<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 0-24688
G/O INTERNATIONAL, INC.
-----------------------
(Name of Small Business Issuer in its Charter)
COLORADO 76-0025986
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
11849 Wink
Houston, Texas 77024
---------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (713) 783-1204
N/A
---
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $0.01 par
value common voting stock
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company 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 files 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 Company'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. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1996 -
$21.
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.
May 16, 1997 - $28,853.72. There are approximately 2,885,372 shares of
common voting stock of the Company held by non-affiliates. During the past
two years there has been no "established public market" for shares of common
voting stock of the Company, so the Company has arbitrarily valued these
shares based on $0.01 par value per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes X No ___
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
May 16, 1997
6,035,372
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Item 13 of this report.
Transitional Small Business Issuer Format Yes X No ___
---
<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
- ---------------------
On March 12, 1996, the Board of Directors of the Company
unanimously resolved to organize the following wholly-owned subsidiaries in
the jurisdictions contained in their respective names: (i) G/O International
(Cayman), Inc.; (ii) G/O International (Bermuda), Inc.; (iii) G/O
International (British Virgin Islands or "BVI"), Inc.; and (iv) G/O
International (Netherlands Antilles or "Antilles"), Inc., and that the
President be authorized to employ such attorneys and/or agents in these
jurisdictions to act under the direction and advice of the Company's attorneys
in this regard. The Board of Directors further resolved to sell 1,000,000
"unregistered" and "restricted" shares of its common stock at a price of $0.05
per share, in order to pay the costs associated with the formation of these
subsidiaries and to provide initial working capital for them.
On July 10, 1996, the Company's Board of Directors resolved (i) to
rescind the March 12, 1996, resolution in its entirety; (ii) to organize the
following wholly-owned subsidiaries of the Company in the Cayman Islands: G/O
International (Cayman) Inc. ("G/O Cayman"); Antares Trading Inc.; Daimyo
Industries Ltd; and Waterbury Resources Inc. ("Waterbury"); (iii) to sell up
to 2,000,000 shares of the Company's common stock at a price of $0.01 per
share pursuant to Regulation S of the Securities and Exchange Commission to
pay the formation costs and provide working capital for these subsidiaries. A
total of 2,000,000 shares were sold and were issued on July 17, 1996.
Pursuant to a Reorganization Plan and Agreement (the "Valle Grande
Plan") dated July 26, 1996, between and among: (i) the Company, (ii) G/O
Cayman, (iii) Valle Grande S.A. de C.V., a Mexican corporation,
("Valle Grande") and (iv) the beneficial owners of 329,856,844 shares of
capital stock of Valle Grande which constituted 96.45% of the issued and
outstanding capital stock of Valle Grande ("Valle Grande Shareholders"), G/O
Cayman issued, in a stock for stock exchange, a total of 15,333,690 of its
Ordinary Shares, $0.0001 par value per share, for a total of 329,856,844
shares or 96.45% of the issued and outstanding shares of capital stock of
Valle Grande, thereby giving G/O Cayman control of Valle Grande and its
subsidiary corporations. No cash or other consideration was tendered in
connection with the Reorganization. For a complete discussion of the Valle
Grande Plan, see the Company's Current Report on Form 8-K, and its amended
Current Report on Form 8-K-A1, both of which are dated August 7, 1996. The
Form 8-K was filed with the Securities and Exchange Commission (the
"Commission") on August 21, 1996, and the Form 8-K-A1 was filed with the
Commission on February 4, 1997, each of which is incorporated herein by this
reference. See Item 13 of this Report.
Pursuant to a Reorganization Plan and Agreement (the "LLI Plan")
dated September 17, 1996, between and among: (i) the Company, (ii) G/O
International Group (USA) Inc., a Delaware corporation, that, prior to the
Reorganization described herein, was the Company's wholly owned subsidiary
("G/O Group"), (iii) Leather Leather, Inc., a Texas corporation, ("LLI") and
(iv) Kent Bouldin, the beneficial owner of 10,000 shares of capital stock of
LLI which constitutes 100% of the issued and outstanding capital stock of LLI
("LLI Shareholders"), G/O Group exchanged, in a stock for stock exchange, a
total of 8,000,000 shares of its $0.0001 par value per share common stock for
a total of 10,000 shares or 100% of the issued and outstanding shares of
capital stock of LLI, making LLI a wholly owned subsidiary of G/O Group. No
cash or other consideration was tendered in connection with the
Reorganization. For a complete discussion of the LLI Plan, see the Company's
Current Report on Form 8-K, dated September 25, 1996, which was filed with the
Commission on October 2, 1996, and its Form 8-K-A1, dated September 25, 1996,
which was filed with the Commission on February 4, 1997, each of which is
incorporated herein by this reference. See Item 13 of this Report.
