SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
Of Small Business Issuers
Under Section 12(b) or (g) of
The Securities Exchange Act of 1934
COMMISSION FILE NUMBER
HIBSHMAN OPTICAL CORP.
(FORMERLY PRS SUB I, INC.)
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(Name of Small Business Issuer in Its Charter)
NEW JERSEY 88-0284402
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
266 CEDAR STREET, CEDAR GROVE, NEW JERSEY 07009
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(Address of Principal Executive Offices) (Zip Code)
973-239-2952
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(Issuer's Telephone Number, Including Area Code)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
NONE
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
Common Stock, $.001 Par Value
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(Title of Class)
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TABLE OF CONTENTS
PART I
Description of Business................................................ 1
Management's Discussion & Analysis..................................... 4
Risk Factors........................................................... 4
Description of Property................................................ 8
Security Ownership of Certain Beneficial Owners and Management......... 8
Directors, Executive Officers Promoters and Control Persons............ 10
Executive Compensation................................................. 12
Certain Relationships and Related Transactions......................... 12
Description of Securities.............................................. 12
PART II
Market Price of and Dividends of the Registrant's Common Equity
and Related Stockholder Matters........................................ 14
Legal Proceedings...................................................... 15
Changes in and Disagreements with Accountants.......................... 15
Recent Sales of Unregistered Securities................................ 15
Indemnification of Directors and Officers.............................. 15
PART F/S.
Financial Statements and Exhibits............................. 16
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ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
The Company was formed in 1991 under the name PRS Sub I, Inc. as a
subsidiary of People Ridesharing Systems, Inc., a public corporation which filed
for the protection of the Bankruptcy Court in 1989, to provide a candidate for
merger with an operating company. In March 1992, the Board of Directors
authorized the name change from PRS Sub I, Inc. to Service Lube Inc.
The Company entered into a transaction with an operating company in
March of 1992 and in April 1992 the Board of Directors of the Company authorized
the name change from Service Lube, Inc. to Fianza Commercial Corp. On April 23,
1992 the Board of Directors and shareholders authorized the name change from
Fianza Commercial Corp. to Hibshman Optical Corporation.
Due to a change in the policy of that operating company's management
team, the transaction between the Company and the operating company was
rescinded and the stock ownership of Hibshman Optical Corp. was transferred to
John B.M. Frohling, Esq., in exchange for monies owed to Mr. Frohling on account
for legal services rendered to the Company. This returned the Company to its
status as a public company with no assets and no liabilities, Mr. Frohling
having canceled any obligations owed to him by the Company and its former
principal stockholders.
On May 5, 1996, Mr. Frohling sold his interest in the Company to the
"Catizone Group." The Catizone Group currently seeks to merge with a going
concern, preferably with assets and a financial history, such that same will
facilitate the merged entity to trading status.
EXISTING AND PROPOSED BUSINESSES
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business entity presented to it
by persons or firms who or which desire to seek the perceived advantages of a
corporation which has a class of securities registered under the Exchange Act.
The Company will not restrict its search to any specific business, industry, or
geographical location and the Company may participate in a business venture of
virtually any kind or nature. This discussion of the proposed business is not
meant to be restrictive of the Company's broad discretion to search for and
enter into potential business opportunities. Management anticipates that it will
be able to participate in only one potential business venture in the near future
because the Company has nominal assets and limited financial resources. See
"FINANCIAL STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with an entity which has
recently commenced operations, or which wishes to utilize the public marketplace
in order to raise additional capital to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly-owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
difficult and complex.
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The Company has, and will continue to have, very limited to no capital
with which to provide the owners of business opportunities with any cash or
other assets. However, management believes the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. Management has not
conducted market research and is not aware of statistical data to support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of the Officers of the Company, who are not professional
business analysts. In analyzing prospective business opportunities, Management
will consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. To the extent possible, management
intends to utilize written reports and personal investigation to evaluate the
above factors. The Exchange Act requires that any merger or acquisition
candidate comply with certain reporting requirements, which include providing
audited financial statements to be included in the reporting filings made under
the Exchange Act.
The Company will not acquire or merge with any company for which
audited financial statement cannot be obtained at or within a reasonable period
of time after closing of the proposed transaction.
The Company will not restrict its search to any specific kind of firms,
but may acquire an interest in a venture which is in its preliminary or
development stage, which is already in operation, or any stage of its business
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded; or may seek
other perceived advantages which the Company may offer.
Management of the Company, which may not have experience in matters
relating to the business of a targeted potential merger company, will rely upon
its own efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person is likely to be
assumed by the target company, as the Company has limited cash assets with which
to pay such obligation.
If management were to utilize the services of a consultant in the
selection of a target company, such consultant will likely be used to supplement
the business experience of management, including perhaps accountants, technical
experts, appraisers, attorneys or others. Management's considerations in
selecting such a consultant may be based on the nature of the target company's
business, the form and amount of compensation required by the consultant, the
depth of such consultant's experience and past success. If a consultant were
retained, Management would expect that any such consultant would provide the
Company with a selection of target companies, would provide due diligence
assistance for study of the target company, would assist in negotiating the
terms of a business combination, and would serve to facilitate the negotiation
process. More than one consultant could be used in locating a target company.
The Company has no agreements or understandings currently with any
consultant to provide services.
