-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TiJVOL188/Ktad1d0IkFRY5xu226KJ/vpZ+lyn3yIwaPjpij3v8rJiv3oHepSC4F 8aPnzVPx8JtBTZV/BB9Mtw== 0000855684-96-000017.txt : 19960723 0000855684-96-000017.hdr.sgml : 19960723 ACCESSION NUMBER: 0000855684-96-000017 CONFORMED SUBMISSION TYPE: 10-12G/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19960719 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAHAINA ACQUISITIONS INC CENTRAL INDEX KEY: 0000855684 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 841325695 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-12G/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27480 FILM NUMBER: 96596646 BUSINESS ADDRESS: STREET 1: 5459 SOUTH IRIS STREET STREET 2: SUITE 2-102 CITY: LITTLETON STATE: C0 ZIP: 80123 BUSINESS PHONE: (303) 904-8884 MAIL ADDRESS: STREET 1: 5459 SOUTH IRIS STREET STREET 2: SUITE 2-102 CITY: LITTLETON STATE: CO ZIP: 80123 10-12G/A 1 1 ================================================================= __________________________________ SECURITIES AND EXCHANGE COMMISSION 450 Fifth Street, N.W. Washington, D. C. 20549 __________________________________ FORM 10/A General Form for Registration of Securities File No. 0-27480 Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934 LAHAINA ACQUISITIONS, INC. (Exact name of registrant as specific in its charter) Colorado 84-1325695 (State of Incorporation) (I.R.S. Employer I.D. No.) 5459 South Iris Street Littleton, Colorado 80123 (Address of principal executive offices, including zip code) Telephone number, including area code: (303) 904-8884 Copies to: Conrad C. Lysiak, Esq. West 601 First Avenue, Suite 503 Spokane, Washington 99204 Securities to be registered pursuant to Section 12(b) of the Act: NONE (Title of Class) Securities to be registered pursuant to Section 12(g) of the Act: COMMON STOCK (Title of Class) Exhibit Index begins on page ___ Page 1 of ___. ================================================================= 2 ITEM 1. BUSINESS. HISTORY, ORGANIZATION AND CHANGE OF CONTROL Lahaina Acquisitions, Inc. (the "Company"), was organized under the laws of the State of Colorado, on April 5, 1989, to make a distribution of securities to shareholders of Coyote Acquisitions, Inc. ("Coyote"). The Company filed a Form S-18 registration statement (33-31031-D) with the United States Securities and Exchange Commission (the "SEC") but subsequently abandoned the same. The Company subsequently decided to make a distribution of securities to the shareholders of St. Joseph Corp. ("St. Joe"), a shell corporation. In May 1991, the Company gifted to the shareholders of St. Joe on a pro rata basis, 496,500 Units. Each Unit consisted of one share of Common Stock, two Class A Warrants and two Class B Warrants (collectively referred to as the "Warrants"). Each Class A Warrant entitles the holder to purchase one (1) share of Common Stock at a price of $1.00 per share. Each Class B Warrant entitles the holder to purchase one share of Common Stock at price of $1.50 per share. The Company has the right to redeem the Warrants upon 30 days written notice at $0.0001 per Warrant. The Warrants were due to expire in May 1995, however, the Board of Directors extended the exercise period until May 15, 1999. In August 1989, the Company issued a total of 1,000,000 shares of Common Stock. 800,000 shares were issued to Gary Agron; 50,000 shares were issued to Barry Swartz; 50,000 shares were issued to James Eller; and, 100,000 Units were issued to Coyote Acquisitions, Inc. Each Unit consisted of one share of Common Stock; five Class A Warrants, exercisable at $1.00 per share; and five Class B Warrants, exercisable at $1.50 per share. On April 24, 1991, Mr. Swartz gratuitously reconveyed his 50,000 shares to the Company; Mr. Eller gratuitously reconveyed 50,000 shares to the Company; and, Mr. Agron gratuitously reconveyed 400,000 shares to the Company. On the same date, the Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000 shares of Common Stock were issued to Philip Davis, the Company's President and to Janice Agron for services rendered. In May 1991, the Company gifted 496,500 Units to shareholders of St. Joe. The purpose of the distribution was to cause the shares of the Company to be widely held, in anticipation of creating a public market for the Company's securities. The Company has no operating history nor any revenues or earnings from operations. The Company has no significant assets or financial resources. As such, the Company can be defined as a "shell" company, who's sole purpose at this time is to locate and consummate a merger or acquisition with a private entity. As a result of the foregoing distribution, the Company currently has 197 shareholders. 3 The Company is filing this Form 10 on a voluntary basis. It has no obligations pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company believes that by filing such Form 10 and being obligated to file reports pursuant to Section 13 of the Exchange Act, it can attract an acquisition candidate of greater financial value with a track record of success. While the Company believes it will be a more attractive acquisition candidate, there is no assurance that the foregoing assumption is correct. The Company believes that there is a demand by non-public corporations for shell corporations that have a public distribution of securities, such as the Company. The Company believes that demand for shells has increased dramatically since the Securities and Exchange Commission (the "Commission") imposed burdensome requirements upon "blank check" companies pursuant to Reg. 419 of the Securities Act of 1933 (the "Act"). According to the Commission, Rule 419 was designed to strengthen regulation of securities offerings by blank check companies, which Congress has found to have been a common vehicle for fraud and manipulation in the penny stock market. See Securities Act Releases No. 6891 (April 17, 1991), 48 SEC Docket 1131 and No. 6932 (April 13, 1992) 51 Docket 0382, SEC Docket 0382. The foregoing regulation has decreased, substantially, the number of "blank check" offerings filed with the Commission, and as a result has stimulated an increased demand for shell corporations. While the Company has made the foregoing assumption, there is no assurance that the same is accurate or correct and accordingly, no assurance that the Company will be acquired by or acquire an existing non-public entity. GENERAL The Company proposes to seek, investigate and, if warranted, acquire an interest in one or more business opportunities ventures. As of the date hereof the Company has no business opportunities or ventures under contemplation for acquisition but proposes to investigate potential opportunities in the form of investors or entrepreneurs with a concept which has not yet been placed in operation, or in the form of firms which are developing companies. The Company may seek out established businesses which may be experiencing financial or operation difficulties and are in need of the limited additional capital the Company could provide. The Company anticipates that it will seek to merge with or acquire an existing business. After the merger or acquisition has taken place, the surviving entity will be the Company (Lahaina Acquisitions, Inc.), however, management from the acquired entity will in all likelihood operate the Company. There is however, a remote possibility that the Company may seek to acquire and operate an ongoing business, in which case the existing management might be retained. Due to the absence of capital available for investment by the Company, the types of business seeking to be acquired by the 4 Company will no doubt be smaller and higher risks types of businesses. In all likelihood, a business opportunity will involve the acquisition of or merger with a corporation which does not need additional cash but which desires to establish a public trading market for its Common Stock. Accordingly, the Company's ability to acquire any business of substance will be extremely limited. The Company does not propose to restrict its search for investment opportunities to any particular industry, or geographical location and may, therefore, engage in essentially any business, anywhere, to the extent of its limited resources. It is anticipated that business opportunities will be available to the Company and sought by the Company from various sources, throughout the United States including its Officers and Directors, professional advisors such as attorneys and accountants, securities broker/dealers, venture capitalists, members of the financial community, other businesses and others who may present