 0 0
-------- ---------
Total Other Assets 0 0
-------- ---------
Total Assets $ 0 $ 0
-------- ---------
-------- ---------
LIABILITIES & STOCKHOLDERS EQUITY
Current Liabilities
Loans from Shareholders $ 8,000 $ 0
-------- ---------
Total Current Liabilities $ 8,000 $ 0
Stockholders Equity
Authorized shares 50,000,000
$0.001 par value; 1,000,000
outstanding at 12-31-94 and
at 12-31-93 1,000 1,000
Paid in Capital 1,000 1,000
Deficit accumulated during
development stage (10,000) (2,000)
-------- ---------
Total Stockholders Equity $ (8,000) $ 0
-------- ---------
Total Liabilities & Stockholders Equity $ 0 $ 0
-------- ---------
-------- ---------
See Accountants' Report and Notes to the Financial Statements
6
<PAGE>
ENERGY SYSTEMS, INC.
(A Development Stage Company)
Statement of Operations
As of December 31, 1995
From
Inception on
May 4, 1988
For the Year-Ended December 31, Through
------------------------------- December 31,
1995 1994 1995
---- --- ----
REVENUES $ 0 $ 0 $ 0
EXPENSES
Administration 8,000 0 9,950
Expenses
AMORTIZATION OF
ORGANIZATIONAL COSTS 0 0 50
--------- --------- ---------
Total Expenses $8,000 $ 0 $(10,000)
--------- --------- ---------
NET (LOSS) $ .01 (00) (10,000)
--------- --------- ---------
(LOSS) PER SHARE (.01) (.00) (.01)
--------- --------- ---------
--------- --------- ---------
AVERAGE SHARES OUTSTANDING 1,000,000 1,000,000 1,000,000
--------- --------- ---------
--------- --------- ---------
See Accountants' Report and Notes to the Financial Statements
7
<PAGE>
ENERGY SYSTEMS, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
Period from May 4, 1988 (Date of Inception) to December 31, 1995
<TABLE>
<CAPTION>
Common Stock
------------
Capital in Excess Accumulated
Shares Amount of Par Value Deficite
------ ------ ------------ --------
<S> <C> <C> <C> <C>
Balance, May 4, 1988 (Date of
Inception) $ 0 $ 0 $ 0 $ 0
Issuance of common stock
(restricted) at $.002 per
share, May 4, 1988 1,000,000 1,000 1,000 0
Net loss from operations from
May 4, 1988 (date of
inception) to December 31,
1988 (1,950)
---------- ------ ------ -------
Balance, December 31, 1988 1,000,000 1,000 1,000 (1,950)
Net loss from operations for
the year ended December 31,
1989 (10)
---------- ------ ------ -------
Balance, December 31, 1989 1,000,000 1,000 1,000 (1,960)
Net loss from operations for
the year ended December 31,
1990 (10)
---------- ------ ------ -------
Balance, December 31, 1990 1,000,000 1,000 1,000 (1,970)
Net loss from operations for
the year ended December 31,
1991 (10)
---------- ------ ------ -------
Balance, December 31, 1991 1,000,000 1,000 1,000 (1,980)
Net loss from operations for
the year ended December 31,
1992 (10)
---------- ------ ------ -------
Balance, December 31, 1992 1,000,000 1,000 1,000 (1,990)
Net loss from operations for
the year ended December 31,
1993 (10)
---------- ------ ------ -------
Balance, December 31, 1994 1,000,000 1,000 1,000 $ (2,000)
Net loss from operations for
the year ended December 31,
1994 0
---------- ------ ------ -------
Balance, December 31, 1994 1,000,000 1,000 1,000 (2,000)
Net Loss from operations for
the year-ended December 31,
1995 8,000
---------- ------ ------ -------
Balance December 31, 1995 $1,000,000 $1,000 $1,000 (10,000)
---------- ------ ------ -------
---------- ------ ------ -------
</TABLE>
See Accountants' Report and Notes to the Financial Statements
8
<PAGE>
ENERGY SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 AND
THE PERIOD MAY 4, 1988 (DATE OF INCEPTION) TO DECEMBER 31, 1995
MAY 4, 1988
(DATE OF
INCEPTION) TO
DECEMBER 31,
1995 1994 1994
---- ---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss $8,000 $ (0) $(10,000)
Adjustments to reconcile net loss
to cash used in operating
activities: Amortization 0 0 50
----- ----- ------
Net Cash Used By Operating
Activities 8,000 0 (9,950)
----- ----- ------
CASH FLOWS FROM INVESTING
ACTIVITIES
Organization costs 0 0 (50)
----- ----- ------
Net cash used by investing
activities 0 0 (50)
----- ----- ------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common
stock 0 0 2,000
----- ----- ------
Loans from shareholders 8,000 0 8,000
----- ----- ------
Net cash provided by financing
activities 8,000 0 10,000
----- ----- ------
Net Increase (Decrease) in Cash 0 0 0
Cash at Beginning of Year 0 0 0
----- ----- ------
Cash at End of Year $ 0 $ 0 $ 0
----- ----- ------
----- ----- ------
SEE ACCOUNTANTS' REPORT AND NOTES TO THE FINANCIAL STATEMENTS
9
<PAGE>
ENERGY SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Energy Systems, Inc.,
(a development stage company). The Company was incorporated in the State
of Nevada on May 4, 1988. The Company was incorporated for the purpose of
providing a vehicle which could be used to raise capital and seek business
opportunities believed to hold a potential for profit.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
c. Organization Costs
Upon commencement of planned principal operations, the Company began
amortizing its organization costs over sixty (60) months using the
straight-line method.