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ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. Upon the consummation of such a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, it is likely
that the Company's officers and directors will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. Until such time as this occurs, it is the Company's intention not
attempt to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market which may
develop in the Company's securities may have a depressive effect on the market
value of the Company's existing publicly traded securities in the future if such
a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby plan to structure the acquisition in a "tax-free" reorganization under
Sections 351 or 368 of the Internal Revenue Code of 1986, as amended (the
"Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their holdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. Thus, the percentage of ownership may be subject to
significant reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements require certain
representations and warranties of the parties thereto, specify certain events of
default, detail the terms of closing and the conditions which must be satisfied
by the parties prior to and after such closing, outline the manner of bearing
costs, including costs associated with the Company's attorneys and accountants,
and include miscellaneous other terms.
The Company will not acquire or merge with any entity which cannot
provide audited financial statements at or within a reasonable period of time
after closing of the proposed transaction. The Company shall be subject to all
of the reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of its Form 8-K to be filed with the Securities and Exchange Commission
upon consummation of a merger or acquisition, as well as the Company's audited
financial statements included in its annual report on Form 10-K (or 1 0-KSB, as
applicable). If such audited financial statements are not available at closing,
or within time parameters necessary to insure the Company's compliance with the
requirements of the Exchange Act, or if the audited financial statements
provided do not conform to the representations made by the target company, the
closing documents may provide that the proposed transaction will be voidable at
the discretion of the present management of the Company.
In the event that the Company needs any additional funds for operating
capital or for costs in connection with searching for or completing an
acquisition or merger, management contemplates that it will seek to issue
additional shares of the Company. There is no fixed minimum or maximum amount
that management will raise in connection with such an issuance. The Company does
not intend to borrow any funds to make any payments to the Company's promoters,
management or their affiliates or associates.
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COMPETITION
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's extremely limited financial resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to its competitors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The activities of the Company since its formation in 1991 have been
limited and have been financed by sources other than from its operations. See
"Financial Statements". Management believes the Company may raise funds during
the next twelve months in the event it identifies a target company with which it
will engage in a business combination. See "DESCRIPTION OF COMPANY- Existing and
Proposed Businesses"
ITEM 3. RISK FACTORS
The Company's liquidity, capital resources, and results of operations
indicate that an investment in the Company remains speculative, involves a high
degree of risk, and should not be made by persons who cannot afford the loss of
their entire investment. Prospective investors in the Company should carefully
consider all of the information contained in this Report before deciding whether
to purchase securities of the Company, and, in particular, the risk factors set
forth below.
Information contained in this Report contains "forward-looking
statements" which can be identified by the use of forward-looking terminology
such as "believes", "expects", "may", "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology or by discussions
of strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. The following Risk Factors include,
among other things, cautionary statements with respect to certain
forward-looking statements, including statements of certain risks and
uncertainties that could cause actual results to vary materially from the future
results referred to in such forward-looking statements.
1. NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had
no operating history nor any revenues or earnings from operations for at least
the last two years. The Company has no significant assets or financial
resources. The Company will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a target company. There is no assurance that the Company will
be able to identify such a target company and consummate such a business
combination on acceptable terms.
2. SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of
the Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target company.
While management intends to seek business combinations with entities having
established operating histories, there can be no assurance that the Company will
be able to identify a candidate satisfying such criteria. In the event the
Company completes a business combination, of which there can be no assurance,
the success of the Company's operations may be dependent upon management of the
target company and numerous other factors beyond the Company's control.
3. SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of business
entities. A large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of companies which
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may be merger or acquisition target candidates for the Company. Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the Company will be
at a competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger or
acquisition candidates.
4. NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no current arrangement,
agreement or understanding with respect to engaging in a merger with or
acquisition of a specific business entity. There can be no assurance that the
Company will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company will be able
to negotiate a business combination on terms favorable to the Company. The
Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it will
require a target company to have achieved, or without which the Company would
not consider a business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
5. CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking
a business combination, management anticipates devoting up to five (5) hours per
month to the business of the Company. The Company's only officers are the
President, Mr. Pasquale Catizone, and Mr. Carmine Catizone, the Secretary and
Treasurer, neither of which have entered into written employment agreements with
the Company and are not expected to do so in the foreseeable future. The Company
has not obtained key man life insurance on its officers and directors. There can
be no assurance that such policies will be available to the Company on
commercially reasonable terms, if at all. Notwithstanding the combined limited
experience and time commitment of management, loss of the services of its
Officers would adversely affect development of the Company's business and its
likelihood of consummating a business combination.
6. CONFLICTS OF INTEREST--GENERAL. The Company's two officers and
directors participate in other business ventures which may compete directly with
the Company. Although none are anticipated, conflicts of interest and non-arms
length transactions may also arise in the future. Management does not anticipate
that the Company will seek a merger with, or acquisition of, any entity in which
any member of management serves as an officer, director or partner, or in which
they or their family members own or hold any ownership interest.
7. REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of
the Exchange Act requires companies subject thereto to provide certain
information about significant acquisitions including certified financial
statements for the company acquired usually covering two years, depending on the
relative size of the acquisition. The time and additional costs that may be
incurred by some target companies to prepare such financial statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do not have or
are unable to obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable.
8. LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the Company.
Even in the event demand exists for a merger or acquisition of the type
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
9. LACK OF DIVERSIFICATION. The Company's proposed operations, even if
successful, will, at least in the short term and in all likelihood, result in
the Company engaging in a business combination with only one business
opportunity. Consequently, the Company's activities will be limited to those
engaged in by the business opportunity which the Company merges with or
acquires. The Company's inability to diversify its activities into a number of
areas may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.
