-----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, Rl/weXUV3XfVPh1mNkiCoMuzMQ+jqYFbVDaNu2UW5IHHwTZxt+Y+4ZP5RCmbMOr8 tpwmmHfDtOQ56Om5W7jv8g== 0000950123-97-008978.txt : 19971030 0000950123-97-008978.hdr.sgml : 19971030 ACCESSION NUMBER: 0000950123-97-008978 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19971029 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STERLING WORLDWIDE CORP CENTRAL INDEX KEY: 0000894539 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FURNITURE & FIXTURES [2590] IRS NUMBER: 870438649 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-22464 FILM NUMBER: 97702526 BUSINESS ADDRESS: STREET 1: 1301 N CONGRESS AVE CITY: DAYTONA BEACH STATE: FL ZIP: 33426 BUSINESS PHONE: 8014857775 MAIL ADDRESS: STREET 1: 1301 N CONGRESS AVE CITY: DAYTONA BEACH STATE: FL ZIP: 33426 FORMER COMPANY: FORMER CONFORMED NAME: KOALA CAPITAL CORP DATE OF NAME CHANGE: 19940422 FORMER COMPANY: FORMER CONFORMED NAME: KOALA CORP DATE OF NAME CHANGE: 19940408 10-K405 1 FORM 10-K FOR Y/E 12/31/96: STERLING WORLDWIDE 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from_____ to ____ Commission file number 33-55254-29 STERLING WORLDWIDE CORPORATION (FORMERLY KOALA CAPITAL CORPORATION) (exact name of registrant as specified in its charter) NEVADA 87-0438649 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
1301 N. CONGRESS AVENUE, SUITE 135 BOYNTON BEACH, FL 33426 (561) 732-1200 (Address and telephone number of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to section 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K. /X/ 2 Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Registrant has 500,000,000 shares of common stock authorized as of October 14, 1997, 51,045,326 shares issued and outstanding, par value $.001. Registrant has 10,000,000 shares of Preferred Stock, Class A authorized and issued and outstanding as of October 14, 1997, par value $1.00. Registrant has 490,000,000 shares of Preferred Stock, Class B authorized but none issued and outstanding as of October 14, 1997, par value $.001. 3 TABLE OF CONTENTS
Number Page Item 1. Description of Business............................................. 1 Item 2. Description of Properties........................................... 1 Item 3. Legal Proceedings................................................... 2 Item 4. Submission of Matter to a Vote of Security Holders.................. 3 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters..................................... 3 Item 6. Selected Financial Data............................................. 4 Item 7. Financial Statements................................................ 5 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................. 5 Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act................................... 6 Item 10. Executive Compensation.............................................. 7 Item 11. Security Ownership of Certain Beneficial Owners and Management.................................... 9 Item 12. Certain relationships and Related Transactions...................... 11 Item 13. Exhibits and Report on Form 8....................................... 12
4 PART I ITEM 1. DESCRIPTION OF BUSINESS. Business Development Sterling Worldwide Corporation (the "Company") was organized under the laws of the State of Utah on May 2, 1986 under the name "Koala Capital Corporation". The Company was subsequently reorganized under the laws of the State of Nevada on December 30, 1993. On October 28, 1996, the Company's name was changed to Sterling Worldwide Corporation. The initial purpose of the Company was to engage in the business of investing and all other lawful businesses. On December 24, 1996 the Company concluded a transaction whereby the Company acquired 585,000 shares of common stock or 86.4% of Travelnet International in exchange for the issuance of 12,500 shares of restricted common stock in the name of Laurie Doll Gladstone. Travelnet International owns and operates Sterling Travel, an operating travel agency with unique characteristics and profit generating aspects. Sterling actively recruits outside, independent travel consultants. Presently, about 1,000 Sterling Travel affiliates use Sterling's licenses, memberships and bonding to introduce and sell travel products to their corporate and individual clients nationwide, commercial sabre software, professional travel reference materials, training seminars, long distance services, internet virtual mall sites (retail storefronts), and other high profit products carried by Sterling cruise and tour departments. Sterling AKG Corp., is a wholly owned subsidiary of Travelnet International. The Company intends to continue to seek out the acquisition of assets, property or business that may be beneficial to it and its stockholders. The Company intends to concentrate on seeking opportunities in developing travel, and resort/casino hotels on the east coast and Carribean. In considering whether to complete any such acquisition, the Board of Directors shall make the final determination, and the approval of stockholders will not be sought unless required by applicable law, the Company's Articles of Incorporation or Bylaws or contract. The Company can give no assurance that any such endeavor will be successful or profitable. ITEM 2. DESCRIPTION OF PROPERTIES. As of December 31, 1996, the Company did not own any properties. On July 31, 1997, the Company entered into a lease agreement for its operating facilities in Boca Raton, Florida with lease payments of $21,035 for 1997 and $12,918 for 1998. The lease was subsequently terminated, with no further obligation and/or 1 5 liability to the Company on August 13, 1997 when control of the Company was transferred to the LaSalle Group Ltd. On September 8, 1997, the Company acquired four entities which own and operate the Fort Thomas Resort in St. Christopher, British Virgin Islands, in exchange for 513,914 shares of common stock under Regulation S of the Securities and Exchange Act of 1933, as amended and 513,914 shares of restricted common stock of the Company each valued at $10.00 per share. The 68-room resort sits on 7.33 acres and operates year round to serve convention clients, tourists and vacationers. Title to the Resort consisting of approximately 2.331 acres is vested in Fort Thomas Development Company Ltd. Title to the 6.451 acre parcel surrounding the Resort is vested in Limekiln Development Ltd. Fort Thomas Management Company Ltd., is the operator