SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 ]
For the fiscal year ended September 30, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 0-22310
LASV ENTERPRISES, INC.
----------------------
(Exact name of small business issuer in its charter)
DELAWARE 33-0564327
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 201, 1736 152nd Street,Surrey,B.C.,V4A 4N4
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 541-6253
-----------------
Securities registered pursuant to Section 12(b) of the Act: None
---------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
-----------------------------
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.
YES X NO
<PAGE>
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]
State issuer's revenues for its most recent fiscal year: None
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of January 5, 2001 was $1,063,369 based on the closing
average bid and asked price of $.59.
The number of shares outstanding of the issuer's classes of Common
Stock as of January 5, 2001:
Common Stock, $.001 Par Value - 22,633,311 shares
DOCUMENTS INCORPORATED BY REFERENCE: NONE
<PAGE>
TABLE OF CONTENTS
LASV ENTERPRISES, INC.
FORM 10-KSB REPORT FOR YEAR ENDED SEPTEMBER 30, 2000
Page
Numbers
-----------
PART I
Item 1. Business 2
Item 2. Properties 4
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 4
Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 7. Financial Statements 7
F1-F
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 8
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act 8
Item 10. Executive Compensation 10
Item 11. Security Ownership of Certain Beneficial Owners
and Management 12
Item 12. Certain Relationships and Related Transactions 13
Item 13. Exhibits and Reports on Form 8-K 14
Signatures 15
1
<PAGE>
PART I
Item 1. DESCRIPTION OF BUSINESS
LASV Enterprises, Inc. (formerly Las Vegas Airlines, Inc.), a Delaware
corporation (the "Company") was incorporated as Hermaton Company on May 4, 1992.
The Company was formed for the purpose of either merging with or acquiring an
operating company with operating history and assets.
The Company acquired 51% of the common stock of Las Vegas Airlines, Inc., a
non-affiliated Nevada corporation ("LVA-Nevada") on April 28, 1998. Under the
Acquisition the Company paid $500,000 to acquire 51% of LVA-Nevada and the
rights to use the LVA-Nevada operating permit. The remaining 49% was acquired by
merger with another subsidiary, Acquisition Corp. 2500, on September 30, 1998.
LVA Nevada had been in business for over 24 years, primarily operating Navajo
aircraft in a commuter service between Las Vegas, Nevada and the Grand Canyon
and in charter operations in the area. The Company intended to continue the
Grand Canyon business, but its primary business focus is the expansion of routes
in niche markets. The first market is the U.S. Virgin Islands to be followed by
routes in Northern California and other locations to be determined. Due to a
changing regulatory climate under FAA Part 121, and the failure of an aircraft
lessee to timely deliver aircraft, the Virgin Islands expansion was indefinitely
postponed. At the same time, subsequent to year end, the Company evaluated its
Las Vegas business and determined that it was not profitable and was not likely
to become profitable in the foreseeable future. In the belief of management, the
prior owner of LVA-Nevada made several material misrepresentations to the
Company. The Company sued Donald J. Donohue, Sr. ("Donohue"), the former owner,
in Nevada state court for these misrepresentations and for embezzling cash from
LVA-Nevada. In response, on December 11, 1998, the former owner of LVA-Nevada,
and 4 other persons filed an involuntary petition for relief under Chapter 7 of
the Federal Bankruptcy Code against LVA. The petition was filed in bankruptcy
court in Las Vegas, Nevada. As a result of this filing and its effect on the
Company, it was obligated to cease operations in December 1998. Subsequently the
bankruptcy petition was dismissed. The Company has evaluated the situation and
has determined that Donohue is likely judgment proof, and has determined that
collectibility of any claim against Donohue is unlikely. In addition, the
Company has determined that the value of LVA-Nevada is nominal and any recovery
from it is unlikely, and has decided not to waste additional funds on recovery
efforts.
The Company under new management and Board of Directors, changed its name to
LASV Enterprises, Inc. (formerly Las Vegas Airlines, Inc.) The Shareholders
approved a restructuring plan proposed by the Board and proceeded to consolidate
its common shares on the basis on one new share for each preconsolidation shares
held. At this time the Company also received a new CUSIP number and Symbol.