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10. REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will be
subject to regulation under the Exchange Act, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could become subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission or counsel as to the status of the Company
under the Investment Company Act of 1940 and, consequently, any violation of
such Act could subject the Company to material adverse consequences.
11. PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all likelihood,
result in shareholders of a target company obtaining a controlling interest in
the Company. Any such business combination may require shareholders of the
Company to sell or transfer all or a portion of the Company's common stock held
by them. The resulting change in control of the Company will likely result in
removal of the present officers and directors of the Company and a corresponding
reduction in or elimination of their participation in the future affairs of the
Company.
12. REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION.
The Company's primary plan of operation is based upon the consummation of a
business combination with a business entity which, in all likelihood, will
result in the Company issuing securities to shareholders of such business
entity. The issuance of previously authorized and unissued common stock of the
Company would result in significant reduction in percentage of shares owned by
the present shareholders of the Company and would most likely result in a change
in control or management of the Company.
13. ASPECTS OF BLANK CHECK OFFERING. The Company may enter into a business
combination with a business entity that desires to establish a public trading
market for its shares. A target company may attempt to avoid what it deems to be
adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
or the inability to obtain an underwriter or to obtain an underwriter on terms
satisfactory to the Company.
14. TAXATION. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as to
minimize the federal and state tax consequences to both the Company and the
target company; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free reorganization or
that the parties will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes which may have an adverse effect on both parties
to the transaction.
15. REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management of the Company will request that any potential
business opportunity provide audited financial statements. One or more potential
combination candidates may elect to forego pursuing a business combination with
the Company rather than incur the burdens associated with preparing audited
financial statements. In such case, the Company may choose to obtain certain
assurances as to the target company's assets, liabilities, revenues and expenses
prior to consummating a business combination, with further assurances that an
audited financial statement would be provided after closing of such a
transaction. Closing documents for such a transaction may include
representations that the audited financial statements will not materially differ
from the representations included in such closing documents.
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16. LIMITED PUBLIC MARKET. To date there has been no public market for the
Company's common stock. There can be no assurance that an active and reliable
public market will develop or, if developed, that such market will be sustained.
As a result, investors may find it difficult to liquidate their investment in
the Company should they desire to do so. The Company intends to apply to have
its common stock approved for quotation on the Nasdaq SmallCap Market at such
time, in the future, that it meets the requirements for inclusion. As at the
date hereof, however, the Company is not eligible for inclusion in NASDAQ or for
listing on any national stock exchange. All companies applying and authorized
for NASDAQ are required to have not less than $4,000,000 in net tangible assets,
a public float with a market value of not less than five million dollars, and a
minimum bid of price of $4.00 per share. At the present time, the Company is
unable to state when, if ever, it will meet the Nasdaq application standards.
Unless the Company is able to increase its net worth and market valuation
substantially, either through the accumulation of surplus out of earned income
or successful capital raising financing activities, it will never be able to
meet the eligibility requirements of NASDAQ. In addition, it is likely that the
Company, which, as of November 1, 1999, had approximately 10,000,000 shares of
common stock issued and outstanding, will have to effect a reverse split of its
issued and outstanding stock, in order to meet the minimum bid price
requirement. Moreover, even if the Company meets the minimum requirements to
apply for inclusion in The Nasdaq SmallCap Market, there can be no assurance,
that approval will be received or, if received, that the Company will meet the
requirements for continued listing on the Nasdaq SmallCap Market. Further,
Nasdaq reserves the right to withdraw or terminate a listing on the Nasdaq
SmallCap Market at any time and for any reason in its discretion. If the Company
is unable to obtain or to maintain a listing on the Nasdaq SmallCap Market,
quotations, if any, for "bid" and "asked" prices of the common stock may be
available on the OTC Bulletin Board or in the "pink sheets" published by the
National Quotation Bureau, Inc. This can result in an investor's finding it more
difficult to dispose of or to obtain accurate quotations of prices for the
common stock than would be the case if the common stock were quoted on the
Nasdaq SmallCap Market. Irrespective of whether or not the common stock is
included in the Nasdaq SmallCap system, there is no assurance that any public
market for the common stock will become active or liquid in the future. In order
to qualify for listing on a national stock exchange, similar minimum criteria
respecting, among other things, the Company's net worth and/or income from
operation must be met.
Accordingly, market transactions in the Company's common stock are subject to
the "Penny Stock Rules" of the Securities and Exchange Act of 1934, which are
discussed in more detail, below, under "Risk Factor No. 17. Applicability of
Penny Stock Rules to Broker-Dealer Sales of Company Common Stock". These rules
could make it difficult to trade the common stock of the Company because
compliance with them can delay and/or preclude certain trading transactions.
This could have an adverse effect on the ability of an investor to sell any
shares of the Company's common stock.
17. APPLICABILITY OF "PENNY STOCK RULES" TO BROKER-DEALER SALES OF COMPANY
COMMON STOCK. As discussed above, at the present time, the Company's common
stock is not listed on any stock exchange. The Securities Enforcement and Penny
Stock Reform Act of 1990 requires special disclosure relating to the market for
penny stocks in connection with trades in any stock defined as a "penny stock".