of the Resort. Mado Investment Company Ltd., owns 10,000 of the issued and outstanding shares of each of the foregoing three corporations. ITEM 3. LEGAL PROCEEDINGS. On August 2, 1997, the Company agreed to transfer the Company's entire interests in its operating subsidiaries, Travelnet International Corp. and Sterling AKG Corp. to Laurie Doll Gladstone as part of an agreement pursuant to which, among other things: (i) Ms. Gladstone was granted an irrevocable three-year put option entitling her to put shares back to the Company in exchange for $2,000,000 of the Company's ordinary shares, registered with the Securities and Exchange Commission, and (ii) the Company agreed to the return to Ms. Gladstone of such number of shares of the Company which would provide her with 80% of the outstanding securities (on a fully diluted basis) of the Company if the Company did not provide certified financial statements for the quarter ended September 30, 1997 to Ms. Gladstone which presented U.S. $10,000,000 in net assets (total assets less total liabilities) on the books of the Company as at such date (the "Condition"). Ms. Gladstone contends that the resolutions of the August 2, 1997 meeting contained resignations of the officers and directors of the Company effective if the Condition was not met. Ms. Gladstone further contends that the Company did not satisfy the Condition. The Company however, believes that it was substantially in compliance by presenting to Ms. Gladstone a certified statement from the accountant which did state that the Company had booked $9,545,000 in assets as of September 30, 1997 which Ms. Gladstone contends was not certified. As a result, a dispute exists with respect to the ownership and control of the Company. The LaSalle Group had believed that an oral compromise had been made to settle the dispute but Ms. Gladstone has denied that any agreement was ever reached. The Company has been informed that on October 2, 1997 a meeting of the Board of Directors of the Company was held in which Mark Colacurcio was reappointed President and sole director of the Company. Management of the Company prior to September 30, 2 6 1997 believes that it is still the authorized management of the Company on the date hereof and believes that Ms. Gladstone's only right is to commence litigation. Management is in negotiations with Ms. Gladstone and her representatives to resolve this matter amicably. To the knowledge of management, no director or executive officer is party to any action which has an interest adverse to the Company. ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS. No matter was submitted to the Company's security holders for a vote during the fiscal year ending December 31, 1996. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Market Information There is only a limited established "public market" for shares of common stock of the Company. The stock is listed on the OTC Bulletin Board of the National Association of Securities Dealers ("NASD"). Management does not expect any expanded public market to develop unless and until the operations of the Company are likewise expanded, when and if the Company completes an acquisition or merger. In any event, no assurance can be given that any market for the Company's common stock will develop or be maintained. When a public market develops in the future, the sale of "unregistered" and "restricted" shares of common stock pursuant to Rule 144 of the Securities and Exchange Commission by members of management or others may have a substantial adverse impact on any such public market. Holders The number of record holders of the Company's common stock as of the fiscal year ended December 31, 1996 was 330. These numbers do not include an indeterminate number of stockholders whose shares may be held by brokers in street name. Dividends There are no present material restrictions that limit the ability of the Company to pay dividends on common stock. The Company has not paid any dividends on its common stock, and does not intend to do so in the foreseeable future. 3 7 ITEM 6.SELECTED FINANCIAL DATA
ASSETS 1996 1995 -------- ------- Current Assets Cash and cash equivalents $406,109 $50,000 Accounts receivable: Trade receivables 40,849 Officer receivables 77,397 Prepaid expenses 10,331 -------- ------- Total Current Assets 534,686 50,000 Property and equipment, net 5,750 Intangible assets, net 18,781 Other assets 1,500 -------- ------- Total Assets $560,717 $50,000 ======== ======= LIABILITIES Current Liabilities Accounts payable $ 57,084 Payroll taxes payable 5,101 Accrued expenses 5,117 -------- ------- Total Current Liabilities 67,302 Minority interest in subsidiary 46,049 -------- ------- Total Liabilities 113,351 -------- -------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Plan of Operation Since, 1995, other than the operations of Travelnet, its wholly-owned subsidiary, Sterling AKG Corp., the Company has not engaged in any material operations. Current assets on December 31, 1996 were $560,717 as compared to net current assets on December 31, 1995 at $50,000. The increase is attributable to the acquisition of Travelnet and its wholly-owned subsidiary. The Company intends to continue to seek out the acquisition of assets, property or business that may be beneficial to the Company and its stockholders. In this regard the Company has made several strategic acquisitions during 1997 as more particularly described in the Company Form 8-K filed on October 21, 1997. The Company is 4 8 also negotiating with an affiliate for the right to develop lands in the Caribbean. No assurance can be given as to the success of these proposed negotiations. The Company's cash requirements during the next 12 months cannot be predicted at this time but it is anticipated that substantial funds will be required to support any operations obtained through an acquisition and/or merger. Therefore, management anticipates that the Company will have to raise additional funds (in all likelihood substantial funds) during the next 12 months. There is no assurance that funds will be available on commercially reasonable terms to consummate any of the above transactions. Results of Operations Since, 1995, other than the operations of Travelnet, as stated above, the Company has not engaged in any material operations. Liquidity At December 31, 1996, the Company had total assets of $560,717 and liabilities of $113,351. Assets of the Company include cash of $406,109. ITEM 7. FINANCIAL STATEMENTS.
