UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 1O-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, 1996
[ ] 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 number: 0-19505
NATIONAL ADVERTISING GROUP INC.
-------------------------------
(Name of small business issuer in its charter)
FLORIDA 65-0274107
------- ----------
State or other Jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
P.O. BOX 490914 KEY BISCAYNE, FLORIDA 33149
---------------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (305) 373-3322
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ------------------- -----------------------------------------
NONE NONE
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK $.001 PAR VALUE
----------------------------
(Title of Class)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or is (d) of the Securities Exchange Act of1934 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 90 days.
Yes [X] No [ ]
<PAGE>
Check if there is no 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 of
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The Issuer's revenues for its most recent fiscal year were $0.
The aggregate market value of the voting stock held by non-affiliates was
approximately $0 as of May 5, 1997, based on the closing sale price of $Nil (not
traded as of May 5, 1997).
The number of shares of common stock outstanding as of May 5, 1997, was
9,403,000.
<PAGE>
National Advertising Group, Inc.
Form 10-KSB
TABLE OF CONTENTS
PART I
PAGE
----
ITEM 1. Description of Business 1
ITEM 2. Description of Property 2
ITEM 3. Legal Proceedings 2
ITEM 4. Submission of Matters to a Vote of
Security Holders 2
PART II
ITEM 5. Market for Common Equity
And related Stockholder Matters 2
ITEM 6. Management's Discussion and Analysis
Or Plan of Operation 2
ITEM 7. Financial Statements 3
ITEM 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 3
PART III
ITEM 9. Directors, Executive Officers, Promoters
And Control Persons; Compliance with Section
16 (a) of the Exchange Act 3
ITEM 10. Executive Compensation 4
ITEM 11. Security Ownership of Certain
Beneficial Owners and Management 5
ITEM 12. Certain Relationships and Related
Transactions 5
ITEM 13. Exhibits and Reports on Form 8-K 6
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
National Advertising Group, Inc. (the Company), a Florida corporation, which was
formed in July 1991, primarily to engage in the telemarketing and sale of
business or consumer products. As of the date of this report, the Company has
not commenced active business operations. The Company intends to commence active
operations during the next fiscal year, but there can be no assurance that it
will be able to commence such active operations. The commencement of active
Company business operations is contingent upon the closing on one or more
acquisitions which the Company anticipates considering during the upcoming
fiscal year. As of the date of this report, no definitive agreements have been
reached with any business entity and no target industry has been identified.
COMPETITION
Numerous companies located in South Florida and throughout the United States
will compete vigorously with the Company for target acquisition candidates.
Venture capital companies as well as established corporations and entities, most
of which have greater resources than the Company will vie for such acquisition
candidates.
PERSONNEL
As of May 5, 1997, the Company had only one employee, its Chief Executive
Officer and a director of the Company, Angel L. Lorie, Jr. If a business
combination is consummated, the Company anticipates hiring a staff to
accommodate such business.
REGULATORY MATTERS
The Company does not yet know what business it will enter as this is dependent
on which target acquisition the Company determines to purchase; however all
industries have generally become increasingly regulated in recent years. The
Company is likely to be subject to the various States, Federal and local laws,
rules, regulations and acts once it commences active business operations.
1
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently occupies space for its headquarters in the office of Angel
L. Lorie, Jr. and does so without a lease and with no obligation to pay rent. It
is anticipated that upon the closing of a business combination, the Company will
enter into a lease or purchase property from which it will operate.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings are pending or known to be threatened against the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY OWNERS
In the final quarter of the year, no matters were submitted to a vote of
security holders.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's shares of common stock were not traded during the fiscal year
ended December 31, 1996. The Company does not anticipate the commencement of a
market for its securities until, and unless, a business combination is
consummated. As such, there is no guarantee that the common stock will commence
trading or that any trading will be active.
On May 5, 1997, the approximate number of record holders of the common stock of
the Company was 95.
To date, the Company has not paid any dividends on its common stock and does not
expect to pay any dividends in the foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATION.
As previously disclosed, the Company had no revenues in any fiscal years. During
the upcoming fiscal year, the Company intends to actively pursue a business
combination through either a merger, a reverse merger, or an acquisition. Since
the Company has no assets, the Company will probably issue additional stock if
it is able to consummate a business combination. Until such time as a business
combination is consummated, the Company will incur only minor expenses, such as
its audit fees, and as such it should be able to meet its cash requirements for
the forthcoming fiscal year.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
Reference is made to the financial statements attached hereto, commencing on
page F-1, which are incorporated by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On February 14, 1997, the company changed its independent certified public
accountants to Dohan and Company, CPA's. Dohan and Company, CPA's audited the
Company's 1995 financial statements after that date. There were no disagreements
with the Company's prior accountant.
