SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-KSB
Annual Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended
December 31, 1998
Commission file number
_______
BIOETHICS, LTD.
(Name of registrant as specified in its charter)
Nevada 87-0485312
(State or other jurisdiction of (IRS employer identification
incorporation) no.)
8092 South Juniper Court, South (801) 476-8110
Weber, Utah 84405
(Address of principal executive (Registrant's telephone number,
offices) including area code)
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. XX Yes No
------ -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K 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. XX
-----
Issuers revenues for its most recent fiscal year: None.
The aggregate market value of voting stock held by non-affiliates of the
registrant at December 31, 1998: The common voting stock of the registrant is
not publicly traded and has no readily ascertainable fair market value.
Shares outstanding of the registrant's common stock as of March 15, 1999:
11,000,000.
<PAGE>
Bioethics, Ltd.
TABLE OF CONTENTS TO ANNUAL REPORT
ON FORM 10-KSB
YEAR ENDED DECEMBER 31, 1998
PART I
Item 1. Descriptoin of Business 3
Item 2. Description of Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 5
Item 6. Management's Discussion and Analysis
or Plan of Operation 5
Item 7. Financial Statements 6
Item 8. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure 6
PART III
Item 9. Directors and Executive Officers, Promoters
and Control Persons; Compliance With Section 16(a)
of the Exchange Act 7
Item 10. Executive Compensation 7
Item 11. Security Ownership of Certain Beneficial
Owners and Management 8
Item 12. Certain Relationships and Related Transactions 8
Item 13. Exhibits and Reports on Form 8-K 8
<PAGE>
PART I
Item 1. Description of Business.
Business Development
Bioethic, Ltd. (the "Company or "Registrant") was incorporated in 1990 as
a Nevada corporation. The Company has not yet generated any significant
revenues and is considered a development stage company.
In May 1998, the former officers and directors of the Registrant resigned
from their respective positions. Prior to said resignations, they appointed
Mr. Mark J. Cowan as the sole member of the Board of Directors of the
Registrant and as the new President, Chief Executive Officer, Chief Financial
Officer, Secretary and Treasurer of the Registrant and they approved and
closed on the sale of 10,000,000 shares of Common Stock at an aggregate
purchase price of $40,000 in a private offering, which shares represent
approximately ninety-one percent (91%) of the outstanding shares of common
stock of the Registrant. Mr. Cowan purchased 2,500,000 shares of common stock
in such private offering with personal funds which shares represent
approximately twenty-three percent (23%) of the total issued and outstanding
common stock of the Registrant. Various other investors purchased the
remaining 7,500,000 shares of common stock in the private offering. The sale
of the shares resulted in a change in the control of the Company.
Business of Issuer
The Company has no current business operations. The Company's business
plan is to seek one or more potential business ventures that, in the opinion
of management, may warrant involvement by the Company. The Company recognizes
that because of its limited financial, managerial and other resources, the
type of suitable potential business ventures which may be available to it will
be extremely limited. The Company's principal business objective will be to
seek long-term growth potential in the business venture in which it
participates rather than to seek immediate, short-term earnings. In seeking to
attain the Company's business objective, it will not restrict its search to
any particular business or industry, but may participate in business ventures
of essentially any kind or nature. It is emphasized that the business
objectives discussed are extremely general and are not intended to be
restrictive upon the discretion of management.
The Company will not restrict its search for any specific kind of firms,
but may participate in a venture in its preliminary or development stage, may
participate in a business that is already in operation or in a business in
various stages of its corporate existence. It is impossible to predict at this
stage the status of any venture in which the Company may participate, in that
the venture may need additional capital, may merely desire to have its shares
publicly traded, or may seek other perceived advantages which the Company may
offer. In some instances, the business endeavors may involve the acquisition
of or merger with a corporation which does not need substantial additional
cash but which desires to establish a public trading market for its common
stock.
There is no assurance that the Company will be able to successfully
identify and negotiate a suitable potential business venture.
Except for the Company's sole officer and director, who works for the
Company on a part time basis, the Company has no other employees. The Company
presently maintains its business office at 8092 South Juniper Court, South
Weber, Utah 84405, which is the home-business office of its President.
Item 2. Description of Properties.
The Company has no significant assets or operating capital. The current
sole officer and director has expressed his intent to borrow funds to the
extent possible, to fund the costs of operating the Company until some type of
business venture can be completed.
Item 3. Legal Proceedings.