For the period ended Page number of December 31, 1996 Financial Statement Independent Auditor's Reports........................ Exhibit A Balance Sheets....................................... A-2 Statements of Operations............................. A-3 Statements of Stockholders' Equity (Deficit)..................................... A-4 Statements of Cash Flows............................. A-5 Notes of the Financial Statements........................................... A-6 to A-12
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. The accounting firm of Berkovits & Company, P.A. with an office in Boca Raton, Florida was appointed to replace Smith & 5 9 Company, of Salt Lake City, Utah, effective March 13, 1997, when the Company relocated its corporate offices to Boca Raton, Florida. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. Identification of Directors and Executive Officers The following table sets forth, in alphabetical order, the names and the nature of all positions and offices held by all directors and executive officers of the Company to date and for the fiscal year ended December 31, 1996, and the period or periods during which each such director or executive officer served in his or her respective positions.
=========================================================================================================================== NAME AGE POSITION HELD DATE OF ELECTION DATE OF OR DESIGNATION RESIGNATION =========================================================================================================================== Krista Casteleton Nielson 34 President, Director May, 1986 Oct., 1996 - --------------------------------------------------------------------------------------------------------------------------- David R. Yeaman 50 Secretary, Director May, 1986 Oct., 1996 Treasurer, - --------------------------------------------------------------------------------------------------------------------------- Mark Colacurio 39 President, Director October, 1996 August, 1997 - --------------------------------------------------------------------------------------------------------------------------- Anne M.E. Greyling* 54 Chief Executive August, 1997 Officer, President, Director - --------------------------------------------------------------------------------------------------------------------------- Mary Duncan* 47 Corporate Secretary August, 1997 ===========================================================================================================================
* These persons presently serve in the capacities indicated opposite their respective names, however a dispute exist as to the proper officers of the Company, see Item 3., Legal Proceedings. Term of Office The term of office of Anne M.E. Greyling as Chief Executive Officer, President and Director shall continue until the annual meeting of stockholders. The annual meeting of the Board of 6 10 Directors immediately follows the annual meeting of stockholders, at which officers for the coming year are elected. Following the agreement to surrender the shares held by Laurie Doll Gladstone, Mr. Colacurio resigned and Anne M.E. Greyling became the sole director and officer of the Company. Set forth below are the backgrounds of the officers and directors of the Company: ANNE M.E. GREYLING is an experienced executive in real estate related business. Ms. Greyling has in excess of 25 years of experience in the development, management and marketing of hotels, condominium projects, apartment complexes and single family home subdivision development and construction. MARY F. DUNCAN, over the last five (5) years, has served in similar administrative capacities for several private and public companies. Family Relationships No family relationship exists between any director, executive officer or person nominated to become such. Compliance with Section 16(a) of the Exchange Act No securities of the Company are registered pursuant to Section 12(g) of Securities Exchange Act of 1934, and the Company files reports under Section 15(d) of the Securities Exchange Act of 1934; accordingly, directors, executive officers and 10 percent stockholders are not required to make filings under Section 16 of the Securities Exchange Act of 1934. ITEM 10. EXECUTIVE COMPENSATION. No officer or director has received any material compensation in the previous fiscal year. Cash Compensation The following table sets forth the aggregate compensation paid by the Company for services rendered during the periods indicated: 7 11 SUMMARY COMPENSATION TABLE
Long Term Compensation ------------------------ Awards Payouts (a) (b) (c) (d) (e) (f) (g) (h) (i) Name and Years $ $ Other Re- Option/ LTIP All Principal or Salary Bonus Annual strict- SAR's Payouts Other Position Periods Com- ed (#) ($) Compen- Ended pen- Stock sation 1996 sation Awards ($) ($) ($) - ------------------------------------------------------------------------------------------------------------------ Krista 0 0 0 0 0 0 0 0 Casteleton Nielson President, Director David R. 0 0 0 0 0 0 0 0 Yeaman Secretary, Director & Treasurer, Mark Colacurio 0 0 0 0 0 0 0 0 President, Director Anne M.E. 0 0 0 0 0 0 0 0 Greyling, CEO, Pres. & Director Mary Duncan, 0 0 0 0 0 0 0 0 Secretary
No cash compensation, deferred compensation or long-term incentive plan awards were issued or granted to the Company's management during the fiscal years ending December 31, 1996, and 1995. Further, no member of the Company's management has been granted any option or stock appreciation right; accordingly, no table relating to such items has been included within this Item. See the Summary Compensation Table of this Item. Compensation of Directors There are no arrangements pursuant to which the Company's directors are compensated for any services provided as director and no additional amounts are payable to the Company's directors for committee participation or special assignments. 8 12 The Company's directors were not compensated during the Company's last completed fiscal year or the previous two fiscal years for any services provided as director. See the Summary Compensation Table of this Item. Termination of Employment and Change of Control Arrangement There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary Compensation Table set out above which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of such person's employment with the Company or its subsidiaries, or any change in control of the Company, or change in the person's responsibilities following a change in control of the Company. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Security Ownership of Certain Beneficial Owners. The following table sets forth the shareholdings of those persons who own more than five percent (5%) of the Company's common stock as of October 13, 1997.
