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For the Fiscal Year Ended June 30, 2000
Commission File Number 0-21566
(Name of small business issuer in its charter)
Incorporated pursuant to the Laws of the State of Delaware
Internal Revenue Service — Employer Identification No. 84-1219819
21 Patrick Street
Kilkenny, Co. Kilkenny
Ireland
U.S. Voice Mail (713) 784-7995
(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
Common Stock, $.01 Par Value
Indicate by check mark whether registrant (1) has filed all reports 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.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
The issuer's had no revenues during the fiscal year ended June 30, 2000.
The aggregate market value of the voting stock held by non-affiliates of the registrant on October 11, 2000 was $209,405, based on the closing price of such stock of $.125 on such date. The number of shares outstanding of the registrant’s Common Stock, $.01 par value, as of October 11, 2000 was 1,697,457.
Transitional Small Business Disclosure format (Check one): YES [ ] NO [X]
INDEX
Page Number
PART I.
Items 1. & 2. Business and Properties. 3
Item 3. Legal Proceedings. 3
Item 4. Submission of Matters to a Vote of Security Holders. 4
PART II.
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters. 5
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 6
Item 7. Financial Statements. 7
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. 7
PART III.
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act. 7
Item 10. Executive Compensation. 8
Item 11. Security Ownership of Certain Beneficial Owners and
Management. 9
Item 12. Certain Relationships and Related Transactions. 10
PART IV.
Item 13. Exhibits and Reports on Form 8-K. 11
Eurbid.com, Inc. f/k/a “LS Capital Corporation” (“Company”) was organized under the laws of the State of Delaware on December 30, 1992 under the name “Lone Star Casino Corporation” to develop, own and operate casinos and related resort facilities. Prior to May 3, 1993, the Company was a wholly-owned subsidiary of Viral Testing Systems Corporation (“VTS”), then a publicly traded company. The Company became publicly-held through the distribution of certain of its shares of common stock to the stockholders of VTS on May 3, 1993. The Company adopted its current corporate name in October 2000 as a result of the change in its corporate direction described below.
From its inception and until shortly after the start of fiscal 1997, the Company was involved exclusively in the gaming industry. During fiscal 1997, the Company adopted a significant change in its corporate direction. It decided to focus its efforts on developing precious metals mining prospects, with each project undertaken in a separate corporate subsidiary. The Company organized a number of wholly-owned or partially-owned precious metals/mining subsidiaries that held rights in certain mining claims or properties believed to contain precious metals or in certain mineral extraction technologies. In February 1999, primarily due to the unavailability of capital to develop the Company's technologies further, the Company decided to discontinue its mineral activities and furlough its remaining personnel in the U.S. The Company allowed its mineral interests to lapse. The Company continues to own a five-acre tract of land in Tecopa, California, certain rights to certain mining claims in British Columbia, Canada, miscellaneous equipment believed to have an aggregate fair market value of $25,000 and rights in certain technologies believed to have no meaningful commercial value. The Company intends to dispose of the tract of land, the rights in the mineral claims and the remaining equipment as purchasers can be procured. The Company has no present intentions regarding its technologies.
Since ceasing its efforts in the precious minerals industry, the Company has been exploring opportunities to develop or acquire one or more businesses in other industries. The Company has been focusing specifically on Internet-related businesses, and has considered certain Internet-related businesses focused on the European market. However, the Company does not now any particular prospect under consideration in any meaningful sense, and the nature of the business in which the Company will engage in the future, the terms and circumstances under which the Company will engage in such business and even whether or not the Company will engage in a future business, are now uncertain. Nonetheless, the Company believed that the possibility of eventually pursuing an Internet-related business focused on Europe was so that great that in October 2000 it changed its corporate name to its present one, which suggests the Internet and Europe.
The principal executive offices of the Company are located at 21 Patrick Street, Kilkenny, Co. Kilkenny, Ireland, and its U.S. Voice Mail is 713/784-7995. The Company currently has only one employee.
On December 14, 1994, the Company filed a lawsuit in Harris County, Texas against Full House Resorts, Inc. (“Full House”), Allen E. Paulson, Donaldson, Lufkin & Jenrette Securities Corporation and My Dang to enforce the terms of a preliminary agreement executed on September 8, 1994 between the Company and Full House to jointly acquire and relocate a casino to the Company’s site in Biloxi, Mississippi. With the agreement of the Company, this litigation was continued in the District Court of Harrison County, Mississippi under case no. A-2402-95-0142. Shortly before a summary judgment hearing scheduled in March 1996, the Company’s counsel withdrew from the case without the substitution of new counsel. The Company was unable to procure new counsel in time, and the presiding judge granted the defendants’ motions for summary judgment. On appeal, the Mississippi Court of Appeals affirmed the summary judgment against the Company as to all of its claims against My Dang, Allen B. Paulson and Donaldson, Lufkin & Jenrette Securities Corporation and its claims of common law fraud against Full House. However, this Court of Appeals reversed the summary judgment against the Company for its claims of breach of contract and breach of fiduciary duties asserted against Full House and remanded these claims to the lower court for a trial on the merits.