2
<PAGE>
The Company acquired 100% of the common stock of 583354 BC, Ltd., a non-
affiliated BC incorporated company. Under the Acquisition, the Company paid 12
million 144 Restricted Shares to acquire 100% of 583354 BC Ltd. and its assets,
finalized negotiations and completed contracts and agreements. The Company
successfully completed the acquisition of the project in the Dominican Republic.
The project; Luxury Condominium and Casino Development consists of 5.4 acres of
prime ocean front property, is located at Cabarete Bay on the north shore of the
Dominican Republic, less than 10 minutes from the International Airport at the
city of Puerto Plata. The Company has concluded financial negotiations with a
Financial Group in Europe to advance the outstanding funds owed by the Company
for the Dominican Republic project. The Financial Group will hold a first
mortgage against the property until the debt is repaid. The recent appraisal
completed in August 2000, appraised the property at a market value in excess of
$8,000,000 with no consideration given to the existing Casino and Gaming License
approved for the development project.
The Company also recently signed a Letter of Intent with Rugby International
Corp. and the Union of Journalists, jointly known as Press-Loto, to become the
sole online lottery company in the lucrative niche market of private and semi
private online lottery businesses in the Russian Federation. The current
existing lottery business which nets $7,000,000 per annum will also be acquired.
The Company ceased all dealings and negotiations with SilverHawk Development
Corporation of Nevada and its associated companies after due diligence confirmed
LASV Enterprises, Inc. would not gain asset value or future revenue from the
acquisition. The resignation of Board Members related to the SilverHawk
Development Corporation acquisition were accepted by the Company. The Company
recently appointed additional notables to the board who will both actively
participate in the operational sectors of the company and their acquisitions.
The Company continues to negotiate additional acquisitions and mergers in the
travel and air route industries as well as casinos and entertainment sectors.
3
<PAGE>
Item 2. DESCRIPTION OF PROPERTY
The Company receives the use of office space on a five year lease with
comparable lease rates. The Company's corporate offices are located at Suite
201, 1736 152nd Street, B.C., Canada, V4A 4N4 telephone (604) 541 6253.
Item 3. LEGAL PROCEEDINGS
There are no legal proceedings in progress or pending at this time.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended September 30, 2000.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's Common Stock has traded minimally and it is not
considered to have an established trading market. As of September 30, 2000,
there were approximately 310 stockholders of record. Subsequent to September
30, 2000, the volume of shares traded increased to 1,380,183, in October to
2,368,518 in November and 4,347,080 in December.
4
<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS AND FINANCIAL CONDITION
General and Administrative expenses increased to $696,546 for the year ended
September 30, 2000 from $2,322 for the same period in 1999. The increase was due
primarily to the increase in acquisition activity of the Company during the
year.
On August 7, 2000, the Company announced the Dominican Republic government had
granted preliminary casino licenses with respect to the Cabarete Bay development
property. The Company also announced it had completed an agreement to acquire
SilverHawk Development Corporation, a privately held company incorporated in
Nevada. SilverHawk Development Corporation is a hotel, resort and vacation
ownership development company with developments in China, Mexico, Belize, Cook
Islands, Hawaii and Florida. Under the agreement the Company agreed to change
its name to SilverHawk International Corporation. The Company appointed the
President of SilverHawk Development, Mr. Von G. Batesole, to its Board of
Directors.
On August 14, 2000, the Company announced it had consummated the acquisition of
100% of the issued shares of SilverHawk Development Corporation. Mr. Von G.
Batesole will serve as the interim chairman of the Board of the new combined
entity.
August 15, 2000, the Company announced that in addition to Mr. Von G. Batesole,
Mr. Peter Gallic and Mr. Leonard Malcolm had been appointed to the Board of
Directors. Mr. Gallic is a financial consultant with a background in financial
consulting, project development and manufacturing. Mr. Malcolm has a background
in finance.
On August 17, 2000, the Company announced the addition of Mr. John G. Chupa to
the board of Directors. Mr. Chupa is President of Chupa & Alberti, P.C. which
specializes in intellectual property, corporate and commercial law. The firm
serves as General Counsel for SilverHawk Development Corporation.
On August 25, 2000, the Company advised its shareholders that on August 24,
2000, it filed a Notice of Late Filing concerning its second quarter 10Q Report,
due on the same date.
On September 14, 2000, the Company announced its business strategy as outlined
and approved at its last board meeting on August 28, 2000. When the pending
merger with SilverHawk Development is completed, the Company will acquire a
valuable joint venture in China with the Yunnan Tobacco Company, the largest of
China's Tobacco Companies.