solicited and unsolicited proposals. The reason for this is to attract the most favorable business opportunities and ventures available. Management believes that business opportunities and ventures will become available to it, due to a number factors, including, among others: (a) management's willingness to enter into unproven, speculative ventures; (b) management's contacts and acquaintances; and, (c) the Company's flexibility with respect to the manner in which it may structure potential financing and/or acquisitions. However, there is no assurance that the Company will be able to structure or finance and/or acquire any business opportunity or venture. OPERATION OF THE COMPANY The Company intends to search throughout the United States for a merger/acquisition candidate, however, because of the lack of capital, the Company believes that the merger/acquisition candidate will be conducting business within a limited geographical area. The Company, however, intends to maintain its corporate headquarters and principal place of business at 5459 South Iris Street, Littleton, Colorado 80123. All corporate records will be maintained at said office, and it is anticipated that all shareholders' meetings will take place in Colorado. In the event that a merger or acquisition of the Company takes place, no assurance can be given that the corporate records or headquarters will continue to be maintained at Littleton, Colorado, or that shareholders' meetings will be held in Colorado. 5 The Officers and Directors will personally seek acquisition/merger candidates and/or orally contact individuals or broker/dealers and advise them of the availability of the Company as an acquisition candidate. The Officers and Directors will review material furnished to them by the proposed merger/acquisition candidates and decide if a merger/acquisition is in the best interests of the Company and its shareholders. The Company may employ outside consultants, however, until a merger/acquisition candidate has been targeted by the Company, management believes that it is impossible to consider the criteria that will be used to hire consultants. While the Company may hire independent consultants, it has not considered any criteria regarding their experience, the services to be provided, or the term of service. The Company has not had any discussions with any consultants and there are no agreements or understandings with any consultants. Other than as disclosed herein, there are no other plans for accomplishing the business purpose of the Company. SELECTION OF OPPORTUNITIES The analysis of new business opportunities will be undertaken by or under the supervision of the Officers and Directors, none of whom is a professional business analyst or has any previous training or experience in business analysis. Inasmuch as the Company will have no funds available to it in its search for business opportunities and venture, the Company will not be able to expend significant funds on a complete and exhaustive investigation of such business or opportunity. The Company will however, investigate, to the extent believed reasonable by its management, such potential business opportunities or ventures. As part of the Company's investigation, Officers and Directors will meet personally with management and key personnel of the firm sponsoring the business opportunity, may visit and inspect plants and facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and conduct other reasonable measures, to the extent of the Company's limited financial resources and management and technical expertise. Prior to making a decision to recommend to shareholders participation in a business opportunity or venture, the Company will generally request that it be provided with written materials regarding the business opportunity containing such items as a description of products, services and company history; management resumes; financial information; available projections with related assumptions upon which they are based; evidence of existing patents, trademarks or service marks or rights thereto; 6 present and proposed forms of compensation to management; a description of transactions between the prospective entity and its affiliates during relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; and, other information deemed relevant. It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and costs for accountants, attorneys and others. $450.00 incurred for the audit covering the last six years was paid by the Company's President Philip Davis. Further $2,000 in legal expenses were paid by Mr. Davis and Mr. John Lee, the Company's Secretary. Mr. Davis and Mr. Lee anticipate funding the Company's operations, including providing funds necessary to search for acquisition candidates. Mr. Davis and Mr. Lee anticipate funding such expenses until an acquisition candidate is found, without regard to the amount involved. Accordingly, no alternative cash resources have been explored. There are no loan agreements or understandings. The Company will not make any loans to officers or directors, nor will the Company make loans to any acquisition candidate. Money advanced by Messrs. Davis and Lee is and will be done gratuitously without any obligation on the part of the Company to repay the same. The Company will have unrestricted flexibility in seeking, analyzing and participating in business opportunities. In its efforts, the Company will consider the following kinds of factors: (a) Potential for growth, indicated by new technology, anticipated market expansion or new products; (b) Competitive position as compared to other firms engaged in similar activities; (c) Strength of management; (d) Capital requirements and anticipated availability of required funds from future operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; and, (e) Other relevant factors. 7 Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Potential investors must recognize that due to the Company's limited capital available for investigation and management's limited experience in business analysis, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired. The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more. The Company does not plan to raise any capital at the present time, by private placements, public offerings, pursuant to Regulation S promulgated under the Act, or by any means whatsoever. Further, there are no plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of an acquisition or merger candidate. FORM OF ACQUISITION The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters. The exact form or structure of the Company's participation in a business opportunity or venture will be dependent upon the needs of the of the particular situation. The Company's participation may be structured as an asset purchase agreement, a lease, a license, a joint venture, a partnership, a merger, or acquisition of securities. As set forth above, the Company may acquire its participation in a business opportunity through the issuance of Common Stock or other securities in the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1954, as amended, may depend upon the issuance to the shareholders of the acquired company of at least eighty percent (80%) of the Common Stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Internal Revenue Code all prior shareholders may, in such circumstances, retain twenty percent (20%) or less of the total issued and outstanding Common Stock. If such a transaction were available to the Company, it will be necessary to obtain shareholder approval to effectuate a reverse stock split or to authorize additional shares 8 of Common Stock prior to completing such acquisition. This could result in substantial additional dilution to the equity of those who were shareholders of the Company prior to such reorganization. Further, extreme caution should be exercised by any investor relying upon any tax benefits in light of the proposed new tax laws. It is possible that no tax benefits will exist at all. Prospective investors should consult their own legal, financial and other business advisors. The present management and the shareholders of the Company in this offering will in all likelihood not have control of a majority of the voting shares of the Company following a reorganization transaction. In fact, it is most probable that the shareholders of the acquired entity will gain control of the Company. Further, management intends to make available for purchase by shareholders of the acquired entity of up to 75% of the shares of Common Stock owned by them. The terms of sale of the shares presently held by officers and/or directors of the Company will not be afforded to other shareholders of the Company. As part of such a transaction, all or a majority of the Company's Directors may resign and new Directors may be appointed without any vote by shareholders. Present stockholders have not agreed to vote their respective shares of Common Stock in accordance with the vote of the majority of all non-affiliated future stockholders of the Company with respect to any business combination. The Company may not borrow funds and use funds to make payments to Company promoters, management or their affiliates or associates. The Company has an unwritten policy that it will not acquire or merge with a business or company in which the Company's management or their affiliates or associates directly or indirectly have an ownership interest. Management is not aware of any circumstances under which the foregoing policy will be changed and management, through their own initiative, will not change said policy. The Company is required by the regulations promulgated under the Securities Exchange Act of 1934 to obtain and file with the Commission, audited financial statements of the acquisition candidate not later than sixty days from the date the Form 8-K is due at the Commission disclosing the acquisition/merger. 