On October 25, 1996, the Board of Directors of the Company
unanimously resolved to issue 10,000 "unregistered" and "restricted" shares to
each of the following persons in consideration of services rendered: Jack
Burns; Michael L. Caswell; Sam Bono; Branden T. Burningham; and Sheryl Ross.
All of these shares have been issued as of the date of this Report.
For a discussion of the business development of the Company from
inception to the end of the calendar year ended December 31, 1995, see its
Registration Statement on Form 10-SB-A3, filed with the Securities and
Exchange Commission on June 2, 1995, its Annual Report on Form 10-KSB
for the calendar year ended December 31, 1994, filed on May 1, 1995, and
its Annual Report on Form 10-KSB for the calendar year ended December 31,
1995, filed on April 10, 1996, each of which is incorporated herein by this
reference. See Item 13 of this Report.
Business.
- ---------
The sole business operations of the Company are those of its 50.7%-
owned subsidiary Waterbury. Waterbury is engaged in the business of
purchasing, training and selling thoroughbred horses in the United States and
Europe.
The Company has had no business operations since approximately
December 15, 1989. To the extent that the Company intends to continue to seek
the acquisition of assets, property or business that may benefit the Company
and its stockholders, the Company is essentially a "blank check" company.
Because the Company has no assets, conducts no business and has no employees,
management anticipates that any such acquisition would require the Company to
issue shares of its common stock as the sole consideration for the
acquisition. This may result in substantial dilution of the shares of current
stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, the Company's Articles of Incorporation or Bylaws, or contract.
The Company makes no assurance that any future enterprise will be profitable
or successful. For a further discussion of its plans with regard to any such
acquisition, see the Company's Registration Statement on Form 10-SB and its
Annual Report on Form 10-KSB for the calendar year ended December 31, 1994,
each of which is incorporated herein by this reference. See Item 13 of this
Report.
Principal Products or Services and their Markets.
- -------------------------------------------------
None; not applicable.
Competition.
- ------------
None; not applicable.
Sources and Availability of Raw Materials.
- ------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts.
- ----------------
None; not applicable.
Governmental Approval of Principal Products or Services.
- --------------------------------------------------------
None; not applicable.
Effects of Existing or Probable Governmental Regulations.
- ---------------------------------------------------------
None; not applicable.
Cost and Effect of Compliance with Environmental Laws.
- ------------------------------------------------------
None; not applicable.
Research and Development Expenses.
- ----------------------------------
None; not applicable.
Number of Employees.
- --------------------
None; not applicable.
Item 2. Description of Property.
------------------------
Other than cash of approximately $34,000, the Company has no
assets, property or business; its principal executive office address and
telephone number are the business office address and telephone number of its
President, John L. Burns, and are provided at no cost.
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.
----------------------------------------------------
During the fourth quarter of the calendar year ended December 31,
1995, no matter was submitted to a vote of the Company's security holders,
whether through the solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
There has been no "public market" for shares of the Company's
common stock during the past five years. On or about September 1, 1995, the
Company obtained a listing on the OTC Bulletin Board of the NASD under the
trading symbol "GOII." However, except as shown below, no bid or asked
quotations have been reflected since that time. Management does not
anticipate that there will be any public market for the Company's common stock
until it has identified and acquired suitable assets, property or business.
Even then, there can be no assurance that a public market for the Company's
securities will develop.
The range of high and low bid quotations for the Company's
common stock during the each quarter of the year ended December 31, 1995 and
each quarter of the calendar year ended December 31, 1996, 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, 1995 Unpriced Unpriced
June 30, 1995 Unpriced Unpriced
September 30, 1995 Unpriced Unpriced
December 31, 1995 Unpriced Unpriced
March 31, 1996 Unpriced Unpriced
June 30, 1996 Unpriced Unpriced
September 30, 1996 Unpriced Unpriced
December 31, 1996 1 1
</TABLE>
There are no outstanding options, warrants or calls to purchase
any of the authorized securities of the Company.