Commission regulations generally define a penny stock to be an equity security
that has a market price of less than $5.00 per share and is not listed on The
Nasdaq SmallCap Stock Market or a major stock exchange. These regulations
subject all broker-dealer transactions involving such securities to the special
"Penny Stock Rules" set forth in Rule 15g-9 of the Securities Exchange Act of
1934 (the "34 Act"). It is anticipated that if a market should develop for the
Company's common stock that the market price of the Company's common stock will
be substantially less than $5.00 per share and such stock can, be expected to
trade in the over-the-counter market at a per share market price of
substantially less than $5.00 (see "Market Information"). Accordingly, any
broker-dealer sales of the Company's shares will be subject to the Penny Stock
Rules. These Rules affect the ability of broker-dealers to sell the Company's
securities and also may affect the ability of purchasers of the Company's common
stock to sell their shares in the secondary market, if such a market should ever
develop.
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The Penny Stock Rules also impose special sales practice requirements on
broker-dealers who sell such securities to persons other than their established
customers or "Accredited Investors." Among other things, the Penny Stock Rules
require that a broker-dealer make a special suitability determination respecting
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. In addition, the Penny Stock Rules require that a
broker-dealer deliver, prior to any transaction, a disclosure schedule prepared
in accordance with the requirements of the Commission relating to the penny
stock market. Disclosure also has to be made about commissions payable to both
the broker-dealer and the registered representative and the current quotations
for the securities. Finally, monthly statements have to be sent to any holder of
such penny stocks disclosing recent price information for the penny stock held
in the account and information on the limited market in penny stocks.
Accordingly, for so long as the Penny Stock Rules are applicable to the
Company's common stock, it may be difficult to trade such stock because
compliance with such Rules can delay and/or preclude certain trading
transactions. This could have an adverse effect on the liquidity and/or price of
the Company's common stock in the future.
18. DEPENDENCE ON KEY PERSONNEL. The Company believes that its success
depends to a significant extent on the efforts and abilities of certain of its
management. The loss of the services of these key personnel could have a
material adverse affect on the Company's business, prospects, operating results,
and financial condition. The Company does not presently have key man life
insurance policies and does not intend to obtain any unless required to do so
under future financing arrangements. There can be no assurance that such
policies will be available to the Company on commercially reasonable terms, if
at all. Additionally, the ability of the Company to realize its business plan
could be jeopardized if any of its management becomes incapable of fulfilling
their obligations to the Company and a capable successor is not found on a
timely basis. There can however be no assurance that, in such event, the Company
will be able to locate and retain a capable successor to any member of its
management.
19. COMPETITION. Although management believes that the Company will find a
suitable entity with which to merge and that it will succeed in business
operations, the Company is certain to face substantial competition from entities
in its line of business, virtually all of whom will be larger than the Company,
and will have substantially more assets and resources than the Company.
Management intends to meet such competition by developing a unique business
plan.
20. NO DIVIDENDS AND NONE ANTICIPATED. The Company has not paid any cash
dividends, nor does it contemplate or anticipate paying any dividends upon its
common stock in the foreseeable future.
ITEM 4. DESCRIPTION OF PROPERTY
The Company owns no properties and at this time has no agreements to
acquire any properties. The Company currently uses the home of Mr. Pasquale
Catizone at no cost to the Company, an arrangement which Management expects will
continue until the Company completes an acquisition or merger.
ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of November 1, 1999, with
respect to the persons known to the Company to be the beneficial owners of more
than 5% of the common stock, $.001 par value of the Company. Except as noted,
each person has sole voting power with respect to the shares shown.
8
<PAGE>
PRINCIPAL SHAREHOLDERS TABLE
------------------------------------------------------------------
TITLE NAME AND AMOUNT AND
OF ADDRESS OF NATURE OF PERCENT
CLASS BENEFICIAL BENEFICIAL OF CLASS
OWNER OWNERSHIP
------------------------------------------------------------------
Common Pasquale Catizone 2,000,000 19.8%
286 Cedar Street
Cedar Grove, NJ 07009
Common Barbara Catizone 1,000,000 9.9%
266 Cedar Street
Cedar Grove, NJ 07009
Common Robyn Conforth 1,000,000 9.9%
266 Cedar Street
Cedar Grove, NJ 07009
Common Carmine Catizone 4,000,000 39.7%
101/2Walker Avenue
Morristown, NJ 07960
--------- -----
TOTAL: 8,000,000 79.30%
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of November 1, 1999, with
respect to the beneficial ownership of the Common Stock, $.001 par value, of the
Company by each of the executive officers and directors of the Company and by
all respective executive officers and directors as a group:
MANAGEMENT SHAREHOLDINGS TABLE
------------------------------------------------------------------
TITLE NAME AND AMOUNT AND
OF ADDRESS OF NATURE OF PERCENT
CLASS BENEFICIAL BENEFICIAL OF CLASS
OWNER OWNERSHIP
------------------------------------------------------------------
Common Pasquale Catizone 2,000,000 19.8%
286 Cedar Street
Cedar Grove, NJ 07009
Common Carmine Catizone 4,000,000 39.7%
101/2Walker Avenue
Morristown, NJ 07960
--------- -----
TOTAL: 6,000,000 59.5%
9
<PAGE>
CHANGES IN CONTROL
The Company is not aware of any arrangements which, at a subsequent
date, may result in a change in control of the Company.