Number and Percentage Name and Address of Shares Beneficially Owned - ---------------- ---------------------------- LaSalle Group Approximately 36,000,000 Shares 153 St. John's Road of Common Stock representing Tunbridge Wells, Kent 72% of the Company's United Kingdom outstanding Common Stock. LaSalle Group 10,000 Shares of Preferred Class 153 St. John's Road A, par value $1.00 representing Tunbridge Wells, Kent 100% of the Company's United Kingdom outstanding Preferred Class A, stock. LY Transportation Construction Approximately 12,000,000 Shares Ltd. of Common Stock representing c/o Commonwealth Management Ltd. 24% of the Company's Drake Chambers, Tortola outstanding Common Stock. British Virgin Islands
SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth the shareholdings of the Company's directors and executive officers as of the date of filing and fiscal year ended December 31, 1996. 9 13 Number and Percentage of Shares Beneficially Owned
NAME & ADDRESS OF BENEFICIAL OWNER OR NUMBER OF PERCENT OF IDENTITY OF GROUP(1) SHARES OWNED* CLASS (2) - -------------------- ------------- --------- Krista Casteleton Nielson 40,000 .03% President, Director David R. Yeaman 500,000 3.9% Secretary, Director Treasurer, Mark Colacurio 0 0% President, Director Anne M.E. Greyling 49,600,000 98.0% Chief Executive Officer, President, Director 153 St. Johns Road Tunbridge Wells Kent TN4 9UP United Kingdom Mary Duncan 0 0% Corporate Secretary 1301 N. Congress Avenue Boynton Beach FL 33426
* These figures take into account all of the shares from the Company's reverse stock split. See Item 1 of this Report. As of December 31, 1996, the Company's directors and executive officers as a group (3) beneficially owned a total of 10,000,000 post-split shares of the Company's common stock, or approximately 80% of the outstanding voting securities of the Company. Pursuant to an agreement, all of these shares were surrendered by Ms. Laurie Doll Gladstone to the Company in exchange for 585,000 shares of Travel Net. Changes in Control To the knowledge of management, there are no present arrangements or pledges of the Company's securities which may result in a change in its control except that on August 13, 1997, 50,000,000 shares of common stock or 99% of the issued and 10 14 outstanding stock of the Company were issued and transferred to the LaSalle Group Ltd., a Cayman Island Corporation with offices in Kent, England in consideration of (1) the transfer from LaSalle of 100% of the issued and outstanding stock of LY Transportation Construction Ltd., a British Virgin Islands Company and (2) LaSalle's agreement to transfer four corporate entities upon formation, to be known as Natural Park Bahamas, Ltd, Natural Park S.A., Ltd., Natural Park Alaska, Inc. and Natural Park USA. A disagreement exist as to whether or not all the conditions of said transaction have been met as more particulary set fourth above in Item 3., Legal Proceedings. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Transactions with Management and Others Except as indicated below, there were no material transactions, or series of similar transactions, during the Company's fiscal year ended December 31, 1996, or any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any director, executive officer or any security holder who is known to the Company to own of record or beneficially more than five percent of any class of the Company's common stock, or any member of the immediate family of any of the foregoing persons, had an interest. Related party transactions, after fiscal year ended December 31, 1996 are more particulary disclosed on the Company's Form 8-K filed on October 21, 1997. Indebtedness of Management Except as indicated under the heading "Transaction with Management and Others" above, there were no material transactions, or series of similar transactions, during the Company's last fiscal year or any currently proposed transactions, or series of similar transactions, to which it or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any director, executive officer or any security holder who is known to the Company to own of record or beneficially more than five percent of any class of its common stock, or any member of the immediate family of any of the foregoing persons, had an interest. Transactions with Promoters Except as indicated under the heading "Transactions with Management and Others" above, there were no material transactions, or series of similar transactions, during the Company's last three fiscal years, or any currently proposed transactions, or series of similar transactions, to which it or any of its subsidiaries was or 11 15 is to be a party, in which the amount involved exceeded $60,000 and in which any promoter or founder or any member of the immediate family of any of the foregoing persons, had an interest. Related Party Transactions 1. Receivable Officer. At December 31, 1996, the Company is owed $4,000.00 from its President for funds advanced from the Company. The loan is non-interest bearing and it is anticipated that it will be repaid in the near future. 