On April 4, 2000, the trial court entered an order granting the Company’s Motion for Substitution of Counsel, appointing new counsel for the Company. On that same day, the trial court entered an order dismissing the Company’s claims with prejudice, due to prior want of prosecution after the first appeal was decided. On April 13, 2000, the Company’s new counsel filed a Notice of Appeal regarding the trial court’s dismissal order. Although the Company’s new counsel plans on vigorously pursuing the Company’s claims for damages against Full House, the ultimate outcome of this proceeding can not now be determined.
No matter was submitted to a vote of the Company’s stockholders during the fourth quarter of fiscal 2000, through the solicitation of proxies or otherwise. However, on August 31, 2000, a special meeting of the Company’s stockholders was convened for the purpose of considering and voting on the following matters:
| 1. | An amendment of the Certificate of Incorporation of the Company to change the name of the Company from "LS Capital Corporation" to "Eurbid.com, Inc." (the "Corporate Name Change"). |
| 2. | An amendment of the Certificate of Incorporation of the Company to effect a 1-for-25 reverse stock split (the “Reverse Stock Split”) of the Company’s Common Stock, $.01 par value per share (“Common Stock”), in which every twenty-five shares of Common Stock outstanding as of the effective date of the amendment will be converted into one share of Common Stock. |
| 3. | The approval of issuances of Common Stock, in the discretion of the Board of Directors, to creditors of the Company (including officers and directors of the Company) in satisfaction of amounts owed by the Company (the “Discretionary Stock Issuances”). As approved by the Company’s stockholders, each Discretionary Stock Issuance to a Company director must be approved by a majority of directors other than the director to be issued the Common Stock. Moreover, the number of shares of Common Stock comprising any Discretionary Stock Issuance must not have an aggregate market value at the time of issuance exceeding the amount being satisfied by the Common Stock if the Common Stock being issued is freely tradeable immediately after issuance, or not have an aggregate market value at the time of issuance twice the amount being satisfied by such issuance if the Common Stock being issued is not freely tradeable immediately after issuance. The restriction on the amount of Common Stock that may be issued places only a maximum amount of Common Stock that may be issued and does not require the Company to issue up to the maximum amount of the restriction. Once a person receives a Discretionary Stock Issuance, such person will not be issued any more Common Stock if the market value of the Common Stock declines, nor will such person be required to reconvey or otherwise forfeit any of the Common Stock issued to him if the market value of the Common Stock increases. |
| 4. | A fourth amendment (the “Amendment No. 4”) to the Company’s 1993 Stock Option Plan authorizing an increase to 6,000,000 shares in the number of shares of the Company’s Common Stock available for issuance of new grants under such plan, of which 1,000,000 shares would be reserved for grants or replacement or reload options. |
| 5. | A first amendment (the “Amendment No. 1”) to the Company’s 1994 Stock Plan for Non-Employee Directors (the “Stock Plan”), authorizing an increase to 500,000 shares in the number of shares of the Company’s Common Stock available for issuance of new grants under such plan. |
| 6. | A second amendment (the “Amendment No. 2”) to the Stock Plan, modifying the timing of grants under such plan and deleting certain requirements and conditions imposed upon grants under such plan. Prior to the approval of Amendment No. 2, the Stock Plan provided that, at the conclusion of each annual meeting of stockholders of the Company, each elected or incumbent Director shall automatically be granted a stock option to purchase 25,000 shares of Common Stock, but only if the Company’s net income for the fiscal year just ended improved over the net income for the prior fiscal year, determined in accordance with generally accepted accounting principals. Amendment No. 2 changed the Stock Plan in several respects. First, instead of the grants automatically occurring at the conclusion of each annual meeting of stockholders of the Company, the grants would be made whenever believed appropriate by a majority of the members of the Company’s Board of Directors who are not eligible for grants pursuant to this Plan (such members are referred to hereinafter as the “Non-Eligible Director Majority”). Second, instead of stock options granted pursuant to the Stock Plan covering a fixed number of shares (specifically 25,000), Amendment No. 2 enables the Non-Eligible Director Majority to grant options pursuant to the Stock Plan covering such number of shares as the Non-Eligible Director Majority believes appropriate, up to the maximum number of shares available under the Stock Plan. Third, Amendment No. 2 deleted the requirement that the Company’s net income for the fiscal year just ended must have improved over the net income for the prior fiscal year. |
All of these matters were approved by the Company’s stockholders. The Corporate Name Change and the Reverse Stock Split became effective on October 3, 2000. The following are the results of the voting on the matters described above.