d. Earning (Loss) Per Share
The computations of earnings (loss) per share of common stock are
based on the weighted average number of shares outstanding at the date of
the financial statements.
e. Income Taxes
No provision for income taxes has been recorded due to operating
losses at December 31, 1995.
f. Capitalization
On May 4, 1988, the Company sold 1,000,000 shares of its common stock
to Capital General Corporation for $2,000 cash, or an average price of $.02
per share. The Company's authorized capital stock consists of 50,000,000
shares of common stock, $.001 par value.
NOTE 2 - GOING CONCERN
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. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating company.
10
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On August 28, 1993, the Company dismissed its prior auditors, Smith &
Company and appointed D. Brian Macbeth as its new principal accountant to audit
its financial statements.
During the Company's two most recent fiscal years there were no
disagreements with Company's accountants on any matter of accounting principal
or practice, financial statement disclosure, or auditing scope or procedure.
Further, the previous accountant's report on the financial statements for the
past two years did not contain an adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principal.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
INFORMATION REGARDING PRESENT DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the present executive
officers and directors of the Company and the positions held by each.
Name Age Title
- ---- --- -----
Gregory W. Boss 28 President and Director
Natalie P. Boss 25 Secretary/Treasurer and Director
Each of the directors has been elected to serve until the next annual
meeting of the directors by the shareholders or until their respective
successors have been duly elected and shall have qualified.
GREGORY W. BOSS was elected President and Director on December 15, 1995.
Mr. Boss has a degree in finance from the University of Utah and is presently
employed by AT&T Wireless.
NATALIE P. BOSS was elected Secretary/Treasurer and Director on December
15, 1995. Ms. Boss has a degree in Psychology from the University of Utah and
is presently employed by AT&T Wireless.
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS
All of the present directors have been nominated for re-election as
directors at the Company's next annual shareholders' meeting.
ITEM 10. EXECUTIVE COMPENSATION
No compensation has been paid to any officer, director or control person
during the prior three years.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT
No officer of director of the Company owned any shares of the Company,
either directly or beneficially.
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 31, 1996, the number of shares
of the Company's Common Stock know to be held by beneficial owners of more than
five percent of the Company's Common Stock.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
Capital General Corporation
3760 South Highland Drive
Suite 300
Salt Lake City, Utah 84106 420,700 42.07%
Hank Vanderkam, Trustee
1111 Caroline, Suite 2905
Houston, Texas 77010 510,000 51.00%
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 31, 1995, Hank Vanderkam advanced the Company the sum of $8,000 to
pay certain filing fees, audit fees and legal bills.
PART IV
ITEM 13. EXHIBITS AND REPORTS OF FORM 8-K
(A) EXHIBITS
None
(B) REPORTS ON FORM 8-K
None
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ENERGY SYSTEMS, INC.
BY: /s/ Gregory W. Boss
----------------------------
GREGORY W. BOSS, PRESIDENT
Dated: June 25, 1995
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 and on
the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Gregory W. Boss Gregory W. Boss
- ------------------------ President & Director June 25, 1996
(Principal Executive Officer)
/s/ Natalie P. Boss
- ------------------------ Natalie P. Boss
Secretary/Treasurer & Director
(Principal Accounting and Financial June 25, 1996
Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 8000
<BONDS> 0
0
0
<COMMON> 1000
<OTHER-SE> 1000
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8000)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
