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 March 31, 1999
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from to
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Commission file number 0-24374
LUCAS EDUCATIONAL SYSTEMS, INC.
-------------------------------
(Exact name of small business issuer in its charter)
DELAWARE 62-1690722
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P. O. Box 789
Templeton, California 93465
---------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (805) 434-3982
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.
(1) YES X NO (2) YES X NO
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. [ ]
State issuer's revenues for its most recent fiscal year: $0.00.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.
July 1, 1999 - $1,022,154. There are approximately 4,088,619 shares
of common voting stock of the Registrant held by non-affiliates. During the
past two years, there has been no "established public market" for shares of
common voting stock of the Registrant. This valuation is based upon the
average bid price for shares of common stock of the Registrant on the OTC
Bulletin Board of the NASD on such date.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
N/A
(APPLICABLE ONLY TO CORPORATE ISSUERS)
The number of shares outstanding of the issuer's classes of common stock
as of July 1, 1999:
Common Stock, $0.001 Par Value - 12,908,619 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Part III, Item 13.
Transitional Small Business Issuer Format Yes X No
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<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
- ---------------------
The Registrant was incorporated under the laws of the State of Delaware
on June 11, 1992, under the name "Mirador Equity Partners, Ltd." It had no
business operations until its acquisition of Lucas Educational Systems, Inc.,
a Nevada corporation ("Lucas Nevada"), which is currently a wholly-owned
subsidiary.
Effective November 5, 1997, Mirador Equity Partners, Ltd.(the
"Company"), effected a 4.357 for one forward split of its outstanding voting
securities, while retaining the authorized capital and par value, with
appropriate adjustments in the stated capital and capital surplus accounts of
the Company. This forward split was reflected in an amendment to the Articles
of Incorporation of the Company of such date, and in which the name of the
Company was changed from "Mirador Equity Partners, Ltd." to "Lucas Educational
Systems, Inc." A copy of the Articles of Amendment respecting these changes
was attached to the 8-K Current Report of the Company dated November 11, 1997,
which has been previously filed with the Securities and Exchange Commission
and which is incorporated herein by reference. See Part III, Item 13.
Pursuant to an Agreement and Plan of Reorganization dated
November 7, 1997 (the "Plan"), between the Company; Lucas Nevada; and Jerry R.
Lucas, Cheryl W. Lucas and William R. Murray, the stockholders of Lucas Nevada
(sometimes collectively called the "Lucas Nevada Stockholders"), the Lucas
Nevada Stockholders became the controlling stockholders of the Company in a
transaction viewed as a reverse acquisition, and Lucas Nevada became a
wholly-owned subsidiary of the Company. The Plan was treated as a
recapitalization of Lucas Nevada for accounting purposes, and the effective
date of the Plan was November 11, 1997. For further information, see the 8-K
Current Report of the Company dated November 11, 1997. See Part III, Item 13.
Business.
- ---------
The Company, through its wholly-owned Nevada subsidiary, Lucas Nevada,
was formed to develop, produce and market the extraordinary learning and
memory techniques and related products that have been developed by Mr. Lucas
over the past 30 years. These techniques enable anyone to learn, memorize and
retain any subject matter more thoroughly and effectively than using
traditional repetition-based methods of learning and memorization. The Lucas
Learning System makes learning fun again. It is based on visual-reinforced
association, which is how children learn before they are able to read.
Because of its extraordinary effectiveness in creating an ability to retain
information, Mr. Lucas has trademarked the following phrase to describe his
system: "Learning that lasts".
Mr. Lucas' vision for the Company is to change the way people learn
"Making a difference in people's lives." The premise of The Lucas Learning
System is that memory requires that something be "registered" in the mind and
that it is much easier for a picture of something tangible to register than an
intangible concept, word or phrase.
The Company's products not only teach an extraordinarily effective way
of learning, but they also apply the technique to specific subject matter,
maximizing the learning process and minimizing the effort required by the user
to acquire knowledge. Numerous religious and educational leaders, as well as
seminar attendees, have endorsed the Company's technique and products.
Mr. Lucas has experience with direct marketing of his products using
television appearances and spot commercials. Direct marketing typically
provides a higher percentage of revenues to the Company. Consequently, based
on the success realized previously by Mr. Lucas and the broad potential appeal
of these products, the Company intends to sell its products, at least
initially, directly to consumers. Methods used to reach consumers will likely
include: QVC shopping network; talk shows; direct mail; internet web sites;
and joint ventures. The Company believes that after consumers realize the
worth of their original purchase, they will order additional non-advertised
products.
The Company proposes to fund the production of the Company's "Bible
Memory" video series and "Ready, Set, Remember" children's products; produce
and pay for television spots in selected markets and enable Mr. Lucas to
obtain guest appearances on talk shows, develop a relationship with QVC and
pursue contacts who have expressed interest in working with Mr. Lucas to
develop the Company. It is anticipated that this activity will create
awareness of and demand for additional products, and warrant marketing through
additional channels, which may require further funding.
The potential markets include: parents who want to make learning easier
and enjoyable for their children; people of all ages who want to memorize
Biblical verses and facts; business people who want to remember names and
faces; students who want to study effectively and retain that knowledge for
college entrance exams; students and others who want to learn and retain
grammar rules; students and others who want to learn foreign languages or
foreign students who want to learn English; and, everyone who wants learning
to be easier and long-lasting.
Principal Products or Services and their Markets.
- -------------------------------------------------
The Company produces, markets and distributes proprietary learning and
memory techniques and related products developed by ex-NBA legend Jerry Lucas,
who currently serves as the President and a director of the Company, and who,
with his wife, Cheryl W. Lucas, are the principal and controlling stock
holders of the Company.
The products have universal appeal for easier learning and lasting
memory. Because of this and the fact that the Company's learning and
memorization techniques can be applied to any field of study, the market for
the Company's products is vast. See the heading "Business," above.