The sales of 750,000, 750,000 and 150,000 shares of common stock
to David M. Klausmeyer, David R. Strawn, Esq. and Leonard W. Burningham, Esq.,
respectively, during the period ended May 31, 1994, the sale of an aggregate
of 4,000,000 shares of common stock pursuant to Regulation S during the
calendar yearS ended December 31, 1995, and 1996 (2,000,000 shares per year),
and the issuance of a total of 80,000 shares in consideration of services
rendered (30,000 shares in 1995, and 50,000 shares in 1996) were the only
sales of any securities of the Company during the past three years. Future
sales of any of these "restricted securities" or any securities of the Company
issued in any acquisition, reorganization or merger may have a future adverse
effect on any "public market" that may develop in the common stock of the
Company.
In addition to the above referenced shares, Mr. Klausmeyer, Mr.
Strawn and Michael L. Caswell beneficially own a total of 90,000
"unregistered" and "restricted" shares of the Company's common stock for which
the two year holding period provided in Rule 144 expired in 1990; these shares
, in addition to the aggregate of 1,500,000 shares owned by Messrs. Klausmeyer
and Strawn and referred to in the previous paragraph, may now be sold pursuant
to Rule 144 in any "public market" that may develop.
The 150,000 shares acquired by Mr. Burningham were acquired
pursuant to Rule 701 of the Securities and Exchange Commission, and thus were
subject to a 90-day holding period commencing on October 12, 1994, the
effective date of the Company's Registration Statement on Form 10-SB. This
holding period has since expired and these shares may be sold without
restriction in any "public market" that may develop for the Company's
securities.
No assurance can be given that any "public market" will develop in
the common stock of the Company, regardless of whether the Company is
successful in completing any acquisition, reorganization or merger deemed by
management to be beneficial for the Company, or if any such "public market"
does develop, that it will continue or be sustained for any period of time.
Holders
- -------
The number of record holders of the Company's common stock as of
May 16, 1997, was approximately 771.
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 business. 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.
- ----------------------------------------
For a discussion of the sales by the Company of "unregistered" and
"restricted" shares of its common stock during the period covered by this
Report, see the Company's Quarterly Reports on Form 10-QSB for the quarterly
periods ended March 31, 1996, June 30, 1996, and September 30, 1996, which
have previously been filed with the Commission, and which are incorporated
herein by reference. See the Exhibit Index, Item 13 of this Report.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any
revenues from operations during the last calendar year or as of the date of
this Report. The Company's plan of operation for the next twelve months is to
continue to seek the acquisition of assets, property or business that may
benefit the Company and its stockholders. Because the Company has no
resources, management anticipates that to achieve any such acquisition, the
Company will be required to issue shares of its common stock as the sole
consideration for such acquisition.
During the next twelve months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which are anticipated to be advanced by management as loans
to the Company. Because the Company has not identified any such venture as of
the date of this Report, it is impossible to predict the amount of any such
loan. However, any loan from management will be on terms no less favorable to
the Company than would be available from a commercial lender in an arm's
length transaction. As of the date of this Report, the Company has not begun
seeking any acquisition.
Management anticipates that the proceeds of the Company's offering
of 2,000,000 shares of common stock pursuant to Regulation S will be
sufficient to pay for administrative expenses of the Company for the next 12
months. In the event that additional funding is required in order to keep the
Company in good standing and/or to review or investigate any potential merger
or acquisition candidate, the Company may attempt to raise such funding
through a private placement of its common stock to accredited investors.
At the present time, management has no plans to offer or sell any
securities of the Company. However, at such time as the Company may decide to
engage in such activities, management may use any legal means of conducting
such offer or sale, including registration with the appropriate federal and
state regulatory agencies and any registration exemptions that may be
available to the Company under applicable federal and state laws, including
sales exempt under Regulation S.
Because the Company is not currently making any offering of its
securities, and does not anticipate making any such offering in the
foreseeable future, management does not believe that Rule 419 promulgated by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, concerning offerings by blank check companies, will have any effect
on the Company or any activities in which it may engage in the foreseeable
future.
Results of Operations.
- ----------------------
Revenues for the calendar years ending December 31, 1995 and 1996,
were $17 and $21, respectively.
