SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ------- to -------
Commission File No. 33-55254-38
ULTRONICS CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 87-0485313
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3098 SOUTH HIGHLAND DRIVE, SUITE 460
SALT LAKE CITY, UTAH 84106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 485-7775
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
As of February, 1997, there is no aggregate market value of the voting stock
held by non-affiliates of the registrant.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of February, 1997
$.001 PAR VALUE CLASS A COMMON STOCK 1,000,000 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
ITEM 1. Business.
The Company was incorporated under the laws of Nevada on March 14, 1990.
The Company is in the developmental stage, and its operations to date have been
limited to the sale of shares to Capital General Corporation and the gifts of
shares to the giftees. The Company is in the process of investigating potential
business ventures which, in the opinion of management, will provide a source of
eventual profit to the Company. Such involvement may take many forms, including
the acquisition of an existing business or the acquisition of assets to
establish subsidiary businesses. The Company's management does not expect to
remain involved as management of an acquired business; presently unidentified
individuals would be retained for such purposes.
As an unfunded venture, the Company will be extremely limited in its
attempts to locate potential business situations for investigation. However, the
Company's officers, directors and major shareholder have undertaken to make
loans to the Company in amounts sufficient to enable it to satisfy its
reporting and other obligations as a public company, and to commence, on a
limited basis, the process of investigating possible merger and acquisition
candidates, and that the Company's status as a publicly-held corporation will
enhance its ability to locate such potential business ventures.
No assurance can be given as to when the Company may locate suitable
business opportunities and such opportunities may be difficult to locate;
however, the Company intends to actively search for potential business ventures
for the next five years. The Company intends not to allocate any incoming funds
specifically, should there be any in the future, to general use for the purpose
of seeking, investigating and acquiring or becoming engaged in a business
opportunity. Decisions concerning these matters may be made by management
without the participation or authorization of the shareholders.
Management anticipates that due to its lack of funds, and the limited
amount of its resources, the Company may be restricted to participation in only
one potential business venture. This lack of diversification should be
considered a substantial risk because it will not permit the Company to offset
potential losses from one venture against gains from another.
Business opportunities, if any arise, are expected to become available
to the Company principally from the personal contacts of its officers and
directors. While it is not expected that the Company will engage professional
firms specializing in business acquisitions or reorganizations, such firms may
be retained if funds become available in the future, and if deemed to be
advisable. Opportunities may thus become available from professional advisers,
securities broker-dealers, venture capitalists, members of the financial
community, and other sources of unsolicited proposals. In certain circumstances,
the Company may agree to pay a finder's fee or other form of compensation,
including perhaps one-time cash payments, payments based upon a percentage of
revenues or sales volume, and/or payments involving the issuance of securities,
for services provided by persons who submit a business opportunity in which the
Company shall decide to participate, although no contracts or arrangements of
this nature presently exist. The Company is unable to predict at this time the
costs of locating a suitable business opportunity.
The Company will not restrict its search to any particular business,
industry or geographical location, and reserves the right to evaluate and to
enter into any type of business opportunity, in any stage of their development
(including the "start up" stage), in any location. In seeking a business
venture, Management will not be influenced primarily by an attempt to take
advantage of the anticipated or perceived appeal of a specific industry,
management group, or product or industry, but rather will be motivated by the
Company's business objective of seeking long term capital appreciation in their
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real value. In addition, the Exchange Act reporting requirements require the
filing of the Form 8-K disclosing any businesses acquired and requires certified
financial statements of such companies. These reporting requirements may
substantially limit the businesses which may be available for possible
acquisition candidates.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's management, none of whom is a professional
analyst and none of whom have significant general business experience. Among the
factors which management will consider in analyzing potential business
opportunities are the available technical, financial and managerial resources;
working capital and financial requirements; the history of operation, if any;
future prospects; the nature of present and anticipated competition; potential
for further research, development or exploration; growth and expansion
potential; profit potential; the perceived public recognition or acceptance of
products or services; name identification, and other relevant factors.
It is not possible at present to predict the exact manner in which the
Company may participate in a business opportunity. Specific business
opportunities will be reviewed and, based upon such review, the appropriate
legal structure or method of participation will be decided upon by management.
Such structures and methods may include, without limitation, leases, purchase
and sale agreements, license, joint ventures; and may involve merger,
consolidation or reorganization. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
However, it is most likely that the Company will acquire a business venture by
conducting a reorganization involving the issuance of the Company's restricted
securities. Such a reorganization may involve a merger (or combination pursuant
to state corporate statutes, where one of the entities dissolves or is absorbed
by the other), or it may occur as a consolidation, where a new entity is formed
and the Company and such other entity combine assets in the new entity. A
reorganization may also occur, directly or indirectly, through subsidiaries, and
there is no assurance that the Company would be the surviving entity. Any such
reorganization could result in additional dilution to the book value of the
shares and loss of control of a majority of the shares. The Company's present
directors may be required to resign in connection with a reorganization.