Competition.
- ------------
Although there are various persons and entities engaged in similar
endeavors, management believes there is no direct competition with the Company
due to the unique nature of the proprietary learning and memory techniques and
related products developed by Mr. Lucas.
Sources and Availability of Raw Materials.
- ------------------------------------------
None, not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts.
- ----------------
Mr. Lucas has granted a 99 year license to use the technique for a
variety of products, many complete, but several more in various stages of
design and development. The Company also intends to design and develop
additional products. The Company's current and future products are and will
be protected by copyrights. A copy of this Licensing and Royalty Agreement
was attached to the 8-K Current Report dated November 11, 1997, and is
incorporated herein by reference. See Part III, Item 13.
Governmental Approval of Principal Products or Services.
- --------------------------------------------------------
None, not applicable.
Effects of Existing or Probable Governmental Regulations.
- ---------------------------------------------------------
The Company is subject to Regulation 14A of the Securities and Exchange
Commission, which regulates proxy solicitations. Section 14(a) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), requires all
companies with securities registered pursuant to Section 12(g) thereof to
comply with the rules and regulations of the Securities and Exchange
Commission regarding proxy solicitations, as outlined in Regulation 14A.
Matters submitted to stockholders of the Company at a special or annual
meeting thereof or pursuant to written consent will require the Company to
provide its stockholders with the information outlined in Schedules 14A or 14C
of Regulation 14; preliminary copies of this information must be submitted to
the Securities and Exchange Commission at least 10 days prior to the date
that definitive copies of this information are forwarded to stockholders.
The Company is also required to file annual reports on Form 10-KSB
and quarterly reports on Form 10-QSB with the Securities and Exchange
Commission on a regular basis, and will be required to timely disclose certain
material events (e.g., changes in corporate control; acquisitions or
dispositions of a significant amount of assets other than in the ordinary
course of business; and bankruptcy) in a Current Report on Form 8-K.
Management believes that these obligations will increase the Company's
annual legal and accounting costs, but it is expected that assets will be
sufficient to meet these costs; in the event that assets are not sufficient,
it is likely that management will advance funds or that funds will be raised
through the limited offering of the Company's securities to "accredited
investors." See the heading "Plan of Operation" of the caption "Management's
Discussion and Analysis or Plan of Operation," Part I, Item 2.
Cost and Effect of Compliance with Environmental Laws.
- ------------------------------------------------------
None; not applicable.
Research and Development Expenses.
- ----------------------------------
None; not applicable.
Number of Employees.
- --------------------
The Company currently has six employees.
Item 2. Description of Property.
------------------------
The Company currently maintains its corporate headquarters in
Templeton, California, in approximately 5,000 square feet of leased office
and warehouse space, at a monthly lease price of $3,000 per month. This
property is leased from Cheryl W. Lucas, the Treasurer and a director of the
Company; however, management believes that the terms of this lease are no less
favorable than could have been obtained from non-affiliated parties. For
additional information respecting this lease, see the Notes of the financial
statements of the Company accompanying this Report. See Item 7 for a complete
description of the financial statements included herein.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. No
federal, state or local governmental agency is presently contemplating any
proceeding against the Company. No director, executive officer or affiliate
of the Company or owner of record or beneficially of more than five percent of
the Company's common stock is a party adverse to the Company or has a material
interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was been submitted to a meeting of the stockholders during the
preceding fiscal year.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
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Market Information
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There has only been a "public market" for shares of the Company's
common stock since the first quarter of 1998. On or about February 3, 1998,
the Company obtained a listing on the OTC Bulletin Board of the NASD under the
trading symbol "LEDS." This is not an "established trading market."
The range of high and low bid quotations for the Company's
common stock during the quarters ended March 31, June 30, September 30, 1998,
and March 31, 1999 is shown below. Prices are inter-dealer quotations as
reported by the NASD and do not necessarily reflect transactions, retail
markups, mark downs or commissions.
<TABLE>
<CAPTION>
STOCK QUOTATIONS*
BID
Quarter ended: High Low
- -------------- ---- ---
<S> <C> <C>
March 31, 1998 7.125 .375
June 30, 1998 7.3125 5.125
September 30, 1998 5.25 1.50
December 31, 1998 2.125 .6875
March 31, 1999 1.10 .5625
</TABLE>
Holders
- -------
The number of record holders of the Company's common stock as of
July 1, 1999, was approximately 138.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its
common stock, and does not intend to declare dividends in the foreseeable
future. The present intention of management is to utilize all available funds
for the development of the Company's current and intended business operations.
There are no material restrictions limiting, or that are likely to limit,
the Company's ability to pay dividends on its common stock.
Recent Sales of Unregistered Securities.
- ----------------------------------------
The following table outlines all sales of "restricted securities" by the
Company during the past three years.
Name Date Number of Shares
Jerry R. & Cheryl W. Lucas 11/5/97 8,500,000(1)
William R. Murray 11/5/97 200,000(1)
David E. Nelson 2/24/98 25,000(2)
Smith Consulting Services, Inc., 2/24/98 400,000(3)
a Utah corporation, ("SCS") 5/15/98 400,000(3)
Kim W. Boyce 2/25/98 100,000(4)
8/4/98 30,000(5)
Cooperative Holding Corp. 8/18/98 5,000(5)
Gale C Leetzow, Trustee, Gale C. 8/17/98 25,000(5)
Leetzow & Associates. Emp. Plan 8/17/98 5,000(5)
and Trust
Michael M. Rammell & Jane Rammell 8/12/98 25,000(5)
Revocable Family Trust
Gale C. Leetzow Inter Vivos Trust
dated July 20, 1988 2/18/99 15,000(6)
Delaware Charter Trustee FBO
Lester E. Taylor Jr. SEP/IRA 2/18/99 120,000(6)
Lester E. Taylor Jr. and Diane
M. Taylor Trustees for the Taylor
Family Trust 2/18/99 40,000(6)
Charles Schwab & Co. Inc. FBO
Donald Curtis Streelman IRA 2/18/99 200,000(6)
Gerald James Collins 2/18/99 40,000(6)
Golden West Partners 2/18/99 40,000(6)
1) These shares were issued under the Plan with Lucas Nevada. See the
heading "Business Development," Part I, Item 1.