The Company had a net loss from operations of $4,095 (a loss of
$0.00 per share) during the calendar year ended December 31, 1995, and a net
loss from operations of $42,782 (a loss of $0.00 per share) for the year
ending December 31, 1996.
Liquidity.
- ----------
During the calendar year ended December 31, 1995, the Company had
expenses of $4,112, while receiving $17 in revenues; the Company received
approximately $21 in revenues, and the Company had total expenses of $42,803
during the calendar year ended December 31, 1996.
Item 7. Financial Statements.
---------------------
Consolidated Financial Statements for the year ended
December 31, 1996
Independent Auditor's Report
Consolidated Balance Sheets - December 31, 1996
Consolidated Statements of Operations from inception
on January 1, 1991 to December 31, 1996
and the Years ended December 31, 1996 and
1995
Consolidated Statements of Stockholders' Equity (Deficit)
for the period January 1, 1991 to December 31,
1996
Consolidated Statements of Cash Flows from inception
on January 1, 1991 to December 31, 1996
and the Years ended December 31, 1996 and
1995
Notes to Consolidated Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
On or about January 16, 1997, which is subsequent to the period
covered by this Report, the Company retained Stayner and Company, Certified
Public Accountants (now known as Jones, Jensen and Company), of Salt Lake
City, Utah, to audit its financial statements for the calendar year ended
December 31, 1996. This change in accountants was disclosed in the Company's
Current Report on Form 8-K, dated January 16, 1997, and filed with the
Commission on January 22, 1997, which is incorporated herein by reference.
See the Exhibit Index, Item 13 of this Report.
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 (held in June of each year) or until their
successors are elected or appointed and qualified, or their prior resignation
or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
<S> <C> <C> <C>
John L. Burns President 10/95 *
Treasurer 10/95 *
Director 10/95 *
Michael L. Caswell Vice President 1/86 * Secretary 1/86 *
Director 1/86 *
Sam Bono Director 7/95 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
John L. Burns, President, Treasurer and Director. Mr. Burns, age
67, graduated from the University of Florida in 1959 with a Master of Science
degree in Engineering. He spent 26 years with Exxon Corporation, holding
various senior management positions in the U.S., Australia, Far East and
Middle East. At the time of his election to retire, he was Vice President of
Esso Middle East, a wholly-owned subsidiary of Exxon Corporation. Since
retiring in 1985, Mr. Burns has been a private investor and has been engaged
in charitable activities as a National Trustee of the Society of St. Vincent
de Paul.
Michael L. Caswell, Vice President, Secretary and Director. Mr.
Caswell is 49 years of age. He graduated from Texas A & M University in 1970
with a Bachelor of Science degree in Petroleum Engineering. He has been the
President of CasKids Operating Company (Houston, Texas) since August 1983.
CasKids is engaged in the oil and gas business. Mr. Caswell is responsible
for the engineering, geological engineering and management of CasKids and the
properties it operates.
Sam Bono, Director. Mr. Bono, age 60, is a graduate of the
University of Florida. For the last five years, he has been the owner and
sole proprietor of the Direct Sales Company of Houston, Texas, a firm that
specializes in the sale and distribution of industrial supplies.
Family Relationships
- --------------------
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
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 the following activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant,
associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or
employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or
continuing any conduct or practice in connection with such
activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with
any violation of federal or state securities laws or
federal commodities laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or
state authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any
activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the judgment
in such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or
vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
The following statements were filed with the Securities and
Exchange Commission in March, 1997: Form 5 Annual Statements of Changes in
Beneficial Ownership of Securities of John L. Burns, Sam Bono and Michael L.
Caswell.
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Year or Other Restricted Option/ LTIP All
Principal Period $ $ Annual Stock SAR's Payouts Other
Position Ended Salary Bonus Compen- Awards ($)1 (#) ($) Compensa-
December sation($) tion ($)
31
John L. Burns 1995 -0- -0- -0- 1,000 -0- -0- -0-
President, 1996 -0- -0- -0- 1,000 -0- -0- -0-
Treasurer and
Director
Sam Bono 1995 -0- -0- -0- 1,000 -0- -0- -0-
Director 1996 -0- -0- -0- 1,000 -0- -0- -0-
Michael L. 1995 -0- -0- -0- 1,000 -0- -0- -0-
Caswell 1996 -0- -0- -0- 1,000 -0- -0- -0-
Vice Pres.,
Secretary
and Director
</TABLE>
(1) Each of the Company's directors is paid 10,000 "unregistered" and
"restricted" shares each year for services rendered during the year.