The Company is not a party to, nor are its properties the subject of, any
pending legal proceedings and no such proceedings are known to the Company to
be threatened or contemplated by or against it.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of the security holders during the 4th
quarter of the fiscal year covered by this report.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
Market Information
To the knowledge of current management, their is no public trading market
for the Company's common stock.
Holders
At March 15, 1998, there were approximately 385 holders of record of the
Company's common stock.
Dividends
The Company has not declared any cash dividends within the past two years
on its common stock. The Company does not anticipate or contemplate paying
dividends in the foreseeable future. It is the present intention of management
to utilize available funds, if any, for the development of the Company's
business.
Sales of Equity Securities
The Company has not sold any securities during the period of this report
that have not been previously reported.
Item 6. Management's Discussion and Analysis or Plan of Operation
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's consolidated results of operations and financial condition. The
discussion should be read in conjunction with the consolidated financial
statements and notes thereto.
Plan of Operation
The Company has no business operations, and very limited assets or
capital resources. The Company's business plan is to seek one or more
potential business ventures that, in the opinion of management, may warrant
involvement by the Company. The Company recognizes that because of its limited
financial, managerial and other resources, the type of suitable potential
business ventures which may be available to it will be extremely limited. The
Company's principal business objective will be to seek long-term growth
potential in the business venture in which it participates rather than to seek
immediate, short-term earnings. In seeking to attain the Company's business
objective, it will not restrict its search to any particular business or
industry, but may participate in business ventures of essentially any kind or
nature. It is emphasized that the business objectives discussed are extremely
general and are not intended to be restrictive upon the discretion of
management.
The Company will not restrict its search for any specific kind of firms,
but may participate in a venture in its preliminary or development stage, may
participate in a business that is already in operation or in a business in
various stages of its corporate existence. It is impossible to predict at this
stage the status of any venture in which the Company may participate, in that
the venture may need additional capital, may merely desire to have its shares
publicly traded, or may seek other perceived advantages which the Company may
offer. In some instances, the business endeavors may involve the acquisition
of or merger with a corporation which does not need substantial additional
cash but which desires to establish a public trading market for its common
stock.
The Company does not have sufficient funding to meet its long term cash
needs. The Company believes that its current cash will be sufficient to
support the Company's planned operations for the next twelve months. The
current sole officer and director has expressed his intent that to the extent
necessary the Company will seek to raise additional funds through the sale of
equity securities or by borrowing to funds until a suitable business venture
can be completed. Management does not anticipate raising funds during the next
twelve months. There is no assurance that the Company will be able to
successfully identify and/or negotiate a suitable potential business venture
or raise additional funds if and when needed.
The Company has experienced net losses during the development stage (1990
to present) and has had no significant revenues during such period. During the
past two fiscal years the Company has had no business operations. In light of
these circumstances, the ability of the Company to continue as a going concern
is significantly in doubt. The attached financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Year 2000
The Company has accessed its state of year 2000 preparedness and determined
that year 2000 issues will not materially effect the Company's business,
results of operations or financial condition. The Company assessment is based
in part on the fact that the Company does not presently conduct any business,
has no operations, has only nominal assets comprised primarily of cash on
deposit with a federally insured bank and does not own a computer or any
software.
Forward-Looking Statements
When used in this Form 10-K or other filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized officer of the Company's executive officers, the
words or phrases "would be", "will allow", "intends to", "will likely result",
"are expected to", "will continue", "is anticipated", "estimate", "project",
or similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any forward-
looking statements, which speak only as of the date made, and advises readers
that forward-looking statements involve various risks and uncertainties. The
Company does not undertake, and specifically disclaims any obligation to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statement.
Item 7. Financial Statements
See attached financial statements.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
The Company is not aware, and has not been advised by its auditors, of
any disagreement on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act
Identify Directors and Executive Officers
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of March 15, 1999:
With
Company
Name Age Position Since
---- --- -------- ------
Mark Cowan (1) 31 Director, President, Chief 1998
Executive Officer, Chief
Financial Officer, Secretary
and Treasurer
_______________
Mark Cowan. Mr. Cowan has been with the Company since May 1998. Since
that time he has been the Company's sole officer and director. Mr. Cowan works
for the Company on a part time basis. Since September 1998, Mr. Cowan has been
principally employed as a mortgage broker for a company that he owns. From
1996 through early 1999 Mr. Cowan worked as a loan officer for a mortgage
company. From 1994 to 1996 Mr. Cowan sold real estate for a residential real
estate development company. Mr. Cowan holds a B.S. in physiology from Brigham
Young University and has done graduate work in molecular genetics at Weber
State University. Mr. Cowan holds no other directorships in reporting
companies.