2) David E. Nelson's shares were issued for services rendered as Chief
Financial Officer of the Company.
3) The principal stockholder of SCS is Karl S. Smith. These
shares were issued for $380,000 advanced to the Company.
See Part III, Item 11.
4) These shares were issued for cash at $2.00 per share.
5) These shares were purchased for cash at $2.00 per share. Mr. Boyce
converted a convertible note payable from the Company in this amount
on this date. These funds were loaned to the Company on June 4,
1998.
6) These shares were purchased for $.50 per share.
All of these securities were sold to persons who were deemed to have been
"accredited investors," or "sophisticated person," who by reason of
educations, experience, business acumen or other factors, were believed to be
capable of evaluating the risks and merits of an investment in the Company.
Future sales of these securities pursuant to Rule 144 of the Securities
and Exchange Commission following the one year holding period from the
respective dates of sale outlined above could have an adverse effect on any
market which develops for the Company's securities.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
The Company plans to market its many and various products over the next
twelve months through direct and indirect marketing channels. It currently
has a website in place and operational known as "jerrylucas.com." This site
explains the Lucas Learning System(TM) and the Company's various products. As
the products are produced, they will also be sold via this website.
The Company is also currently developing interactive CD educational
products that will also be marketed in the next twelve month period. We also
plan on developing educational video games based on the Lucas Learning
System(TM) over the next twelve months to take advantage of the huge video
game market.
The Company plans to satisfy its cash requirements to accomplish its
objectives by raising additional capital either in equity or debt financing
over the next twelve months.
Results of Operations.
- ----------------------
Revenues for the fiscal years ending March 31, 1998 and 1999,
were $0, and $0, respectively.
The Company had a net loss of ($1,246,753) from inception through the
year ended March 31, 1999; and a net loss of ($895,509) for the year ended
March 31, 1999. General and Administrative expenses for fiscal 1999, were
$893,394; and $351,181 for fiscal 1998. The Company was inactive from March
31, 1997 until November 11, 1997, when it completed the acquisition of all of
the outstanding securities of Lucas Nevada.
Liquidity.
- ----------
From inception through the year ended March 31, 1999, the Company and had
total expenses of $1,246,753, while receiving $0 in revenues; the Company
received $0 in revenues, with total expenses of $895,509 during the fiscal
year ended March 31, 1999.
The Company had $89,546 in cash on March 31, 1999, with total current
assets of $98,556, against current liabilities of $23,438.
The Company received $416,225 from the sale of "restricted securities"
during fiscal 1998, and an additional $407,500 from the sale of "restricted
securities" during fiscal 1999. Also, during fiscal 1999, $300,000 in debts
and other payables and $258,125 in services were paid by the issuance of
"restricted securities."
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Financial Statements for the years ended
March 31, 1999 and 1998
Independent Auditor's Report
Consolidated Balance Sheets - March 31, 1999 and 1998
Consolidated Statements of Operations from inception
on December 5, 1996 to March 31, 1999
and the years ended March 31, 1999 and 1998
Consolidated Statements of Stockholders' Equity (Deficit)
from inception on December 5, 1996 through March 31, 1999
Consolidated Statements of Cash Flows from inception
on December 5, 1996 through March 31, 1999
and the years ended March 31, 1999 and 1998
Notes to Consolidated Financial Statements
<PAGE>
LUCAS EDUCATIONAL SYSTEMS, INC.
Consolidated Financial Statements
March 31, 1999 and 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Stockholders of Lucas Educational Systems, Inc.
We have audited the accompanying consolidated balance sheet of Lucas
Educational Systems, Inc. and Subsidiary, (a development stage company) as of
March 31, 1999 and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended and the
cumulative amounts since December 5, 1996 (date of commencement of
development stage). These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit. The
consolidated financial statements of Lucas Educational Systems, Inc. as of
March 31, 1998, were audited by other auditors whose report dated August 4,
1998, expressed an unqualified opinion on those statements.
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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Lucas
Educational Systems, Inc. and Subsidiary, as of March 31, 1999, and the
results of its operations and cash flows for the year then ended and the
cumulative amounts since December 5, 1996 (date of commencement of development
stage), in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As described in
Note 1, the Company is a development stage company with no significant
operating revenues to date and has a significant accumulated deficit. These
circumstances raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to this matter are also described in
note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/Tanner & Co.
Salt Lake City, Utah
June 28, 1999
<TABLE>
Lucas Educational Systems, Inc. and Subsidiary
Consolidated Balance Sheet
March 31,
Assets 1999 1998
<S> <C> <C>
Current assets:
Cash $89,546 $37,191
Related party receivables 3,400 -
Inventory 5,610 5,610
Total current assets 98,556 42,801
Property and equipment, net 60,144 75,219
Deposits - 3,000
$158,700 $121,020
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $11,438 $46,036
Accrued liabilities - 9,863
Related party notes payable 12,000 -
Total current liabilities 23,438 55,899
Commitments - -
Stockholders' equity:
Common stock authorized
20,000,000 shares at $0.001
par value; 12,453,619 shares
and 11,243,619 shares issued
and outstanding, respectively 12,454 11,244
Additional paid-in capital 1,476,436 405,146
Unearned compensation (106,875) -
Stock subscription receivable - (25)
Accumulated deficit (1,246,753) (351,244)
Total stockholders'
equity 135,262 65,121
Total liabilities and
stockholders' equity $158,700 $121,020
</TABLE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Operations
Years Ended March 31, 1999 and 1998 and Cumulative Amounts
Since December 5,1996 (Date of Commencement of Development Stage)
<CAPTION>
Cumulative
1999 1998 Amounts
<S> <C> <C> <C>
Revenue $ - $ - $ -
General and administrative expenses 893,394 351,181 1,244,638
Net loss from operations (893,394) (351,181) (1,244,638)
Other income (expense):
Interest expense (2,115) - (2,115)
Net loss before provision for
income taxes (895,509) (351,181) (1,246,753)
Provision for income taxes - - -
Netloss $ (895,509) $(351,181) $(1,246,753)
Net loss per common share -
basic and fully diluted $ (.08) $ (.04) $ (.10)
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC.
