-----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, OaSKMwSqrGgQgUwnQfFuBtp0u/zYbpYopAsPEIDvq3S8P53b9wXEszRJICUdWT/t sEGIVzm5IspGbDhC8pQ57Q== 0000950144-99-012223.txt : 19991101 0000950144-99-012223.hdr.sgml : 19991101 ACCESSION NUMBER: 0000950144-99-012223 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981214 ITEM INFORMATION: FILED AS OF DATE: 19991029 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAHAINA ACQUISITIONS INC CENTRAL INDEX KEY: 0000855684 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 841325695 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-27480 FILM NUMBER: 99737402 BUSINESS ADDRESS: STREET 1: 5895 WINDWARD PARKWAY STREET 2: SUITE 200 CITY: ALPHARETTA STATE: GA ZIP: 30005 BUSINESS PHONE: 7707546140 MAIL ADDRESS: STREET 1: 5895 WINDWARD PARKWAY STREET 2: SUITE 200 CITY: ALPHARETTA STATE: GA ZIP: 30005 8-K/A 1 LAHAINA ACQUISITIONS, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF EARLIEST EVENT REPORTED: DECEMBER 14, 1998 LAHAINA ACQUISITIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) COLORADO 0-27480 84-1325695 (STATE OF OTHER JURISDICTION OF (COMMISSION FILE (IRS EMPLOYER INCORPORATION OR ORGANIZATION) NO.) IDENTIFICATION NO.)
(770) 754-6140 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) NOT APPLICABLE (FORMER NAME OF FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) This Current Report on Form 8-K/A is an amendment to the Current Report on Form 8-K filed by Lahaina Acquisitions, Inc. ("Lahaina" or the "Company") on December 28, 1998 to provide historical financial statements of Beachside Commons I, Inc. ("Beachside") and pro forma financial information regarding the acquisition of Beachside by the Company. ITEM 1. NOT APPLICABLE ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements 2 To the Board of Directors BEACHSIDE COMMONS I, INC. Alpharetta, GA INDEPENDENT AUDITORS' REPORT We have audited the accompanying balance sheet of BEACHSIDE COMMONS I, INC. as of December 7, 1998, and the related statements of operations, changes in stockholder's equity, and cash flows for the period from inception, September 25, 1998, to December 7, 1998. 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 BEACHSIDE COMMONS I, INC. as of December 7, 1998, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Kenneth R. Walters, P.A. - --------------------------- KENNETH R. WALTERS, P.A. Fernandina Beach, FL October 14, 1999 3 BEACHSIDE COMMONS I, INC. BALANCE SHEET December 7, 1998 ASSETS Current Assets Cash $ -- Prepaid Expenses 17,281 Escrow Funds 30,000 ---------- Total Current Assets 47,281 Fixed Assets Land 400,000 Building 2,403,623 Equipment 143,738 Accumulated Depreciation (24,389) Total Fixed Assets 2,922,972 TOTAL ASSETS $2,970,253 ---------- LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES Current Liabilities Accounts Payable 4,250 Security Deposits Payable 9,000 ---------- Total Current Liabilities 13,250 Long-term Debt Notes Payable 1,730,000 ---------- Total Long-term Debt 1,730,000 ---------- TOTAL LIABILITIES 1,743,250 STOCKHOLDER'S EQUITY Common stock, $1.00 par value, 500 shares authorized, 500 shares issued and outstanding 500 Additional Pain-In Capital 1,247,069 Retained Deficit (20,566) ---------- TOTAL STOCKHOLDER'S EQUITY 1,227,003 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $2,970,253 ----------
The accompanying notes are an integral part of these financial statements. 4 BEACHSIDE COMMONS I, INC. STATEMENT OF OPERATIONS For the Period from September 25, 1998 (Date of Inception) To December 7, 1998
Rent Revenue $ Operating Expenses Depreciation 3,252 Legal Fees 500 Insurance 926 Taxes - Property 600 --------- Total Operating Expenses 5,278 --------- Operating Loss (5,278) Interest Expense (15,288) --------- Net Operating Loss $ (20,566) ---------
The accompanying notes are an integral part of these financial statements. 5 BEACHSIDE COMMONS I, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Period from September 25, 1998 (Date of Inception) To December 7, 1998
Common Stock Additional Total $1.00 Par Value Retained Paid in Stockholders' ------------------------- Earnings Capital Equity Shares Amount ------------- ------------ ------------ ------ --------- Balance at September 25, 1998 -- $ -- $ -- $ -- $ -- Issuance of Common Stock 500 500 -- -- 500 Non-Cash Capital Contributed -- -- -- 1,247,069 1,247,069 Net loss -- -- (20,566) -- (20,566) ------ --------- -------- ---------- ---------- Balance at December 7, 1998 500 $ 500 $(20,566) $1,247,069 $1,227,003 ====== ========= ======== ========== ==========