ITEM 6. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following sets forth, as of November 1, 1999, the names and ages of
all directors and executive officers of the Company; the date when each director
was appointed; and all positions and offices in the Company held by each. Each
director will hold office until the next annual meeting of shareholders and
until his or her successor has been elected and qualified:
DATE
OFFICES APPOINTED
NAME AGE HELD DIRECTOR
---------------------- --- ------- ---------
Paquale Catizone 58 President May 1996
Carmine Catizone 53 Secretary, Treasurer May 1996
Director
There are no agreements or understandings for an officer or director to
resign at the request of another person and the above-named officers and
directors are not acting on behalf of nor will act at the direction of any other
person.
BIOGRAPHIES OF DIRECTORS AND OFFICERS OF THE COMPANY
Set forth below are the names of the directors and officers of the
Company, all positions and offices with the Company held, the period during
which he has served as such, and the business experience during at least the
last five years:
PASGUALE CATIZONE. Mr. Catizone has been president and a director of
the Company since 1996. Mr. Catizone has been self-employed as a financial
consultant for the last ten years. He served as president and a director of
First Equity of New Jersey, Inc., from its organization in May 1983 until
September 1992. Mr. Catizone was also the president and a director of Phonics
Corporation from September 1985 until May 1994 and president and director of
Baynon International Corporation since May 1998.
CARMINE CATIZONE. Mr. Catizone has been secretary and director of the
Company since 1996. From June 1988 to July 1994, Mr. Catizone was the president
and director of J&E Beauty Supply, Inc., a retail and wholesale beauty supply
distributor. Mr. Catizone formerly served as president and a director of C&C
Investments, a blank check company (now known as T.O.P.S. Medical Corp.) from
July 1977 until December 1984 and secretary and director of Baynon International
Corporation since May 1998.
CONFLICTS OF INTEREST
Although there are no plans to do so at this time, the Company's
officers and directors may in the future organize other companies of a similar
nature and with a similar purpose as the Company. Consequently, there are
potential inherent conflicts of interest in acting as an officer and director of
the Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates that it will devote only a minor amount of
time to the Company's affairs. The Company does not have a right of first
refusal pertaining to opportunities that come to management's attention insofar
as such opportunities may relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check company with
which management becomes affiliated is formed and actively seeks a target
company. It is anticipated that target companies will be located for the Company
and other blank check companies in chronological order of the date of formation
of such blank check companies. However, any blank check companies that may be
formed may differ from the Company in certain respects such as place of
incorporation, number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a target company may be
10
<PAGE>
more suitable for or may prefer a certain blank check company formed after the
Company. In such case, a business combination might be negotiated on behalf of
the more suitable or preferred blank check company regardless of date of
formation. Mr. Pasquale Catizone will be responsible for seeking, evaluating,
negotiating and consummating a business combination with a target company, which
may result in terms providing benefits to any officer or director.
Mr. Pasquale Catizone is currently a self-employed financial
consultant. As such, demands may be placed on the time of Mr. Catizone, which
will detract from the amount of time he is able to devote to the Company. Mr.
Catizone intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no assurance that Mr.
Catizone would not attend to other matters prior to those of the Company. Mr.
Catizone intends to spend only a limited amount of time locating a target
company, and his time devoted to the Company would increase when the analysis of
and negotiations with a target company are conducted.
In the event the Company needs additional funds for operating capital
and/or for costs in connection with a business combination, the Company may
elect to issue additional common stock. Except in connection with the foregoing
financing possibility, no other securities, or rights to securities, of the
Company will be issued to management or promoters, or their affiliates or
associates, prior to the completion of a business combination. At the time of a
business combination, management expects that some or all of the shares of
Common Stock owned by the officers and directors will be purchased by the target
company. The amount of Common Stock sold or continued to be owned by the
officers and directors cannot be determined at this time.
Business combinations may include such terms as one or more of the
present directors remaining a director or officer of the Company. The terms of a
business combination may provide for a payment by cash or otherwise to one or
more of the present directors for the purchase of all or part of their holdings
of common stock of the Company by a target company. In such event, one or more
directors would directly benefit from such employment or payment, and such
benefits may influence management's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and allowed,
to unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. The amount of any finder's fee will
be subject to negotiation, and cannot be estimated at this time. No finder's fee
of any kind will be paid to management or promoters of the Company or to their
associates or affiliates. No loans of any type have, or will be, made to
management, or promoters of the Company or to any of their associates or
affiliates.
The Company's officers and directors, its promoters and their
affiliates or associates have not had any negotiations with and there are no
present arrangements or understandings with any representatives of the owners of
any business or company regarding the possibility of a business combination with
the Company.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management or promoters of the
Company or any affiliates or associates have any interest, direct or indirect.
The Company will not pay any finder's fees to members of management in
connection with identifying an entity for a successful business combination.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of the Company could result in liability of management to the Company.
However, any attempt by shareholders to enforce a liability of management to the
Company would most likely be prohibitively expensive and time consuming.
11
<PAGE>
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities
Act, management believes the Company will not be subject to regulation under the
Investment Company Act of 1940 insofar as the Company will not be engaged in the
business of investing or trading in securities. In the event the Company engages
in business combinations which result in the Company holding passive investment
interests in a number of entities the Company could be subject to regulation
under the Investment Company Act of 1940. In such event the Company would be
required to register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940, any violation of
which would subject the Company to material adverse consequences.
ITEM 7. EXECUTIVE COMPENSATION
The Company's current officers and directors do not receive any
compensation for their services rendered to the Company, have not received such
compensation in the past, and are not accruing any compensation pursuant to any
agreement with the Company.
The officers and directors of the Company will not receive any finder's
fee, either directly or indirectly, as a result of their efforts to implement
the Company's business plan outlined herein.