(Formerly Mirador Equity Partners, Ltd.)
(A Development Stage Company)
Statements of Stockholders Equity
From Inception on December 5, 1996 through March 31, 1999
<CAPTION>
Additional
Paid-In
Treasury stock Common Stock Capital
Shares Amount Shares Stock (Deficit)
<S> <C> <C> <C> <C> <C>
Inception at December 5, 1996 - - - $ - $ -
Issuance of common stock at
$0.00125 per share - - 8,700,000 8,700 (8,600)
Net loss from inception on
December 6, 1996 through
March 31, 1997 - - - - -
Balance, March 31, 1997 - - 8,700,000 8,700 (8,600)
Common stock issued in
recapitalization - - 1,849,869 1,850 (1,810)
Common stock issued for
cash and services of
$0.60 per share - - 192,000 192 114,808
Common stock issued for debt
at $0.60 per share - - 333,000 333 199,667
Common stock issued for
services at $0.60 per share - - 168,750 169 101,081
Net loss for the year
ended March 31, 1998 - - - - -
Balance, March 31, 1998 - - 11,243,619 $11,244$405,146
Proceeds from stock subscription - - - - -
receivable
Common stock issued for
cash - - 90,000 90 179,910
debt and other payables - - 400,000 400 299,600
Services - - 720,000 720 364,280
Contributed shares 455,500 - - - -
Treasury stock
issued for cash (455,500) - - - 227,500
Net Loss - - - - -
Balance, March 31, 1999 - - 12,453,619 12,454 1,476,436
</TABLE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC.
(Formerly Mirador Equity Partners, Ltd.)
(A Development Stage Company)
Statements of Stockholders Equity
From Inception on December 5, 1996 through March 31, 1999
<CAPTION>
Unearned Stock Sub-
Compen- scription Accumulated
sation Receivable Deficit Total
<S> <C> <C> <C> <C>
Inception at December 5, 1996 $ - $ - $ - $ -
Issuance of common stock at
$0.00125 per share - - - 100
Net loss from inception on
December 6, 1996 through
March 31, 1997 - - (63) (63)
Balance, March 31, 1997 - - (63) 37
Common stock issued in
recapitalization - - - 40
Common stock issued for
cash and services of
$0.60 per share - (25) - 114,975
Common stock issued for debt
at $0.60 per share - - - 200,000
Common stock issued for
services at $0.60 per services - - - 101,250
Net loss for the year
ended March 31, 1998 - - (351,181) (351,181)
Balance, March 31, 1998 - $(25)(351,244) 65,121
Proceeds from stock subscription
receivable - 25 - 25
Common stock issued for
cash - - - 180,000
debt and other payables - - - 300,000
Services (106,875) - - 258,125
Contributed shares - - - -
Treasury stock
issued for cash - - - 227,500
Net Loss - - (895,509) (895,509)
Balance, March 31, 1999 (106,875) -(1,246,753) 135,262
</TABLE>
<TABLE>
LUCAS EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Cash Flows
Years Ended March 31,1999 and 1998
and Cumulative Amounts Since December 5,1996,
(Date of Commencement of Development Stage)
<CAPTION>
Cumulative
1999 1998 Amounts
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(895,509) $(351,181) $(1,246,753)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation and amortization 21,903 5,750 27,653
Common stock issued for
services and payables 506,997 116,225 374,350
Common stock issued for debt - 200,000 200,000
(increase) decrease in:
Inventory - (5,610) (5,610)
Related party receivables (3,400) - (3,400)
Deposits 3,000 (3,000) -
Increase (decrease) in:
Accounts payable 1,530 46,036 296,438
Accrued liabilities (9,863) 9,863 -
Net cash (used in) provided by
operating activities (375,342) 18,083 (357,322)
Cash flows from investing activities
purchase of property and equipment (6,828) (80,969) (87,797)
Cash flows from financing activities:
Proceeds from related party
notes payable 33,500 - 33,500
Payments on related party notes
payable (6,500) - (6,500)
Issuance of common stock 407,500 100,040 507,640
Proceeds from stock subscription
receivable 25 - 25
Net cash provided by
financing activities 434,525 100,040 534,665
Net increase in cash 52,355 37,154 89,546
Cash, beginning of period 37,191 37 -
Cash, end of period $ 89,546 $ 37,191 $ 89,546
</TABLE>
See accompanying notes to consolidated financial statements.
LUCAS EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARY (A Development Stage Company)
Notes to Consolidated Financial Statements
March 31, 1999 and 1998
1 Summary OF Business and Significant Accounting Policies
(a) Organization
The Company was incorporated in the state of Delaware on June 11, 1992
under the name Mirador Equity Partners, Ltd. On November 30, 1997, Mirador
Equity Partners, Ltd. changed its name to Lucas Educational Systems, Inc. in
conjunction with the merger with Lucas Educational Systems, Inc. (LEDS). The
Company distributes memory aides for the Bible, English grammar and Spanish.
Prior to the acquisition of Lucas Educational Systems, Inc., the Company had
been seeking to merge with an existing, operating company.