1. Corporate Name Change For Against Abstain Broker Non-Votes
27,588,604 1,376,981 162,671 -0-
2. Reverse Stock Split For Against Abstain Broker Non-Votes
25,666,451 3,369,553 95,252 -0-
3. Discretionary Stock Issuances For Against Abstain Broker Non-Votes
5,454,890 3,446,529 53,619 20,218,218
4. Amendment No. 4 For Against Abstain Broker Non-Votes
1,421,585 4,169,668 363,785 20,218,218
5. Amendment No. 1 For Against Abstain Broker Non-Votes
4,432,343 4,099,726 422,969 20,218,218
6. Amendment No. 2 For Against Abstain Broker Non-Votes
4,448,792 4,139,279 366,967 20,218,218
The Company’s common stock is traded on the OTC Bulletin Board under the symbol “EURB”. As of June 30, 2000, the Company 1,803 had holders of record. Presented below are the high and low closing bid prices of, the Company’s common stock for the two years ended June 30, 2000.
High Low
---- ---
Fiscal year ended June 30, 1999:
First Quarter $ .145 $.055
Second Quarter .090 .040
Third Quarter .057 .032
Fourth Quarter .050 .030
Fiscal year ended June 30, 2000:
First Quarter $ .039 $.020
Second Quarter .030 .013
Third Quarter .220 .028
Fourth Quarter .095 .022
The Company has never paid cash dividends, and has no intention of paying cash dividends in the foreseeable future.
SIGNIFICANT EVENTS
From its inception and until shortly after the start of fiscal 1997, the Company was involved exclusively in the gaming industry. During fiscal 1997, the Company adopted a significant change in its corporate direction. It decided to focus its efforts on developing precious metals mining prospects, with each project undertaken in a separate corporate subsidiary. The Company organized a number of wholly-owned or partially-owned precious metals/mining subsidiaries that held rights in certain mining claims or properties believed to contain precious metals or in certain mineral extraction technologies. In February 1999, primarily due to the unavailability of capital to develop the Company’s technologies further, the Company decided to discontinue its mineral activities and furlough its remaining personnel in the U.S. The Company allowed its mineral interests to lapse. The Company continues to own a five-acre tract of land in Tecopa, California, certain rights to certain mining claims in British Columbia, Canada, miscellaneous equipment believed to have an aggregate fair market value of $25,000 and rights in certain technologies believed to have no meaningful commercial value. The Company intends to dispose of the tract of land, the rights in the mineral claims, and the remaining equipment as purchasers can be procured. The Company has no present intentions regarding its technologies.
In the future, the Company intends to explore opportunities to develop or acquire one or more businesses in other industries. The Company expects to focus specifically on Internet-related businesses. The Company does not now any particular prospect under consideration in any meaningful sense. The nature of the business in which the Company will engage in the future, the terms and circumstances under which the Company will engage in such business and even whether or not the Company will engage in a future business, are now uncertain.
MATERIAL CHANGES IN FINANCIAL CONDITION
At June 30, 2000, the Company has a working capital deficiency of $1,046,000 compared to a deficiency of $946,000 at June 30, 1999.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Year Ended June 30, 2000 and 1999
The Company incurred a net loss of $419,202 or $.35 a share, in the year ended June 30, 2000 as compared to net loss of $12,424 or $0.02 per share for the prior year. The change of $406,778 was attributable primarily to non-recurring debt forgiveness and gain on the sale of marketable securities in fiscal 1999 partially offset by lower operating expenses.
The reports of Company’s Independent Auditors appear at Page F-1 hereof, and the Consolidated Financial Statements of the Company appear at Page F-2 through F-8 hereof.
Not applicable.
The following table sets forth certain information regarding the directors and executive officers of the Company and its subsidiaries, including the business experience of each for at least the past five years:
Director Officer
Name Age Since Since
Paul J. Montle 53 1993 1993
Chairman of the
Board, President and
Chief Executive Officer
Roger W. Cope 59 1993 -----
Director
C. Thomas Cutter 60 1993 -----
Director
Paul J. Montle has served as the Chairman of the Board and Chief Executive Officer of the Company since 1992.
Roger W. Cope has served as a Director of the Company since 1993. Since 1996, he has served as Vice President - Business Development with Lamb Technicon Machining Systems. From June 30, 1993 until January 16, 1996, Mr. Cope served as President of the Company and Manager of Papone's Palace, Ltd. Liability Co.
C. Thomas Cutter has served as a Director of the Company since December 1992. For over 14 years, he has served as President, Director and sole shareholder of Cutter Fire Brick Co., Inc. and Cutter Northern Refractories, Inc., both of which are engaged in the repair and maintenance of industrial heat enclosures. For over 24 years, Mr. Cutter has served as President, Director and sole shareholder of Cutter Ceramics, Inc., a manufacturer and distributor of art clay.
Each officer of the Company generally serves at the pleasure of the Board of Directors.
There are no family relationships among the officers and directors, and there are no present arrangements or understandings pursuant to which any of them were elected as officers or directors.
The following table sets forth the compensation paid by the Company and its subsidiaries to the Chief Executive Officer. No other executive officer whose total annual salary and bonus for the fiscal year ended June 30, 2000, 1999 or 1998 exceeded $100,000 for services in all capacities to the Company and its subsidiaries.