The accompanying notes are an integral part of these financial statements. 6 BEACHSIDE COMMONS I, INC. STATEMENT OF CASH FLOWS From September 25, 1998 (Date of Inception) To December 7, 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (20,566) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 3,252 Expenses paid by stockholder 11,538 Decrease In: Prepaid expenses 1,526 Increase In: Accounts payable 4,250 ----------- Net cash provided by operating activities - ----------- CASH - Beginning of period - ----------- CASH - End of period - ----------- NON-CASH INVESTING AND FINANCING ACTIVITIES Fixed assets acquired through long-term debt, net of accumulated depreciation at September 25, 1998 $ 2,926,224 Non-cash capital contributions 1,247,569 ----------- $ 4,173,793 ----------- SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for interest $ 15,288 ----------- Cash paid during the period for income taxes $ - -----------
The accompanying notes are an integral part of these financial statements. 7 BEACHSIDE COMMONS I, INC. NOTES TO FINANCIAL STATEMENTS December 7, 1998 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS ACTIVITY BEACHSIDE COMMONS I, INC. ("the Company"), was incorporated under the laws of the State of Florida on September 25, 1998. The Company's intent at December 7, 1998 was to operate and further develop a commercial real estate property in the resort area of Amelia Island, Florida. The commercial property owned by the Company was purchased and developed by Mongoose Investments, LLC ("Mongoose") a limited liability company formed under the laws of the state of Georgia. On September 25, 1998, BEACHSIDE COMMONS I, INC. was incorporated under the laws of the state of Florida as a wholly-owned subsidiary of Mongoose. On November 13, 1998, the commercial real estate property was transferred from Mongoose to the Company. On December 14, 1998, Lahaina Acquisitions, Inc. (Lahaina) completed the acquisition of all of the outstanding stock. CASH EQUIVALENTS The Company considers all short-term investments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents at December 7, 1998. FISCAL YEAR The Company's original fiscal year-end was December 31. It has adopted September 30 as the fiscal year-end, which is the fiscal year-end of the acquirer. PROPERTY AND EQUIPMENT/DEPRECIATION The Company depreciates buildings and equipment on the straight-line method based on their estimated useful lives which range from five to twenty years. Depreciation expenses for the period was $3,252. 8 BEACHSIDE COMMONS I, INC. NOTES TO FINANCIAL STATEMENTS December 7, 1998 ACCOUNTS PAYABLE-CASH BOOK BALANCE As of December 7, 1998, the Company had checks outstanding in excess of book balances totaling $4,250, which have been classified as accounts payable. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. COMPREHENSIVE INCOME Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, (SFAS 130), requires that total comprehensive income be reported in the financial statements. Comprehensive income is equal to the net loss for the period ended December 7, 1998. NOTE 2-ESCROW FUNDS The Company was involved in legal proceedings and $30,000 was being held in escrow at December 7, 1998. The Company is party from time-to-time in various legal proceedings. In the opinion of management, there are no matters which might have a material impact on the Company's financial position or results of operations. 9 BEACHSIDE COMMONS I, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 7, 1998 NOTE 3-LONG-TERM DEBT Note payable to Pacific Coast Investment Company (secured by a first mortgage on the Beachside Commons property), at an interest rate of 15% payable in monthly installments of interest only. The entire principal is due and payable November 11, 2003. $1,550,000 Note payable to GCA Strategic Investment Fund, Ltd. (1), (secured by a second mortgage on the Beachside Commons property), at an interest rate of 9%, maturing January 31, 2001 with interest payable quarterly in arrears on the last day of March, June, September and December of each year until the maturity date. 25,000 Notes payable, others, consists of three notes, at an interest rate of 18% payable on demand, from individuals in the amounts of $85,000, $50,000, and $20,000. 155,000 --------- $1,730,000 =========
All long-term debt is reported at fair value. The notes payable on demand are recorded as long-term debt due to subsequent events. Maturities of long-term debt are as follows:
Year Ending December 31 Amount ----------- ----------- 1999 $ -0- 2000 -0- 2001 25,000 2002 -0- 2003 1,550,000