A reorganization may be structured in such a way as to take advantage
of certain beneficial tax consequences available in business reorganizations, in
accordance with provisions of the Internal Revenue Code of 1986 (as amended).
Pursuant to such a structure, the number of shares held prior to the
reorganization by all of the Company's shareholders might be less than 20% of
the total shares to be outstanding upon completion of the trans action.
Substantial dilution of percentage equity ownership may result to the giftees,
in the discretion of management.
Generally, the issuance of securities in a reorganization transaction
would be undertaken in reliance upon one or more exemptions from the
registration provisions of applicable federal securities laws, including the
exemptions provided for non-public or limited offerings, distributions to
persons resident in only one state and similar exemptions provided by state law.
Shares issued in a reorganization transaction based upon these exemptions would
be considered "restricted" securities under the 1933 Act, and would not be
available for resale for a period of two years, in accordance with Rule 144
promulgated under the 1933 Act. However, the Company might undertake, in
connection with such a reorganization transaction, certain registration
obligations in connection with such securities.
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The Company may choose to enter into a venture involving the
acquisition of or merger with a company which does not need substantial
additional capital but desires to establish a public trading market for its
securities. Such a company may desire to consolidate its operations with the
Company through a merger, reorganization, asset acquisition, or other
combination, in order to avoid possible adverse consequences of undertaking its
own public offering. (Such consequences might include expense, time delays or
loss of voting control.) In the event of such a merger, the Company may be
required to issue significant additional shares, and it may be anticipated that
control over the Company's affairs may be transferred to others. It should also
be noted that this type of business venture might have the effect of depriving
the giftee shareholders of the protection of federal and state securities laws,
which normally affect the process of a company's becoming publicly held.
It is likely that the investigation and selection of business
opportunities will be complex, time-consuming and extremely risky. However,
management believes that even though the Company will have limited capital, the
fact that its securities will be publicly-held will make it a reasonably
attractive business prospect for other firms.
As part of their investigation of acquisition possibilities, the
Company's management may meet with executive officers of the business and its
personnel; inspect its facilities; obtain independent analysis or verification
of the information provided, and conduct other reasonable measures, to the
extent permitted by the Company's limited resources and management's limited
expertise. Generally, the Company intends to analyze and make a determination
based upon all available information without reliance upon any single factor as
controlling.
In all likelihood, the Company's management will be inexperienced in
the areas in which potential businesses will be investigated and in which the
Company may make an acquisition or investment. Thus, it may become necessary for
the Company to retain consultants or outside professional firms to assist
management in evaluating potential investments, and to hire managers to run or
oversee the operations of its acquisitions or investments. The Company can give
no assurance that it will be able to find suitable consultants or managers. The
Company intends not to employ any of its affiliates, officers, directors or
principal shareholders as consultants. The Company has no policy regarding the
use of consultants, however, if management, in its discretion, determines that
it is in the best interests of the Company, management may seek consultants to
review potential merger or acquisition candidates. It is anticipated that the
total amount of fees paid to any consultant would not exceed $5,000.00 per
transaction. The fee, it is anticipated, would be paid by Capital General
Corporation or by the potential target company. There are currently no contracts
or agreements between any consultant and any companies that are searching for
"shell" companies with which to merge. There have been no preliminary
discussions or understandings between the Company and any market maker regarding
the participation of any such market maker in the aftermarket for the Company's
securities inasmuch as no market for the securities is expected to arise due to
the lack of transferability on the Company's shares until an acquisition is made
and a Form 8-K is filed with the Commission.
It may be anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention, and substantial costs for accountants, attorneys
and others. Should a decision thereafter be made not to participate in a
specific business opportunity, it is likely that costs already expended would
not be recoverable. It is also likely, in the event a transaction should
eventually fail to be consummated, for any reason, that the costs incurred by
the Company would not be recoverable. The Company's officers and directors are
entitled to reimbursement for all expenses incurred in their investigation of
possible business ventures on behalf of the Company, and no assurance can be
given that if the Company has available funds they will not be depleted in such
expenses.
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In addition to the severe limitations placed upon the Company by virtue
of its unfunded status, the Company will also be limited, in its investigation
of possible acquisitions, by the reporting requirements of the Securities
Exchange Act of 1934, pursuant to which certain information must be furnished in
connection with any significant acquisitions. The Company would be required to
furnish, with respect to any significant acquisition, certified financial
statements for the acquired company, covering one, two or three years (depending
upon the relative size of the acquisition). Consequently, acquisition prospects
which do not have the requisite certified financial statements, or are unable to
obtain them, may be inappropriate for acquisition under the present reporting
requirements of the 1934 Act.