However, the officers and directors of the Company anticipate receiving
benefits as beneficial shareholders of the Company. See "ITEM 4. SECURITY
OWNERSHIP."
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
ITEM 8. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions during the last two completed fiscal
years, the current fiscal year or any presently proposed transactions, to which
the Company was or is to be a party, in which the amount involved in such
transaction (or series of transactions) was $60,000 or more and which any of the
following persons had or is to have a direct or indirect material interest: (i)
any director or executive officer of the Company; (ii) any person who owns or
has the right to acquire 5% or more of the issued and outstanding common stock
of the Company; and (iii) any member of the immediate family of any such
persons. The Company does not have any requirement respecting the necessity for
independent directors to approve transactions with related parties.
ITEM 9. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $.001 per share, of which 10,088,235 shares
are issued and outstanding. The following statements relating to the capital
stock are summaries and do not purport to be complete. Reference is made to the
more detailed provisions of, and such statements are qualified in their entirety
by reference to, the Certificate of Incorporation and the By-laws, copies of
which are filed as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of common stock
do not have cumulative voting rights. Holders of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by the
Board of Directors in its discretion from funds legally available therefore. In
the event of a liquidation, dissolution or winding up of the Company, the
holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. All of the outstanding shares of
common stock are, and the shares of common stock offered by the Company pursuant
to this offering will be, when issued and delivered, fully paid and
non-assessable. Holders of common stock have no preemptive rights to purchase
the Company's common stock. There are no conversion or redemption rights or
sinking fund provisions with respect to the common stock.
12
<PAGE>
DIVIDENDS
The Company has paid no cash dividends and has no present plan to pay
cash dividends, intending instead to reinvest its earnings, if any into the
Company. Payment of future cash dividends will be determined from time to time
by its board of directors, based upon its future earnings (if any), financial
condition, capital requirements and other factors, the Company is not presently
subject to any contractual or similar restriction on its present or future
ability to pay such dividends.
13
<PAGE>
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
At this time there is no active market for the Company's common stock.
The Company intends to trade its common stock, on a limited basis in the
over-the-counter market and to cause its stock to be quoted on the OTC
Electronic Bulletin Board maintained by the National Association of Securities
Dealers, Inc. (the "OTC Bulletin Board").
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
In order to qualify for listing on the Nasdaq SmallCap Market, a
company must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the Nasdaq
SmallCap Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 shareholders.
It after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the Company's
securities may be traded in the NASD's over-the-counter ("OTC") market. The OTC
market differs from national and regional stock exchanges in that it (1) is not
cited in a single location but operates through communication of bids, offers
and confirmations between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. The Company may apply for listing on the NASD OTC
Bulletin Board or may offer its securities in what are commonly referred to as
the "pink sheets" of the National Quotation Bureau, Inc. To qualify for listing
on the NASD OTC Bulletin Board, an equity security must have one registered
broker-dealer, known as the market maker, willing to list bid or sale quotations
and to sponsor the company for listing on the Bulletin Board.
If the Company is unable initially to satisfy the requirements for
quotation on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is conducted
in the OTC market, a shareholder may find it more difficult to dispose of or to
obtain accurate quotations as to the market value of the Company's securities.
14
<PAGE>
There are approximately 735 holders of the Company's Common Stock. The
issued and outstanding shares of the Company's Common Stock were issued in
accordance with the exemptions from registration afforded by Sections 3(b) and
4(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder.
The Company has not paid any dividends in the past two years, and has
no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS
The Company is unaware of any other pending or threatened legal
proceedings to which the Company is a party or of which any of its assets is the
subject.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14A:3-5 of the New Jersey Statutes Annotated provides that a
New Jersey corporation has the power, under specified circumstances, to
indemnify its directors, officers, employees and agents, against expenses
incurred in any action, suit or proceeding. The Certificate of Incorporation and
the by-laws of the Company provide for indemnification of directors and officers
to the fullest extent permitted by the General Corporation Law of the State of
New Jersey.
The General Corporation Law of the State of New Jersey provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director or officer to the corporation or its stockholders for
monetary damages for actions taken as a director or officer provided that such
provision shall not eliminate or limit the liability of a director for acts or
omissions that (a) were in breach of his duty of loyalty to the corporation as
defined in subsection (3) of N.J.S.A. 14A2-7; (b) were not in good faith or
involved a knowing violation of law; or (c) resulted in receipt by the corporate
agent of an improper personal benefit.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION
OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
15
<PAGE>
PART F/S
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Attached are audited financial statements for the Company for the period ended
December 31, 1998.
The following financial statements are attached to this report and filed as a
part thereof
1) Table of Contents - Financial Statements
2) Report of Independent Certified Public Accountants
3) Balance Sheet
4) Statement of Operations
5) Stockholders' Equity
6) Statement of Cash Flows
PART III
ITEM 1. INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION LOCATION
--------------------------------------------------------------------------------
(2) Articles of Incorporation and By-laws:
2.1* Articles of Incorporation
2.2* By-laws
(10)(a) Consents - Experts:
10.1* Consent of Accountants
* filed herewith.
