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
[ ] Transitional Report Under Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1996
Commission File No. 0-24684
K&S VENTURES, INC.
(Name of small business issuer in its charter)
Colorado
(State or other jurisdiction of Incorporation or Organization)
84-1214336
(IRS Employer Identification Number )
8908 South Yale Avenue, Suite 409
Tulsa, OK 74137
(918) 481-0167
(Address, including zip code and telephone number, including area
code of registrant's executive offices)
Securities registered under Section 12 (b) of the Exchange Act: none
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, $0.01 par value
(Title of class)
Check whether the issuer (1) 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
----- -----
Check if 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-KSB or any amendment to this Form 10-KSB.
Yes No X
----- -----
Issuer's revenues for its most recent fiscal year: $0
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:
As of March 31, 1997: $0.
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
As of March 31, 1997 there were 10,000 shares of the Company's common
stock issued and outstanding.
Documents Incorporated by Reference: Form 8-K filed March 20, 1997
This Form 10-KSB consists of 14 pages. There is one Exhibit to this Report,
the Financial Data Schedule, on page 14.
Page 1 of 16
<PAGE>
PART I
ITEM I. DESCRIPTION OF BUSINESS.
K&S Ventures, Inc. (the "Company") was incorporated on March 4, 1991,
under the laws of the State of Colorado, to engage in any lawful corporate
undertaking, including but not limited to, selected mergers and acquisitions.
In October, 1992, the Company began operating as a retail sales outlet for
Herbalife products. On June 17, 1994, the Company ceased all operations
relevant to the retail sales of Herbalife products and the Board of Directors
elected to change the Company's principal business purpose to that of
investigating and possibly acquiring other business opportunities.
In order to facilitate the Company's business objectives, a registration
statement on Form 10-SB was filed with the Securities and Exchange Commission
on August 11, 1994, registering the Company's Common Stock pursuant to
Section 12g of the Securities Exchange Act of 1934, as amended. Management
believed that the filing of this registration statement enhanced the
Company's ability to attract a viable merger or acquisition candidate.
Since June 17, 1994, the Company has had limited operations and, as of the date
of this report, had not identified any merger or acquisition opportunities.
The proposed business activities classify the Company as a "blank check"
company. Many states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their respective
jurisdictions. Each shareholder of the Company has executed and delivered a
"lock-up" letter agreement, affirming that their stock is restricted until
such time as the Company has successfully completed a merger or acquisition and
is no longer classified as a "blank check" company. Each shareholder has
agreed to place their respective stock certificates with the Company's legal
counsel until such time as legal counsel has confirmed that a merger or
acquisition has been successfully completed. While management believes that
the procedures established to preclude any sale of the Company's issued and
outstanding securities prior to closing of a merger or acquisition are
sufficient, there can be no assurances that such procedures will limit any
shareholder's ability to sell their respective securities prior to such
closing. Management has not established a market for the Company's
securities and will not begin establishing a market until such time as the
Company has successfully merged with or acquired a viable business entity.
Employees
During the year ended December 31, 1996, the Company had two non-salaried
employees: its President, Mark Poole and its Vice President and Secretary,
Gail Pesek (See Item 9. Directors, Executive Officers and Control Persons.)
ITEM 2. DESCRIPTION OF PROPERTY
Facilities
The Company presently maintains its principal offices at the home of its
President and pays no rent for the use of such offices.
Other Property
The Company owns no other property.
Page 2 of 16
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings, of which management is aware,
that are pending or have been threatened against the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
Market Information
There is no established trading market for the common or preferred equity of
the Company.
Holders
As of December 31, 1996, the Company had 10,000 shares of Common Stock
issued and outstanding and 10 shareholders of record. All of the issued and
outstanding shares of Common Stock were issued in accordance with the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933.
As of the date of this report all 10,000 shares of the Company's Common
Stock were eligible for sale under Rule 144 of the Securities Act of 1933, as
amended, subject to certain limitations included in such rule. In general,
under Rule 144, a person who has satisfied a two year holding period may,
under certain circumstances, sell within any three-month period a number of
shares that does not exceed the greater of one percent of the then outstanding
shares of Common Stock or the average weekly trading volume during the four
calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation by a person
who has satisfied a three-year holding period and who is not, and has not been
for the preceding three months, an affiliate of the Company.
Dividends
The Company has not paid any dividends on its Common Stock and does not
foresee that dividends will be paid in the future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company had no assets or liabilities at December 31, 1996 and does not
expect to accumulate assets or incur liabilities until such time as a merger
or acquisition is completed. Any expenses incurred, which historically have
been nominal, are paid directly by shareholders and are reflected as
additional paid in capital. Management believes that the shareholders have
sufficient resources to cover the cash needs of the Company, which relate
Page 3 of 16
<PAGE>
primarily to accounting fees for the annual audit of the Company's financial
statements. Though management is confident that the cash needs of the
Company will remain nominal, there can be no assurance that will not incur, due
to unforseen events, material expenses in the future. In the event that
material expenses are incurred, there can be no assurance that the
shareholders will continue to make funds available.