The Company does not intend to take any action which would render it an
investment company under The Investment Companies Act of 1940 (the "1940 Act").
The 1940 Act defines an investment company as one which (1) invests, reinvests
or trades in securities as its primary business, (2) issues face-amount
certificates of the installment type or (3) invests, reinvests, owns, holds or
trades securities or owns or acquires investment securities having a value
exceeding 40 percent of the value of its total assets (exclusive of Government
securities and cash items) on an unconsolidated basis. The above 40 percent
limitation may be exceeded so long as a company is primarily engaged, directly
or through wholly-owned subsidiaries, in a business or businesses other than
that of investing, reinvesting, owning, holding or trading in securities. A
wholly-owned subsidiary is defined as one which is at least 95% owned by the
company.
Neither the Company nor any of its officers or directors are registered
as investment advisers under the Investment Advisers Act of 1940 (the "Advisers
Act"), and so there is no authority to pursue any course of business or
activities which would render the Company or its management "investment
advisers" as defined in the Advisers Act. Management believes that registration
under the Advisers Act is not required and that certain exemptions are
available, including the exemptions for persons who may render advice to a
limited number of other persons and who may advise other persons located in one
state only.
The Company expects to encounter intense competition in its efforts to
locate suitable business opportunities in which to engage. The primary
competition for desirable investments may come from other small companies
organized and funded for similar purposes, from small business development
corporations and from public and private venture capital organizations. As the
Company will be completely unfunded, it can fairly be said that all of the
competing entities will have significantly greater experience, resources,
facilities, contacts and managerial expertise than the Company and will,
consequently, be in a better position than the Company to obtain access to, and
to engage in, business opportunities. Due to its lack of funds, the Company may
not be in a position to compete with larger and more experienced entities for
business opportunities which are low-risk. Business opportunities in which the
Company may ultimately participate are likely to be highly risky and extremely
speculative.
ITEM 2. Properties.
The Company owns no properties and utilizes space on a rent-free basis
in the office of its principal shareholder, Capital General Corporation. This
arrangement is expected to continue until such time as the Company becomes
involved in a business venture which necessitates its relocation, as to which no
assurances can be given. The Company has no agreements with respect to the
maintenance or future acquisition of office facilities, however, if a successful
merger/acquisition is negotiated, it is anticipated that the office of the
Company will be moved to that of the acquired company.
5
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ITEM 3. Legal Proceedings.
On January 7, 1994, the Bureau of Securities of the State of New Jersey
filed a complaint in the matter of Capital General Corporation, David R. Yeaman
and 74 other named defendants, Nevada and Utah corporations including the
Company, which complaint proposes that civil monetary penalties totalling
$30,000.00 be assessed against Capital General Corporation for alleged
violations of the Uniform Securities Law (1967), N.J.S.A. 49:3-47 et. seq. by
(1) selling to 24 New Jersey residents between April 1986 and May 1991,
securities in 25 of the 74 above referred to respondent corporations named in
the proceeding, not including the Company, which were neither registered nor
exempt from registration, and (2) making untrue statements of material fact and
omitting to state material facts in connection with said New Jersey sales in 6
of the 74 above referred to resident corporations named in the proceeding, not
including the Company. Also on January 7, 1994, the Bureau of Securities of the
State of New Jersey, based on substantially similar allegations as in the above
referred complaint, issued its Order Denying Exemptions and to Cease and Desist.
This order summarily denied the exemptions contained in N.J.S.A. 49:3- 50(b),
(1), (2), (3), (9), (11) and (12) of the securities of Capital General
Corporation and the other 74 respondent corporations, including the Company,
except that excluded from the summary denial of the exemption contained in
N.J.S.A. 49-3-50(b)(12) is the Offer of Rescission by Capital General
Corporation to 24 New Jersey residents pursuant to the offer of rescission which
began about April 28, 1993. This order also ordered Capital General Corporation
and David Yeaman to Cease and Desist from offering or selling any securities in
blind pool corporations into, or from the State of New Jersey.
Capital General and David Yeaman filed answers denying the material
allegations of said complaint and resisting the imposition of said civil
monetary penalties, and the said Order Denying Exemptions and to Cease and
Desist. Subsequently the issues raised in said complaint and order were settled
by agreement between the said Bureau of Securities and Mr. Yeaman and Capital
General Corporation in a consent order dated July 11, 1994 and approved by an
administrative law judge of the State of New Jersey Office of Administrative Law
September 2, 1994. Under the terms of said consent order, all claims in the
complaint against all named respondents were settled by the payment of $3,000
civil penalty, and the order was modified so that it does not apply to 27 of the
respondent companies; however said order does still apply to the Company.
See also Item 10 regarding legal proceedings against officers and
directors.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to the Company's security holders for a vote
during the fiscal year ending December 31, 1996.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
There currently is not a trading market for the Company's $.001 par
value common stock nor has there been a trading market for the Company's stock
since its inception.