Summary Compensation Table (1)
Annual Long-Term
Compensation Compensation
(a) (b) (c) (g)
Name and Fiscal Securities Underlying
Principal Year Stock Options
Position Ended Salary (Number of Shares)
-----------------------------------------------------------------------------------------
Paul J. Montle 6/30/00 $ 90,000(2) 5,000,000
Chairman and 6/30/99 $124,019(3) -0-
Chief Executive 6/30/98 $183,225 290,000
Officer
(1)The Columns designated by the SEC for the reporting of certain annual compensation (including bonuses and other annual compensation) and certain long-term compensation (including awards of restricted stock, long term incentive plan payouts, and all other compensation) have been eliminated as no such bonuses, other annual compensation, awards, payouts or compensation were awarded to, earned by or paid to any specified person during any fiscal year covered by the table.
(2)All of this amount was accrued and not paid.
(3)Of this amount, only $29,673 was actually paid while the remaining $94,346 was accrued.
The following table sets forth information pertaining to stock options granted during the fiscal year ended June 30, 2000. The Company has not granted stock appreciation rights ("SAR's") of any kind.
(a) (b) (c) (d) (e)
Number of
Securities Percentage of Total
Underlying Options Granted
Options to Employees Exercise Expiration
Name Granted in Fiscal Year Price Date
--------------------------------------------------------------------------------------------
Paul J. Montle 3,000,000 60% $.033 July 1, 2009
2,000,000 40% $.05 January 1, 2010
The following table sets forth the number of securities underlying options exercisable at June 30, 2000, and the value at June 30, 2000 of exercisable in-the-money options remaining outstanding as to the Chief Executive Officer of the Company. No SAR’s of any kind have been granted.
Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year End Option Values
(a) (d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised
Options at June 30, 2000 In-the-Money Options at
(Numbers of Shares) June 30, 2000
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------------------------------
Paul J. Montle 5,591,600 200,000 (2) (2)
---------------------
(1) The Columns designated by the SEC for the reporting of the number of shares acquired on exercise, the value realized, and the number and value of unexercisable options have been eliminated as no options were exercised and no unexercisable options existed during the fiscal year covered by the table.
(2) The closing price of the Common Stock on June 30, 2000 on the NASD OTC Bulletin Board was $.0312, which was less than the exercise price of all options reported in the table.
The Company currently has no written employment contracts or other written compensation agreements with any of its current executive officers.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors, and persons who own more than 10 percent of a registered class of the Company's equity securities to file reports of ownership and changes of ownership with the Securities and Exchange Commission. Officers, directors and greater than 10 percent stockholders are required to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its discussions with certain reporting persons and its review of forms received from those persons, the Company believes that during the year ended June 30, 2000 all filing requirements applicable to the Company's officers, directors and greater than 10 percent shareholders were satisfied, except that Paul J. Montle (a director and the President of the Company) was one month late in filing a Form 4 and Roger W. Cope (a director of the Company) failed to file one Form 4, which he subsequently corrected by the filing of a Form 5.
The following table sets forth certain information as of July 19, 2000 concerning the beneficial ownership of the Common Stock (i) by each stockholder who is known by the Company to own beneficially in excess of 5% of the outstanding Common Stock; (ii) by each director; (iii) by each executive officer named in the Summary Compensation Table under "Executive Compensation," below; and (iv) by all executive officers and directors as a group. The following table does not reflect the 1-for-25 reverse stock split of the Company's Common Stock that became effective in October 2000. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of Common Stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of Common Stock.
Shares of
Common Stock Beneficially Owned (1)
Name and Address of Beneficial Owner Number Percent
Paul J. Montle 5,707,351(2) 14.27%
21 Patrick Street
Kilkenny, Co. Kilkenny
Ireland
Roger W. Cope 627,398(3) 1.83%
5663 East Nine Mile Rd.
Warren, Michigan 48901
C. Thomas Cutter 2,200(4) (5)
82 Olympia Ave.
Woburn, Massachusetts 01801
All directors and officers
as a group (three persons) 6,336,947(6) 15.84%
---------------------
(1) Includes shares of Common Stock beneficially owned pursuant to options and warrants exercisable on the July 19, 2000 or within 60 days thereafter.
(2) Includes 17,351 shares of Common Stock held by Travis Partners, G.P., a general partnership in which Mr. Montle has a 51.67% interest and a trust for the benefit of Mr. Montle's children has a 15% interest, and 5,690,000 shares of Common Stock beneficially owned pursuant to non-qualified stock options currently exercisable.
(3) Does not include 12,000 shares owned by Elizabeth Cope, Mr. Cope's wife, all such shares of which Mr. Cope disclaims beneficial ownership.
(4) Includes 200 shares directly owned, and 2,000 shares beneficially owned pursuant to stock options immediately exercisable.
(5) Less than 1%
(6) Includes 627,398 shares directly owned; 5,692,000 shares beneficially owned pursuant to stock options currently exercisable; and 17,351 shares beneficially owned indirectly through affiliated entities.
None.