Identify Significant Employees
The Company has no significant employees.
Family Relationships
None.
Involvement in Certain Legal Proceedings
Mr. Cowan has not been involved in any material legal proceedings which
occurred within the last five years of any type as described in Regulation S-K.
Compliance With Section 16(a) of the Exchange Act
The Company does not have a class of equity securities registered
pursuant to Section 12 of the Exchange Act. As a result, no reports are
required to be filed pursuant to Section 16(a).
Item 10. Executive Compensation
During the last fiscal year, the Company's sole officer and director did
not receive any salary, wage or other compensation. During the current fiscal
year the Company has no present plans to pay compensation to its sole officer
and director. There are presently no ongoing pension or other plans or
arrangements pursuant to which remuneration is proposed to be paid in the
future to any of the officers and directors of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of March 15, 1999,
for: (i) each person who is known by the Company to beneficially own more than
5 percent of the Company's common stock, (ii) each of the Company's directors,
(iii) each of the Company's Named Executive Officers, and (iv) all directors
and executive officers as a group. As of March 15, 1999, the Company had
11,000,000 shares of common stock outstanding.
Name and Address Shares Percentage of
of Beneficial Beneficially Shares Position
Owner(1) Owned Beneficially Owned
- --------------- --------- ---------- ---------------
Mark Cowan 2,500,000 23% Director,
President, Chief
Executive Officer,
Chief Financial
Officer, Secretary
and Treasurer
Windsor 2,000,000 18%
Development
2522 Alice Drive
West Jordan,
Utah 84084
__________________________
(1) Except where otherwise indicated, the address of the beneficial owner
is deemed to be the same address as the Company.
Item 12. Certain Relationships and Related Transactions.
In May 1998, the former officers and directors of the Registrant resigned
from their respective positions. Prior to said resignations, they appointed
Mr. Mark J. Cowan as the sole member of the Board of Directors of the
Registrant and as the new President, Chief Executive Officer, Chief Financial
Officer, Secretary and Treasurer of the Registrant and they approved and
closed on the sale of 10,000,000 shares of Common Stock at an aggregate
purchase price of $40,000 in a private offering, which shares represent
approximately ninety-one percent (91%) of the outstanding shares of common
stock of the Registrant. Mr. Cowan purchased 2,500,000 shares of common stock
in such private offering with personal funds which shares represent
approximately twenty-three percent (23%) of the total issued and outstanding
common stock of the Registrant. Various other investors purchased the
remaining 7,500,000 shares of common stock in the private offering. The sale
of the shares resulted in a change in the control of the Company.
Item 13. Exhibits and Reports on Form 8-K.
Exhibits
Listed on page 10 hereof.
Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the fourth
quarter ended December 31, 1998.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.
Bioethics, Ltd.
(Registrant)
Date: March 25, 1999 By /s/ Mark Cowan
Mark Cowan
Chairman, Chief Executive
Officer, Chief Financial
Officer and Secretary
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
---------- -------------------------- ---------
/s/ Mark Cowan Chairman, Chief Executive March 25, 1998
Officer, Chief Financial Officer
Mark Cowan and Secretary
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
NO.
3(i) Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 3(i).1 of the
Company's Form 10-Q, dated June 30, 1998).
3(ii) Bylaws of the Company (Incorporated by reference to
Exhibit 3(ii).1 of the Company's Form 10-Q, dated
June 30, 1998).
27 Financial Data Schedule
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 1998
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report 1
- Balance Sheets, December 31, 1998 and 1997 2
- Statement of Operations, for the years ended
December 31, 1998, 1997 and 1996, and
from inception on July 26, 1990 through
December 31, 1998 3
- Statement of Stockholders' Equity,
from inception on July 26, 1990
through December 31, 1998 4-5
- Statements of Cash Flows, for the years ended
December 31, 1998, 1997 and 1996, and
from inception on July 26, 1990 through
December 31, 1998 6
- Notes to Financial Statements 7 - 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
BIOETHICS, LTD.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Bioethics, Ltd. [a
development stage company] at December 31, 1998, and the related statements of
operations, stockholders' equity and cash flows for the year ended December
31, 1998 and from inception on July 26, 1990 through December 31, 1998. 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 audit. The financial statements of Bioethics, Ltd. as of and for the
years ended December 31, 1997 and 1996 and for the period from inception on
July 26, 1990 through December 31, 1997 were audited by other auditors whose
report, dated January 31, 1998, expressed an unqualified opinion on these
financial statements. The financial statements for the period from inception
on July 26, 1990 though December 31, 1997 reflect a net loss of $1,000 of the
total net loss. The other auditors report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for such prior periods,
is based solely on the report of the other auditors.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements audited by us present fairly, in all material respects,
the financial position of Bioethics, Ltd. as of December 31, 1998, and the
results of its operations and its cash flows for the year ended December 31,
1998 and for the period from inception through December 31, 1998, in
conformity with generally accepted accounting principles.