As of February, 1997, there were 378 record holders of the Company's
common stock. The Company has not previously declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in the
foreseeable future.
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ITEM 6. Selected Financial Data.
<TABLE>
<CAPTION>
ULTRONICS CORPORATION
SUMMARY OF OPERATIONS
DECEMBER 1996
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Assets............. 0 0 0 0 0
Revenues................ 0 0 0 0 0
Operating Expenses.... 0 0 0 0 0
Net Earnings (Loss).. 0 0 0 0 0
Per Share Data
Earnings (Loss)....... 0 0 0 0 0
Average Common Shares
Outstanding..... 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
</TABLE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
The Company has had no operational history and has yet to engage in
business of any kind. All risks inherent in new and inexperienced enterprises
are inherent in the Company's business. The Company has not made a formal study
of the economic potential of any business. At the present, the Company has not
identified any assets or business opportunities for acquisition.
As of February, 1997, the Company has no liquidity and no presently
available capital resources, such as credit lines, guarantees, etc. and should a
merger or acquisition prove unsuccessful, it is possible that the Company may be
dissolved by the State of Nevada for failing to file reports, at which point the
Company would no longer be a viable corporation under Nevada law and would be
unable to function as a legal entity. Should management decide not to further
pursue its acquisition activities, management may abandon its activities and the
shares of the Company would become worthless. However, the Company's officers,
directors and major shareholder, have made an oral undertaking to make loans to
the Company in amounts sufficient to enable it to satisfy its reporting
requirements and other obligations incumbent on it as a public company, and to
commence, on a limited basis, the process of investigating possible merger and
acquisition candidates. The Company's status as a publicly-held corporation may
enhance its ability to locate potential business ventures. The loans will be
interest free and are intended to be repaid at a future date, if or when the
Company shall have received sufficient funds through any business acquisition.
The loans are intended to provide for the payment of filing fees, professional
fees, printing and copying fees and other miscellaneous fees.
Based on current economic and regulatory conditions, Management
believes that it is possible, if not probable, for a company like the Company,
without assets or liabilities, to negotiate a merger or acquisition with a
viable private company. The opportunity arises principally because of the high
legal and accounting fees and the length of time associated with the
registration process of "going public". However, should any of these conditions
change, it is very possible that there would be little or no economic value for
anyone taking over control of the Company.
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ITEM 8. Financial Statements and Supplementary Data.
See Item 14.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not Applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The following table shows the positions held by the Company's officers
and directors. The directors were appointed at inception and will serve until
the next annual meeting of the Company's stockholders, and until their
successors have been elected and have qualified. The officers were appointed to
their positions, and continue in such positions, at the discretion of the
directors.
Name Age Position
Krista Nielson 34 President, Director
David R. Yeaman 50 Secretary/Treasurer, Director
KRISTA NIELSON, has been Director of the Company since inception. In
addition to her management position with the Company, she has been since 1986 an
officer and director of Capital General Corporation, a Utah-based financial
consulting firm, and has been involved in the organization and promotion of
various shell companies. Ms. Nielson received a Business degree from Salt Lake
Community College in 1987. She serves as an officer and/or director in the
following private corporations: Yeaman Enterprises, Inc. and Universal
Associates, Inc., family holding companies, Yeaman Auto Sales, Inc., an
automobile dealership company, Four Star Ranch, Inc., a farmland development
company, Creative Financial Corporation and Visual Impact Corporation, financial
consulting companies, and National Stock Transfer, Inc., a stock transfer agency
company. Ms. Nielson devotes her time primarily to her role as Vice President of
Capital General and to the financial consulting activities in which Capital
General engages.
DAVID R. YEAMAN, has been Director of the Company since inception, and,
in addition to his management position with the Company, has been President of
Capital General Corporation since its inception in 1971 to the present. Mr.
Yeaman has been involved in numerous development stage companies since he
assisted in organizing Capital General. During the last five years, in
connection with Capital General, he has been primarily involved in the
organization and promotion of various shell companies. Mr. Yeaman serves as an
officer and/or director in the following private corporations: Yeaman
Enterprises, Inc., a family holding company, Four Star Ranch, Inc., a farmland
development company, Yeaman Auto Sales, Inc., an automobile dealership company,
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Financial Connections, Inc. and Peak Experience, Inc., financial consulting
companies. Mr. Yeaman devotes his time primarily to his role as President of
Capital General and to the financial consulting activities in which Capital
General engages.
The management of Capital General is essentially the same as that of
the Company and, as the Company's largest shareholder, Capital General exerts
considerable influence in the election of the Company's officers and directors.