9 RIGHTS OF DISSENTING SHAREHOLDERS Under the Colorado Corporation Code, a business combination typically requires the approval of two-thirds of the outstanding shares of both participating companies. The Company's Articles of Incorporation reduce the voting requirement to a majority of the Company's outstanding Common Stock. Shareholders who vote against any business combination in certain instances may be entitled to dissent and to obtain payment for their shares pursuant to Sections 7-4-123 and 7-4-124 of the Colorado Corporation Code. The requirement of approval of the Company's shareholders in any proposed business combination is limited to those transactions identified as a merger or a consolidation. A business combination identified as a share exchange does not require the approval of the Company's shareholders, nor does it entitle shareholders to dissent and obtain payment for their shares. Accordingly, unless the acquisition is a statutory merger, requiring shareholder approval, the Company will not provide shareholders with a disclosure document containing audited or unaudited financial statements, prior to such acquisition. Prior to any business combination for which shareholder approval is required, the Company intends to provide its shareholders complete disclosure documentation concerning the business opportunity or target company and its business. Such disclosure will in all likelihood be in the form of a proxy statement which will be distributed to shareholders at least 20 days prior to any shareholder's meeting. None of the Company's officers, directors, promoters, their affiliates or associates have had any preliminary contact or discussions with and there are no present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger transaction contemplated in this registration statement. NOT AN "INVESTMENT ADVISER" The Company is not an "investment adviser" under the Federal Investment Advisers Act of 1940, which classification would involve a number of negative considerations. Accordingly, the Company will not furnish or distribute advice, counsel, publications, writings, analysis or reports to anyone relating to the purchase or sale of any securities within the language, meaning and intent of Section 2(a)(11) of the Investment Advisers Act of 1940, 15 U.S.C. 80b2(a)(11). 10 NOT AN "INVESTMENT COMPANY" The Company may become involved in a business opportunity through purchasing or exchanging the securities of such business. The Company does not intend however, to engage primarily in such activities and is not registered as an "investment company" under the Federal Investment Company Act of 1940. The Company believes such registration is not required. The Company must conduct its activities so as to avoid becoming inadvertently classified as a transient "investment company" under the Federal Investment Company Act of 1940, which classification would affect the Company adversely in a number of respects. Section 3(a) of the Investment Company Act provides the definition of an "investment company" which excludes an entity which does not engage primarily in the business of investing, reinvesting or trading in securities, or which does not engage in the business of investing, owning, holding or trading "investment securities" (defined as "all securities other than United States government securities or securities of majority-owned subsidiaries") the value of which exceeds forty percent (40%) of the value of its total assets (excluding government securities, cash or cash items). The Company intends to implement its business plan in a manner which will result in the availability of this exemption from the definition of "investment company." The Company proposes to engage solely in seeking an interest in one or more business opportunities or ventures. Effective January 14, 1981, the Securities and Exchange Commission adopted Rule 3a-2 which deems that an issuer is not engaged in the business of investing, reinvesting, owning, holding or trading in securities for purposes of Section 3(a)(1), cited above, if, during a period of time not exceeding one year, the issuer has a bona fide intent to be engaged primarily, or as soon as reasonably possible (in any event by the termination of a one year period of time), in a business other than that of investing, reinvesting, owning, holding or trading in securities and such intent is evidenced by the Company's business activities and appropriate resolution of the Company's Board of Directors duly adopted and duly recorded in the minute book of the Company. The Rule 3a-2 "safe harbor" may not be relied on more than a single time. 11 COMPANY'S OFFICE The Company's offices are located at 5459 South Iris Street, Littleton, Colorado 90123, and the telephone number is (303) 940-8884. The Company's office is located in the home of Philip Davis, the Company's President and a member of the Board of Directors. Approximately nine square feet are allocated to the Company on a rent free basis. The office will remain at Mr. Davis's home until an acquisition has been concluded. There are no written documents memorializing the foregoing. There are no preliminary agreements or understandings with respect to the office facility subsequent to the completion of an acquisition. Upon a merger or acquisition, the Company intends to relocate its office to that of the acquisition candidate. Employees The Company is a development stage company and currently has no employees other than certain of its Officers and Directors. See "Management." Management of the Company expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in a specific business opportunity. ITEM 2. FINANCIAL INFORMATION. SELECTED CONSOLIDATED FINANCIAL DATA The selected financial data presented below has been derived from the financial statements of the Company, which financial statements have been examined by Doran Peck, C.P.A. P.C. independent certified public accountant, as indicated in his report included elsewhere herein. The following table summarized certain financial information and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements and related notes included elsewhere in this Prospectus. For the reasons set forth in this Form 10 registration statement the information shown below may not be indicative of the Company's future results of operations. 12 Statement of Loss and Accumulate Deficit Data:
Years Ended September 30 1995 1994 1993 1992 1991 Six Months Ended --------------------------------------------- 3/31/96 3/31/95 (Unaudited) Income $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Operating Expenses $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Net Income (loss) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Net Income per Share $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Balance Sheet Data: Working Capital $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Total Assets $ 600 $ 600 $ 600 $ 600 $ 600 $ 1,050 $ 600 Long-term Debt $ -0- $ -0- $ -0- $ -0- $ -0- $ 450 $ -0- Stockholders' equity $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS Results of Operations - (May 1, 1991) through May 30, 1996. The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards No. 7. There have been no operations since incorporation. Liquidity and Capital Resources. The Company issued 996,500 shares of its Common Stock to officers, directors and others. The Company has no operating history and no material assets. The Company has $-0- in cash as of May 30, 1996. ITEM 3. DESCRIPTION OF PROPERTIES. The Company has no assets. 13 ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth as of May 30, 1996, the Common Stock ownership of each person known by the Company to be the beneficial owner of five percent or more of the Company's Common Stock, each director individually and all officers and directors of the Company as a group. Each person has sole voting and investment power with respect to the shares of Common Stock shown, and all ownership is of record and beneficial. Name and address Number of Percent of owner Shares Position of Class - --------------------------------------------------------------------------- Philip J. Davis [1] 440,000 President and a member 44.18% 5459 South Iris Street of the Board of Directors Littleton, CO 80123 John C. Lee [2] 440,000 Secretary and a member 44.18% 5410 E. Long Pl. of the Board of Directors Littleton, CO 80122 Charles C. Van Gundy[3] 20,000 Treasurer and a member 2.00% 7215 Lowell Boulevard of the Board of Directors Westminster, CO 80030 All officers and 900,000 90.36% directors as a group (3 persons) [1] Does not include 380,000 Class A Warrants and 380,000 Class B Warrants to purchase up to 760,000 shares of Common Stock. [2] Does not include 380,000 Class A Warrants and 380,000 Class B Warrants to purchase up to 760,000 shares of Common Stock. [3] Does not include 40,000 Class A Warrants and 40,000 Class B Warrants to purchase up to 80,000 shares of Common Stock. 14 ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS. Officers and Directors. The officers and directors of the Company are as follows: Name Age Position Philip J. Davis 39 President and a member of the Board of Directors John C. Lee 39 Secretary and a member of the Board of Directors Charles C. Van Gundy 43 Treasurer and a member of the Board of Directors All directors hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. The Company's officers are elected by the Board of Directors at the annual meeting after each annual meeting of the Company's shareholders and hold office until their death, or until they resign or have been removed from office. Philip J. Davis - President and a member of the Board of Directors. Mr. Davis is President and a member of the Board of Director of the Company. Mr. Davis held the position of Secretary/Treasurer of the Company from May 1991 until November 1995 when resigned said office to assume the position of President of the Company. Mr. Davis has held the position of President since November 1995. Mr. Davis has held the position as a member of the Board of Directors since May 1991 of the Company. From December 1992 to the present, Mr. Davis is a self-employed consultant. From January 1991 to November 1992, Mr. Davis was affiliated with Private Investors Cartel, Ltd., a securities broker/dealer, as a trader and principal thereof. From September 1984 to December 1990, Mr. Davis was the President and a member of the Board of Directors of Richfield Securities, Inc., a securities broker/dealer. On January 27, 1992, the District Business Conduct Committee of the National Association of Securities Dealers, Inc. rendered a decision against Mr. Davis finding that Mr. Davis, Richfield Securities, Inc. and another individual charged unfair and fraudulent markups in connection with the sale of securities. Further, the District Business Conduct Committee found that Mr. Davis and Richfield Securities, Inc. failed to establish and implement written supervisory procedures to detect and prevent the markup violations. Richfield Securities, Inc. was fined $30,133.97 and suspended from membership in the National Association of Securities Dealers, Inc. 15 for one year and Mr. Davis was censured, fined $30,133.97, suspended from the National Association of Securities Dealers for one year and required to requalify by examination prior to becoming associated with any member of the National Association of Securities Dealers, Inc. On January 15, 1991, Mr. Davis voluntarily closed Richfield Securities, Inc. Further, Richfield Securities, Inc., Mr. Davis and the third party were assessed the costs of the action in the amount of $908.00. Mr. Davis appealed the foregoing decision to the Securities and Exchange Commission (the "Commission") and on November 12, 1993 the foregoing sanctions were affirmed by the Commission. The suspensions referred to above began on March 21, 1994 and will conclude at the close of business on March 21, 1995. In October 1992, Mr. Davis filed for protection under Chapter XIII of the United States Bankruptcy Act. In July 1994, the action was voluntarily dismissed by the Bankruptcy Court. On December 2, 1994, Mr. Davis filed a petition for bankruptcy pursuant to Chapter VII of the United States Bankruptcy Act. Mr. Davis was granted a discharge in March 1995. Since May 1991, Mr. Davis has been Secretary/Treasurer and a member of the Board of Directors of Cancun Acquisitions, Inc., a shell corporation. Cancun Acquisitions, Inc. distributed its securities to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Securities and Exchange Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. No mergers or acquisitions have occurred. From May 1991 to November 1995, Mr. Davis was Secretary/Treasurer and a member of the Board of Directors of Kapalua Acquisitions, Inc., a Colorado shell corporation. From November 1994 to November 1995, Mr. Davis was President of Kapalua Acquisitions, Inc. Kapalua's securities were distributed to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. Mr. Davis resigned his positions as an officer and director of Kapalua Acquisitions, Inc. when it completed a reverse acquisition with Startech Corporation, a Connecticut corporation engaged in the business of waste disposal. Since May 1991, Mr. Davis has been Secretary/Treasurer and a member of the Board of Directors of Napili Acquisitions, Inc., a shell corporation. Napili Acquisitions, Inc. distributed shares to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Securities and Exchange Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. No mergers or acquisitions have occurred. From May 1991 to November 1995, Mr. Davis was Secretary/Treasurer and a member of the Board of Directors of Paia Acquisitions, Inc., a shell corporation. Paia Acquisitions, Inc. 16 distributed its securities to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Securities and Exchange Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. In November 1995, Paia acquired all of the issued and outstanding shares of common stock of Consolidated Financial Management, Inc. d/b/a Banc-Pro, an Arizona corporation in exchange for 3,900,000 post reverse-split restricted shares of common of Paia and 845,000 preferred shares of Paia. Paia's common stock began trading on the Bulletin Board operated by the National Association of Securities Dealers, Inc. in January 1996. Mr. Davis resigned as an officer and director of Paia in November 1995. Since May 1991, Mr. Davis has been Secretary/Treasurer and a member of the Board of Directors of Wailea Acquisitions, Inc., a shell corporation. Wailea Acquisitions, Inc. distributed its securities to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Securities and Exchange Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. No mergers or acquisitions have occurred. From June 1987 to December 1992, Mr. Davis was President and a member of the Board of Directors of Pre-Cor Corporation, which was used by Mr. Davis to hold title to his personal investments. Pre-Cor Corporation was dissolved in 1992. Mr. Davis will devote approximately 2% of his time to the Company. John C. Lee - Secretary and a member of the Board of Directors. Mr. Lee is Secretary and a member of the Board of Directors of the Company. Mr. Lee has held the foregoing positions since November 1995. Since November 1992, Mr. Lee been engaged in the practice of investing his personal funds in securities. From November 1994 to November 1995, Mr. Lee was Vice President and a member of the Board of Directors of Kapalua Acquisitions, Inc., a Colorado shell corporation. Kapalua's securities were distributed to shareholders of St. Joe in May 1991. The shares were distributed without consideration and a Form D was filed with the Commission. There was no offering price and no funds were raised from the distribution. The purpose of the distribution was to cause the securities to become widely held. Mr. Lee resigned his positions as an officer and director when it completed a reverse acquisition with Startech Corporation, a Connecticut