2. Receivable Related Party. As of December 31, 1996, the Company is owed $53,750 by Richard Gladstone, the husband of the former controlling shareholder of Travelnet International Corporation. Richard Gladstone is owed $500,00 for a loan made to New Contenders, Inc., the promoters of the boxing match between Sugar Ray Leonard and Hector Camacho which was held in February, 1997. The loan bears interest at 24% per annum. $250,000 was due by March 15, 1997 and $250,000 plus all unpaid interest and a commission of $37,500 was due April 15, 1997. The loan is secured by the promoter's sale of foreign transmission rights up to $600,000. In October 1996, the Company purchased 10% of Gladstone's interest in the receivable for $50,000. A $3,750 commission was accrued at October 31, 1996 which represents the Company's 10% share of the commission. The amounts will be repaid to Sterling on the same terms that it made the advance to Gladstone. No amounts have been repaid to date. In addition at December 31, 1996 the Company is owed $19,647 by Richard Gladstone, for advances made by Sterling AKG Corp., a subsidiary of the Company. Interest has been accrued in the amount of $719. ITEM 13. EXHIBITS AND REPORT ON FORM 8-K Reports on Form 8-K Form 8-K filed on October 28, 1997
Where Incorporated Page In This Report Number -------------- ------ Current Report on Form 8-K filed on or about October 21, 1986. Part I *
* These documents and related exhibits have previously been filed with the Securities and Exchange Commission and are incorporated herein by this reference. 12 16 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 28, 1997 By: /s/ ANNE M.E. GREYLING ------------------------------------ Anne M.E. Greyling, Director and President Date: October 28, 1997 By: /s/ MARY DUNCAN ------------------------------------ Mary Duncan, Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: October 28, 1997 By: /s/ ANNE M.E. GREYLING ------------------------------------ Anne M.E. Greyling, Director and President Date: October 28, 1997 By: /s/ MARY DUNCAN ------------------------------------ Mary Duncan, Secretary 13 17 Sterling Worldwide Corporation (Formerly Known as Koala Capital Corporation) And Subsidiaries Consolidated Financial Statements As of December 31, 1996 Together with Report of Independent Certified Public Accountants 18 Sterling Worldwide Corporation and Subsidiaries Consolidated Financial Statements As of December 31, 1996 Index
Page ---- Report of Independent Certified Public Accountants 1 Financial Statements Balance Sheet 2 Statement of Operations 3 Statement of Stockholders' Equity 4 Statement of Cash Flows 5 Notes to Financial Statements 6-12
-i- 19 BERKOWITS & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS 8211 WEST BROWARD BOULEVARD - SUITE 340 PLANTATION, FLORIDA 33324 (954) 475-3199 DADE (305) 944-9326 FAX (954) 472-2308 (800) 686-3521 http//www.berkowits-cpa.com REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Stockholders Sterling Worldwide Corporation and Subsidiaries We have audited the consolidated balance sheet of Sterling Worldwide Corporation (Formerly Koala Capital Corporation) and Subsidiaries as of December 31, 1996 and the related statements of operations, stockholders' equity and cash flows for the year ended December 31, 1996. 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 misstatements. 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 Sterling Worldwide Corporation and Subsidiaries as of December 31, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Plantation, Florida July 28, 1997 -1- 20 Sterling Worldwide Corporation and Subsidiaries Consolidated Balance Sheet December 31, 1996 and 1995 Assets
1996 1995 -------- ------ Current Assets Cash and cash equivalents $406,109 $ 50,000 Accounts receivable: Trade receivables 40,849 Officer receivables 77,397 Prepaid expenses 10,331 -------- -------- Total Current Assets 534,686 50,000 Property and equipment, net 5,750 Intangible assets, net 18,781 Other assets 1,500 -------- -------- Total Assets $560,717 $ 50,000 ======= ======= Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 57,084 Payroll taxes payable 5,101 Accrued expenses 5,117 -------- -------- Total Current Liabilities 67,302 Minority interest in subsidiary 46,049 -------- -------- Total Liabilities 113,351 ======= ======== Stockholders' Equity Preferred stock, Class A, $1 par value,10,000,000 shares authorized, no shares issued and outstanding Preferred stock, Class B, $.001 par value,490,000,000 shares authorized, no shares issued and outstanding Common stock; $.001 par value; 500,000,000 shares authorized; 16,375 shares issued and outstanding (1,375 at 12/31/95) 16 1 Additional paid in capital 467,796 51,999 Accumulated (deficit) ( 20,446) ( 2,000) ------- ------- Total Stockholders' Equity 447,366 50,000 ------- ------- Total Liabilities and Stockholders' Equity $560,717 $ 50,000 ======= =======
The accompanying notes are an integral part of these financial statements. -2- 21 Sterling Worldwide Corporation and Subsidiaries Consolidated Statement of Operations