On Septemebr 15, 2000, the Company announced it is in final negotiations to
acquire the Acapulco Plaza Beach Resort in Acapulco, Mexico. The Company has
finalized the terms of the merger with SilverHawk Development Corporation. LASV
Enterprises, Inc. has agreed to assume any and all liabilities of SilverHawk
Development Corporation.
5
<PAGE>
On September 19, 2000, the Company announced that in a joint venture with the
Yunnan Tobacco Company, it will spend the next twelve months opening additional
offices. The joint venture with the Yunnan Tobacco Company has the only National
Government License under the name of Shangri-La (which is currently being
changed to Sun Vacations & Exchange Company).
DISCUSSION OF SUBSEQUENT EVENTS FOR THE PERIOD OF OCTOBER 1, 2000 TO JANUARY 5,
2001
On October 2, 2000, the Company announced that SilverHawk Development
Corporation recognized the Republic of China opportunity 4 years ago when they
initiated Sun Vacation & Exchange Club. Currently SilverHawk has on "test" sales
and operation marketing operation in Kunming, China, employing 60 professionals.
During the year 2001, SilverHawk Development Corporation expects to have an
estimated 12 to 15 sales centers.
On October 4, 2000, the Company announced that SilverHawk Development
Corporation has signed an additional new joint venture contract with Southern
China Development Corporation. SilverHawk anticipates the launch of hotels and
sales operations outside China and throughout Asia during the first half of the
year 2001.
On October 25, 2000, SilverHawk announced all agreements with LASV Enterprises,
Inc. had been terminated because of differences that could not be resolved.
On October 26, 2000, the Company announced that the Attorneys for LASV
Enterprises, Inc. and the SilverHawk Development Corporations' Attorneys
strongly counseled the Company, that due to the debt situation within SilverHawk
Development Corporation, and the fact that verification of SilverHawk
Development Corporation's ownership of any hotels or resorts in Mexico, the
United States, including the widely talked about Anaheim project at the expanded
Disneyland Park, as well as the lack of verification on the hotels and resorts
in China, and being that the only verification presented by SilverHawk was an
Option Agreement regarding a hotel in Mexico and an Option Agreement on a resort
in the Cook Islands, completion of the transaction was not advisable. It was the
opinion of the company that the acquisition of SilverHawk Development
Corporation and its associated companies had no present asset value of future
revenue potential.
On October 26, 2000 the Company also announced approval from the State Secretary
of Finance in the Dominican Republic for a casino and gaming license to be
operated within the project in Cabarete Bay.The Company also announced that Von
G. Batesole and John Chupa had resigned as Directors of the Company.
On October 31, 2000, the Company announced a correction to a previous release
dated the same day; that the Company has entered into settlement negotiations
with Howell & Associates, L.L.P., a creditor, who also represents claimants
relating back to the previous Chairman, Michael O. Ison.
On November 7, 2000, the Company announced the appointment of Albert Landwehr,
Jr. to the Board of Directors.
6
<PAGE>
On November 10, 2000 the Company announced that the Company and Associated
Insiders will buy up to 1,000,000 shares over the next 30 days.
On December 12, 2000, the Company announced the appointment of Timothy Metz to
the Board of Directors.
On December 18, 2000, the Company announced the concluded financial negotiations
with a Financial Group in Europe to advance the outstanding funds owed by the
Company for the Dominican Republic project. The Financial Group will hold a
first mortgage against the property until the debt is repaid. The Company also
announced that in reference to the press release on November 10, 2000 that
purchases have been confirmed for over 550,000 shares purchased by Associates.
While the 30 days have lapsed, Associates continue to buy shares confirming the
undervaluation of the Company's share price.
On December 20, 2000 the Company announced they had signed a Letter of Intent to
acquire 100% of the common stock of Rugby International Corp., which holds the
license for the sole online lottery in the lucrative niche market of private and
semi private online lottery businesses in the Russian Federation. Rugby
International Corp. and the Union of Journalists, jointly own Press-Loto, which
will operate the lottery.
On December 28, 2000 the Company announced conclusion of final negotiations to
acquire 100% of the common shares of Alliance Financial Group, a company
concerned in the installation and operation of automated teller machines
throughout Europe. Approval for $10 million start-up capital from a US Funding
Group, headed by Texas Capital has been received. Repayment of this loan is
scheduled over a seven year period. Additionally, final negotiations are
underway to acquire 100% of the patented SmartCard Technology for integration
within the automated teller machines.