Capital General is a private venture capital and financial consulting firm,
incorporated in Utah in 1971. Capital General is a closely held corporation with
eight shareholders and is not an investment company under The Investment
Companies Act of 1940. A majority of the stock of Capital General is owned by
Yeaman Enterprises, Inc., a private corporation which is, in turn, owned by
certain members of the family of David R. Yeaman; Krista Nielson is also an
officer and director of Yeaman Enterprises, Inc.
Management of the Company have, in their various capacities at Capital
General over the past ten years, assisted in the organization of approximately
75 corporations similar to the Company which are in varying stages of
development and approximately 50 of such corporations have completed a merger/
acquisition transaction. In merger/acquisition transactions similar to those
contemplated by the Company, present management would be replaced by new
management and additional shares would be issued in consideration for the assets
being transferred into the Company. Present management does not anticipate
operating the business of the Company subsequent to any acquisition and
therefore the future success of the Company will be primarily dependent on new
management which is now unknown.
Each of the above directors of the Company is a director of Arrow
Management, Inc., Why Not?, Inc., Vicuna, Inc. Saber Capital, Inc., Grandeur,
Inc., Kowtow, Inc., Radar Resources, Inc., Alpaca, Inc., Bonito Industries,
Inc., Cetacean Industries, Inc., Star Dolphin, Inc., Flamingo Capital, Inc.,
Gopher, Inc., Hyena Capital, Inc., Jackal Industries, Inc., Longhorn Inc., Macaw
Capital, Inc, Environmental Development Corporation, Bioethics, Ltd.,
Quantitative Methods Corporation, and Bio-Chem, Inc. which are companies
subject to the requirements of section 15(d) of the Exchange Act. None of the
directors are directors or officers of any other company with a class of
securities registered pursuant to Section 12 of the Exchange Act or the
requirements of Section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940.
On February 8, 1996, David R. Yeaman was charged in the United States
District Court for the Eastern District of Pennsylvania with conspiracy, wire
fraud and fraud in the offer, purchase and sale of securities, in violation of
18 U.S.C. Sections 2, 371 and 1343; 15 U.S.C. Sections 77q(a), 77x, 78j(b), and
78ff; and Rule 10b-5 promulgated by the Securities and Exchange Commission,
Title 17, Code of Federal Regulations, Section 240.10b-5 (1986).
On February 22, 1996, Mr. Yeaman entered his not guilty plea to all
charges. The allegations against Mr. Yeaman are based on the government's claims
that he and five of the other defendants named in the proceeding violated the
aforesaid laws by inflating the apparent worth of certain reinsurance companies
by leasing them alleged worthless securities. Specifically, it is alleged that
Mr. Yeaman, with other defendants, engaged in practices which falsely increased
the quoted prices of the securities and misrepresented restricted securities as
free trading securities. Based on these allegations, the charges against Mr.
Yeaman include one count of conspiracy, seven counts of wire fraud, six counts
of securities fraud, and aiding and abetting with respect to each count. This
matter is scheduled for trial on March 10, 1997.
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The U.S. Securities and Exchange Commission, Securities Act of 1933
Release No. 7008 and Securities Exchange Act of 1934 Release No. 32669 announced
that on July 23, 1993, it ordered David R. Yeaman and Capital General
Corporation to permanently cease and desist from committing or causing further
violations of Section 5(a) and (c) and 17(a) of the Securities Act of 1933 and
Sections 10(b) and 13(g) of the Securities Exchange Act of 1934 and Rules 10b-5,
12b-20 and 13d-1(c) thereunder.
Krista Nielson was ordered to permanently cease and desist from
committing or causing further violations of Section 17(a) of the Securities Act
and Section 10(b) of the Exchange Act and Rules 10b-5 and 12b-20 thereunder. In
addition, the Commission ordered the revocation of the registration of the
common stock of Altara International, Inc., Arrow Management, Inc., Atlas
Equity, Inc., Dynamic Associates, Inc., Energy Systems, Inc., Four Star Ranch,
Inc., Panorama Industries, Inc., Partisan Corporation, Quiescent Corporation,
Saber, Inc., Upsilon, Inc., Vicuna, Inc., Why Not?, Inc., Xebec Galleon, Inc.,
Zebu, Inc., and Zeus Enterprises, Inc. pursuant to Section 12(j) of the Exchange
Act. The Commission found that each of the issuers had filed a registration
statement on Form 10 that contained materially false and misleading statements
in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Each of the respondents had submitted an Offer of Settlement consenting
to the entry of the Order without admitting or denying the allegations in the
Order. Prior to the submission of the Offers of Settlement, Capital General, on
behalf of the above mentioned companies, except for Panorama Industries, Inc.,
filed a registration statement on Form S-1 during December of 1992 to register
the common stock of those companies under the Securities Act of 1933.