corporation engaged in the business of waste disposal. From August 1989 to November 1992, Mr. Lee was Secretary of Private Investors Cartel, Ltd. a securities broker/dealer. From April 1985 to August 1989, Mr. Lee was self-employed as a financial consultant. From March 1985 to July 1986, Mr. Lee was Vice President of American Mobile Communications in Littleton, Colorado. American Mobile 17 Communications was engaged in the business of acquiring and managing mobile home parks. From November 1984 to July 1985, Mr. Lee was Secretary of Sequal Securities, Inc. a securities broker/dealer located in Glendale, Colorado. From October 1981 to March 1985, Mr. Lee was President of Rigel Securities, a securities broker/dealer located in Aurora, Colorado. From February 1982 to July 1982, Mr. Lee was a registered representative associated with Columbine Securities, a securities broker/dealer located in Denver, Colorado. Mr. Lee will devote approximately 2% of his time to the operation of the Company. Charles C. Van Gundy - Treasurer and a member of the Board of Directors. Mr. Van Gundy is Treasurer and a member of the Board of Directors of the Company. Mr. Van Gundy has held the foregoing positions since November 1995. Since January 1992, Mr. Van Gundy has been employed by U. S. Pawn, Inc., Denver, Colorado, a NASDAQ traded public company, first as its Assistant Controller, subsequently as its Controller and Vice President of Accounting, and currently as its Vice President of Finance and Chief Financial Officer. From 1982 to January 1992, Mr. Van Gundy served as an accounting officer for various mutual fund, high technology and economic redevelopment organizations. Mr. Van Gundy holds a Bachelor of Science degree in accounting and finance from Metropolitan State College of Denver (1979), and subsequently studied law at the University of San Diego School of Law until 1981. There are no family relationship between any director or executive office and any other director or executive officer. Gary Agron and Janice Agron are friends of Philip Davis. Mr. Agron is an attorney and renders legal services to Mr. Davis. Gary Agron, Janice Agron and Philip Davis are or were officers and/or directors of the shell entities described in Mr. Davis's biographical information. John Lee and Philip Davis are friends and former officers/directors of Kapalua Acquisitions, Inc. Charles VanGundy, John Lee and Philip Davis are acquaintances. Charles Van Gundy and Gary Agron are acquaintances who met while playing golf and are currently affiliated with U.S. Pawn. Gary Agron and Janice Agron are no longer affiliated with the Company in any manner. None of the officers or directors of the Company are affiliated in any manner with St. Joe. 18 There are no agreements or understandings for any officer or director to resign at the request of another person and that none of the officers or directors are acting on behalf of or will act at the direction of any other person. The officers and directors may resign, however, at the time of the acquisition or merger at the request of the management of the acquisition candidate. The activities of each Officer and Director will be material to the operation of the Company. No other person's activities will be material to the operation of the Company. There are no promoters of the Company, other than its Officers and Directors. ITEM 6. EXECUTIVE COMPENSATION. None of the Company's officers or directors currently receives any salary from the Company. The Company does not anticipate entering into employment agreements with any of its officers or directors in the near future. Directors do not receive compensation for their services as directors and are not reimbursed for expenses incurred in attending board meetings. Other than consulting fees and finder's fees which may be paid to unaffiliated third parties, no other individuals will receive any salaries or fees from the Company. The Company's officers and directors will not receive finder's fees, consulting fees or salaries. Officers, directors and/or principal shareholders may receive cash or stock from the sale of their shares of the Company's stock to the Company's merger/acquisition candidate or principals of the merger/acquisition candidate. ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The Company was incorporated on April 5, 1989. In August 1989, the Company issued a total of 1,000,000 shares of Common Stock. 800,000 shares were issued to Gary Agron; 50,000 shares were issued to Barry Swartz; 50,000 shares were issued to James Eller; and, 100,000 Units were issued to Coyote Acquisitions, Inc. Each Unit consisted of one share of Common Stock; five Class A Warrants, exercisable at $1.00 per share; and five Class B Warrants, exercisable at $1.50 per share. On April 24, 1991, Mr. Swartz gratuitously reconveyed his 50,000 shares to the Company; Mr. Eller gratuitously reconveyed 50,000 shares to the Company; and, Mr. Agron gratuitously reconveyed 400,000 shares to the Company. On the same date, the Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000 shares of Common Stock were issued to Philip Davis, the Company's President and to Janice Agron for services rendered. 19 On May 10, 1991, the Company gifted 496,500 Units of securities of the Company on a pro rata basis to shareholders of St. Joseph Corp. ("St. Joe"), pursuant to Regulation D of the Securities Act of 1933, as amended. Each Unit consisted of one share of common stock, two Class A Warrants and two Class B Warrants. Each Class A Warrant entitles the holder to purchase one share of common stock at a price of $1.00 per share for a period of four year from May 10, 1991 and each Class B Warrant entitled the holder to purchase one share of common stock at a price of $1.50 per share for a period of four years from May 10, 1991. The exercise period of the Class A and Class B Warrants was extended to May 10, 1999 by resolution of the Board of Directors on May 1, 1995. The purpose of the distribution was to cause the shares of the Company to be widely held, in anticipation of creating a public market for the Company's securities. The Company has no operating history nor any revenues or earnings from operations. The Company has no significant assets or financial resources. As such, the Company can be defined as a "shell" company, who's sole purpose at this time is to locate and consummate a merger or acquisition with a private entity. Gary Agron and Janice Puder Agron received 350,000 Units in this offering as a result of their ownership of shares of St. Joe and Mr. Davis received 50,000 Units in this offering as a result of his ownership of shares of St. Joe. From March 1990 to October 1994, Mr. Davis was the Secretary and a Director of St. Joe. As a result of a change in control of St. Joe in October 1994, Mr. Davis resigned as Secretary and a Director. Since October 1994, Mr. Davis has not been affiliated with St. Joe. Mr. Davis owns approximately 0.009% of the outstanding shares of St. Joe. Since resigning, Mr. Davis has not received any communications from St. Joe. On November 11, 1994, Gary Agron and Janice Puder Agron conveyed all of their right, title and interest in and to 800,000 shares of Common Stock, 700,000 Class A Warrants and 700,000 Class B Warrant to Mr. Davis. In November 1995, Mr. Davis conveyed 440,000 shares of Common Stock, 380,000 Class A Warrants and 380,000 Class B Warrants to Mr. Lee. The foregoing was characterized as a 4(1 1/2) transaction pursuant to Section 4(2) of the Securities Act of 1933. In November 1995, Mr. Davis conveyed 20,000 shares of Common Stock, 40,000 Class A Warrants and 40,000 Class B Warrants to Mr. Van Gundy. The foregoing was characterized as a 4(1 1/2) transaction pursuant to Section 4(2) of the Securities Act of 1933. ITEM 8. LEGAL PROCEEDINGS. The Company is not a party to any litigation and to its knowledge, no action, suit or proceedings against it has been threatened by any person. 