(a) Documents filed as part of this report:
1. Consolidated Financial Statements:
Report of Independent Auditor .........................................................................F-1
Consolidated Balance Sheet as of June 30, 2000 ....................................................... F-2
Consolidated Income Statements for the years ended
June 30, 2000 and 1999 ............................................................................... F-3
Consolidated Statement of Stockholders' Equity for the
years ended June 30, 2000 and 1999 ....................................................................F-4
Consolidated Statements of Cash Flows for the years
ended June 30, 2000 and 1999 ......................................................................... F-5
Notes to Financial Statements ........................................................................F-6
2. Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts
None
3. Exhibits:
The following exhibits are filed with this Annual Report or are incorporated herein by reference:
Exhibit
Number... Description
4.01 Certificate of Incorporation of the Company filed December 30, 1992 is incorporated
herein by reference from the Company's (SEC File No. 33-57998-D) Form SB-2
Registration Statement filed April 29, 1993, Item 27(a), Exhibit 3.1.
4.02 Bylaws of the Company are incorporated herein by reference from the Company's (SEC
File No. 33-57998-D) Form SB-2 Registration Statement filed April 29, 1993, Item
27(a), Exhibit 3.2.
4.03 Certificate of Amendment of Certificate of Incorporation of the Company is
incorporated herein by reference from the Company's (SEC File No. 33-57998-D) Form
SB-2 Registration Statement filed April 29, 1993, Item 27(a), Exhibit 3.5..
4.04 Amendment to Certificate of Incorporation filed February 2, 1995 is incorporated
herein by reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q
for the period ended December 31, 1994, Item 6, Exhibit 3.01
4.05 Certificate of Designation, Preferences, Rights and Limitations of 12% Senior
Convertible Preferred Stock of the Company filed January 25, 1993, is incorporated
herein by reference from the Company's (SEC File No. 33-57998-D) Form SB-2
Registration Statement filed April 29, Item 27(a), Exhibit 4.1.
4.06 Certificate of Amendment of Certificate of Incorporation of the Company filed June
26, 1996 is incorporated herein by reference from the Company's (SEC File No.
0-21566) Annual Report on Form 10-K for the year ended June 30, 1996, Part IV, Item
14(c), Exhibit 4.06.
4.07 Certificate of Amendment of Certificate of Incorporation of the Company filed
October 3, 2000.
10.01 The Company's 1993 Stock Option Plan is incorporated herein by reference from the
Company's (SEC File No. 33-57998-D ) Form SB-2 Registration Statement filed April
29, 1993, Item 27(a), Exhibit 10.8.
10.02 Amendment to the Company 1993 Stock Option Plan is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
September 30, 1994, Item 6, Exhibit 10.8.
10.03 Amendment No. 2 to the Company 1993 Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the
period ended December 31, 1994, Item 6, Exhibit 10.02.
10.04 Amendment No. 3 to the Company 1993 Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the
period ended December 31, 1994, Item 6, Exhibit 10.03.
10.05 The Company's 1994 Employee Stock Purchase Plan is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
December 3, 1994, Item 6, Exhibit 10.06.
10.06 The Company's Capital Accumulation Plan is incorporated herein by reference from
the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
December 31, 1994, Item 6, Exhibit 10.07.
10.07 The Company's 1994 Stock Option Plan for Non-Employee Directors is incorporated
herein by reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q
for the period ended December 31, 1994, Item 6, Exhibit 10.08.
10.08 The Company's Fiscal 2000 Non-Qualified Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 333-87825) Registration Statement on
Form S-8 filed September 27, 1999, Exhibit 4.2.
10.09 The Company's 1999 Consultant Compensation Plan is incorporated herein by reference
from the Company's (SEC File No. 333-65761) Registration Statement on Form S-8
filed October 15, 1998, Exhibit 4.2.
10.10 Amended and Restated Agreement dated September 1, 1999 between Genesee Holdings,
Inc., successor in interest to GFL Ultra Fund, Ltd., on the one hand, and the
Company and Paul J. Montle, on the other hand, is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Annual Report on Form 10-SBK for the year
ended June 30, 1999, Part IV, Item 13(a), Exhibit 10.13.
10.11 Amendment No. 4 to the Company's 1993 Stock Option Plan.
10.12 Amendment No. 1 to the Company's 1994 Stock Option Plan for Non-Employee
Directors.
10.13 Amendment No. 2 to the Company's 1994 Stock Option Plan for Non-Employee
Directors.
27 Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no report on Form 8-K during the last quarter of its 2000 fiscal year.
To the Board of Directors and Stockholders
Eurbid.com, Inc.
(formerly LS Capital Corporation)
Houston, Texas
We have audited the accompanying consolidated balance sheet of Eurbid.com, Inc. (formerly LS Capital Corporation), as of June 30, 2000, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2000. 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.
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, the financial statements referred to above present fairly, in all material respects, the financial position of Eurbid.com, Inc. as of June 30, 2000, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2000 in conformity with generally accepted accounting principles.
MALONE & BAILEY, PLLC
Houston, Texas
October 10, 2000
F - 1
Eurbid.com, Inc.