Concurrently with the signing of the Offers of Settlement, the Registration
Statement was declared effective on June 30, 1993. A Post Effective Amendment
was filed and declared effective September 2, 1993. Although the registration of
the common stock under Section 12(g) of the 1934 Act was revoked on July 23,
1993, the companies are now registered and reporting under the Securities Act of
1933 by virtue of the filing of Form S-1 as indicated by Commission File No.
33-55254.
During 1986 and 1987, Capital General gifted very small percentages of
stock (usually 100 shares to each giftee) in the following companies, which
includes the Company, to approximately 1,000 persons or entities: Amenity, Inc.,
Dogmatic, Inc., Mystic Industries, Inc., Highland Mfg., Inc., Kowtow, Inc.,
Noble Industries, Inc., Oryan Capital Corporation, Pegasus Star Enterprise,
Inc., Showstoppers, Inc., Hightide, Inc., Grandeur, Inc., Fantastic Industries,
Inc., Jugglar, Inc., Xebec Galleon, Inc., Golden Home Health Care Equipment
Centers, Inc., Nighthawk Capital, Inc., Instrument Development Corporation,
Panther Industries, Inc., Owl Enterprises, Inc., Quail, Inc., GBS Technologies
Corporation, H & B Carriers, Inc., Florida Growth Industries, Inc., Macaw, Inc.,
Longhorn Enterprise, Inc., Koala Corporation, Yahwe Corporation, Star Dolphin,
Inc., Jackal, Inc., Hyena Capital, Inc., Gopher, Inc., Flamingo Capital, Inc.,
Egret, Inc., Cetacean Industries, Inc., Bonito, Inc., Alpaca, Inc., Zeus
Enterprise, Inc., Tamarind, Inc., Saber, Inc., Radar, Inc., Quiescent
Corporation, Vanadium, Inc., Upsilon, Inc., Why Not?, Inc., Bestmark, Inc.,
Missouri Illinois Mining Co., Inc.
Capital General did not register the gifts of shares in these companies
with the Securities Division of the State of Utah or with the Securities
Exchange Commission because it believed these gifts to be outside the scope of
the Utah Uniform Securities Act and the Securities Act of 1933 in as much as
such acts require registration for sales and do not require registration of
gifts. Nevertheless, in connection with the distribution of shares of its
subsidiaries, Capital General was found by the Utah Securities Advisory Board,
in two decisions affirmed by the Utah State Courts, to have violated the
registration provisions of the Utah Uniform Securities Act. See In re Amenity
Inc., No. SD-86-11 (Utah Sec. Adv. Bd. February 18, 1987) aff'd C87-2625 (3d
Dist. Ct. September 18, 1987) aff'd sub nom Capital General Corp. v. Utah Dep't
of Business Reg., 777 P.2d 494, 498 (Utah Ct. App.) cert. denied, 781 P.2d 873
(Utah S.Ct. 1989); In re H&B Carriers Inc., No. 87-09-28-01 (Utah Sec. Adv. Bd.,
10
<PAGE>
Apr. 15, 1988) aff'd No. 88-5900053 (3d Dist. Ct. Sept 10, 1990) aff'd sub nom
Capital General Corp. v. Utah Dep't of Business Reg., Case No 91-196 (Utah Ct.
App. February 10, 1992. All of the remaining companies listed above were
parties to the H&B Carriers order.
Both of these actions sought suspension of transactional exemptions
respecting the shares of these companies pursuant to Section 14 (3) of the Utah
Uniform Securities Act. Capital General defended both actions on the grounds
that the Utah Uniform Securities Act did not apply to gifts of securities, that
the gifts were good faith gifts specifically exempted by the Act, and that in
any event even if it had "sold" shares in violation of the Act, suspension of
transactional exemptions was not an authorized remedy under the statute. These
defenses were rejected at the administrative agency level, and upon judicial
review at the District Court level and by the Utah Court of Appeals.
ITEM 11. Executive Compensation.
The Company has made no arrangements for the remuneration of its
officers and directors, except that they will be entitled to receive
reimbursement for actual, demonstrable out-of-pocket expenses, including travel
expenses if any, made on the Company's behalf in the investigation of business
opportunities. No remuneration has been paid to the Company's officers or
directors prior to the filing of this form. There are no agreements or
understandings with respect to the amount or remuneration that officers and
directors are expected to receive in the future. Management takes no salaries
from the Company and does not anticipate receiving any salaries in the
foreseeable future. No present prediction or representation can be made as to
the compensation or other remuneration which may ultimately be paid to the
Company's management, since upon the successful consummation of a business
opportunity, substantial changes may occur in the structure of the Company and
its management. At such time, contracts may be negotiated with new management
requiring the payment of annual salaries or other forms of compensation which
cannot presently be anticipated. Use of the term "new management" is not
intended to preclude the possibility that any of the present officers or
directors of the Company might be elected to serve in the same or similar
capacities upon the Company's decision to participate in one or more business
opportunities.