Results of Operations for the year ended December 31, 1996
During 1996, the Company generated no revenues and had no operating
activities. During 1996, the Company paid in full its liability of $4,410
for legal and accounting costs incurred during 1995. Such payment was
provided by a shareholder of the Company and was reflect as additional paid in
capital on the books of the Company. During 1996, the Company incurred no
liabilities for legal and accounting fees related to its reporting obligations
under the Exchange Act of 1934. The quarterly financial statements filed
contained unaudited financial information and the filings were completed
at no charge by a shareholder of the Company. It is anticipated the
shareholders will continue to fulfill, at no cost, the Company's reporting
obligations under the Exchange Act of 1934.
Results of Operations for the year ended December 31, 1995
During 1995, the Company generated no revenues and had no operating
activities. During the period, the Company incurred $4,410 in legal and
accounting expenses related to the audit of its financial statements and the
filing of its quarterly reports to the SEC. Such liability was paid in full,
subsequent to year end, by a shareholder of the Company.
Page 4 of 16
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of K&S Ventures, Inc.
We have audited the balance sheet of K&S Ventures, Inc., a Colorado
Corporation, as of December 31, 1996 and the related statements of operations,
stockholders' equity, and cash flows for the year 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. The financial statements of K&S Ventures, Inc. as of
December 31, 1995 were audited by other auditors whose report dated
April 1, 1996 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 1996 financial statements referred to above present
fairly, in all material respects, the financial position of K&S Ventures, Inc.
as of December 31, 1996 and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
CROSS AND ROBINSON
/S/ CROSS AND ROBINSON
------------------------
Certified Public Accountants
April 7, 1996
Page 5 of 16
<PAGE>
<TABLE>
K&S VENTURES, INC.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents 0 0
----- ------
Total Assets 0 0
----- ------
Liabilities and Stockholders' Equity
Accrued Liabilities 0 4,410
Stockholders' Equity
Common Stock- $0.01 Par
Value 100,000,000 Shares
Authorized; 10,000 Shares
Issued and Outstanding 100 100
Paid in Capital 19,447 15,047
Accumulated Deficit (19,557) (19,557)
--------- ---------
Total Stockholders'
Equity 0 (4,410)
--------- ---------
Total Liabilities and
Stockholders' Equity 0 0
--------- ---------
</TABLE>
Page 6 of 16
<PAGE>
<TABLE>
K&S VENTURES, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 and 1995
<CAPTION>
1996 1995
<S> <C> <C>
Revenue 0 0
Expenses
Legal Fees 0 4,110
Accounting Fees 0 300
------ ------
Total Expenses 0 4,410
------ ------
Income (loss) before
income taxes 0 (4,410)
Provision for Income Taxes 0 0
------ -------
Net Income (Loss) 0 (4,410)
------ -------
Net Income (Loss)
per common share: $(0.00) $(0.44)
------ -------
</TABLE>
Page 7 of 16
<PAGE>
<TABLE>
K&S VENTURES, INC.
Statement of Cash Flows
For the years ended December 31, 1996 and 1995
<CAPTION>
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (loss) 0 (4,410)
Change in accrued liabilities (4,410) 4,410
Financing Activities
FINANCING ACTIVITIES
Paid in capital from
shareholders 4,410 0
------- -------
Change in Cash 0 0
Cash at beginning of period 0 0
------- -------
Cash at end of period 0 0
------- -------
</TABLE>
Page 8 of 16
<PAGE>
<TABLE>
K&S VENTURES, INC.
STATEMENT OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
Total
Common Stock Paid in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1994 10,000 $100 $15,047 $(15,147) $0
Net Loss 0 0 0 (4,410) (4,410)
------ ---- ------- --------- -------
Balance at
December 31, 1995 10,000 100 15,047 (19,557) (4,410)
Net Loss 0 0 0 0 0
Additional paid-
in capital 0 0 4,410 0 4,410
------ ---- ------- --------- -------
Balance at
December 31, 1996 10,000 $100 $19,457 (19,557) $0
------ ---- ------- --------- -------
</TABLE>
Page 9 of 16
<PAGE>
K&S VENTURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 and 1995
1. Significant Accounting Policies
Organization
K&S Ventures, Inc. was incorporated on March 4, 1991, in the state of
Colorado. On October 14, 1992, the Company began operating as a retail
distributor of Herbalife products. On June 17, 1994, the Company
discontinued such operating activities in favor of searching out merger and
acquisition opportunities.
Basis of Accounting
Assets, liabilities, equity, revenue and expenses are recorded under the
accrual method of accounting in conformity with generally accepted accounting
principles.
Cash and cash equivalents
The Company considers all cash and marketable securities as cash equivalents.
Income Taxes
The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under the provisions of the Code, all taxable income
or loss flows to the stockholders of the Company.
Fiscal Year End
The Company's fiscal year end is December 31.
2. Stockholders Equity
During 1992, the Company issued 10,000 shares of Common Stock for proceeds of
$100. From 1992 to December 31, 1996, the stockholders have contributed
additional paid in capital of $19,447. On July 19, 1994, the stockholders
approved an amendment to the Articles of Incorporation whereby the number of
shares of authorized Common Stock, $0.01 par value, was increased to
100,000,000 shares and 20,000,000 shares of Preferred Stock, no par value, was
authorized.