PART III
ITEM 9. DIRECTORS, AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth certain information with respect to the Company's
Officers, Directors and key employees:
NAME POSITIONS WITH THE COMPANY
- ---- --------------------------
Angel L. Lorie, Jr. Director, President, Chief Executive Officer,
Chief Financial Officer and Secretary
Angel L. Lorie, Jr., is the current Chief Executive Officer, Chief Financial
Officer and a Director and Secretary of the Company. Mr. Lorie has been an
active real estate developer since 1970, and a real estate developer within the
State of Florida since 1980. Mr. Lorie was the owner and President of Lorie &
Associates, a mortgage banking and construction firm, from 1972 to 1978. He was
Executive Vice President and Director of EHG Enterprises, Inc. in 1981. From
1964 to 1993, he held several positions with real estate development and
multinational corporations, including ITT Corporation. Mr. Lorie is also
President of Diversified Capital Resources, Inc., which is a company he founded
two years ago and which is engaged in investment banking. In addition, Mr. Lorie
is the president and owner of Florida Atlantic Group, Inc., which is a holding
company.
All directors hold office until the next annual meeting of shareholders of the
Company or until their successors are elected and qualified. Officers hold
office until their successors are chosen and qualified, subject to earlier
removal by the Board of Directors. The Company does not have an executive,
nominating, compensation or audit committee.
3
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following summary compensation table sets forth the aggregate compensation
paid to Mr. Lorie, as the Company's president, chief executive officer, and only
officer and only employee. No employment agreement exists with any individuals.
There are no stock options or warrants, or bonds or profit sharing plans, with
respect to any individuals employed by the company.
SUMMARY COMPENSATION TABLE
NAME AND SALARY OTHER RESTRICTED
PRINCIPAL POSITION YEAR AND BONUS COMPENSATION STOCK AWARDS
- ------------------- ---- --------- ------------ ------------
Angel L. Lorie, Jr.
President and 1994 0 0 0
Chief Executive 1995 7,380 0 8,380,000 (1)
Officer 1996 0 0 0
All Executives 1994 0 0 0
Officers as a 1995 0 0 8.380,000 (1)
Group (1 person) 1996 0 0 0
(1) On August 15, 1993, the Company issued 6,500,000 shares of common stock to
its president at par ($.00l) in exchange for services rendered to the
Company. Subsequently, on September 1, 1994, the Company redeemed the
shares. On March 15, 1995, the Company issued 8,380,000 shares of Common
Stock to Florida Atlantic Group, Inc., which is a company controlled by
Mr. Lorie, in exchange for services rendered to the Company and $1,000 in
expenses paid.
The Company's directors do not receive compensation for acting in this
capacity.
4
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the holdings of Common Stock by each person who,
as of May 5, 1997, held of record, or was known by the Company to own
beneficially more than five percent of the outstanding Common Stock of the
Company, by each Director and Officer of the Company and by all Directors and
officers of the Company as a group.
Names and Address of Beneficial Owner:
NATURE OF BENEFICIAL PERCENTAGE OF COMMON
OWNERSHIP NO. OF SHARES SHARES OUTSTANDING
- -------------------- ------------- --------------------
Angel L. Lorie, Jr.(1) 8,380,000(1) 89.12%
All Directors and Officers
as a group (1 person) 8,380,000 89.12%
(1) All of Mr. Lorie's shares are owned by Florida Atlantic Group, Inc.,
which is a company controlled by Mr. Lorie.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 15, 1993, the Company had issued 6,500,000 shares of its common stock
to its Chief Executive Officer, Angel L. Lorie, Jr. The shares were issued to
Mr. Lorie in consideration of services he rendered to the Company and expenses
incurred on its behalf. On September 1, 1994, Mr. Lorie resigned as president of
the Company and his shares were redeemed by the Company. On March 15, 1995, Mr.
Lorie was once again elected as the Company's president and chief executive
officer and the Company then issued 8,380,000 shares of Common Stock to Florida
Atlantic Group, Inc., which is a company controlled by Mr. Lorie. The shares
were issued in consideration for services provided by Mr. Lorie and expenses
paid.
5
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits:
(3) Registrant's Articles of Incorporation and by-laws are incorporated by
reference to the Registrant's previous filing with the Commission.
(4) Form of Registrant's Common Stock Certificate is incorporated by
reference to the Registrant's to the Registrant's previous filing with the
Commission.
b. Reports on Form 8-K. No reports were filed for the last quarter of the
fiscal year covered by this report.
6
<PAGE>
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: May 5, 1997
NATIONAL ADVERTISING GROUP, INC.
By: /s/ ANGEL L. LORIE, JR.
-----------------------------------
Angel L. Lorie, Jr., President
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.
Dated: May 5, 1997
By: /s/ ANGEL L. LORIE, JR.
---------------------------
Angel L. Lorie, Jr.
President & Director
7
<PAGE>
Dohan and Company, CPA's
7700 North Kendall Drive, Suite 204
Miami, Florida 33156
Report of Independent Certified Public Accountants
Board of Directors
National Advertising Group, Inc.