16
<PAGE>
HIBSHMAN OPTICAL CORPORATION
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
<PAGE>
INDEX TO FINANCIAL STATEMENTS
HIBSHMAN OPTICAL CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants F-1
Financial Statements:
Assets F-2
Stockholders' Equity F-4
Notes to Financial Statement F-6
17
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Hibshman Optical Corporation
We have audited the accompanying balance sheets of Hibshman Optical Corporation
(formerly Fianza Commercial Corp.) as of December 31, 1999 and 1998, and the
related statements of operations, 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 audits 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 Hibshman Optical Corporation as
of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
SAMUEL KLEIN AND COMPANY
Newark, New Jersey
March 1, 2000
F-1
<PAGE>
HIBSHMAN OPTICAL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-------------------- June 30,
ASSETS 1999 1998 2000
------ -------- -------- --------
(Unaudited)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 52,887 $ 50,188 $ 54,287
-------- -------- --------
Total Current Assets 52,887 50,188 54,287
-------- -------- --------
Total Assets $ 52,887 $ 50,188 $ 54,287
======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
-----------------------------
Current Liabilities:
Accounts payable and accrued expenses $ 4,263 $ 263 $ 7,013
Convertible notes payable 50,000 50,000 50,000
-------- -------- --------
Total Current Liabilities 54,263 50,263 57,013
-------- -------- --------
Total Liabilities 54,263 50,263 57,013
-------- -------- --------
Stockholders' Equity (Deficit):
Common stock, $.001 par value, 100,000,000
shares authorized, 10,088,235 shares issued
and outstanding at December 31, 1999 and
1998 10,088 10,088 10,088
Additional paid-in-capital 19,912 19,912 19,912
Retained earnings (deficit) (31,376) (30,075) (32,726)
-------- -------- --------
Total Stockholders' Equity (Deficit) (1,376) (75) (2,726)
-------- -------- --------
Total Liabilities and Stockholders'
Equity (Deficit) $ 52,887 $ 50,188 $ 54,287
======== ======== ========
</TABLE>
--------------------
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
HIBSHMAN OPTICAL CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended For the Six Months Ended
December 31, June 30,
---------------------------- ----------------------------
1999 1998 2000 1999
------------ ------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Cost of Revenues -- -- -- --
------------ ------------ ------------ ------------
Gross Profit -- -- -- --
Other Costs:
General and administrative
expenses -- -- 750 --
------------ ------------ ------------ ------------
Total Other Costs -- -- 750 --
Other Income and Expense:
Interest income (expense) (1,301) (75) (600) (679)
------------ ------------ ------------ ------------
Net Loss before Income Taxes (1,301) (75) (1,350) (679)
Income Taxes -- -- -- --
------------ ------------ ------------ ------------
Net Loss $ (1,301) $ (75) $ (1,350) $ (679)
============ ============ ============ ============
Earnings (Loss) Per Share:
Loss per common share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
Loss per common share -
assuming dilution $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
Common shares outstanding 10,088,235 10,088,235 10,088,235 10,088,235
============ ============ ============ ============
Common shares outstanding -
assuming dilution 10,088,235 10,088,235 10,088,235 10,088,235
============ ============ ============ ============
</TABLE>
--------------------
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
HIBSHMAN OPTICAL CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Common Stock
$.001 Par Value
-------------------------- Total
Common Additional Retained Stockholders'
Number Stock Paid-In- Earnings Equity
of Shares Amount Capital (Deficit) (Deficit)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balances, January 1, 1998 10,088,235 $ 10,088 $ 19,912 $ (30,000) $ --
Issuance of Common Shares -- -- -- -- --
Net Loss for the Year Ended
December 31, 1998 -- -- -- (75) (75)
---------- ---------- ---------- ---------- ----------
Balances, December 31, 1998 10,088,235 10,088 19,912 (30,075) (75)
Net Loss for the Year Ended
December 31, 1999 -- -- -- (1,301) (1,301)
---------- ---------- ---------- ---------- ----------
Balances December 31, 1999 10,088,235 10,088 19,912 (31,376) (1,376)
Net Loss for the Six Months Ended
June 30, 2000 (Unaudited) -- -- -- (1,350) (1,350)
---------- ---------- ---------- ---------- ----------
Balances, June 30, 2000 10,088,235 $ 10,088 $ 19,912 $ (32,726) $ (2,726)
========== ========== ========== ========== ==========
</TABLE>
--------------------
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
HIBSHMAN OPTICAL CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years Ended For the Six Months Ended
December 31, June 30,
---------------------- ----------------------
1999 1988 2000 1999
-------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (1,301) $ (75) $ (1,350) $ (679)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Increase in accounts payable
and accrued expenses 4,000 263 2,750 2,000
-------- -------- -------- --------
Net Cash Provided by
Operating Activities 2,699 188 1,400 1,321
-------- -------- -------- --------
Cash Flows from Financing Activities:
Proceeds of convertible notes -- 50,000 -- --
-------- -------- -------- --------
Net cash provided by financing
activities -- 50,000 -- --
-------- -------- -------- --------
Net Increase in Cash and Cash
Equivalents 2,699 50,188 1,400 1,321
Cash and Cash Equivalents, beginning 50,188 -- 52,887 50,188
-------- -------- -------- --------
Cash and Cash Equivalents, end $ 52,887 $ 50,188 $ 54,287 $ 51,509
======== ======== ======== ========
</TABLE>
--------------------
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
HIBSHMAN OPTICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Hibshman Optical Corporation (formerly known as Fianza Commercial Corp. and
hereinafter referred to as the "Company") was formed in 1991 as a subsidiary of
People Ridesharing Systems, Inc. ("PRS") a company that filed for reorganization
under Chapter 11 of the Bankruptcy Act. As a result of an arrangement with the
Bankruptcy Court and PRS, ownership in the Company was to be provided to the
creditors and stockholders of PRS who received ten percent and five percent,
respectively, of the outstanding stock of the Company upon the sale of the
Company and in contemplation of a merger. In addition, the Company sold
eighty-five percent of the Company's stock to nonaffiliated parties.