3. Subsequent Events
Subsequent to year end, the Company issued 90,000 shares of its common
stock, $0.01 par value, to Lone Wolf Exploration, Inc. for $100,000 in cash.
The transaction with Lone Wolf, by virtue of its status as a corporation,
cancelled the Company's standing as a Subchapter "S" corporation as defined
by the Internal Revenue Code. For the year ended December 31, 1997, the
Company will be considered a "C" corporation.
Page 10 of 16
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected for one-year terms or until the next annual meeting of
shareholders and until their successors are duly elected and qualified.
Officers serve at the discretion of the Board of Directors.
The officers and directors devote only such time as is necessary to the
operations of the Company. Each officer maintains outside employment at
non-affiliated companies.
The Directors and Officers of the Registrant as of the date of this report
are as follows:
Name Age Position
------------------ --- -------------------------
Mark A. Poole 28 President and Director
Gail E. Pesek 30 Vice President, Secretary
and Director
Fred A. Poole 52 Director
Fred A. Poole and Mark A. Poole are father and son. There are no other
family relationships among the officers and directors.
Mark A. Poole has been President and Director of the Company since 1991.
Mr. Poole is currently Vice President of Kolorfusion International, Inc.
Mr. Poole earned a Bachelor of Arts Degree in Business Administration from
the University of Washington in 1989.
Gail E. Pesek has been Vice President, Secretary and Director of the Company
since 1991. Ms. Pesek is currently self-employed as a hair designer.
Fred A. Poole has been a Director of the Company since 1991. Mr. Poole is
currently employed as Manager of Maintenance Operations for United Airlines.
Mr. Poole earned a Bachelor of Science Degree in Aeronautical Maintenance from
San Jose State University in 1966.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who beneficially
own more than ten percent of a registered class of the Company's securities
to file initial reports of securities ownership of the Company and reports of
changes in ownership of equity securities of the Company with the Securities
and Exchange Commission ("SEC"). Such persons also are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, during the fiscal year ended December 31, 1996,
the Company's officers and directors complied with all applicable Section
16(a) filing requirements. These statements are based solely on a review of
the copies of such reports furnished to the Company by its officers and
directors.
Page 11 of 16
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
For the years ended December 31, 1996 and 1995, the Company paid no salary or
compensation of any kind to its executive officers. During those periods,
there were no bonus or incentive plans in effect, nor were there any
liabilities incurred for the payment of compensation to the Company's
officers related to past, present or future services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a. Security Ownership of Certain Beneficial Owners and Management
The following table lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as by all directors and officers of
the issuer. Unless otherwise indicated, the shareholders listed possess
sole voting and investment power with respect to the shares shown:
Title of Class Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
-------------- ------------------- -------------------- --------
Common Mark A. Poole 4,000 40%
19921 East Kent Drive
Aurora, CO 80013
Common Gail E. Pesek 1,000 10%
19921 East Kent Drive
Aurora, CO 80013
Common Fred A. Poole 1,000 10%
15906 E. Crestridge Cr.
Aurora, CO 80015
Common All Officers and Directors
as a group (3 persons) 6,000 60%
Page 12 of 16
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
For the years ended December 31, 1996 and 1995, there were no related
party transactions.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit No. Page of this Report
----------- -------------------
3.0 Articles of Incorporated herein by reference
Incorporation to Form 10-SB filed August 11, 1994
3.1 Bylaws Incorporated herein by reference
to Form 10-SB filed August 11, 1994
23.0 Consent of Cross & Robinson Page 15
24.0 Power of attorney Included on Signature Page of this
Form 10-KSB
27.0 Financial Data Schedule Page 16
b. Reports on Form 8-K
For the year ended December 31, 1996, the registrant did not file any
reports on Form 8-K.
Page 13 of 16
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized
K&S VENTURES, INC.
/s/ MARK A. POOLE
-----------------------------
Mark A. Poole
President
Dated: April 10, 1997
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Rhonda R. Vincent, his or her
true and lawful attorney-in-fact and agent, to sign any or all amendments to
this Report on Form 10-KSB, and to file the same with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person hereby ratifying and
confirming that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Exchange Act of 1934, this Report on
Form 10-KSB has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
- ------------------- -------------------------- --------------
/s/ MARK A. POOLE President and Director April 10, 1997
- -----------------
Mark A. Poole
/s/ GAIL E. PESEK Vice President, Secretary April 10, 1997
- ----------------- and Director
Gail E. Pesek
/s/ FRED A. POOLE Director April 10, 1997
- -----------------
Fred A. Poole
Page 14 of 16
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
K&S Ventures, Inc.
We hereby do consent to the inclusion of the December 31, 1996
independent auditor's report in the K&S Ventures, Inc., FORM 10-KSB for the
year ended December 31, 1996.
CROSS AND ROBINSON
/S/ CROSS AND ROBINSON
----------------------
Certified Public Accountants
April 7, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> (100)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