These shares are valued at par value ($0.01) per share.
Bonuses and Deferred Compensation
- ---------------------------------
None.
Compensation Pursuant to Plans
- ------------------------------
None.
Pension Table
- -------------
None; not applicable.
Other Compensation
- ------------------
None.
Compensation of Directors
- -------------------------
At a special meeting of the Company's Board of Directors, held
October 4, 1995, the Board of Directors unanimously resolved to pay to each
director of the Company 10,000 "unregistered" and "restricted" shares of the
Company's common stock, valued at $0.01 per share, for each year or partial
year of service, commencing on the date of the resolution. As of the date of
this Report, 20,000 "unregistered" and "restricted" shares have been issued to
each of the following directors of the Company: John L. Burns; Michael L.
Caswell; and Sam Bono.
Employment Contracts
- --------------------
None.
Termination of Employment and Change of Control Arrangements
- ------------------------------------------------------------
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.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
Form 5 Annual Statement of Beneficial Ownership of Securities of
John L. Burns, Sam Bono and Michael L. Caswell were filed with the Securities
and Exchange Commission on March 6, 1997, March 10, 1997, and March 11, 1997,
respectively.
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
David M. Klausmeyer 12.9% 780,000
10878 Westheimer, #178
Houston, Texas 77042
David R. Strawn, Esq. 12.9% 780,000
11440 W. Bernardo Ct., #300
San Diego, California 92127
Charlie Investments, Ltd. 24.9% 1,500,000
P. O. Box 2097
Grand Cayman
British West Indies
Yankee Investments, Ltd. 24.9% 1,500,000
P. O. Box 2097
Grand Cayman
British West Indies _______ ______
75.6% 4,560,000
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
John L. Burns 0.3% 20,000
11849 Wink
Houston, Texas 77024
Michael L. Caswell 0.8% 50,0001
3637 W. Alabama, #400
Houston, Texas 77027
Sam Bono 0.3% 20,000
11949 FM 3005, #403
Galveston, Texas 77554 ---- ------
All directors and executive
officers as a group 1.4% 90,000
1 30,000 of these shares are held in the name of M.L. Caswell
Investments, which is a "doing business as" name of Mr.
Caswell.
Each of these individuals has sole investment and voting power
with regard to the securities listed opposite his name. See Item 9 of this
Report for information concerning the offices or other capacities in which the
foregoing persons serve with the Company.
Changes in Control
- ------------------
To the knowledge of the Company's management, there are no present
arrangements or pledges of the Company's securities which may result in a
change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
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.
- -------------------------------
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.
- ---------------------------
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.
- ----------------------
None; not applicable.
Transactions with Promoters.
- ----------------------------
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**
Current Report on Form 8-K and Amended Current Report on Form 8-K-A1
dated August 7, 1996
Current Report on Form 8-K and Amended Current Report on Form 8-K-A1
dated September 25, 1996
Current Report on Form 8-K dated January 16, 1997
Exhibits*
(i)
Where Incorporated
in this Report
--------------
Registration Statement on Form 10-SB-A1, Part I
filed August 19, 1994**
Annual Report on Form 10-KSB-A1, Part I
filed August 2, 1995**
Annual Report on Form 10-KSB-A1, Part I
filed June 17, 1996**
(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.
G/O INTERNATIONAL, INC.
Date: May 22, 1997 By /s/ J. L. Burns
------------ ---------------
John L. Burns, Director
President and Treasurer
Date: May 30, 1997 By /s/ Michael L. Caswell
------------ ----------------------
Michael L. Caswell, Director,
Vice President and Secretary
Date: 5/29/97 By /s/ Sam Bono
------- ------------
Sam Bono, Director
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated:
G/O INTERNATIONAL, INC.
Date: May 22, 1997 By /s/ John L. Burns
------------ -----------------
John L. Burns, Director
President and Treasurer
Date: May 30, 1997 By /s/ Michael L. Caswell
------------ ----------------------
Michael L. Caswell, Director
Vice President and Secretary
Date: 5/29/97 By /s/ Sam Bono
------- ------------
Sam Bono, President
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
INDEPENDENT AUDITORS REPORT
Directors and Stockholders
G\O International, Inc.