(formerly LS Capital Corporation)
Consolidated Balance Sheet
June 30, 2000
ASSETS
Current Asset
Cash $ 9
Prepaid professional fees 17,487
-----------
Total Current Assets 17,496
-----------
Land held for resale 21,634
-----------
TOTAL ASSETS $ 39,130
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 550,602
Accrued expenses 327,182
Notes payable to affiliates 185,885
-----------
Total Current Liabilities 1,063,669
-----------
Stockholders' Equity
Preferred stock, $.01 par, 10,000,000 shares authorized,
no shares issued or outstanding -
Common stock, $.01 par, 50,000,000 shares authorized,
1,363,721 shares issued and outstanding 136,372
Paid in capital 27,468,781
Accumulated (deficit) (28,629,692)
-----------
Total Stockholders' Equity (deficit) (1,024,539)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,130
===========
See summary of significant accounting policies
and notes to financial statements.
F - 2
Eurbid.com, Inc.
(formerly LS Capital Corporation)
Consolidated Income Statements
For the Years Ended June 30, 2000 and 1999
2000 1999
--------- ---------
Sales $ 3,288
Operating Expenses
Mining exploration costs 31,786
General and administrative $ 385,171 530,973
Writedown of mining claims carrying value 50,000 184,423
Depreciation and amortization 3,407
--------- ---------
435,171 750,589
--------- ---------
Operating Loss (435,171) (747,301)
Other income and (expense)
Debt forgiveness 631,652
Gain on sale of marketable equity securities 106,448
Interest income 684
Gaming license refund 7,969
Gain (loss) on equipment disposal 8,000 ( 3,907)
--------- ---------
15,969 734,877
--------- ---------
Net (loss) $(419,202) $( 12,424)
========= =========
Net loss per common share $(.353) $(.016)
Weighted average common shares outstanding 1,188,538 765,720
See summary of significant accounting policies
and notes to financial statements.
F - 3
Eurbid.com, Inc.
(formerly LS Capital Corporation)
Statement of Stockholders' Equity
For the Years Ended June 30, 2000 and 1999
Common Stock Paid In Accumulated
Shares Amount Capital (Deficit) Totals
--------- ------- ----------- ------------ -----------
Balances,
June 30, 1998 703,921 $ 7,039 $27,075,372 $(28,198,066) $(1,115,655)
Shares issued for
- services 104,800 1,048 127,234 128,282
- debt
cancellation 60,000 600 74,400 75,000
Net (loss) ( 12,424) ( 12,424)
--------- ------- ----------- ------------ -----------
Balances,
June 30, 1999 868,721 8,687 27,277,006 (28,210,490) (924,797)
Shares issued for
- cash 104,000 1,040 37,960 39,000
- services 391,000 3,910 276,550 280,460
Net (loss) ( 419,202) ( 419,202)
--------- ------- ----------- ------------ -----------
Balances,
June 30, 2000 1,363,721 $13,637 $27,591,516 $(28,629,692) $(1,024,539)
========= ======= =========== ============ ===========
See summary of significant accounting policies
and notes to financial statements.
F - 4
Eurbid.com, Inc.
Statements of Consolidated Cash Flows
For the Years Ended June 30, 2000 and 1999
2000 1999
--------- ---------
CASH FLOWS FROM OPERATIONS
Net (loss) $(419,202) $( 12,424)
Adjustments to reconcile net deficit
to cash provided from operating activities
Depreciation and amortization 3,407
Common stock issued for services 262,973 128,282
Writedown of mining claims 50,000 184,423
Debt forgiveness income (631,652)
Gain on sale of marketable securities (106,448)
Changes in:
Receivable from affiliated parties 81,400
Accounts payable ( 35,848) 82,255
Accrued expenses 90,000 41,054
--------- ---------
NET CASH (USED BY) OPERATING ACTIVITIES ( 52,077) (229,702)
--------- ---------
CASH FLOWS (USED BY) INVESTING ACTIVITIES
Proceeds from sale of marketable securities 116,622
CASH FLOWS FROM FINANCING ACTIVITIES
Advances by affiliates 13,085 112,800
Issuance of common stock 39,000
--------- ---------
NET CASH FROM FINANCING ACTIVITIES 52,086 112,800
--------- ---------
NET INCREASE (DECREASE) IN CASH 9 ( 280)
Cash at beginning of period 0 280
--------- ---------
Cash at end of period $ 9 $ 0
========= =========
See summary of significant accounting policies
and notes to financial statements.
F - 5
Eurbid.com, Inc.
(formerly LS Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of operations. Eurbid.com, Inc. (“Company”) is a Delaware corporation formed December 30, 1992, to develop and operate casinos and related resort facilities. During the fiscal years 1997 - 1999, the Company acquired interests in gold mining claims and exploration and development of those claims. Currently, the Company has no operations. The fiscal year-end is June 30. On October 3, 2000, the shareholders approved a change in the corporate name from “LS Capital Corporation” to “Eurbid.com, Inc.” The shareholders also approved a 1 for 25 reverse stock split. The financial statements are restated to reflect this split for all periods presented.