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
LASV ENTERPRISES INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Audited)
U.S. Funds
7
<PAGE>
TABLE OF CONTENTS
PAGE
AUDITOR'S REPORT F-2
BALANCE SHEET
- As at September 30, 2000, 1999 & 1998 F-3
STATEMENT OF DEFICIT
- For the years ended September 30, 2000, 1999 & 1998 F-4
STATEMENT OF OPERATIONS
- For the years ended September 30, 2000, 1999 & 1998 F-5
STATEMENT OF CASH FLOWS
- For the years ended September 30, 2000, 1999 & 1998 F-6
NOTES TO FINANCIAL STATEMENTS F-7 - F-15
F-1
<PAGE>
AUDITOR'S REPORT
To the shareholders of LASV ENTERPRISES INC.
We have audited the balance sheet of LASV Enterprises Inc. as at September 30,
2000, September 30, 1999 and September 30, 1998 and the statements of
operations, deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at September 30, 2000,
September 30, 1999 and September 30, 1998 the results of its operations and its
cash flows for the years then ended in accordance with generally accepted
accounting principles. As required by the Company Act of British Columbia, we
report that in our opinion, these principles have been applied on a basis
consistent with that of the preceding years.
COQUITLAM, B.C. PEACH GODDARD
January 05, 2001 CHARTERED ACCOUNTANTS
/s/ Peach Goddard
------------------
F-2
<PAGE>
<TABLE>
<CAPTION>
LASV ENTERPRISES LTD.
BALANCE SHEET
AS AT SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
ASSETS
2000 1999 1998
---------- --------- ----------
<S> <C> <C> <C>
CURRENT
Cash $ - $ - $ 141,599
Accounts Receivable - - 58,709
Expendable parts, at cost - - 126,313
Refundable taxes based on income - - 90,416
Refundable excise taxes - - 2,463
Deposits 556,737
Prepaid insurance - - 231,363
---------- --------- ----------
- - 1,207,600
CAPITAL ASSETS (Note 4) 2,825,000 - 37,005
---------- --------- ----------
$2,825,000 $ - $1,244,605
========== ========= ==========
LIABILITIES
CURRENT
Accounts Payable $ 73,000 $ - $ 733,512
Current portion of Long-term Debt - - 408,486
---------- --------- ----------
73,000 - 1,141,998
DUE TO SHAREHOLDERS (Note 5) 1,481,108 - 966,100
NOTE PAYABLE (Note 6) 1,950,000 - -
LONG TERM DEBT - - 7,421
---------- --------- ----------
3,504,108 - 2,115,519
---------- --------- ----------
SHAREHOLDER EQUITY (DEFICIENCY)
SHARE CAPITAL (Note 7) 238,925 221,487 170,487
DEFICIT (918,033) (221,487) (1,041,401)
---------- --------- ----------
(679,108) - (870,914)
---------- --------- ----------
$2,825,000 $ - $1,244,605
========== ========= ==========
</TABLE>
See Accompanying Notes
F-3
<PAGE>
<TABLE>
<CAPTION>
LASV ENTERPRISES INC.