(a Development Stage Company)
Houston, Texas
We have audited the accompanying consolidated balance sheet of G\O
International, Inc. (a development stage company) as of December 31, 1996 and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the year then ended and from development stage
inception (January 1, 1991) to December 31, 1996. 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.
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 consolidated financial
statements are free of material misstatements. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated 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 my opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of G\O
International, Inc. (a development stage company) at December 31, 1996
and the consolidated results of its operations and its cash flows, for the
year
then ended and from development stage inception (January 1, 1991) to
December 31, 1996 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 discussed in Note 1,
the Company is in the development stage and has limited assets, working
capital, sustained losses during its development stage and has capital
deficiencies which together raise substantial doubt about its ability to
continue as a going concern. Management plans regarding those matters is also
discussed in Note 8. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
May 12, 1997
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheet
<CAPTION>
ASSETS
December 31,
1996
<S> <C>
CURRENT ASSETS
Cash $ 34,091
Prepaid expenses 986
Total Current Assets 35,077
OTHER ASSETS
Organization costs 3,200
Horses 84,710
Total Other Assets 87,910
TOTAL ASSETS $ 122,987
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 16,134
Advances from stockholders 34,385
Total Current Liabilities 50,519
MINORITY INTEREST 84,666
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value,
20,000,000 shares authorized;
6,035,372 shares issued and outstanding 60,354
Additional paid-in capital 2,315,228
Accumulated deficit prior to
development stage (2,330,609)
Deficit accumulated during the
development stage (57,171)
Total Stockholders' Equity (Deficit) (12,198)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 122,987
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
<CAPTION>
From Inception
For the Year Ended On January 1, 1991 to
December 31, December 31, December 31,
1996 1995 1996
<S> <C> <C> <C>
REVENUES
Other income $ 21 $ 17 $ 38
EXPENSES:
General and
administrative 42,443 4,112 74,121
Interest expense 360 - 360
Total Expenses 42,803 4,112 74,481
NET LOSS FROM OPERATIONS (42,782) (4,095) (74,443)
MINORITY INTEREST 17,272 - 17,272
NET LOSS $ (25,510) $ (4,095) $ (57,171)
LOSS PER SHARE $ (0.00) $ (0.00)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, January 1, 1991
(inception of development stage) 323,866 $ 3,239 $2,321,443 $(2,330,609)
Net income (loss) for the year
ended December 31, 1991 - - - (72)
Balance, December 31, 1991 323,866 3,239 2,321,443 (2,330,681)
Net income (loss) for the year
ended December 31, 1992 - - - (1,466)
Balance, December 31, 1992 323,866 3,239 2,321,443 (2,332,147)
Net income (loss) for the year
ended December 31, 1993 - - - (1,678)
Balance, December 31, 1993 323,866 3,239 2,321,443 (2,333,825)
Shares issued to directors in
lieu of services rendered and
offset of advances, 1,500,000
shares at $0.01 per share on
May 6, 1994 1,500,000 15,000 - -
Issuance of shares for legal
services at $0.01 per share on
July 26, 1994 150,000 1,500 - -
Net income (loss) for the year
ended December 31, 1994 - - - (24,350)
Balance, December 31, 1994 1,973,866 19,739 2,321,443 (2,358,175)
Shares returned back to the
Company and cancelled in
February 1995 (18,494) (185) 185 -
Balance forward 1,955,372 $19,554 $2,321,628 $(2,358,175)
Issuance of shares for cash,
October 23, 1995 at $0.01 per
share 2,000,000 20,000 - -
Shares issued to directors in
lieu of services rendered,
November 1995 at $0.01 per share 30,000 300 - -
Net income (loss) for the year
ended December 31, 1995 - - - (4,095)
Balance, December 31, 1995 3,985,372 39,854 2,321,628 (2,362,270)
Issuance of 2,000,000 shares
for cash, March 12, 1996 at
$0.01 2,000,000 20,000 - -
Issuance of 50,000 shares for
services on October 31, 1996
at $0.01 50,000 500 - -
Liquidating dividend - - (6,400) -
Net income (loss) for the year
ended December 31, 1996 - - - (25,510)
Balance, December 31, 1996 6,035,372 $60,354 $2,315,228 $(2,387,780)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<CAPTION>
From
Inception on
January 1,
For the Years Ended 1991 through
December 31, December 31,
1996 1995 1996
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