Twelve Months Ended December 31, 1996 1995 -------- ------- Revenues Commissions $ 3,750 $ -0- Interest 719 -0- -------- ------- Total Revenues 4,469 -0- -------- ------- Costs and Expenses General and administrative 22,915 -0- -------- ------- Total Costs and Expenses 22,915 -0- -------- ------- Net (loss) $(18,446) $ -0- ======== ======= Weighted average number of shares outstanding 5,438 1,261 ======== ======= Net (loss) per common share $ (3.39) $ -0- ======== =======
The accompanying notes are an integral part of these financial statements. -3- 22 Sterling Worldwide Corporation Consolidated Statement of Changes in Stockholders' Equity
Common Stock Additional Par Value $0.001 Paid In Accumulated Shares Amount Capital Deficit Total ------ ------ ------- ------- ----- Balance- 12/31/94 1,250 $ 1 $ 1,999 $ (2,000) $ -0- Insurance of common stock (restricted) at $400 per share at 12/1/95 125 50,000 50,000 Net income for year -0- -0- ------ -------- -------- --------- -------- Balance- 12/31/95 1,375 1 51,999 (2,000) 50,000 Issuance of common stock (Regulation S) for cash at $50 per share on 10/29/96 2,500 3 124,997 125,000 Issuance of common stock (restricted) on 12/24/96 for net assets of Travelnet International Corp. 12,500 12 290,800 290,812 Net loss for year (18,446) (18,446) ------ -------- -------- --------- -------- Balance-12/31/96 16,375 $ 16 $467,796 $ (20,446) $447,366 ====== ======== ======== ========= ========
The accompanying notes are an integral part of these financial statements. -4- 23 Sterling Worldwide Corporation and Subsidiaries Consolidated Statement of Cash Flows
Twelve Months Ended December 31, 1996 1995 -------- ------ Cash flows from operating activities: Net (loss) $(18,446) $ -0- Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 241 -0- -------- ------- f Net cash used in operating activities (18,205) -0- -------- ------- Cash flows provided for investing activities: Increase in officer receivable (58,469) -0- Acquisition of property and equipment (1,388) -0- Increase in organizational costs (3,050) -0- -------- ------- Net cash used in investing activities (62,907) -0- -------- ------- Cash flows from financing activities: Proceeds from sale of common stock 125,000 50,000 -------- ------- Net cash provided by financing activities 125,000 50,000 -------- ------- Net increase in cash and cash equivalents 43,888 50,000 Cash and cash equivalents, beginning of year 50,000 -0- -------- ------- Cash and cash equivalents, end of year $ 93,888 $50,000 ======== ======= SUPPLEMENTAL CASH FLOW DISCLOSURES Non cash investing activity
The Company acquired $366,464 in assets and assumed $75,652 in liabilities of Travelnet International Corporation in exchange for 12,500 common restricted shares of its common stock. The accompanying notes are an integral part of these financial statements. -5- 24 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements Note 1 ORGANIZATION The Company was incorporated under the laws of the State of Utah on May 2, 1986 as Koala Capital Corporation and was in the development stage since incorporation until December 24, 1996. On December 30, 1993, the Company was dissolved as a Utah corporation and reincorporated as a Nevada corporation. On October 28, 1996, the name was changed to Sterling Worldwide Corporation. On December 24, 1996, the Company acquired 86.4% of Travelnet International Corporation, A Florida Corporation and its subsidiary Sterling AKG Corporation, A Florida corporation in exchange for 12,500 common restricted shares of its common stock. Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES Principles of Consolidation- The consolidated financial statements include the accounts of Sterling Worldwide Corporation and majority owned subsidiary Travelnet International Corporation and its subsidiary Sterling AKG Corp. All significant intercompany transactions have been eliminated. Accounting Methods-The Company recognizes income and expenses based on the accrual method of accounting in accordance with generally accepted accounting principles. Dividend Policy- The Company has not yet adopted any policy regarding payment of dividends. Organization Costs- The Company amortizes its organization costs over a five year period. Income Taxes- The Company records the income tax effect of transactions in the same year that the transactions enter into the determination of income, regardless of when the transactions are recognized for tax purposes. Tax credits are recorded in the year realized. Since the Company has not yet realized significant income as of the date of this report, no provision for income taxes has been made. The Company utilizes the liability method of accounting for income taxes as set forth in Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109"). Under the liability method, deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. -6- 25 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements Cash and Cash Equivalents- For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in financial institutions which are federally insured up to a limit of $100,000. At December 31, 1996 the Company had one bank account with a balance of $179,183 which is $79,183 in excess of the federally insured limit. Loss Per Share- Loss per share is calculated by dividing net loss by the weighted average common stock and common stock equivalents outstanding during the period, adjusted to give effect to a 1 for 4 reverse stock split in April 1997 and a 1 for 200 reverse split in July 1997. Property and Equipment- Property and equipment are recorded at cost. The Company follows the practice of charging expenditures for additions or major replacements to the asset accounts. When assets are retired or otherwise disposed of, the cost or other basis thereof, and the related accumulated depreciation are eliminated from the respective accounts with any gain or loss being recognized in that period. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets as follows:
Years ----- Equipment, Furniture and Improvements 5
Note 3 CAPITALIZATION On the date of incorporation, the Company sold 1,250 shares of its common stock to Capital General Corporation for $2,000 cash for an average consideration of $1.60 per share. On December 1, 1995, the Company sold an additional 125 shares of its common stock to Capital General Corporation for $50,000 cash for an average consideration of $400 per share. On October 29, 1996, the Company sold 2,500 shares of Regulation S stock for $125,000 cash for an average consideration of $50 per share. -7- 26 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements NOTE 4 ACQUISITIONS On December 24, 1996, Sterling Worldwide Corporation acquired 585,000 shares of Travelnet International Corporation or 86.4% of its outstanding stock by transferring 12,500 shares of common restricted shares of its common stock. The acquisition was accounted for as a purchase with the results of operations of Travelnet International and its wholly owned subsidiary Sterling AKG Corp. included from the acquisition date. However, due to the few number of days remaining in 1996 these results were deemed immaterial. The fair value of assets acquired was $366,464 and liabilities assumed was $75,652 which is net of the minority interest. The proforma results listed below are unaudited and reflect purchase price accounting adjustments assuming the acquisition occurred at the beginning of each year presented.
1996 1995 ---------- ---------- Revenues $5,737,676 $3,580,890 Net (loss) (117,485) (34,932) (Loss) per share $(21.60) $(27.70) Average shares outstanding 5,438 1,261
NOTE 5 MINORITY INTERESTS On December 24, 1996, Sterling Worldwide Corporation acquired 86.4% of the outstanding stock of Travelnet International Corporation. Total assets of $424,452 were acquired with liabilities assumed of $87,591. For financial reporting purposes the assets and liabilities are included in Sterling Worldwide Corporation consolidated financial statements and the outside investors interest in Travelnet International Corporation is reflected as a minority interest. -8- 27 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements Note 6 PROPERTY AND EQUIPMENT Property and equipment is summarized as follows:
December 31, 1996 ---- Equipment $ 4,211 Furniture 2,484 Improvements 1,454 -------- 8,149 Less accumulated depreciation (2,399) -------- $ 5,750 ========
Depreciation expense for the year ended December 31, 1996 was $1,256. Note 7 RELATED PARTY TRANSACTIONS 1. Receivable Officer At December 31, 1996, the Company is owed $4,000 from its President for funds advanced from the Company. The loan is non-interest bearing and it is anticipated that it will be repaid in the near future. 2. Receivable Related Party At December 31, 1996, the Company is owed $53,750 by Richard Gladstone, the husband of the former controlling shareholder of Travelnet International Corporation. Richard Gladstone is owed $500,000 for a loan made to the promoters, New Contenders, Inc. of the boxing match between Sugar Ray Leonard and Hector Camacho which was held in February, 1997. The loan bears interest at 24% per annum. $250,000 was due by March 15, 1997 and $250,000 plus all unpaid interest and a commission of $37,500 was due April 15, 1997. The loan is secured by the promoter's sale of foreign transmission rights up to $600,000. In October 1996, the Company purchased 10% of Gladstone's interest in the receivable for $50,000. A $3,750 commission was accrued at October 31, 1996 which represents the Company's 10% share of the commission. The amounts will be repaid to Sterling on the same terms that New Contenders, Inc. repays its advance to Richard Gladstone. No amounts have been repaid to date. In addition at December 31, 1996, the Company is owed $19,647 by Richard Gladstone, for advances made by Sterling AKG Corp a subsidiary of the company. Interest has been accrued in the amount of $719. -9- 28 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements NOTE 8 COMMITMENTS The Company entered into a twelve month lease which expires July 31, 1998 for its operating facilities in Boca Raton, Florida. The lease calls for a monthly base rental plus Florida sales tax. Future minimum payments under noncancellable operating leases with initial terms of one year or more (excluding taxes and cost of living adjustments) are as follows:
December 31, 1996 ----------------- 1997 $ 21,035 1998 12,918 ------ Total minimum lease payments $ 33,953 ======