We have audited the accompanying balance sheets of National Advertising Group,
Inc. (a development stage company) as of December 31, 1996 and 1995, and the
related statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 National Advertising Group,
Inc. (a development stage company) as of December 31, 1996 and 1995, and the
results of its operations, changes in its stockholders' equity and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ DOHAN AND COMPANY, CPA's
- ------------------------------
Dohan and Company, CPA's
May 5, 1997
Miami, Florida
F-1
<PAGE>
NATIONAL ADVERTISING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
-------- --------
ASSET
Organizational costs $ 70 $ 70
Less accumulated amortization ( 70) ( 60)
-------- --------
Total Asset $ - $ 10
-------- --------
LIABILITIES AND STOCKHOLDERS' EOUITY (DEFICIENCY IN ASSETS)
Liabilities:
Accrued expenses $ 1,000 $ -
-------- --------
Stockholders' Equity:
Common stock, par value $0.001 per share;
10,000,000 shares authorized,
9,399,700 shares
issued and outstanding 9,400 9,400
Additional paid-in capital (Note 2) 6,690 6,690
Preferred stock, par value $0.10 per
share; 1,000,000 shares authorized,
no shares issued - -
Deficit accumulated during the
development stage (17,090) (16,080)
-------- --------
Total Stockholders' Equity (Deficiency in Assets) (1,000) 10
-------- --------
Total Liabilities and Stockholders' Equity $ - $ 10
======== ========
See accompanying notes.
F-2
<PAGE>
NATIONAL ADVERTISING GROUP, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 AND 1995
CUMULATIVE DURING
THE
1996 1995 DEVELOPMENT STAGE
---------- ---------- -----------------
Revenues $ - $ - $ -
Expenses:
Officer compensation (Note 2) - 7,380 15,020
Audit and other fees 1,000 1,000 2,000
Amortization 10 14 70
---------- ---------- ---------
Total expenses 1,010 8,394 17,090
---------- ---------- ---------
Net loss ($ 1,010) ($ 8,394) ($ 17,090)
========== ========== ==========
Weighted average loss per share ($ -) ($ .001)
========== ==========
See accompanying notes.
F-3
<PAGE>
NATIONAL ADVERTISING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
YEARS ENDED DECEMBER 31, 1996 AND 1995
CUMULATIVE DURING
THE
1996 1995 DEVELOPMENT STAGE
---------- --------- -------------------
Beginning of year $ 10 $ 24 $ -
Additions
Issuance of common stock
at par value (Note 2) $ - $ 8,380 $ 16,090
Deductions
Net loss for the year ended
December 31-deficit accumulated
during the development stage ( 1,010) ( 8,394) ( 17,090)
--------- --------- ----------
End of year ($ 1,000) $ 10 ($ 1,000)
========= ========= ==========
See accompanying notes.
F-4
<PAGE>
NATIONAL ADVERTISING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
CUMULATIVE DURING
THE
1996 1995 DEVELOPMENT STAGE
--------- -------- -----------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss ($ 1,010) ($ 8,394) ($ 17,090)
Adjustment to reconcile net loss
to net cash used by operating
activities:
Issuance of common stock for
services - 8,380 16,090
Amortization 10 14 70
Increase in accrued expenses 1,000 - 1,000
--------- -------- ----------
Net cash used by
operating activities - - -
Cash flow from investing activities - - ( 70)
Cash flow from financing activities - - -
Net increase in cash - - -
Cash beginning of year - - -
--------- -------- ----------
Cash end of year $ - $ - $ -
========= ======== ==========
SUPPLEMENTAL DISCLOSURE:
- ------------------------
During 1995, the Company issued 8,380,000 shares of common stock at $0.001 par
value
See accompanying notes.
F-5
<PAGE>
NATIONAL ADVERTSING GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY
National Advertising Group, Inc. (the Company) was organized under the
laws of the State of Florida on July 25, 1991. The Company is a
development stage entity, which has not yet commenced business
operations. The Company intends to acquire an operating entity, however,
it has not yet targeted an acquisition.
LOSS PER SHARE
Loss per share is based on the weighted average shares outstanding
during the periods.
ORGANIZATIONAL COSTS
Organizational costs consist of expenditures incurred in the formation
of the Company. These costs are being amortized ratably over a period of
sixty months.
NOTE 2. COMMON STOCK
On March 15, 1995, the Company issued 8,380,000 common shares in
exchange for services rendered to the Company by its President, and
expenses paid by Florida Atlantic Group, Inc. The President of the
Company controls Florida Atlantic Group, Inc.
NOTE 3. INCOME TAXES
The Company has not recorded a provision for income taxes in the
accompanying financial statements because of a lack of certainty of the
realization of the benefit from the net operating losses incurred for
tax reporting purposes. At December 31, 1996, the Company has a net
operating loss carryover of approximately $17,090, less a valuation
allowance of the same amount. The ultimate benefit of the net operating
loss will be reduced, or eliminated, in the event of a significant
change in control.
F-6
<PAGE>
INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 10
<TOTAL-ASSETS> 10
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 9,403,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,010
<LOSS-PROVISION> (1,010)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,010)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,010)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