STATEMENT OF DEFICIT
FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
2000 1999 1998
----------- ---------- -----------
<S> <C> <C> <C>
DEFICIT, BEGINNING OF YEAR $ 221,487 $1,041,401 $ 819,914
NET INCOME (LOSS) FOR THE YEAR 696,546 819,914 (221,487)
----------- ---------- -----------
DEFICIT, END OF YEAR $ 918,033 $ 221,487 $ 1,041,401
=========== ========== ===========
</TABLE>
See Accompanying Notes
F-4
<PAGE>
<TABLE>
<CAPTION>
LASV ENTERPRISES INC.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
2000 1999 1998
---------- --------- ---------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
---------- --------- ---------
GENERAL AND ADMINISTRATIVE EXPENSES 696,546 2,322 231,212
---------- --------- ---------
696,546 2,322 231,212
LOSS FROM CONTINUING OPERATIONS 696,546 2,322 231,212
DISCONTINUED OPERATIONS NET OF TAXES
Loss from discontinued operations - (217,106) (579,738)
Gain from transfer of assets - 450,929 -
Gain from relief of liabilities - 588,413 -
---------- --------- ---------
- 822,236 (579,738)
NET INCOME (LOSS) $ (696,546) $ 819,914 $(810,950)
========== ========= =========
INCOME (LOSS) PER SHARE - BASIC $ (0.03) $ 0.19 $ (0.22)
========== ========= =========
</TABLE>
See Accompanying Notes
F-5
<PAGE>
<TABLE>
<CAPTION>
LASV ENTERPRISES INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
2000 1999 1998
----------- ---------- ----------
<S> <C> <C> <C>
CASH RESOURCES PROVIDED BY (USED IN):
OPERATIONS
Cash flow provided by operations before
the undernoted $ (696,546) $ 819,914 $ (810,950)
Non-cash working capital 73,000 (1,039,342) (391,727)
Depreciation & Amortization - - 50,089
----------- ---------- ----------
(623,546) (219,428) (55,899)
----------- ---------- ----------
INVESTING
Purchase of capital asset (2,825,000) - -
Sale of aircraft - - 3,306
----------- ---------- ----------
(2,825,000) - 3,306
----------- ---------- ----------
FINANCING
Proceeds from debt - - 285,967
Sale of shares 17,438 51,000 131,000
Advances from shareholders 1,481,108 26,829 966,100
Note payable 1,950,000 - -
Long-term debt - - (105,617)
----------- ---------- ----------
3,448,546 257,348 78,892
----------- ---------- ----------
NET INCREASE (DECREASE) IN CASH - (141,599) 128,168
CASH POSITION AT BEGINNING OF YEAR - (141,599) 13,431
----------- ---------- ----------
CASH POSITION AT END OF YEAR $ - $ - $ 141,599
=========== ========== ==========
CASH POSITION CONSISTS OF:
Cash $ - $ 45,538 $ -
Cheques issued in excess of funds on deposit (33,311) - (4,320)
----------- ---------- ----------
$ (33,311) $ 45,538 $ (4,320)
=========== ========== ==========
Supplemental Schedule of non-cash Transactions
Shares issued for debt $ 499,423 $ - $ -
=========== ========== ==========
</TABLE>
See Accompanying Notes
F-6
<PAGE>
LASV ENTERPRISES INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
1. CONTINUED OPERATIONS
These financial statements have been prepared on the basis of accounting
principles applicable to a "going concern", which assume that the company
will continue in operation for the foreseeable future and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
The continuation of the company as a going concern is dependent upon its
ability to obtain additional financing to meet its obligations for future
development and the attainment of successful operations. The company is
currently seeking new investors to raise the needed working capital.
These financial statements do not reflect adjustments that would be
necessary if the "going concern" assumption were not appropriate because
management believes that the actions already taken or planned, as
described above, will mitigate the adverse conditions and events which
raise doubts about the validity of the "going concern" assumption used in
preparing these financial statements.
If the "going concern" assumption were not appropriate for these financial
statements, then adjustments would be necessary in the carrying values of
assets and liabilities, the reported revenues and expenses, and the
balance sheet classifications used.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared on the historical cost basis in
accordance with generally accepted accounting principles.
a) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that reflect the amounts reported in the financial statements
and accompanying notes. These estimates are based on management's best
knowledge of current events and actions that the company may undertake in
the future
F-7
<PAGE>
LASV ENTERPRISES INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
2. SIGNIFICANT ACCOUNTING POLICIES, continued
b) Foreign currency transactions
The financial statements of the company are reflected in U.S dollars. The
company uses the temporal method of accounting for foreign currency
translations, whereby monetary items are translated at the rate of
exchange in effect at the balance sheet date, non-monetary items are
translated at historical rates and revenue and expense items are
translated at the rate of exchange on the dates they occur.
c) Capital Assets
Capital Assets are recorded at cost. Amortization of buildings will begin
once construction is complete. Amortization is provided using the
declining balance method at the following rates:
Buildings 5%
Equipment 20%
Furniture & fixtures 20%
d) Loss per Share
Basic loss per share computations is based on the weighted average number
of shares outstanding during the year. Fully diluted earnings per shares
have not been disclosed, as it is anti-dilutive.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The company's financial instruments consist of accounts receivable,
cheques issued in excess of funds on deposit, accounts payable and
long-term debt. Unless otherwise noted, it is management's opinion that
the company is not exposed to significant interest, currency or credit
risks arising from the financial instruments. The fair value of these
financial instruments approximates their carrying value due to their
short-term maturity or capacity of prompt liquidation.