Capital General and the Company's management may benefit directly or
indirectly by payments of consulting fees, payment of finders fees to others
from Capital General's consulting fees, sales of insiders' stock positions in
whole or in part to the private company, the Company or management of the
Company, or through the payment of salaries, or any other methods of payments
through which insiders or current investors receive funds, stock, other assets
or anything of value whether tangible or intangible. There are no plans,
proposals, arrangements or understandings with respect to the sale of additional
securities to affiliates, current shareholders or others prior to the location
of a business opportunity.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of December 31, 1996, information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding shares, by each of the directors
and by the officers and directors as a group.
11
<PAGE>
<TABLE>
<CAPTION>
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
<S> <C> <C> <C>
Common Stock Capital General Corporation(1,2) 920,400 92.04%
3098 So. Highland Drive, Suite 460
Salt Lake City, Utah 84106
Common Stock Krista Nielson(1,2) 40,000 4.0%
3098 So. Highland Drive, Suite 460
Salt Lake City, Utah 84106
Common Stock All Officers and
Directors as a Group(2) 960,400 96.04%
</TABLE>
(1)Capital General Corporation, Yeaman Enterprises, Inc., Krista Nielson and
David R. Yeaman may be deemed to be the Company's "parents" and "promoters,"
pursuant to the Rules and Regulations promulgated under the 1933 Act.
(2)Capital General Corporation is a private corporation. The majority of its
shares (80%) are owned by another private corporation, Yeaman Enterprises, Inc.
The stockholders of Yeaman Enterprises are members of the family of David R.
Yeaman, who is also an officer and director of the Company and Capital General.
Mr. Yeaman's beneficial ownership of the securities of the Company includes
shares directly owned by Capital General and Yeaman Enterprises. Although Yeaman
Enterprises is nominally owned by Mr. Yeaman's children, Mr. Yeaman beneficially
owns shares nominally owned by Yeaman Enterprises in that he has the power to
vote or direct the voting of the shares and the power to dispose of or to direct
the disposition of the shares. Other owners of the stock of Capital General
include Krista Nielson, the Company's president. Mr. Yeaman and Ms. Nielson
control and have beneficial ownership of the shares owned by Capital General and
Yeaman Enterprises and exercise shared voting power and shared investment power
over those shares.
ITEM 13. Certain Relationships and Related Transactions.
No officer, director, nominee for election as a director, or associate
of such officer, director or nominee is or has been in debt to the Company
during the last fiscal year. However, the Company's officers, directors and
major shareholder, have made an oral undertaking to make loans to the Company in
amounts sufficient to enable it to satisfy its reporting requirements and other
obligations incumbent on it as a public company, and to commence, on a limited
basis, the process of investigating possible merger and acquisition candidates.
The Company's status as a publicly-held corporation may enhance its ability to
locate potential business ventures. The loans will be interest free and are
intended to be repaid at a future date, if or when the Company shall have
received sufficient funds through any business acquisition. The loans are
intended to provide for the payment of filing fees, professional fees, printing
and copying fees and other miscellaneous fees.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Financial Statements and Financial Statement Schedules.
Financial Statements - December 31, 1996, 1995 and 1994.
Reports on Form 8-K.
There were no reports on Form 8-K filed during the fiscal year ending
December 31, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ULTRONICS CORPORATION
Date: February 25, 1997 By: s\Krista Nielson
-------------------------------------------
Krista Nielson, President, CEO and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: February 25, 1997 By: s\Krista Nielson
-------------------------------------------
Krista Nielson, President, CEO and Director
Date: February 25, 1997 By: s\David R. Yeaman
-------------------------------------------
David R. Yeaman, Secretary/Treasurer, CFO
and Director
13
<PAGE>
SMITH & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: CRANDALL BUILDING SUITE 700
AMERICAN INSTITUTE OF 10 WEST 100 SOUTH
CERTIFIED PUBLIC ACCOUNTANTS SALT LAKE CITY, UTAH 84101
UTAH ASSOCIATION OF TELEPHONE: (801) 575-8297
CERTIFIED PUBLIC ACCOUNTANTS FACSIMILE: (801) 575-8306
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors
ULTRONICS CORPORATION (A Development Stage Company)
We have audited the accompanying balance sheets of ULTRONICS CORPORATION
(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 ended December 31, 1996, 1995 and 1994 and for the period of March 14,
1990 (date of inception) to December 31, 1996. 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 ULTRONICS CORPORATION
(a development stage company) as of December 31, 1996 and 1995 and the results
of its operations, changes in stockholders' equity and its cash flows for the
years ended December 31, 1996, 1995 and 1994 and for the period of March 14,
1990 (date of inception) to December 31, 1996 in conformity with generally
accepted accounting principles.