On November 7, 1997, the Company and LEDS completed an Agreement and Plan
of Reorganization whereby the Company issued 8,700,000 shares of its common
stock in exchange for all of the outstanding common stock of LEDS. Immediately
prior to the Agreement and Plan of Reorganization, the Company had 1,849,869
post-split shares of common stock issued and outstanding.
The acquisition was accounted for as a recapitalization of LEDS because
the shareholders of LEDS controlled the Company after the acquisition.
Therefore, LEDS is treated as the acquiring entity. There was no adjustment to
the carrying value of the assets or liabilities of LEDS in the exchange. The
Company is the acquiring entity for legal purposes and LEDS is the surviving
entity for accounting purposes. On November 5, 1997, the shareholder of the
Company authorized a forward stock split of 1-for-4.357 shares of common
stock. All references to shares of common stock have been retroactively
restated to reflect the forward stock split.
(b) Principles of Consolidation
The consolidated financial statements include the financial statements
of the Company and its subsidiary. All significant intercompany balances and
transactions have been eliminated.
(c) Development Stage Company
Effective December 5,1996, the Company is considered a development stage
company as defined in SFAS No. 7. 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.
(d) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments with an original maturity of three months or
less to be cash equivalents.
(e) Inventory
Continued Inventory consists of books held for resale and are stated at
the lower of cost or market. Cost is determined by the first-in, first-out
(FIFO) method.
(f) Property and Equipment
Property and equipment is stated at cost. Depreciation and amortization
are computed using the straight-line method over estimated usefu1 lives which
range from 3 to 5 years.
(g) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(h) Income Taxes
Deferred income taxes are provided in amounts sufficient to give effect
to temporary differences between financial and tax reporting.
(i) Earnings Per Share
The computation of basic earnings per common share is based on the
weighted average number of shares outstanding during each year.
The computation of diluted earnings per common share is based on the
weighted average number of shares outstanding during the year plus
the common stock equivalents, which would arise from the exercise of
stock options and warrants outstanding using the treasury stock method
and the average market price per share during the year. Common stock
equivalents are not included in the diluted earnings per share
calculation when their effect is antidilutive.
(j) Going Concern
The Company's financial statements are prepared using generally
and accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. The Company has not established revenues
sufficient to cover its operating costs and allow it to continue as a going
concern. The Company is developing a marketing program for its educational
products. In the interim, management has committed to covering all operating
and other costs.
2. Property
Property and equipment consist of the following at March 31:
1999 1998
Furniture and fixtures $ 1,931 $ 1,931
Leasehold improvements 11,070 11,070
Vehicles 37,382 37,382
Master videos 13,577 13,577
Computer equipment 23,837 17,009
87,797 80,969
Accumulated depreciations and
amortization (27,653) (5,750)
$ 60,144 $ 75,219
3. Related Party Notes Payable
At March 31, 1999 and 1998, related party notes payable consists of an
unsecured, past due note payable to a shareholder with interest at 10% Payable
totaling $3,500 and $-0-, respectively, and an unsecured, non-interest
bearing, demand note payable to a shareholder totaling $7,500 and $-0-,
respectively.
4. Income Taxes
The benefit for income taxes is different than amounts which would be
provided by applying the statutory federal income tax rate to loss before
provision for income taxes for the following reasons:
Year Ended
March 31,
Cumulative
1999 1998 Amounts
Income tax benefit at
statutory rate $ 305,000 $ 119,000 $ 424,000
Change in valuation
allowance (305,000) (119,000) (424,000)
$ - $ - $ -
Deferred tax assets are comprised of the following:
March 31,
1999 1998
Operating loss carryforwards $ 424,000 $ 119,000
Valuation allowance (424,000) (119,000)
At March 31, 1999, the Company had net operating loss carryforwards of
approximately $1,247,000 available to offset future taxable income which begin
to expire in 2017. The amount of loss which may be used each year is limited
based on several factors which include changes in Company ownership, the fair
value of the Company and the federal discount rate.
No deferred tax assets have been provided for the tax benefits of loss
carryforwards due to uncertainty concerning their ultimate realization.
5. Other Related Party Transactions
Related party receivables consist of amounts due from employees
totaling $3,500 and $-0-, respectively at March 31, 1999 and 1998. As of March
31, 1999 and 1998 accounts payable included $-0- and $1,368, respectively, due
to a shareholder.
6. Supplemental Cash Flow Information
During the year ended March 31, 1999, the Company increased
additional paid-in capital and unearned compensation by $106,875 as part of an
employment contract.
During the year ended March 31, 1999, the Company reduced related party
note payable and accounts payable in the amount of $51,128 in exchange for
common stock.
Actual amounts paid for interest and income taxes are as follows:
Years Ended
March 31,
1999 1998
Interest $ 2,115 $ -
Income taxes $ - $ -
7. Commitments
(a) Operating Lease Obligation
The Company leases certain office and warehouse space from a shareholder,
under noncancellable operating lease agreements. Future minimum lease payments
required under operating leases are as follows:
Year Amount
2000 $ 36,000
2001 36,000
$ 72,000
Rental expense for the years ended March 31, 1999 and 1998 related to
these operating leases was approximately $36,500 and $33,000, respectively.
(b) Licensing and Royalty Agreement
On August 13, 1997, the Company entered into an agreement with Jerry and
Cheryl Lucas for rights to use the copyright, trademark, patents and name of
the Company. Revenues produced form these activities will be 8% of the gross
receipts. Jerry and Cheryl Lucas also have rights to purchase inventory of the
Company at cost plus 10%. The term of the agreement is 99 years.
(c) Employment Agreement
Effective November 1, 1998, the Company entered into an employment
agreement with an officer which expires November 1, 2000. The agreement
provides for a minimum monthly salary of $2,500. In addition, the Company
issued 120,000 shares of common stock vesting at 5,000 per month as well as
options to purchase 25,000 shares of common stock at an exercise price of
$1.50, after the officer has been employed for a period of two years.