Use of estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Consolidation. The consolidated financial statements include varying ownership interests in nine different currently inactive corporations. All significant intercompany transactions have been eliminated.
Cash and cash equivalents. For purposes of the cash flow statement, the Company considers highly liquid investments with maturities less than 90 days as cash and cash equivalents.
Income taxes are not due since the Company has had substantial losses since inception.
Reclassifications of certain prior year amounts were made to conform with the current year presentation.
Non-cash transaction. The Company purchased a mining claim in Canada for $50,000 in September 1999 with a promissory note due September 30, 2001 with interest at 8%, and an option to convert into 100,000 shares of stock.
NOTE 2 - FORGIVENESS OF DEBT
In the early 1990s, the Company incurred substantial unpaid debts in connection with its casino site exploratory activities through its various subsidiaries. The Company’s policy is to recognize as debt forgiveness income any such liabilities for which no attempt at collection has been made for more than the statute of limitations period in each state in which the debts were incurred. During the years ended June 30, 2000 and 1999, $0 and $632,000, respectively, of such liabilities were written off as forgiveness of debt income.
NOTE 3 - INCOME TAXES
Net operating losses of $3,200,000 are available as of June 30, 2000, to offset future taxable income. Of this amount, about $260,000 is restricted to about $15,000 per year, due to the Internal Revenue code Section 382 limitation relating to significant changes in ownership, which occurred in October 1996. These net operating losses expire $200,000 in 2012, $2,600,000 in 2013, and 400,000 in 2020.
F-6
Eurbid.com, Inc.
(formerly LS Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company is pursuing a claim against Full House Resorts, Inc., Allen E. Paulson, Donaldson, Lufkin & Jenrette Securities Corporation and My Dang to enforce an agreement to jointly acquire and relocate a casino to the Company’s former site in Biloxi, Mississippi in 1994. There is no remaining counter-claim against the Company. The ultimate outcome of this proceeding cannot be determined.
NOTE 5 - STOCK OPTIONS AND WARRANTS
Beginning in 1997, the Company adopted the disclosure requirements of FASB Statement 123, Accounting for Stock Based Incentive Plans. The Company has granted options pursuant to its stock option plans. Grants are made at management’s discretion, and are compensation for services. In addition, the Company issues stock warrants from time to time to employees, consultants, stockholders and creditors as additional financial incentives. The stock option plans and warrants issuances are administered by the Board of Directors of the Company, who have substantial discretion to determine which persons, amounts, time, price, exercise terms, and restrictions, if any. Both options and warrants carry certain anti-dilution provisions concerning stock dividends or splits, mergers and reorganizations. Options differ from warrants in that most of the options awards have employment termination restrictions, vesting periods and are non-transferable. In contrast, all warrants issued are immediately exercisable and are assignable.
The Company uses the intrinsic value method of calculating compensation expense, as described and recommended by Accounting Principles Board (APB) Opinion No. 25 (Accounting for Stock Issued to Employees) and permitted by FASB Statement 123. Options for 2,500,000 shares at $.0136 (100,000 at $.34, restated for the reverse stock split described in Note 1) were issued and exercised during fiscal 2000. No options or warrants were issued during fiscal 1999.
Summary information is as follows:
Weighted Weighted
Average Average
Share Share
Options Price Warrants Price
------- --------- -------- ---------
Year ended June 30, 1998:
Granted and outstanding 83,128 $ 24.50 17,392 $ 316.25
Year ended June 30, 1999:
Expired ( 8) 625.00 ( 3,120) 1,875.00
------- --------- -------- ---------
Outstanding at June 30, 1999 83,120 $24.50 14,272 153.75
Year ended June 30, 2000:
Expired ( 240) 2,317.75 ( 9,152) 25.00
------- --------- -------- ---------
Outstanding at June 30, 2000 82,880 $ 24.50 5,440 $ 34.00
======= ========= ======== =========
F-7
Eurbid.com, Inc.
(formerly LS Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - STOCK OPTIONS AND WARRANTS (continued)
Additional disclosures as of June 30, 2000 are:
Options Options Options
$6.50-18.75 $25-51 $390-3,125
----------- ------- ----------
Total options
Number of shares 76,000 6,440 440
Weighted average exercise price $11.75 $25.25 $2,711
Remaining life 5 years 7 years 4 years
Currently exercisable options
Number of shares 61,800 4,840 440
Weighted average exercise price $10.25 $6.00 $2,711
Warrants Warrants
$10-18.75 $125
--------- --------
Total warrants
Number of shares 4,240 1,200
Weighted average exercise price $11.25 $125.00
Remaining life 1 year 1 year
All warrants are currently exercisable.