20 ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. No market exists for the Company's securities and there is no assurance that a regular trading market will develop, or if developed, that it will be sustained. A shareholder in all likelihood, therefore, will be unable to resell the securities referred to herein should he or she desire to do so. Furthermore, it is unlikely that a lending institution will accept the Company's securities as pledged collateral for loans unless a regular trading market develops. There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of the Company's securities. As of May 30, 1996, the Company has 197 holders of record of its Common Stock, 197 holders of record of its Class A Warrants, and 197 holders of record of its Class B Warrants. The Company has not paid any dividends since it is inception and does not anticipate paying any dividends on its Common Stock in the foreseeable future. Blue Sky Considerations. The laws of some states prohibit the resale of securities issued by "blank check" or "shell" corporations. The Company may be considered a "blank check" or "shell" corporation for the purpose of state securities laws. Accordingly, it is possible that current shareholders may be unable to resell their securities in other states. The Company is unaware which particular states prohibit such resales, other than Idaho or Indiana. The Commission has suggested that the Company take steps to prohibit further transfer of the securities distributed to current shareholders, unless the Company is assured that the further transfer would not violate the securities laws of the fifty states. The Company believes that the Commission has no authority to cause the Company to place restrictions on the securities it previously distributed and which it currently does not own. Such action by the Company would legally be construed as a unilateral modification of a fully executed contract and would be considered as a breach thereof. Further, the Company believes that such action by the Commission would be a usurpation of the authority granted it by Congress. Further, because each state has a series of exempt securities transaction predicated upon the particular facts of each transaction, it is impossible to determine if a contemplated transaction by an existing shareholder would possibly violate the securities laws of any particular state. 21 In the event a current shareholder or broker/dealer resells its securities in a state where such resale is prohibited, the Company believes that the seller thereof may be liable criminally or civilly under that particular state's laws. The Company believes that it will not be liable for such improper secondary sales. Existing shareholders should exercise caution in the resale of their shares of common stock in light of the foregoing. ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES. The Company was incorporated on April 5, 1989. In August 1989, the Company issued a total of 1,000,000 shares of Common Stock. 800,000 shares were issued to Gary Agron; 50,000 shares were issued to Barry Swartz; 50,000 shares were issued to James Eller; and, 100,000 Units were issued to Coyote Acquisitions, Inc. Each Unit consisted of one share of Common Stock; five Class A Warrants, exercisable at $1.00 per share; and five Class B Warrants, exercisable at $1.50 per share. On April 24, 1991, Mr. Swartz gratuitously reconveyed his 50,000 shares to the Company; Mr. Eller gratuitously reconveyed 50,000 shares to the Company; and, Mr. Agron gratuitously reconveyed 400,000 shares to the Company. On the same date, the Units issued to Coyote Acquisitions, Inc. were cancelled and 50,000 shares of Common Stock were issued to Philip Davis, the Company's President and to Janice Agron for services rendered. On May 10, 1991, the Company gifted 496,500 Units of securities of Company on a pro rata basis to shareholders of St. Joe Corp. ("St. Joe"), pursuant to Regulation D of the Securities Act of 1933, as amended. Each Unit consisted of one share of common stock, two Class A Warrants and two Class B Warrants. Each Class A Warrant entitles the holder to purchase one share of common stock at a price of $1.00 per share for a period of four years from May 10, 1991 and each Class B Warrant entitled the holder to purchase one share of common stock at a price of $1.50 per share for a period of four years from May 10, 1991. The exercise period of the Class A and Class B Warrants was extended to May 10, 1999 by resolution of the Board of Directors on May 1, 1995. The purpose of the distribution was to cause the shares of the Company to be widely held, in anticipation of creating a public market for the Company's securities. The Company has no operating history nor any revenues or earnings from operations. The Company has no significant assets or financial resources. As such, the Company can be defined as a "shell" company, who's sole purpose at this time is to locate and consummate a merger or acquisition with a private entity. Gary Agron and Janice Puder Agron received 350,000 Units as a result of their ownership of shares of St. Joe and Mr. Davis received 50,000 Units as a result of his ownership of St. 22 Joe. From March 1990 to October 1994, Mr. Davis was the Secretary and a Director of St. Joe. As a result of a change in control of St. Joe in October 1994, Mr. Davis resigned as Secretary and a Director. Since October 1994, Mr. Davis has not been affiliated with St. Joe. Mr. Davis owns approximately 0.009% of the outstanding shares of St. Joe. Since resigning, Mr. Davis has not received any communications from St. Joe. On November 11, 1994, Gary Agron and Janice Puder Agron conveyed all of their right, title and interest in and to 800,000 shares of Common Stock, 700,000 Class A Warrants and 700,000 Class B Warrant to Mr. Davis. In November 1995, Mr. Davis conveyed 440,000 shares of Common Stock, 380,000 Class A Warrants and 380,000 Class B Warrants to Mr. Lee. The foregoing was characterized as a 4(1 1/2) transaction pursuant to Section 4(2) of the Securities Act of 1933. In November 1995, Mr. Davis conveyed 20,000 shares of Common Stock, 40,000 Class A Warrants and 40,000 Class B Warrants to Mr. Van Gundy. The foregoing transactions were characterized as a 4(1 1/2) transactions pursuant to Section 4(2) of the Securities Act of 1933. ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE REGISTERED. UNITS The Units consisted of one share of Common Stock, two A Warrants and two B Warrants. Each A Warrant entitles the holder to purchase one share of Common Stock at a price of $1.00 per share. Each B Warrant entitles the holder to purchase one share of Common Stock at a price of $1.50 per share. The A and B Warrants were due to expire four years from May 1, 1991. On May 1, 1995 the Board of Directors of the Company extended the exercise period of the Class A and Class B Warrants until May 10, 1999. The Units were validly issued, fully paid and nonassessable. COMMON STOCK The authorized Common Stock of the Company consists of 800,000,000 shares of no par value Common Stock. All shares have equal voting rights and are not assessable. Voting rights are not cumulative and, therefore, the holders of more than 50% of the Common Stock could, if they chose to do so, elect all of the directors of the Company. Upon liquidation, dissolution or winding up of the Company, the assets of the Company, after the payment of liabilities, will be distributed pro rata to the holders of the Common Stock. The holders of the Common Stock do not have preemptive rights to subscribe for any securities of the Company and have no right to require the Company to redeem or purchase their shares. The shares of Common Stock presently outstanding are fully paid and nonassessable. 23 WARRANTS Each Unit consisted of one share of Common Stock, two A Warrants and two B Warrants. Each A Warrant entitles the holder to purchase one share of Common Stock at $1.00 per share during the four year period commencing on May 10, 1991. Each B Warrant entitles the holder to purchase one share of Common Stock at $1.50 per share during the four year period commencing on May 10, 1991. On May 1, 1995, the Board of Directors of the Company extended the exercise period of the Class A and Class B Warrants until May 10, 1999. The A Warrants and B Warrants are referred to collectively as the "Warrants." At any time, the Company may redeem the Warrants at $0.0001 per Warrant upon 30 days' written notice to warrant holders. The Company may redeem all or a portion of either of the Warrants and the Company may redeem the A Warrants and the B Warrants at different times. Any warrant holder who does not exercise his or her warrants prior to the redemption date, as set forth in the Company's notice of redemption, will forfeit the right to purchase the shares of Common Stock underlying the Warrants and, after the redemption date, any outstanding Warrants will be void and of no further force and effect, except that they will have the right to receive the redemption price of $0.0001 per Warrant until the conclusion of the exercise period. If the Company does not redeem the Warrants, the Warrants will expire, become void and be of no further force or effect on conclusion of the exercise period, unless extended by the Company's Board of Directors. The Warrants will be issued pursuant to a warrant agreement between the Company and Corporate Stock Transfer, Inc., Denver, Colorado (the "Warrant Agent"). The Company has authorized and reserved for issuance the shares of Common Stock issuable upon exercise of the Warrants. The Warrants contain anti-dilution provisions so as to avoid dilution of the equity interest represented by the underlying Common Stock upon the occurrence of certain events such as share dividends or splits. The anti-dilution provisions will not apply in the event a merger or acquisition is undertaken by the Company. In the event of the liquidation, dissolution or winding up of the Company, holders of the Warrants will not be entitled to to participate in the assets of the Company. Holders of the Warrants will have no voting, preemptive, liquidation or other rights of a shareholder, and no dividends will be declared on the Warrants. 