F-8
<PAGE>
LASV ENTERPRISES INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
4. CAPITAL ASSETS
<TABLE>
<CAPTION>
2000 1999 1998
Accumulated Net Book Net Book Net Book
Cost Amortization Value Value Value
------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Buildings $ 1,440,750 $ - $ 1,440,750 $ - $ -
Equipment 217,515 217,515 - - 37,005
Land 1,384,250 - - - -
------------- ----------- ----------- --------- ---------
$ 3,042,515 $ 217,515 $ 1,440,750 $ - $ 37,005
============= =========== =========== ========= =========
</TABLE>
5. DUE TO SHAREHOLDERS
Amounts due to shareholders are non-interest bearing and have no specific
terms of repayment. The shareholders have indicated that these amounts
need not be repaid within the next fiscal period and consequently these
have been classified as long term.
6. NOTE PAYABLE
The loan payable is non-interest bearing and has no specific terms of
repayment. The note holder has indicated that these amounts need not be
repaid within the next fiscal period and consequently these have been
classified as long term.
F-9
<PAGE>
LASV ENTERPRISES INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, 1999 & 1998
(Audited)
U.S. Funds
7. SHARE CAPITAL
Authorized
The authorized capital of the company consists of 100,000,000 Common
Shares $ .001 par value and 1,000,000 Preferred Shares $ .001 par value
Issued and Outstanding
Number Amount
---------- ----------
Balance, September 30, 1998 3,937,000 $ 170,487
Issued for cash 20,400 51,000
---------- ----------
Balance, September 30, 1999 3,957,400 221,487
Issued for cash 17,437,640 17,438
----------- ----------
Balance, September 30, 2000 21,395,040 $ 238,925
========== ==========
12. NAME CHANGE
During the year the company changed its name from Las Vegas Airlines Inc.
to LASV Enterprises Inc.
13. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates are processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. Although the change in date has
occurred, it is not possible to conclude that all aspects of the year 2000
issue that may affect the entity, including those related to customers,
suppliers, or other third parties, have been fully resolved.
F-10
<PAGE>
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On December 11, 2000 the Company appointed Peach & Goddard as the Auditors for
the Company. There were no disagreements with the former auditor, Thurman Shaw &
Co. and have parted on good terms. See Exhibit 16.1
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors and Executive Officers
--------------------------------
The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. The following are the
directors, executive officers and significant employees of the Company as of
January 5, 2001.
Name Position
---- --------
Robert Abbott President, Director
Albert Landwehr, Jr. Director
Timothy Metz Director, Secretary
Allan Davis Director, resigned October 31, 2000.
Patrick Strasburger Director, resigned October 31, 2000
Von G. Batesole Interim Chairman of the Board, Director,
resigned October 26, 2000
Gilbert Matsumoto Chief Financing Officer, Director,
resigned October 31, 2000.
Peter Gallic Director, resigned October 31, 2000
Leonard Malcolm Director, resigned October 31, 2000
John Chupa Director, resigned September 29,2000
8
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Robert Abbott, age 54, has been a director of the Company since April 2000.
From 1996 to 1999 he was Director of Operations of Fraser Downs Raceway,
supervising approximately 850 persons. In 1995 he was Promotional Special Events
Coordinator for Hastings Park Recourse and was also an Occupational Safety
Specialist for Perley Hospital/Rideau Vet's Health Center. He was Health and
Safety Coordinator for Scott Paper Ltd. from 1989 to 1994. Mr. Abbott is a
Canadian citizen.
Albert Landwehr, Jr., was elected as director in November 7, 2000.
Includes over 20 years of successful airline experience with Federal Express
Corporation as Manager of Corporate Development and Manager - Financial
Operations Analyst and Diverse Financial Management and Analytic Experience.
Experience in international transactions, gained in both large corporate,
investment banking and entrepreneurial environments. Mr. Landwehr is a U.S.
citizen.
Timothy Metz, was elected as director in December 12, 2000. The most
recent two - year project PeakSoft Multinet Corp., directed by Mr. Metz,
President, CEO and Director, enabled a hands - on, all functions, including
operations, strategic planning, administration, finance engineering, and
fulfillment of this publicly traded high tech multinet portal software company.