10 BEACHSIDE COMMONS I, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 7, 1998 NOTE 4 - STOCKHOLDER'S EQUITY The Company is authorized to issue 500 shares of common stock with $1.00 per share par value. As of December 7, 1998, the Company had issued 500 common shares. At December 7, 1998, all outstanding shares were owned by Lahaina Acquisitions, Inc., with 86% of Lahaina stock owned by Richard P. Smyth. NOTE 5 - CAPITAL CONTRIBUTIONS Some expenses were paid on behalf of the Company by the stockholder. Those amounts have been recorded as additional paid-in capital. NOTE 6 - RELATED PARTY TRANSACTIONS Included in Note 3 - LONG-TERM DEBT are two notes payable to Nancy E. Smyth totaling $70,000. Mrs. Smyth is married to the majority stockholder of Lahaina. NOTE 8 - SUBSEQUENT EVENTS On June 30, 1999, Mongoose agreed to assume three notes payable whose balances at June 30, 1999, totaled approximately $198,000 and included the notes payable at December 7, 1998 for $155,000. On December 14, 1998, the Company was acquired by Lahaina Acquisitions, Inc. ("Lahaina"). Lahaina issued 1,250,000 shares of common stock and 1,910,000 shares of preferred stock and paid $667,500 for the Company. The acquisition was accounted for as a reverse acquisition. The Company was determined to be the accounting acquiror for financial statement purposes in accordance with Staff Accounting Bulletin No. 97. The assets and liabilities of Lahaina were recorded at its historical cost basis as it was a shell company at December 14, 1998. A related note payable for $750,000 was added to long-term debt on December 14, 1998. The note payable was convertible into the Company's common stock. 11 b) Pro forma Financial Statements LAHAINA ACQUISITIONS, INC. UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS BASIS OF PRESENTATION The following unaudited pro forma condensed combined financial statements give effect to the acquisition of Beachside Commons I, Inc. ("Beachside") by Lahaina Acquisitions, Inc. ("Lahaina"). The acquisition of Beachside will be accounted for using the purchase method of accounting. In accordance with the provisions of Staff Accounting Bulletin No. 97, Beachside is deemed to be the accounting acquirer of Lahaina as its stockholders will receive the largest portion of the voting rights in the combined corporation. The acquired company, Lahaina, will be recorded at its historical cost basis as it was a shell company prior to the acquisition of Beachside. The Unaudited Pro Forma Condensed Balance Sheet gives effect to the acquisition as if it had occurred on September 30, 1998. The Unaudited Pro Forma Combined Statements of Operations for the year ended September 30, 1998 gives effect to these transactions as if they had occurred on October 1, 1997. The pro forma adjustments are based on estimates, available information and certain assumptions and may be revised as additional information becomes available. The pro forma combined financial data does not purport to represent what Lahaina's financial position or results of operations would actually have been if such transactions in fact had occurred on those assumed dates and are not necessarily representative of Lahaina's financial position or results of operations for any future period. Since Lahaina and Beachside were not under common control or management, historical combined results may not be comparable to, or indicative of, future performance. The unaudited pro forma combined financial statements should be read in conjunction with the other financial statements and notes thereto included elsewhere in this Form 8-K/A. 12 LAHAINA ACQUISITIONS, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET SEPTEMBER 30, 1998
Pro Forma Historical Adjustments Pro Forma Lahaina Beachside (see note 3) Combined ---------- ---------- ------------ --------- ASSETS Current Assets Cash $ 28 $ -- $ 82,500 $ 82,528 Other Current Assets -- 47,281 -- 47,281 -------- ---------- -------- ---------- Total Current Assets 28 47,281 82,500 129,809 Fixed Assets Land -- 400,000 -- 400,000 Buildings -- 2,403,623 -- 2,403,623 Equipment -- 143,738 -- 143,738 Accumulated Depreciation -- (24,389) -- (24,389) -------- ---------- -------- ---------- Total Fixed Assets -- 2,922,972 -- 2,922,972 TOTAL ASSETS $ 28 $2,970,253 $ 82,500 $3,052,781 -------- ---------- -------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current Liabilities Accounts Payable 7,093 4,250 -- 11,343 Security Deposits Payable -- 9,000 -- 9,000 -------- ---------- -------- ---------- Total Current Liabilities 7,093 13,250 -- 20,343 Long-Term Debt Note Payable - Mortgage -- 1,550,000 -- 1,550,000 Note Payable - Other -- 180,000 -- 180,000 Note Payable - Convertible Debenture -- -- 