8. Stock Options and Warrants
The Company has a stock option plan (the Option Plan), which allows
a maximum of options to be granted to purchase common stock at prices
generally not less than the fair market value of common stock at the date of
grant. Under the Option Plan, grants of options may be made to selected
officers and key employees without regard to any performance measures. The
options may be immediately exercisable or may vest over time as determined by
the Board of Directors. However, the maximum term of an option may not exceed
five years.
Information regarding the stock options is summarized below:
Weighted
Average
Number of Exercise
Options Price
Outstanding at April 1, 1997 - $ -
Granted 25,000 .001
Exercised (25,000) .001
Forfeited
Outstanding at March 31, 1998 - -
Granted 625,000 .43
Exercised 600,000 .38
Forfeited - -
Outstanding at March 31, 1999 25,000 $ 1.50
The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation expense has been recognized for
stock options granted to employees. Had compensation expense for the Company's
stock options been determined based on the fair value at the grant date for
awards in 1999 and 1998, consistent with the provisions of SFAS No. 123, the
Company's results of operations would have been reduced to the proforma
amounts indicated below:
Years Ended
March 31, Cumulative
1999 1998 Amounts
Net loss - as reported $(895,509) $(351,181) $(1,244,753)
Net loss - pro forma $(895,509) $(351,181) $(1,244,753)
Loss per share - as reported $ (.08) $ (.04) $ (.10)
Loss per share - proforma $ (.08) $ (.04) $ (.10)
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
March 31,
1999
Expected dividend yield $ -
Expected stock price volatility 109%
Risk-free interest rate 5.0%
Expected life of options 2 years
The weighted average fair value of options granted during 1999 and 1998
are $.66 and $-0-, respectively.
The following table summarizes information about stock options and
warrants outstanding at March 31, 1999:
Outstanding Exercisable
Weighted
Average
Number Remaining Weighted Number Weighted
Outstanding Contractual Average Exercisable Average
Exercise at Life Exercise at Exercise
Price 3/31/99 (Years) Price 3/31/99 Price
$1.50 25,000 2.00 $ - $ -
9. Earnings Per Share
Financial accounting standards require companies to present basic
earnings per share (EPS) and diluted earnings per share along with additional
informational disclosures. Information related to earnings per share is as
follows:
Years Ended
March 31, Cumulative
1999 1998 Amounts
Basic and Diluted EPS:
Net loss available to common
stockholders $ (895,509) $ (351,181) $(1,246,753)
Weighted average common 11,975,000 9,972,000 11,482,000
Net loss per share $ (.08) $ (.04) $ (.10)
10. Fair Value of Financial Instruments
None of the Company's financial instruments are held for trading
purposes. The Company estimates that the fair value of all financial
instruments at March 31, 1999, does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
balance sheet. The estimated fair value amounts have been determined by the
Company using available market information and appropriate valuation
methodologies. Considerable judgement is necessarily required in interpreting
market data to develop the estimates of fair value, and, accordingly, the
estimates are not necessarily indicative of the amount that the Company could
realize in a current market exchange.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
Effective June 28, 1999, the Company selected Tanner & Co., Certified
Public Accountants of Salt Lake City, Utah, to audit the Company's financial
statements for the year ended March 31, 1999. Jones Jenson & Company,
Certified Public Accountants of Salt Lake City, Utah, audited the financial
statements of the Company for the years ended March 31, 1998 and 1997, and
which accompanied the Company's 10-KSB Annual Report for the year ended March
31, 1998.
There were no disagreements with the former accountants on any matter of
accounting principles and practices, financial statement disclosure or
auditing scope or procedure.
An 8-K Current Report dated June 28, 1999, respecting this change in
accountants has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. See Part III, Item 13.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of stockholders or until their successors are elected or
appointed and qualified, or their prior resignations or terminations.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
<S> <C> <C> <C>
Jerry R. Lucas President 11/25/96 *
Director 11/25/96 *
Cheryl W. Lucas Secretary/ 11/25/96 3/5/98
Treasurer 11/25/96 *
Director 11/25/96 *
William R. Murray Vice President 11/25/96 *
David E. Nelson CFO 1/28/98 *
Secretary 3/6/98 *
William A. Husa Chief Operating
Officer 11/1/98 *
</TABLE>
* These persons presently serves in the capacities indicated.
Business Experience.
- --------------------
Jerry R. Lucas. President and Director, age 58. Mr. Lucas was Phi
Beta Kappa graduate of Ohio State University; he has written extensively on
learning and memory training. Learning and memory training have been passions
of his since his childhood days. While still in the NBA, Mr. Lucas
co-authored The Memory Book, which was number two on the New York Times' "Best
Seller" list for 50 weeks. The book sold over three million copies. Mr.
Lucas has 30 years' experience in developing, promoting and selling learning
and memory training products. His promotional efforts have been greatly aided
by his expertise in another field-basketball. He was voted one of the top 50
basketball players of all time, having been a three-time college All-American
at Ohio State and a seven-time All-Pro with the New York Knicks. He is one of
only two players to average over 20 points and 20 rebounds per game during an
entire NBA season-a feat he accomplished twice.
William R. Murray. Vice President, age 57. Mr. Murray has over 30
years' experience, including significant management experience relating to
the Company's intended operations. Early in his career, he was responsible
for ordering and stock control for a major grocer. From 1986 to 1989, he was
in charge of product development and inventory/warehouse management for Edwin
Cole Ministries, an operation similar in distribution channels and
merchandising approach to that of the Company. In addition, Mr. Murray has
considerable experience in booking engagements for various individuals and
groups, which will be invaluable in providing Mr. Lucas with opportunities to
appear on talk-shows and the like.