Mr. Metz is a U.S. citizen.
Patrick Strasburger, age 42, has been President and CEO and a director
of the Company since June 1, 2000. Mr Strasburger was employed by Continental
Airlines for the past twenty years and from 1995 to May 2000 was Managing
Director of International Operations for Continental. Mr. Strasburger is a U.S.
citizen. Resigned from the board of LASV on October 31, 2000.
Allan Davis, age 38, was elected as Chief Financial Office and Director
in May 2000. From March 1999 to the present he has been Executive Vice
President, Finance and Administration of The Whistler Group, a mobile
electronics manufacturer. He was Senior Vice President - Finance of Member
Services, Inc. from September 1996 to March 1999 and prior thereto held other
accounting positions with Member Services, Inc. since 1993. He received
bachelors' degrees in Finance and Insurance from the University of Arkansas. Mr.
Davis is a U.S. citizen. Resigned from the board of LASV on October 31, 2000.
Von G. Batesole, has been a director of the Company and chairman of the
board since August 15, 2000. Was current President and CEO of SilverHawk
Development Corporation and was appointed to the board as negotiated in the
Agreement between the Company and SilverHawk Development Corporation. Resigned
from the board on October 26, 2000.
Gilbert Matusmoto, has been a director of the Company and Chief
Financial Officer since August 28, 2000. Was also on the board of SilverHawk
Development Corporation. Resigned from the board of LASV on October 31, 2000.
9
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Peter Gallic, has been a director of the Company since August 15, 2000.
Was also on the board of SilverHawk Development Corporation. Resigned from the
board of LASV on October 31, 2000.
Leonard Malcolm, has been a director of the Company since August 15,
2000. Was also on the board of SilverHawk Development Corporation. Resigned from
the board of LASV on October 31, 2000.
John Chupa, has been a director of the Company since August 17, 2000.
Was also on the board of SilverHawk Development Corporation. Resigned form the
board of LASV on September 29, 2000. 5
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
--------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock to file with the Securities and Exchange Commission
reports of ownership and of changes in beneficial ownership of Common Stock and
other equity securities of the Company. Based on information provided to the
Company for the fiscal year ended September 30, 2000, all reports were timely
filed.
Item 10. EXECUTIVE COMPENSATION
The Company paid the following compensation to its executive officers and
directors in fiscal 2000.
Patrick Strasburger $8,000.00
20,000 common shares (unrestricted)
Allan Davis $8,000.00
Additional Directors currently receive no compensation for their duties as
directors.
10
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1992 Stock Option Plan
----------------------
The Company, by resolution of its Board of Directors and stockholders,
adopted a 1992 Stock Option Plan (the "Plan") on May 4, 1992. The Plan enables
the Company to offer an incentive based compensation system to employees,
officers and directors and to employees of companies who do business with the
Company.
In the discretion of a committee comprised of non-employee directors (the
"Committee"), directors, officers, and key employees of the Company and its
subsidiaries or employees of companies with which the Company does business
become participants in the Plan upon receiving grants in the form of stock
options or restricted stock. A total of 2,000,000 shares are authorized for
issuance under the Plan, of which 780,000 shares were granted in fiscal 1998 at
an exercise price of $2.50 per share. These options all lapsed in fiscal 1999.
The Company may increase the number of shares authorized for issuance under the
Plan or may make other material modifications to the Plan without shareholder
approval. However, no amendment may change the existing rights of any option
holder.
Any shares which are subject to an award but are not used because the terms
and conditions of the award are not met, or any shares which are used by
participants to pay all or part of the purchase price of any option may again be
used for awards under the Plan. However, shares with respect to which a stock
appreciation right has been exercised may not again be made subject to an award.
Stock options may be granted as non-qualified stock options or incentive
stock options, but incentive stock options may not be granted at a price less
than 100% of the fair market value of the stock as of the date of grant (110% as
to any 10% shareholder at the time of grant); non-qualified stock options may
not be granted at a price less than 85% of fair market value of the stock as of
the date of grant. Restricted stock may not be granted under the Plan in
connection with incentive stock options.
Stock options may be exercised during a period of time fixed by the
Committee except that no stock option may be exercised more than ten years after
the date of grant or three years after death or disability, whichever is later.