750,000 750,000 -------- ---------- -------- ---------- Total Long-Term Debt -- 1,730,000 750,000 2,480,000 -------- ---------- -------- ---------- TOTAL LIABILITIES 7,093 1,743,250 750,000 2,500,343 -------- ---------- -------- ---------- SHAREHOLDERS' EQUITY Common Stock 6,582 500 (7,082) -- Additional Paid-In Capital - Common Stock 52,653 1,247,069 (726,718) 573,004 Contributed Capital -- -- -- -- Retained Deficit (66,300) (20,566) 66,300 (20,566) -------- ---------- -------- ---------- TOTAL SHAREHOLDERS' EQUITY (7,065) 1,227,003 (667,500) 552,438 -------- ---------- -------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 28 $2,970,253 $ 82,500 $3,052,781 -------- ---------- -------- ----------
13 LAHAINA ACQUISITIONS, INC. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1998
Pro Forma Historical Adjustments Pro Forma Lahaina Beachside (see note 4) Combined ---------- --------- ----------- --------- REVENUE $ -- $ -- $ -- $ -- EXPENSES: Administrative Expense 45,479 -- -- 45,479 Operating Expense -- 5,278 -- 5,278 -------- --------- --------- --------- Total Expenses 45,479 5,278 -- 50,757 LOSS FROM OPERATIONS (45,479) (5,278) -- (50,757) INTEREST EXPENSE - NET -- (15,288) (67,500) (82,788) -------- --------- --------- --------- NET LOSS $(45,479) $ (20,566) $ (67,500) $(133,545) ======== ========= ========= =========
The accompanying notes are an integral part of these financial statements. 14 LAHAINA ACQUISITIONS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS NOTE 1 - GENERAL Lahaina was founded in 1989 to seek, investigate and, if warranted, acquire an interest in one or more business opportunities or ventures. The historical financial statements reflect the financial position and results of operations of Lahaina Acquisitions, Inc. ("Lahaina") and Beachside Commons I, Inc. ("Beachside"), and were derived from the respective historical financial statements where indicated. The period included in these financial statements for Lahaina is as of and for the year ended September 30, 1998. The period included in these financial statements for Beachside is as of and for the period from September 25, 1998 (date of inception) to December 7, 1998. The audited historical financial statements of Beachside included elsewhere herein have been included in accordance with Securities and Exchange Commission Regulation S-X Rule 3-05. NOTE 2 - ACQUISITIONS The acquisition of Lahaina will be accounted for using the purchase method of accounting with Beachside being treated as the accounting acquirer of Lahaina in accordance with Staff Accounting Bulletin No. 97. The acquired company, Lahaina, will be recorded at its historical cost basis as it was a shell company prior to the acquisition of Beachside. NOTE 3 - UNAUDITED PRO FORMA BALANCE SHEET ADJUSTMENTS The pro forma combined balance sheet adjustments related to the acquisition of Lahaina by Beachside reflect (i) the issuance of a $750,000 note payable convertible into Lahaina common stock, (ii) cash paid to the stockholder of Beachside that, due to the reverse acquisition, will be accounted for as a distribution in the amount of $667,500, and (iii) the reclassification of Lahaina's shareholders' equity to Additional Paid in Capital in conjunction with the merger. NOTE 4 - UNAUDITED PRO FORMA STATEMENT OF OPERATIONS ADJUSTMENTS The pro forma combined statement of operations adjustments related to the acquisition of Lahaina by Beachside reflect additional interest expense associated with the issuance of a $750,000 convertible note payable. The proceeds of the note payable were used to fund the cash distribution to the stockholder of Beachside. 15 LAHAINA ACQUISITIONS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The pro forma adjustments are not adjusted for their income tax effect as none of the entities had profitable operations during any of the periods. NOTE 5 - NET LOSS PER SHARE The pro forma net loss per share for the year ended September 30, 1998 was $0.06 per share, and the number of shares used in computing both the basic and diluted net loss totaled 2,246,500 shares. This represents the total number of shares outstanding immediately prior to the acquisition (996,500) plus the number of shares issued in connection with the acquisition (1,250,000). The convertible securities were not included in the computation of loss per share as they would be anti-dilutive. 16 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Lahaina Acquisitions, Inc. (REGISTRANT) By: /s/ L. Scott Demerau -------------------------- Name: L. Scott Demerau October 29, 1999 Title: President -----END PRIVACY-ENHANCED MESSAGE-----