NET LOSS $ (25,510) $ (4,095) $ (57,171)
Reconciliation of net loss to cash
provided (used) in operating activities
Common stock issued in lieu of services
rendered and offset of advances 500 300 17,300
Minority interest (17,272) - (17,272)
(Increase) decrease in prepaid expenses (986) - (986)
Increase (decrease) in accounts
payable 10,883 (85) 10,205
Increase (decrease) in advances from
stockholders 20,091 2,416 34,385
Net Cash (Used) by Operating
Activities (12,294) (1,464) (13,539)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of investments (3,200) - (3,200)
Purchase of horses (84,710) - (84,710)
Net Cash (Used) by Investing
Activities (87,910) - (87,910)
CASH FLOWS FROM FINANCING
ACTIVITIES
Payment of dividend (6,400) - (6,400)
Cash from minority shareholders 101,940 - 101,940
Cash from sales of stock 20,000 20,000 40,000
Net Cash Provided from Financing
Activities 115,540 20,000 135,540
NET CHANGE IN CASH 15,336 18,536 34,091
CASH AT BEGINNING OF PERIOD 18,755 219 -
CASH AT END OF PERIOD $ 34,091 $ 18,755 $ 34,091
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes - - -
NON-CASH ITEMS
Common stock issued in lieu of
services rendered and offset or
advances $ 500 $ 600 $ 17,600
Common stock returned and cancelled $ - $ 185 $ 185
</TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
NOTE 1 - ORGANIZATION
G/O International, Inc. (the Company) was initially incorporated
under the laws of the State of Colorado in June, 1973 as Rocky
Mountain Ventures, Inc. During mid 1978, the Company experienced
financial difficulties, at which time new officers and directors
were elected, the Company changed its business activity from hard
rock mining to oil and gas exploration, development and production,
and offices were relocated from Denver, Colorado, to its present
location in Houston, Texas.
On February 4, 1986, the Company filed for protection under Chapter
11 of the United States Bankruptcy Code. The Company ceased
operations in 1988 and has not conducted any business activity other
than the closing of its bankruptcy filing and other organizational
activities.
The Company is now considered to be in the development stage
(effective January 1, 1991 for accounting purposes) and has not
commenced planned principal operations. For disclosure purposes,
the accompanying Statement of Stockholders' Equity (Deficit) has
been reflected from the date of the inception of the development
stage. The Company has paid a partially liquidating dividend. The
dividend was in the form of shares of two of its subsidiaries.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
followed in connection with the preparation of the consolidated
financial statements.
Income Taxes - Income taxes have been provided on financial
statement income. There are no deferred income taxes arising from
timing difference which result from income and expense items being
reported for financial accounting and tax reporting purposes in
different periods (see Note 7).
(Loss) Per Share - The Company computes earnings (loss) per share by
the weighted average method. Fully diluted earnings per share are
not presented because the Company does not have common stock
equivalents. As discussed below, the Company's Board of Directors
authorized a reverse split of its outstanding Common Stock. All
earnings per share disclosures have been retroactively restated to
reflect the reverse split.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with maturities of three months or less to be cash
equivalents.
Use of Estimates - The preparation of consolidated 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 consolidated
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Principles of Consolidation - The accompanying financial statements
include the accounts of the Company and its wholly owned subsidiary
Antares Trading, Inc. and its 50.7% owned subsidiary Waterbury
Resources, Inc.
NOTE 3 - BANKRUPTCY FILING
On February 4, 1986, the Company filed a voluntary petition pursuant
to Chapter 11 of Title 11 of the United States Bankruptcy Code. At
the time of its filing, the Company had liabilities in excess of
$950,000.
In accordance with the Company's Second Amended Plan of
Reorganization the creditors were broken down into nine separate
classes for individual satisfaction. A total of $1,496 of debt was
paid in cash, $562,098 of debt was paid through transfer of secured
property interest, and the balance of $338,061 of debt was satisfied
through the issuance of 338,062 shares of its previously unissued
common stock. On March 13, 1992 the Bankruptcy Court issued its
final decree and the Chapter 11 bankruptcy was closed.