Cheryl W. Lucas. Treasurer and Director, age 44. Ms. Lucas is
President and Director of Second Chance for Love Humane Society, and was Vice
President of Marketing of CCI Communications. She was also Vice President of
the Latin American Division of Parker International. She received a B.A.
Degree in Criminal Justice in 1976 from California State University.
David E. Nelson, CPA, Secretary and Chief Financial Officer. Mr.
Nelson, age 56, received a B.S. degree in accounting from the University of
Utah in 1966. He has over 20 years' experience in operations, finance and
regulatory compliance of stock brokerage firms. He is the past President of
Covey & Company, Inc. Mr. Nelson has been a member of the NASD Board of
Arbitrators, the American Institute of Certified Public Accountants and
the Utah Association of Certified Public Accountants.
William A. Husa, Chief Operating Officer, Age .
Family Relationships
- --------------------
Jerry R. Lucas, the President and a director of the Company, and
Cheryl W. Lucas, the Treasurer and a director, are husband and wife, and
together are the controlling stockholders of the Company.
Involvement in Certain Legal Proceedings
- ----------------------------------------
Except as indicated below and to the knowledge of management, during
the past five years, no present or former director, person nominated to become
a director, executive officer, promoter or control person of the Company:
(1) Was a general partner or executive officer of any business by
or against which any bankruptcy petition was filed, whether at
the time of such filing or two years prior thereto;
(2) Was convicted in a criminal proceeding or named the subject of
a pending criminal proceeding (excluding traffic violations and
other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting his involvement in any type of
business, securities or banking activities:
(4) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission or the
Commodity Futures Trading Commission to have violated any
federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or
vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
To the knowledge of management, all reports required to be filed under
Section 16(a) of the Securities and Exchange Act of 1934, as amended, have
been filed by directors, executive officers, promoters and controlling persons
of the Company.
Item 10. Executive Compensation.
-----------------------
Cash Compensation
- -----------------
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerry R.
Lucas, 3/31/97 0 0 0 0 0 0 0
President, 3/31/98 8,000 0 0 0 0 0 0
Director 3/31/99 96,000 0 0 0 0 0 0
Cheryl W.
Lucas, 3/31/97 0 0 0 0 0 0 0
Tres, 3/31/98 0 0 0 0 0 0 0
Director 3/31/90 0 0 0 0 0 0 0
William R.
Murray, 3/31/97 0 0 0 0 0 0 0
V Pres 3/31/98 6,000 0 0 0 0 0 0
3/31/99 72,000 0 0 0 0 0 0
David E.
Nelson, 3/31/97 0 0 0 0 0 0 0
Sec & CFO 3/31/98 1,000 0 0 0 0 0 0
3/31/99 12,000 0 0 0 0 0 0
William A.
Husa, 3/31/97 0 0 0 0 0 0 0
COO 3/31/98 0 0 0 0 0 0 0
3/31/99 12,500 0 0 120,000 0 0 0
</TABLE>
Bonuses and Deferred Compensation
- ---------------------------------
None.
Compensation Pursuant to Plans
- ------------------------------
As of Apirl 1, 1997, there were outstanding options to acquire
25,000 shares of the Company's common stock at a price of $0.001 per share
pursuant to its Stock Option Plan; these were granted to a former director and
executive officer of the Company.
During the year ended March 31, 1998, options to acquire an
aggregate total of 600,000 shares of the Company's common stock pursuant to
its Stock Option Plan were granted to two consultants and exercised at a price
of $0.38 per share; the 25,000 share option outstanding at April 1, 1997, was
compromised and canceled in consideration of the completion of the Plan with
Lucas Nevada.
At March 31, 1999, there were 25,000 outstanding options to acquire
shares at $1.50 per share, which were granted to William A. Husa, the Chief
Operations Officer of the Company,
For further information concerning these options, see Note 8 to the
financial statements of the Company accompanying this Report.
Pension Table
- -------------
None; not applicable.
Other Compensation
- ------------------
None.
Compensation of Directors
- -------------------------
None.
Employment Contracts
- --------------------
The Company has only one written employment contract, that being with
William A. Husa; but it has made the following arrangements with members of
management, to wit: Jerry R. Lucas is paid a salary of $8,000 per month;
William R. Murray is paid a salary of $6,000 per month; and David E. Nelson is
paid $1,000 per month. William A. Husa is paid a minimum of $2,500 per month
pursuant to an Employment Agreement which runs through November 1, 2000; in
addition, the Company has issued 120,000 shares of "restricted securities" to
Mr. Husa, with 5,000 shares to vest during each month of employment, as well
as having granted Mr. Husa an option to acquire 25,000 shares of the Company's
common stock at a price of $1.50 per share, after he has been employed for a
period of two years.
Termination of Employment and Change of Control Arrangements
- ------------------------------------------------------------
Except as indicated under the heading "Employment Contracts," of this
Item, above, there are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any director or executive officer of the Company which would in any way
result in payments to any such person because of his or her resignation,
retirement or other termination of employment with the Company or its
subsidiaries, any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
The following table sets forth the shareholdings of those persons
who own more than five percent of the Company's common stock as of the date of
this Report:
Percentage Number
Name and Address of Class of Shares Beneficially Owned
Jerry R. Lucas 66% 8,500,000
Cheryl W. Lucas
P. O. Box 789
Templeton, CA 93465
66% 8,500,000
Each of these individuals or entities has sole investment and
voting power with regard to the securities listed opposite his or its name.
Security Ownership of Management.
---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of the date of this Report:
Percentage Number
Name and Address of Class of Shares Beneficially Owned
Jerry R. Lucas 66% 8,500,000
Cheryl W. Lucas
P. O. Box 789
Templeton, CA 93465
William R. Murray 1.5% 200,000
P. O. Box 146
Avilla Beach, CA 93424
William A. Husa .93% 120,000
11412 Dutch Ravine Court
Gold River, CA 95670
All directors and executive
officers as a group (4) 68.43% 8,820,000
Each of these individuals has sole investment and voting power
with regard to the securities listed opposite his or her name. See Part III,
Item 9, for information concerning the offices or other
capacities in which the foregoing persons serve with the Company.