24 PREFERRED STOCK The Company is authorized to issue 10,000,000 shares of Preferred Stock, no par value. The Preferred Stock may be issued in series from time to time with such designation, rights, preferences and limitations as the Board of Directors of the Company may determine be resolution. The rights, preferences and limitations of separate series of Preferred Stock may differ with respect to such matters as may be determined by the Board of Directors, including, without limitation, the rate of dividends, method and nature of payment of dividends, terms of redemption, amounts payable on liquidation, sinking fund provisions (if any), conversion rights (if any) and voting rights. No Preferred Stock has been issued by the Company. DIVIDENDS Holders of the Common Stock are entitled to share equally in dividends when, as and if declared by the Board of Directors of the Company, out of funds legally available therefore. No dividend has been paid on the Common Stock since inception, and none is contemplated in the foreseeable future. TRANSFER AGENT Corporate Stock Transfer, Inc., 370 Seventeenth Street, Suite 2300, Denver, Colorado 80202, is the Company's transfer and warrant agent. ISSUANCE OF ADDITIONAL SECURITIES The Company has not considered and does not know, at the present time, of circumstances which may result in the issuance to management, promoters or their affiliates or associates of securities of the Company, other than the possible issuance of securities to a finder of the acquisition/merger candidate. The Company will not, however, issue securities to a finder who is an Officer, Director or affiliate of the Company. Currently, there are no agreements nor have there been any discussions with anyone to pay a finder's fee in cash or securities. ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 7-3-10(o) of the Colorado Revised Statutes and certain provisions of the Company's Articles of Incorporation under certain circumstances provide for indemnification of the Company's Officers, Directors and controlling persons against liabilities which they may incur in such capacities. A summary of the circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety by reference to the Company's Articles of Incorporation and to the statutory provisions. 25 In general, any Officer, Director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal proceeding to which such person is a party, if that person's actions were in good faith, were believed to the be in the Company's best interest, and were not unlawful. Unless such person sis successful upon the merits in such an action, indemnification may be awarded only after a determination by independent decision of the Board of Directors, by legal counsel, or by a vote of the shareholders, that the applicable standard of conduct was met by the person to be indemnified. The circumstances under which indemnification is granted in connection with an action brought on behalf of the Company is generally the same as those set forth above; however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection with the defense or settlement of the action. In such actions, the person to be indemnified must have acted in good faith and in a manner believed to have been in the Company's best interest, and have not been adjudged liable for negligence or misconduct. Indemnification may also be granted pursuant to the terms of agreements which may be entered in the future or pursuant to a vote of shareholders or Directors. The statutory provision cited above and the Company's Articles of Incorporation also grant the power to the Company to purchase and maintain insurance which protects its Officers and Directors against any liabilities incurred in connection with their service in such a position, and such a policy may be obtained by the Company. ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements are included on Pages F-1 through F-13 herein. ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND FINANCIAL DISCLOSURE. There have been no disagreements on accounting and financial disclosures from the inception of the Company through the date of this Registration Statement. 26 ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS. LAHAINA ACQUISITIONS, INC. (A development stage Company) FINANCIAL STATEMENTS SEPTEMBER 30, 1995, 1994, 1993 1992, 1991 AND 1990 (WITH INDEPENDENT AUDITORS' REPORT THEREON) 27 INDEPENDENT AUDITOR'S REPORT The Board of Directors Lahaina Acquisitions, Inc. (A development stage Company) 5459 South Iris Street Littleton, Colorado 80123 We have audited the accompanying balance sheets of Lahaina Acquisitions, Inc. as of September 30, 1995, 1994 1993, 1992, 1991 and 1990 and the related statements of operations cash flows and changes in stockholders' equity for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lahaina Acquisitions, Inc. as of September 30, 1995, 1994 1993, 1992, 1991 and 1990, and the results of its operations for the years then ended, in conformity with generally accepted accounting principles. /s/ Doran Peck, C.P.A., P.C. Denver, Colorado June 6, 1996 28 LAHAINA ACQUISITIONS, INC. (A development stage Company) BALANCE SHEETS September 30, 1995, 1994, 1993, 1992, 1991 and 1990 ASSETS
1995 1994 1993 1992 1991 1990 ____ ____ ____ ____ ____ ____ ORGANIZATION COSTS 600 600 600 600 600 500 ==== ==== ==== ==== ==== ==== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities NONE -0- -0- -0- -0- -0- -0- Stockholders' Equity: Common Stock, 800,000,000 shares authorized no par value; 996,500 shares issued and outstanding (see note A) 600 600 600 600 600 500 Preferred stock. 10,000,000 shares authorized, -0- -0- -0- -0- -0- -0- no par value Net income (deficit) accumulated during the development stage -0- -0- -0- -0- -0- -0- ____ ____ ____ ____ ____ ____ 600 600 600 600 600 500 ==== ==== ==== ==== ==== ====
See accompanying notes to financial statements. 29 LAHAINA ACQUISITIONS, INC. (A development stage Company) STATEMENTS OF OPERATIONS years ending September 30, 1995, 1994, 1993, 1992, 1991 and 1990
1995 1994 1993 1992 1991 1990 ____ ____ ____ ____ ____ ____ Revenues -0- -0- -0- -0- -0- -0- Expenses -0- -0- -0- -0- -0- -0- Net Income -0- -0- -0- -0- -0- -0-
See accompanying notes to the financial statements. 30 LAHAINA ACQUISITIONS, INC. (A development stage Company) STATEMENT OF CASH FLOWS years ending September 30, 1995, 1994, 1993, 1992, 1991 and 1990
1995 1994 1993 1992 1991 1990 ____ ____ ____ ____ ____ ____ Cash flows from investment activities -0- -0- -0- -0- 100 500 Cash flows from operating and financing activities -0- -0- -0- -0- (100) (500) Beginning cash balance -0- -0- -0- -0- -0- -0- ____ ____ ____ ____ ____ ____ Ending cash balance -0- -0- -0- -0- -0- -0- ==== ==== ==== ==== ==== ====
See accompanying notes to the financial statements. 31 LAHAINA ACQUISITIONS, INC. (A development stage Company) STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY From August 1989 (date of inception) to September 30, 1995
Total Common Stock Paid-in Stockholders' Shares Warrants Amounts Capital Equity 8/89 shares issued to Mr. Agron, Swartz & Eller 900,000 $ 450 $ 450 8/89 shares issued to Coyote Acquisitions 100,000 1,000,000 50 50 _________ _________ ____ ____ Balance 9/30/89 1,000,000 1,000,000 500 500 4/24/91 shares gratuitously reconveyed to the Company: Swartz & Eller (100,000) ( 50) 50 Mr. Agron (400,000) (200) 200 4/24/91 shares of Coyote cancelled (100,000) (1,000,000) ( 50) 50 4/24/91 shares issued to Mr. Davis & Mrs. Agron 100,000 100 100 5/10/91 shares issued to St. Joseph Corp. shareholders: Agron 312,500 1,250,000 Agron 37,500 150,000 Davis 50,000 200,000 Other Share- holders 96,500 386,000 _________ _________ ____ ___ ____ Balances 9/30 1991, 1992, 1993 1994 & 1995 996,500 1,986,000 $ 600 $-0- $ 600 ========= ========= ==== === ====