s\Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
February 28, 1997
F-1
<PAGE>
<TABLE>
<CAPTION>
ULTRONICS CORPORATION
(A Development Stage Company)
BALANCE SHEETS
12/31/96 12/31/95
-------- --------
<S> <C> <C>
CURRENT ASSETS
Cash in bank $ 0 $ 0
------ ------
TOTAL CURRENT ASSETS 0 0
------ ------
$ 0 $ 0
====== ======
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 0 $ 0
------ ------
TOTAL CURRENT LIABILITIES 0 0
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding
1,000,000 shares 1,000 1,000
Deficit accumulated during
the development stage (1,000) (1,000)
------ ------
TOTAL STOCKHOLDERS' EQUITY 0 0
------ ------
$ 0 $ 0
====== ======
See Notes to Financial Statements.
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
ULTRONICS CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
3/14/90 (Date
Year ended Year ended Year ended of inception) to
12/31/96 12/31/95 12/31/94 12/31/96
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0
--------- --------- --------- ---------
GROSS PROFIT 0 0 0 0
General & administrative
expenses 0 0 0 1,000
--------- --------- --------- ---------
NET LOSS $ 0 $ 0 $ 0 $ (1,000)
========= ========= ========= =========
Net income (loss) per weighted
average share $ .00 $ .00 $ .00
========= ========= =========
Weighted average number of
common shares used to compute
net income (loss) per weighted
average share 1,000,000 1,000,000 1,000,000
========= ========= =========
See Notes to Financial Statements.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
ULTRONICS CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock During
Par Value $0.001 Development
Shares Amount Stage
<S> <C> <C> <C>
Balances at 3/14/90
(Date of inception) 0 $ 0 $ 0
Issuance of common
stock (restricted)
at $.001 per share
at 3/14/90 1,000,000 1,000 0
Net loss for period (1,000)
--------- --------- ---------
Balances at 12/31/90 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/91 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/92 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/93 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/94 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/95 1,000,000 1,000 (1,000)
Net income for year 0
--------- --------- ---------
Balances at 12/31/96 1,000,000 $ 1,000 $ (1,000)
========= ========= =========
See Notes to Financial Statements.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
ULTRONICS CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
3/14/90 (Date of
Year ended Year ended Year ended Inception) to
12/31/96 12/31/95 12/31/94 12/31/96
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 0 $ 0 $ 0 $ (1,000)
Adjustments to reconcile
net income (loss) to
cash used by operating
activities 0 0 0 0
-------------- -------------- -------------- --------------
NET CASH USED BY
OPERATING ACTIVITIES 0 0 0 (1,000)
INVESTING ACTIVITIES 0 0 0 0
-------------- -------------- -------------- --------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 0
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 0 1,000
-------------- -------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 1,000
-------------- -------------- -------------- --------------
INCREASE IN CASH
AND CASH EQUIVALENTS 0 0 0 0
Cash and cash equivalents
at beginning of year 0 0 0 0
-------------- -------------- -------------- --------------
CASH & CASH EQUIVALENTS
AT END OF YEAR $ 0 $ 0 $ 0 $ 0
============== ============== ============== ==============
See Notes to Financial Statements.
</TABLE>
F-5
<PAGE>
ULTRONICS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy:
The Company has not yet adopted any policy regarding payment of
dividends.
Income Taxes:
The Company records the income tax effect of transactions in the same
year that the transactions enter into the determination of income,
regardless of when the transactions are recognized for tax purposes.
Tax credits are recorded in the year realized. Since the Company has
not yet realized income as of the date of this report, no provision for
income taxes has been made.
In February, 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which supersedes substantially all existing authoritative
literature for accounting for income taxes and requires deferred tax
balances to be adjusted to reflect the tax rates in effect when those
amounts are expected to become payable or refundable. The Statement was
applied in the Company's financial statements for the fiscal year
commencing January 1, 1993.
At December 31, 1996 a deferred tax asset has not been recorded due to
the Company's lack of operations to provide income to use the net
operating loss carryover of $1,000 which will expire December 31, 2005.
NOTE 2: DEVELOPMENT STAGE COMPANY
The Company was incorporated under the laws of the State of Nevada on
March 14, 1990 and has been in the development stage since
incorporation.
NOTE 3: CAPITALIZATION
On the date of incorporation, the Company sold 1,000,000 shares of its
common stock to Capital General Corporation for $1,000 cash for an
average consideration of $.001 per share. The Company's authorized
stock includes 25,000,000 shares of common stock at $.001 par value.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Office services
are provided, without charge, by Capital General Corporation. Such
costs are immaterial to the financial statements, and, accordingly,
have not been reflected therein. The officers and directors of the
Company are involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
F-6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
ULTRONICS CORPORATION December 31, 1996 financial statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000894556
<NAME> ULTRONICS CORPORATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (1,000)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