The Company will attempt to identify and negotiate with a business target for
the merger of that entity with and into the Company. In certain instances, a
target company may wish to become a subsidiary of the Company or may wish to
contribute assets to the Company rather than merge. No assurances can be given
that the Company will be successful in identifying or negotiating with any
target company. The Company seeks to provide a method for a foreign or domestic
private company to become a reporting (public) company whose securities are
qualified for trading in the United States secondary market.
CASH AND CASH EQUIVALENTS
For financial statement purposes, short-term investments with a maturity of
ninety days or less and highly liquid investments are considered cash
equivalents.
USE OF MANAGEMENT'S 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 of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
INCOME TAXES
The Company follows Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS 109). SFAS 109 requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax liabilities and assets are determined based on the
difference between the financial statement carrying amounts and tax bases of
assets and liabilities using enacted tax rates in effect in the years in which
the differences are expected to reverse. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
F-6
<PAGE>
HIBSHMAN OPTICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
EARNINGS (LOSS) PER SHARE
As of December 31, 1997, the Financial Accounting Standards Board issued
Statement No. 128 "Earnings Per Share" (SFAS 128) replacing the calculation of
primary and fully diluted earnings per share with Basic and Diluted earnings per
share. Unlike primary earnings per share, basic earnings per share excludes the
dilutive effects of options, warrants and convertible securities and thus is
computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding. Diluted earnings per share is
similar to the previously fully diluted earnings per share. Diluted earnings per
share reflects the potential dilution that could occur if securities or other
agreements to issue common stock were exercised or converted into common stock.
Dilutive earnings per share is computed based upon the weighted average number
of common shares and dilutive common equivalent shares outstanding.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted Statement of Financial Accounting Standards No. 121
(SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". SFAS 121 requires that if facts and
circumstances indicate that the cost of fixed assets or other assets may be
impaired, an evaluation of recoverability would be performed by comparing the
estimated future undiscounted pre-tax cash flows associated with the asset to
the asset's carrying value to determine if a write-down to market value or
discounted pre-tax cash flow value would be required.
COMPREHENSIVE INCOME
For the year ended December 31, 1999, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). This
statement establishes rules for the reporting of comprehensive income and its
components which require that certain items such as foreign currency translation
adjustments, unrealized gains and losses on certain investments in debt and
equity securities, minimum pension liability adjustments and unearned
compensation expense related to stock issuances to employees be presented as
separate components of stockholders' equity. The adoption of SFAS 130 had no
impact on total stockholders' equity for either of the years presented in these
financial statements.
2. CONVERTIBLE NOTES PAYABLE
On December 7, 1998 the Company received $50,000 and issued two $25,000, 8%
convertible notes payable each to Pasquale and Carmine Catizone, current
officers, directors and principal stockholders of the Company. Pasquale and
Carmine Catizone are brothers. The notes, due on December 7, 2001, are
convertible in whole or in part at any time prior to maturity into common stock
of the Company at a conversion price of $.0025 per share.
F-7
<PAGE>
HIBSHMAN OPTICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. COMMON STOCK
The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock, par value $.001 per share, of which 10,088,235 shares are issued
and outstanding at December 31, 1998 and 1999.
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock do not have
cumulative voting rights. Holders of common stock are entitled to share ratably
in dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefor. In the event
of a liquidation, dissolution or winding up of the Company, the holders of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. All of the outstanding shares of common stock are
fully paid and nonassessable. Holders of common stock have no preemptive rights
to purchase the Company's common stock. There are no conversion or redemption
rights or sinking fund provisions with respect to the common stock.
In March of 1992 the Company issued 1,588,235 shares of its common stock to the
former stockholders and creditors of PRS and issued 8,500,000 shares to
unaffiliated parties for $30,000 pursuant to the PRS Plan of Reorganization
described in Note 1.
Pursuant to a certain Securities Purchase Agreement dated as of May 5, 1996, Mr.
Pasquale Catizone and related individuals (the "Catizone Group") purchased from
the former president and director of the Company an aggregate of 8,500,000
shares of Common Stock for an aggregate purchase price of $35,000. Simultaneous
with the closing of the Securities Purchase Agreement, the then officers and
directors of the Company tendered resignations from their respective positions,
at which time Pasquale Catizone became president and director and Carmine
Catizone became secretary, treasurer and director of the Company.
F-8
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934 as
amended, the Registrant caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized.
HIBSHMAN OPTICAL CORP.
By: /s/ PASQUALE CATIZONE
--------------------------------------
Pasquale Catizone, President, Director
Date August __, 2000
In accordance with Section 15(d) of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on behalf of
the Company in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
PRINCIPAL EXECUTIVE OFFICER:
/s/ PASQUALE CATIZONE
----------------------------
Pasquale Catizone President August __, 2000
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ CARMINE CATIZONE
----------------------------
Carmine Catizone Secretary, Treasurer August __, 2000
A MAJORITY OF THE BOARD OF DIRECTORS:
/s/ PASQUALE CATIZONE
----------------------------
Pasquale Catizone Director
/s/ CARMINE CATIZONE
----------------------------
Carmine Catizone Director
18