NOTE: There was no deficit accumulated during the development stage. 32 LAHAINA ACQUISITIONS, INC. (A development stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 1995, 1994, 1993, 1992, 1991 and 1990 Note A - Summary of Significant Accounting Policies ORGANIZATION Lahaina Acquisitions, Inc. was incorporated under the laws of the State of Colorado in April 1989. The Company is in the development stage and has had no operations. The Company is in the development stage as more fully defined in Statement no. 7 of the Financial Accounting Standards Board. The Company intends to actively seek, locate, evaluate, structure and complete mergers with or acquisitions of private companies, partnerships or sole proprietorships. In September 1989, the Company filed a Registration Statement with the United States Securities and Exchange Commission to register 100,000 Units of its securities sold to Coyote Acquisitions, Inc. Each Unit consists of one share of Common Stock, five A Warrants and five B Warrants. In April 1991, the Company cancelled the 100,000 Units of its securities issued to Coyote Acquisitions, Inc. and abandoned the registration statement on Form S-18 filed with the Securities and Exchange Commission in 1989. In May 1991, the Company distributed 496,500 Units of its securities under the provisions of Regulation D, Rule 504 on a pro rata basis to the shareholders of St. Joseph Corp. Each Unit consists of: 1 Share of common no par stock 2 Class A common stock purchase warrants 2 Class B common stock purchase warrants Each Class A warrant entitles the holder to purchase one share of common stock at $1.00 per share. Each Class B warrant entitles the holder to purchase one share of common stock at $1.50 per share. These common stock purchase warrants expire May 10, 1999. The Company has the right to redeem the warrant upon 30 days written notice at $.0001 per share. Professional fees of $450 were incurred in December 1995 for the audit for the years ending September 30, 1995, 1994, 1993, 1992, 1991 and 1990. This expense was paid by the President of the Company. Additional accounting fees of $650 were incurred in May 1996 and were paid by the President of the Company. 33 LAHAINA ACQUISITIONS, INC. INTERIM OPERATING RESULTS (Unaudited) 34 LAHAINA ACQUISITIONS, INC. BALANCE SHEET
ASSETS March September 31, 1996 30, 1995 ________ ________ (Unaudited) Organization Costs $ 1,050 $ 600 LIABILITIES AND STOCKHOLDERS EQUITY Liabilities Loan payable officer 450 -0- Stockholders equity: Common stock, 800,000,000 shares authorized no par value; 996,500 shares issued and outstanding (Note A) 600 600 Preferred stock, 10,000,000 authorized, no par value -0- -0- Accumulated deficit -0- -0- ______ _____ Total $ 1,050 $ 600 ====== =====
See accompanying notes to the financial statements. 35 LAHAINA ACQUISITIONS, INC. STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended March 31 March 31 1996 1995 1996 1995 ------------------ ---------------- Revenues: -0- -0- -0- -0- Expenses: -0- -0- $ -0- -0- Net Income (loss): -0- -0- $ -0- -0- === === ==== ===
See accompanying notes to the financial statements. 36 LAHAINA ACQUISITIONS, INC. STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended March 31 1996 1995 Cash flows from operations: Net income (loss) $ -0- -0- ----- --- Net cash (Used) from operating activities: $ -0- -0- ===== === Cash flows from investing activities: 450 -0- ----- --- Net cash (Used) by investing activities: 450 -0- ===== === Cash Flows from financing activities: Loan - officer $ (450) -0- Net cash (Used) by financing activities: $ (450) -0- ===== === Beginning cash balance -0- -0- Ending cash balance -0- -0-
See accompanying notes to the financial statements. 37 LAHAINA ACQUISITIONS, INC. NOTES TO FINANCIAL STATEMENTS March 31, 1996 Note A - Summary of Significant Accounting Policies ORGANIZATION Lahaina Acquisitions, Inc. was incorporated under the laws of the State of Colorado in April 1989. The Company is in the development stage and has had no operations. The Company is in the development stage as more fully defined in Statement No. 7 of the Financial Accounting Standards Board. The Company intends to actively seek, locate, evaluate, structure and complete mergers with or acquisitions of private companies, partnerships or sole proprietorships. In September 1989, the Company filed a Registration Statement with the United States Securities and Exchange Commission to register 100,000 Units of its securities sold to Coyote Acquisitions, Inc. Each Unit consists of one share of Common Stock, five A Warrants and five B Warrants. In April 1991, the Company cancelled the 100,000 Units of its securities issued to Coyote Acquisitions, Inc. and abandoned the registration statement on Form S-18 filed with the Securities and Exchange Commission in 1989. In May 1991, the Company distributed 496,500 Units of its securities under the provisions of Regulation D, Rule 504 on a pro rata basis to the shareholders of St. Joseph Corp. Each Unit consists of: 1 Share of common no par stock 2 Class A common stock purchase warrants 2 Class B common stock purchase warrants Each Class A warrant entitles the holder to purchase one share of common stock at $1.00 per share. Each Class B warrant entitles the holder to purchase one share of common stock at $1.50 per share. These common stock purchase warrants expire May 10, 1999. The Company has the right to redeem the warrant upon 30 days written notice at $.0001 per share. Professional fees of $450 were incurred in December 1995 for the audit for the years ending September 30, 1995, 1994, 1993, 1992, 1991 and 1990. This expense was paid by the President of the Company. Additional accounting fees of $650 were incurred in May 1996 and were paid by the President of the Company. 38 EXHIBITS Exhibit No. Description 3.1 Articles of Incorporation. * 3.2 Bylaws of the Company. * 4.1 Specimen Stock Certificate. * 4.2 Specimen Class A Warrant Certificate. * 4.3 Specimen Class B Warrant Certificate. * 24.1 Consent of Doran Peck, C.P.A., P.C. 27 Financial Data Schedule * 28.1 Private Placement Memorandum. * 28.2 Notice of Distribution Pursuant to Regulation D. * 28.3 Warrant Agreement. * * Filed previously. 40 SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 2 to the Form 10 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Denver, Colorado, on this 18th day of July, 1996. LAHAINA ACQUISITIONS, INC. /s/ Philip J. Davis, President KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Philip J. Davis, as true and lawful attorney-in-fact and agent, with full power of substitution, for his and in his name, place and stead, in any and all capacities, to sign any and all amendment (including post-effective amendments) to this registration statement, and to file the same, therewith, with the Securities and Exchange Commission, and to make any and all state securities law or blue sky filings, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying the confirming all that said attorney-in-fact and agent, or any substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment No. 2 to the Form 10 Registration Statement has been signed by the following persons in the capacities and on the dates indicated: Signature Title Date /s/ Philip J. Davis President and a member July 18, 1996 of the Board of Directors /s/ John C. Lee Secretary and a member July 18, 1996 of the Board of Directors /s/ Charles C. Treasurer, Chief July 18, 1996 Van Gundy Financial Officer, Principal Accounting Officer and a member of the Board of Directors 41 EXHIBIT INDEX Exhibit No. Description 3.1 Articles of Incorporation. * 3.2 Bylaws of the Company. * 4.1 Specimen Stock Certificate. * 4.2 Specimen Class A Warrant Certificate. * 4.3 Specimen Class B Warrant Certificate. * 24.1 Consent of Doran Peck, C.P.A., P.C. 27 Financial Data Schedule * 28.1 Private Placement Memorandum. * 28.2 Notice of Distribution Pursuant to Regulation D. * 28.3 Warrant Agreement. * * Filed previously. EX-24 2 DORAN PECK, C.P.A., P.C. 2121 South Oneida Street, Suite 636 Denver, Colorado 80224 Bus (303) 758-1796 FAX (303) 758-1825 INDEPENDENT AUDITOR'S CONSENT We consent to the use in this Form 10 of Lahaina Acquisitions, Inc. of our report dated June 6, 1996, accompanying the financial statements of Lahaina Acquisitions, Inc. contained in such Form 10, and to the use of our name and the statements with respect to us, as appearing under the heading "Experts" in this Form 10. /s/ Doran Peck, C.P.A. P.C. Doran W. Peck, C.P.A. P.C. Certified Public Accountants Denver, Colorado July 17, 1996 -----END PRIVACY-ENHANCED MESSAGE-----