Note 9 SUBSEQUENT EVENTS On April 15, 1997, The Company reverse split its common stock on a 1 for 4 basis. The number of shares outstanding prior to the split was 13,100.000. The number of shares outstanding after this split is 3,275,000. On July 2, 1997, the Company reverse split its common stock on a 1 for 200 basis. The number of shares outstanding prior the split was 3,275,000. The number of shares outstanding after this split is 16,375. All references to common stock retroactively reflect the stock splits. On July 11, 1997, the Company amended its Articles of Incorporation and Bylaws to provide for the following amended capital structure: 1. Authorized share capital be increased from 100,000,000 total shares of common stock to 500,000,000 shares of $.001 par value. 2. Authorized a series of 10,000,000 shares of Class A Preferred Stock of $1.00 per share par value. The Class A Preferred Shares shall have superpriority voting rights of 100,000 votes per share and that the holders of the Class A shares shall have the right to elect majority of the directors to the Board of the Company, and 3. Authorized 490,000,000 shares of Class B referred Stock which shares shall be non-voting and have a par value of $.001 per share and shall be convertible into one share of common stock at a conversion rate of ten shares of common stock for each Preferred Share surrendered. -10- 29 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements Note 9 On July 11, 1997, the Board of Directors adopted a stock grant for key employees, consultants and attorneys. The maximum number of shares available for issuance under the plan is 1,000,000 shares of common stock. Note 10 EVENTS SUBSEQUENT TO THE DATE OF REPORT OF INDEPENDENT ACCOUNTANTS (UNAUDITED) On August 7, 1997, the Company agreed to dispose of the Company's majority owned operating subsidiary, Travelnet International Corporation and its wholly subsidiary Sterling AKG Corp. in exchange for the common stock owned by its majority shareholder, Laurie Doll Gladstone. The shares are now owned by LaSalle Group, Ltd. Gladstone received an irrevocable three year put option which requires the corporation to purchase Gladstone's 584,400 shares in Travelnet for $2,000,000 in fully registered shares of the corporation. If the corporation does not show $10,000,000 in net assets on its certified financial statements for the quarter ended September 30, 1997 on or prior to October 1, 1997, then the corporation must return to Ms. Gladstone any such number of shares of the corporation which would provide her with 80% of the outstanding securities (on a fully diluted basis) of the corporation. On August 13, 1997, the Board approved the acquisition by the Company of International Property Investments Corporation, a licensed Florida real estate brokerage engaged in the real estate brokering business of commercial real estate, in exchange for 150,000 shares of restricted common stock of the Company. On August 13, 1997 the Company agreed to acquire Resort Marketing Group, Inc., a Florida company specializing in the marketing of Resort condominiums and resort-related properties in exchange for 150,000 shares of restricted common stock. On August 13, 1997 in a related party transaction, the Board approved the acquisition from LaSalle Group, Ltd. of 100% of the issued and outstanding stock of LY Transportation Construction Ltd., a BVI company and four corporate entities to be known as Natural Park Bahamas, Ltd., Natural Park S.A. Ltd., Natural Park Alaska, Inc. and Natural Park U.S.A, Inc. in exchange for the issuance of 10,000,000 shares of Class A Preferred of $1.00 par value and 50,000,000 shares of newly issued restricted common stock of the Company. -11- 30 Sterling Worldwide Corporation and Subsidiaries (Formerly Koala Capital Corporation) Notes to Financial Statements On August 19, 1997, the Company approved a Resolution to acquire the Fort Thomas Resort in St. Kitts in exchange for the issue of 1,027,828 shares of common stock to be valued at $10.00 per share in exchange for the real property commonly known as the Fort Thomas Resort. The Company has issued 1,027,828 shares of common stock to be held in escrow pending the closing of this transaction. On August 19, 1997 the Company agreed, subject to due diligence, to proceed with the acquisition of FINdex.com , a Florida company engaged in the offering of services on the Internet via its web site www.FINdex.com. On August 19, 1997 the Board approved a private placement in the sum of $100,000,000 to be offered under Rule 144(a) to institutional investors. The Company President was authorized to enter into an exclusive private placement agreement with AIBC Investment Services Corporation, investment bankers, for the purpose of raising $100,000,000 in equity funds to be utilized by Sterling to make an equity investment of $100,000,000 in the Natural Park Public Company, Ltd. of Thailand, or in the alternative, to acquire a substantial portfolio of properties from the Natural Park of Thailand portfolio. -12- EX-27 2 FINANCIAL DATA SCHEDULE
5 YEAR DEC-31-1996 JAN-01-1996 DEC-31-1996 406,109 0 118,246 0 0 534,686 8,149 2,399 560,717 67,302 0 0 0 16 447,350 560,717 3,750 4,469 0 22,915 0 0 0 (18,446) 0 0 0 0 0 (18,446) (3.39) 0
-----END PRIVACY-ENHANCED MESSAGE-----