NOTE 4 - ADVANCES FROM STOCKHOLDERS
Stockholders of the Company have advanced funds to the Company to
cover settlement of bankruptcy obligations and ongoing
administrative expenses. The advances bear no interest and are
repayable on demand as funds become available. Total advances
amounted to $34,385 at December 31, 1996.
NOTE 5 - CAPITAL TRANSACTIONS
On May 6, 1994, the Company's Board of Directors authorized a
reverse split of its outstanding common stock. The reverse split
was on a basis of 1 (one) share for each 100 shares outstanding (1
for 100). However, no shareholders' holding was to be reduced to
less than 100 shares. The total number of shares of common stock
outstanding after the split was 323,866. The reverse stock split is
reflected on a retroactive basis.
On May 6, 1994, the Company's shareholders adopted, ratified and
approved Board of Directors' resolutions authorizing the issuance of
a total of 1,500,000 post-split shares of its previously unissued
common stock to a director and the former legal counsel (750,000
shares each) in exchange for services rendered and advances made
totaling $15,000.
On July 26, 1994, the Company's Board of Directors entered into a
compensation agreement calling for the issuance of 150,000 post-
split shares of its previously unissued commons stock, valued at
$1,500, in exchange for legal services rendered by its current legal
counsel.
During 1995 18,494 shares of common stock was turned back to the
Company and canceled due to rounding of shares in the reverse split
of the Company's common stock.
On October 23, 1995 the Company issued 2,000,000 shares of its
common stock at $0.01 per share for a total of $20,000.
During November 1995, 30,000 shares of common stock was issued to
Directors of the Company in lieu of services rendered.
In March of 1996, 2,000,000 shares of common stock were issued for
cash of $20,000 or $0.01 per share.
In October of 1996, 50,000 shares of common stock were issued for
services valued $0.01 or $500.
NOTE 6 - RELATED PARTY TRANSACTIONS
The President of the Company provides office space and other
clerical services at no cost to the Company.
NOTE 7 - INCOME TAX
During 1993 the Company adopted Statement of financial Accounting
Standards No.109 - "Accounting for income Taxes" (SFAS 109). SFAS
109 is an asset and liability approach that requires the recognition
of deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the Company's
financial statements or tax returns. In estimating future tax
consequences, SFAS 109 generally considers all expected future
events other than enactments of changes in the tax law or rates.
Previously, the Company accounted for income taxes under APB Opinion
No. 11. Under SFAS 109, in the year of adoption, previously
reported results of operations for that year should be restated to
reflect the effects of applying SFAS 109, and the cumulative effect
of adoption on prior years' results of operations should be shown in
the income statement n the year of change it was determined that
there was no cumulative effect on the prior year earnings. For tax
purposes, the Company had available, at December 31, 1996, not
operating loss ("NOL") carry forwards for regular Federal Income Tax
purposes of an estimated $2,159,011 which are estimated to expire as
shown below. A valuation, allowance has been established for
estimated tax benefits of the loss carry overs which are not
expected to be realized.
Year Amount
1997 $119,801
1998 73,718
1999 1,891,249
2006 72
2007 1,466
2008 1,678
2009 24,350
2010 4,395
2011 42,282
NOTE 8 - GOING CONCERN
The Company has experienced losses totaling $57,171 from inception
of its development stage. The Company also has limited assets and
operating capital with a stockholder deficit of $12,198 at December
31, 1996. In light of this circumstance, the ability of the Company
to continue as a going concern is substantially in doubt. The
consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Management plans are to seek another entity that wants to consummate
an acquisition by allowing the purchasing entity to buy or exchange
unissued shares of the Company's common stock in order to become a
part of a public company. Management believes their plans will
provide the corporation with the ability to continue in existence.
In the interim management has committed to meeting its operating
expenses.
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
Antares Trading Inc.
Daimyo Industries Ltd.
Waterbury Resources Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 34091
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35077
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 122987
<CURRENT-LIABILITIES> 50519
<BONDS> 0
0
0
<COMMON> 60354
<OTHER-SE> (72552)
<TOTAL-LIABILITY-AND-EQUITY> 122987
<SALES> 0
<TOTAL-REVENUES> 21
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 42443
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 360
<INCOME-PRETAX> (25510)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25510)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