Had compensation cost for the Company’s issuances of stock options and warrants been determined based on the fair value on the grant dates for awards under those plans consistent with the Black-Scholes option-pricing model suggested by FASB Statement 123, the Company’s losses and net loss per share would have been increased to the pro forma amounts indicated below:
(in thousands) 2000 1999
--------- ---------
Net loss - As reported $(419) $( 12)
- Pro forma (611) (197)
Net loss per share -As reported $( 0.35) $( 0.02)
- Pro forma $( 0.51) $( 0.26)
Variables used in the Black-Sholes option pricing model include (1) 5.5% risk-free interest rate, (2) expected option life is the actual remaining life of the options as of year-end, (3) expected volatility is the actual historical price fluctuation volatility and (4) zero expected dividends.
F-8
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, LS Capital Corporation has duly caused this annual report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: October 12, 2000
EURBID.COM, INC.
(Registrant)
| By |
/s/ Paul J. Montle ______________________________ Paul J. Montle Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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.
Name Title Date /s/ Paul J. Montle Chairman of October 12, 2000 --------------------------- Paul J. Montle the Board /s/ Roger W. Cope Director October 12, 2000 --------------------- Roger W. Cope /s/ C. Thomas Cutter Director October 12, 2000 -------------------------- C. Thomas Cutter
Exhibit
Number Description
4.01 Certificate of Incorporation of the Company filed December 30, 1992 is incorporated
herein by reference from the Company's (SEC File No. 33-57998-D) Form SB-2
Registration Statement filed April 29, 1993, Item 27(a), Exhibit 3.1.
4.02 Bylaws of the Company are incorporated herein by reference from the Company's (SEC
File No. 33-57998-D) Form SB-2 Registration Statement filed April 29, 1993, Item
27(a), Exhibit 3.2.
4.03 Certificate of Amendment of Certificate of Incorporation of the Company is
incorporated herein by reference from the Company's (SEC File No. 33-57998-D) Form
SB-2 Registration Statement filed April 29, 1993, Item 27(a), Exhibit 3.5..
4.04 Amendment to Certificate of Incorporation filed February 2, 1995 is incorporated
herein by reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q
for the period ended December 31, 1994, Item 6, Exhibit 3.01
4.05 Certificate of Designation, Preferences, Rights and Limitations of 12% Senior
Convertible Preferred Stock of the Company filed January 25, 1993, is incorporated
herein by reference from the Company's (SEC File No. 33-57998-D) Form SB-2
Registration Statement filed April 29, Item 27(a), Exhibit 4.1.
4.06 Certificate of Amendment of Certificate of Incorporation of the Company filed June
26, 1996 is incorporated herein by reference from the Company's (SEC File No.
0-21566) Annual Report on Form 10-K for the year ended June 30, 1996, Part IV, Item
14(c), Exhibit 4.06.
4.07 Certificate of Amendment of Certificate of Incorporation of the Company filed
October 3, 2000.
10.01 The Company's 1993 Stock Option Plan is incorporated herein by reference from the
Company's (SEC File No. 33-57998-D ) Form SB-2 Registration Statement filed April
29, 1993, Item 27(a), Exhibit 10.8.
10.02 Amendment to the Company 1993 Stock Option Plan is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
September 30, 1994, Item 6, Exhibit 10.8.
10.03 Amendment No. 2 to the Company 1993 Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the
period ended December 31, 1994, Item 6, Exhibit 10.02.
10.04 Amendment No. 3 to the Company 1993 Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the
period ended December 31, 1994, Item 6, Exhibit 10.03.
10.05 The Company's 1994 Employee Stock Purchase Plan is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
December 3, 1994, Item 6, Exhibit 10.06.
10.06 The Company's Capital Accumulation Plan is incorporated herein by reference from
the Company's (SEC File No. 0-21566) Report on Form 10-Q for the period ended
December 31, 1994, Item 6, Exhibit 10.07.
10.07 The Company's 1994 Stock Option Plan for Non-Employee Directors is incorporated
herein by reference from the Company's (SEC File No. 0-21566) Report on Form 10-Q
for the period ended December 31, 1994, Item 6, Exhibit 10.08.
10.08 The Company's Fiscal 2000 Non-Qualified Stock Option Plan is incorporated herein by
reference from the Company's (SEC File No. 333-87825) Registration Statement on
Form S-8 filed September 27, 1999, Exhibit 4.2.
10.09 The Company's 1999 Consultant Compensation Plan is incorporated herein by reference
from the Company's (SEC File No. 333-65761) Registration Statement on Form S-8
filed October 15, 1998, Exhibit 4.2.
10.10 Amended and Restated Agreement dated September 1, 1999 between Genesee Holdings,
Inc., successor in interest to GFL Ultra Fund, Ltd., on the one hand, and the
Company and Paul J. Montle, on the other hand, is incorporated herein by reference
from the Company's (SEC File No. 0-21566) Annual Report on Form 10-KSB for the year
ended June 30, 1999, Part IV, Item 13(a), Exhibit 10.13.
10.11 Amendment No. 4 to the Company's 1993 Stock Option Plan.
10.12 Amendment No. 1 to the Company's 1994 Stock Option Plan for Non-Employee
Directors.
10.13 Amendment No. 2 to the Company's 1994 Stock Option Plan for Non-Employee
Directors.
27 Financial Data Schedule
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