Changes in Control
- ------------------
See the 8-K Current Report dated November 11, 1997, which is
incorporated herein by reference. See Part III, Item 13.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
Except as indicated in the 8-K Current Report dated November 11,
1997, and except for the lease of the principal executive offices and
warehouse described in Item 2 from Cheryl W. Lucas, there have
been no material transactions, series of similar transactions
or currently proposed transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any director or executive officer, or any security holder
who is known to the Company to own of record or beneficially more than five
percent of the Company's common stock, or any member of the immediate family
of any of the foregoing persons, had a material interest.
Certain Business Relationships.
- -------------------------------
Except as indicated in the 8-K Current Report dated November 11,
1997, and except for the lease of the principal executive offices and
warehouse described in Item 2 from Cheryl W. Lucas, there have
been no material transactions, series of similar transactions
or currently proposed transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any director or executive officer, or any security holder
who is known to the Company to own of record or beneficially more than five
percent of the Company's common stock, or any member of the immediate family
of any of the foregoing persons, had a material interest.
Indebtedness of Management.
- ---------------------------
Except as indicated in the 8-K Current Report dated November 11,
1997, and except for the lease of the principal executive offices and
warehouse described in Item 2 from Cheryl W. Lucas, there have
been no material transactions, series of similar transactions
or currently proposed transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any director or executive officer, or any security holder
who is known to the Company to own of record or beneficially more than five
percent of the Company's common stock, or any member of the immediate family
of any of the foregoing persons, had a material interest.
Parents of the Issuer.
- ----------------------
Jerry R. Lucas, the President and a director of the Company and
Cheryl W. Lucas, Treasurer and a director, who are husband and wife,
by virtue of their ownership of in excess of 66% of the outstanding voting
securities of the Company, may be deemed to be parents of the Company.
For information regarding transactions between the Company and Mr. Lucas, see
the other headings of this Item; also see Part III, Item 11, respecting stock
ownership.
Transactions with Promoters.
- ----------------------------
Except as indicated in the 8-K Current Report dated November 11,
1997, and except for the lease of the principal executive offices and
warehouse described in Item 2 from Cheryl W. Lucas, there have
been no material transactions, series of similar transactions, currently
proposed transactions, or series of similar transactions, to which the Company
or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any promoter or founder, or any member
of the immediate family of any of the foregoing persons, had a material
interest.
Item 13. Exhibits and Reports on Form 8-K.*
---------------------------------
Reports on Form 8-K**
Exhibits*
(i)
Where Incorporated
in this Report
--------------
8-K Current Report dated Part I, Item 1
November 11, 1998** Part III, Item 11
Part III, Item 12
Agreement and Plan of Reorganization
Exhibit A - Lucas Stockholders
Exhibit B - Mirador Equity Partners, Ltd. Financial
Statements for the periods ended
March 31, 1997 and 1996
Exhibit B-1 - Mirador Equity Partners, Ltd. Unaudited
Financial Statements for the
period ended September 30, 1997
Exhibit C - Exceptions to Mirador Equity Partners,
Ltd. Financial Statements
Exhibit D - Lucas Educational Systems, Inc. Financial
Statements for the period from
inception (December 5, 1996) to
June 30, 1997 and three months ended
September 30, 1997 (See Item 7 above)
Exhibit E - Exceptions to Lucas Educational Systems
Financial Statements
Exhibit F - Investment Letter
Exhibit G - Compliance Certificate of Mirador Equity
Partners, Ltd. Corporation
Exhibit H - Compliance Certificate of
Lucas Educational Systems, Inc.
Exhibit I - Consultant Shares
Certificate of Amendment to Certificate of
Incorporation reflecting name change to
"Lucas Educational Systems, Inc." and forward
split of shares
Licensing and Royalty Agreement
10-KSB Annual Report for the year
ended March 31, 1998** Part I, Item 1
Subsidiaries of the Company
Financial Data Schedule
8-K Current Report dated June 28, 1999 regarding change of
accountants
(ii)
Exhibit
Number Description
- ------ -----------
21 Subsidiaries of the Company
27 Financial Data Schedule
* Summaries of all exhibits contained within this
Report are modified in their entirety by reference
to these Exhibits.
** These documents and related exhibits have been
previously filed with the Securities and Exchange
Commission and are incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
LUCAS EDUCATIONAL SYSTEMS, INC.
Dated: 7/12/99 By:/s/Jerry R. Lucas
Jerry R. Lucas
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 the dates indicated:
Dated: 7/12/99 By:/s/Jerry R. Lucas
Jerry R. Lucas
President and Director
Dated: 7/12/99 By:/s/Cheryl W. Lucas
Cheryl W. Lucas
Treasurer and Director
Dated: 7/12/99 By:/s/William R. Murray
William R. Murray
Vice President
Dated: 7/13/99 By:/s/David E. Nelson
David E. Nelson
Secretary and CFO
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
Lucas Educational Systems, a Nevada corporation
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 89546
<SECURITIES> 0
<RECEIVABLES> 3400
<ALLOWANCES> 0
<INVENTORY> 5610
<CURRENT-ASSETS> 98556
<PP&E> 87797
<DEPRECIATION> 27653
<TOTAL-ASSETS> 158700
<CURRENT-LIABILITIES> 23438
<BONDS> 0
0
0
<COMMON> 12454
<OTHER-SE> 122808
<TOTAL-LIABILITY-AND-EQUITY> 158700
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 893394
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2115
<INCOME-PRETAX> (895509)
<INCOME-TAX> 0
<INCOME-CONTINUING> (895509)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (895509)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