In the discretion of the Committee, payment of the purchase price for the shares
of stock acquired through the exercise of a stock option may be made in cash,
shares of the Company's Common Stock or by delivery or recourse promissory notes
or a combination of notes, cash and shares of the Company's common stock or a
combination thereof. Incentive stock options may only be issued to directors,
officers and employees of the Company.
11
<PAGE>
Stock options that may be granted under the Plan may include the right to
acquire an Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option
grant contains the AO feature and if a participant pays all or part of the
purchase price of the option with shares of the Company's common stock, then
upon exercise of the option the participant is granted an AO to purchase, at the
fair market value as of the date of the AO grant, the number of shares of common
stock the Company equal to the sum of the number of whole shares used by the
participant in payment of the purchase price and the number of whole shares, if
any, withheld by the Company as payment for withholding taxes. An AO may be
exercised between the date of grant and the date of expiration, which will be
the same as the date of expiration of the option to which the AO is related.
Stock appreciation rights and/or restricted stock may be granted in
conjunction with, or may be unrelated to stock options. A stock appreciation
right entitles a participant to receive a payment, in cash or common stock or a
combination thereof, in an amount equal to the excess of the fair market value
of the stock at the time of exercise over the fair market value as of the date
of grant. Stock appreciation rights may be exercised during a period of time
fixed by the Committee not to exceed ten years after the date of grant or three
years after death or disability, whichever is later. Restricted stock requires
the recipient to continue in service as an officer, director, employee or
consultant for a fixed period of time for ownership of the shares to vest. If
restricted shares or stock appreciation rights are issued in tandem with
options, the restricted stock or stock appreciation right is canceled upon
exercise of the option and the option will likewise terminate upon vesting of
the restricted shares.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information relating to the beneficial
ownership of Company common stock by those persons beneficially holding more
than 5% of the Company capital stock, by the Company's directors, executive
officers and significant employees and by all of the Company's directors and
executive officers as a group, as of September 30, 2000. All information
regarding shares held by persons other than executive officers and directors is
based solely upon a review of the stockholder list. The information herein gives
effect to a one-for-six reverse stock split effected in May 2000 and the
issuance of 12 million post split shares.
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Percentage
Name of Number of of Outstanding
Stockholder Shares Owned Common Stock
----------- ------------ --------------
Robert Abbott(2) -- --
Allan Davis(2)(4) 100,000 .8%
Patrick Strasburger(2)(4) 1,800,000 14.2%
Patrick Hood 1,000,000 7.9%
915 Whitby Court
Sugarland, Texas 77479
Net Interest, Inc.(3) 9,100,000 71.9%
Houston, Texas
All officers and directors as
a group (3 persons) 1,900,000 15.0%
(1) Unless otherwise noted below, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. For purposes hereof, a
person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options or the conversion of convertible
securities. Each beneficial owner's percentage ownership is determined by
assuming that any such warrants, options or convertible securities that are
held by such person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof, have been exercised.
(2) The address of this person is c/o the Company.
(3) The President and Sole Shareholder of Net Interest, Inc. is S.J. Hood.
(4) Subsequent to September 30, 2000 the Company, on December 22, 2000 returned
to the Transfer Agent the share certificates issued to Patrick Strasburger for
1,800,000 shares and Allan Davis for 100,000 shares. A combined total of
1,900,000 was returned to the Treasury.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
An officer of the Corporation has advanced certain expenses on behalf
of the Company. As of March 31, 1998 and 1999 such expenses totaled $15,188 and
$26,329.
13
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PART IV
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits of the Company are included herein.
Exhibit No. Document Description
2. Plan of acquisition, reorganization, arrangement, liquidation
or succession. *
2.1. Share Purchase Agreement, between the Registrant and David J.
Donohue, Sr.*
16.1 Auditor letter from Thurman Shaw & Co.
27.1 Financial Data Schedule
* Previously filed
14
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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 as amended to
be signed on its behalf by the undersigned, thereunto duly authorized on January
5, 2001.
LASV ENTERPRISES, INC.
By: /s/ Robert Abbott
--------------------------
Robert Abbott
President 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 on January 5, 2001.
By: /s/ Robert Abbott President and Director
----------------- (principal executive officer)
Robert Abbott
By: /s/ Albert Landwehr, Jr. Director
----------------------- (principal accounting and financial officer)
Albert Landwehr, Jr.
By: /s/ Timothy Metz Director, Secretary
----------------
Timothy Metz
15