/s/ Pritchett, Siler & Hardy, P.C.
March 15, 1999
Salt Lake City, Utah
-1-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
BALANCE SHEETS
ASSETS
December 31, December 31,
1998 1997
___________ ___________
CURRENT ASSETS:
Cash in bank $ 35,564 $ -
___________ ___________
$ 35,564 $ -
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 899 $ -
___________ ___________
Total Current Liabilities 899 -
___________ ___________
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
25,000,000 shares authorized,
11,000,000 and 1,000,000 shares
issued and outstanding 11,000 1,000
Capital in excess of par value 30,000 -
Deficit accumulated during the
development stage (6,335) (1,000)
___________ ___________
Total Stockholders' Equity 34,665 -
___________ ___________
$ 35,564 $ -
___________ ___________
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
From Inception
For the Year Ended on July 26,
December 31, 1990 Through
___________________________ December 31,
1998 1997 1996 1998
_________ _______ _______ ____________
REVENUE :
Sales $ - $ - - $ -
_________ _______ _______ ____________
EXPENSES:
General and
administrative 5,335 - - 6,335
_________ _______ _______ ____________
LOSS BEFORE INCOME TAXES (5,335) - - (6,335)
CURRENT TAX EXPENSE - - - -
DEFERRED TAX EXPENSE - - - -
_________ _______ _______ ____________
NET LOSS $(5,335) $ - - $(6,335)
_________ _______ _______ ____________
LOSS PER COMMON SHARE $ (.00) $ (.00) $(.00) $ (.00)
_________ _______ _______ ____________
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JULY 26, 1990
THROUGH DECEMBER 31, 1998
Deficit
Capital Accumulated
Common Stock in During the
__________________ Excess of Development
Shares Amount Par Value Stage
__________ ______ _______ ____________
BALANCE, July 26, 1990 - $ - $ - $ -
Issuance of 1,000,000 shares
common stock for cash,
July, 1990 at $.001
per share 1,000,000 1,000 - -
Net loss for period
ended December 31, 1990 - - - (1,000)
__________ ______ _______ ___________
BALANCE, December 31, 1990 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1991 - - - -
__________ ______ _______ __________
BALANCE, December 31, 1991 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1992 - - - -
__________ ______ _______ __________
BALANCE, December 31, 1992 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1993 - - - -
__________ ______ _______ __________
BALANCE, December 31, 1993 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1994 - - - -
__________ ______ _______ ___________
BALANCE, December 31, 1994 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1995 - - - -
__________ ______ _______ ___________
BALANCE, December 31, 1995 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1996 - - - -
__________ ______ _______ ___________
BALANCE, December 31,1996 1,000,000 1,000 - (1,000)
Net loss for period
ended December 31, 1997 - - - -
__________ ______ _______ __________
[Continued]
-4-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JULY 26, 1990
THROUGH DECEMBER 31, 1998
[Continued]
Deficit
Accumulated
Common Stock Capital in During the
__________________ Excess of Development
Shares Amount Par Value Stage
__________ ______ __________ _________
BALANCE, December 31, 1997 1,000,000 $1,000 $ - $(1,000)
Issuance of 10,000,000 shares
common stock for cash,
May, 1998 at $.004
per share 10,000,000 10,000 30,000 -
Net loss for the period
ended December 31, 1998 - - - (5,335)
__________ ________ ______ _________
BALANCE, December 31, 1998 11,000,000 $11,000 $30,000 $(6,335)
__________ ________ ______ _________
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
From Inception
For the Year Ended on July 26,
December 31, 1990 Through
_____________________________ December 31,
1998 1997 1996 1998
____________ _______ ______ ____________
Cash Flows from Operating
Activities:
Net loss $(5,335) $ - $ - $ (6,335)
Adjustments to reconcile
net loss to net cash
used by operating
activities:
Depreciation and
amortization - - - -
Changes in assets and
liabilities:
Accounts payable 899 - - 899
____________ _______ _______ ___________
Net Cash to
Operating
Activities (4,436) - - (5,436)
____________ _______ _______ ___________
Cash Flows from Investing
Activities:
Payment of organization
costs - - - -
____________ _______ _______ ___________
Net Cash to Investing
Activities - - - -
____________ _______ _______ ___________
Cash Flows from Financing
Activities:
Proceeds from common
stock issuance 40,000 - - 41,000
____________ _______ _______ ___________
Net Cash from
Financing
Activities 40,000 - - 41,000
____________ _______ _______ ___________
Net Increase (Decrease)
in Cash 35,564 - - 35,564
Cash at Beginning of Period - - - -
____________ _______ _______ ___________
Cash at End of Period $35,564 $ - $ - $35,564
____________ _______ _______ ___________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - -
Supplemental schedule of Noncash Investing and Financing Activities:
For the period ended December 31, 1998:
None
For the period ended December 31, 1997:
None
For the period ended December 31, 1996:
None
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of Nevada
on July 26, 1990. The Company has not yet generated significant revenues from
its planned principal operations and is considered a development stage company
as defined in SFAS No. 7. The Company was organized to provide a vehicle for
participating in potentially profitable business ventures which may become
available through the personal contacts of, and at the complete discretion of,
the Company's officers and directors. The Company has, at the present time,
not paid any dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other relevant
factors.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in accordance
with statement of Financial Standard No. 128, "Earnings Per Share" [See Note
6].
Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.
Accounting 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, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those estimated.
Recently Enacted Accounting Standards - SFAS No. 130, "Reporting Comprehensive
Income", SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" SFAS No. 132, "Employer's Disclosure about Pensions and
Other Postretirement Benefits", SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and SFAS No. 134, "Accounting for Mortgage-
Backed Securities." were recently issued. SFAS No. 130, 131, 132, 133 and 134
have no current applicability to the Company or their effect on the financial
statements would not have been significant.
NOTE 2 - COMMON STOCK
During July 1990, in connection with its organization, the Company issued
1,000,000 shares of its previously authorized, but unissued common stock.
Total proceeds from the sale of stock amounted to $1,000 (or $.001 per share).
During May 1998, the Company issued 10,000,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the sale of stock
amounted to $40,000 (or $.004 per share). The issuance of common stock
resulted in a change in control of the Company [See Note 5].
-7-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At December 31, 1998, the Company has available
unused operating loss carryforwards of approximately $6,000, which may be
applied against future taxable income and which expire in 2005 through 2013.
The amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the amount of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax assets are approximately $2,000 and $400
as of December 31, 1998 and 1997, respectively, with an offsetting valuation
allowance at each year end of the same amount resulting in a change in the
valuation allowance of approximately $1,600 during 1998.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to its
officers and directors.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his home as
a mailing address, as needed, at no expense to the Company.
NOTE 5 - CHANGES IN CONTROL
During May 1998, the Company raised $40,000 through the sale of 10,000,000
shares of common stock. The shares sold represent approximately ninety-one
percent (91%) of the outstanding shares of common stock of the Company
resulting in a change in control of the Company. The proceeds from the stock
sale will be used to pay for legal and accounting fees and for management to
search for possible business opportunities. The former officers and directors
of the Company resigned and an individual holding approximately 23% of the
outstanding common stock was appointed as the sole member of the Board of
Directors of the Company and as the new President, Chief Executive Officer,
Chief Financial Officer, and Secretary/Treasurer of the Company.
-8-
<PAGE>
BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income (loss) per
share and the effect on income and the weighted average number of shares
of dilutive potential common stock for the periods presented:
From Inception
For the Year Ended on July 26,
December 31, 1990 Through
_______________________________ December 31,
1998 1997 1996 1998
_________ _________ _________ ________
Income (loss) available
to common stockholders
used in income (loss)
per share $ (5,335) $ - $ - $(6,335)
_________ _________ _________ ________
Weighted average number
of common shares
outstanding used in
earnings per share
during the period 7,684,932 1,000,000 1,000,000 1,792,208
_________ _________ _________ ________
Dilutive earnings per share was not presented, as the Company had no common
equivalent shares for all periods presented that would effect the computation
of diluted earnings (loss) per share.
-9-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 35,564
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,564
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,564
<CURRENT-LIABILITIES> 899
<BONDS> 0
0
0
<COMMON> 11,000
<OTHER-SE> 23,665
<TOTAL-LIABILITY-AND-EQUITY> 35,564
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,335
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,335)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,335)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,335)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
