1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(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 June 30, 1997.
[ ] 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: 022307
NAVA LEISURE USA, INC.
(Exact name of registrant as specified in charter)
IDAHO 84-1368850
- ------------------------------ -------------------------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
253 Ontario #1, P.O. Box 3303, Park City, Utah 84060
- ---------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 649-5060
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- ------------------------------------------
None N/A
Securities registered pursuant to section 12(g) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common stock, None
par value $0.0005
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. (1) Yes [ ]
No [X ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
2
State issuer's revenues for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by
nonaffiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days: The Company does not have an active trading
market and it is, therefore, difficult, if not impossible, to determine the
market value of the stock. To the knowledge of the Company, no bid or asked
quotation is available at this time, nor at any time in the last sixty days.
The Company has 3,000,025 shares of its common stock outstanding, of which
599,258 shares are held by nonaffiliates.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the part of the Form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933: NONE
PAGE
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PART I,
ITEM 1: DESCRIPTION OF BUSINESS
HISTORY AND ORGANIZATION
NAVA LEISURE USA, INC. (the "Company") was organized on April 1, 1964
under the laws of the State of Idaho as Felton Products, Inc., having the
stated purpose of engaging in various investment activities, without
limitation of its general corporate powers to engage in any lawful activities.
The Company engaged in limited investment and business development operations
and, from the time of its inception, the Company has underwent several name
changes and business changes.
On September 1, 1987, the Company changed its name to Ink & Imagers,
Inc. There is no record of any business operations during the period the
Company was known as Ink & Imagers, Inc. On November 16, 1988, the Company's
name was changed to its present form, NAVA LEISURE USA, Inc. in anticipation
of the acquisition of an operating business incorporated in Delaware with a
similar name, NAVA LEISURE USA, INC., a Delaware corporation (hereinafter,
"NAVA (Delaware)"). The acquisition and related stock exchange agreement was
never completed, and all rights and interest in the Company and the NAVA
(Delaware) subsidiary were confirmed to the Company by an Order Pursuant to
Stipulation of the District Court for Idaho, Sixth Judicial District, on
December 11, 1995.
The Company never engaged in an active trade or business throughout the
period from 1988 to 1995. The only activity involved the lawsuit to rescind
the NAVA (Delaware) business acquisition agreement, which was never completed
in the first instance. The acquisition agreement was "rescinded and voided"
by court order dated December 11, 1995. Furthermore, any exchanges of stock
related thereto were canceled and made null and void by the same court order,
and all certificates related thereto were returned to the Company.
Accordingly, NAVA (Delaware) again became a wholly-owned subsidiary of the
Company. On December 16, 1995, a special meeting of the board of directors
was held for the purpose of canceling all shares of common and preferred stock
issued by the Company pursuant to the rescinded NAVA (Delaware) transaction.
The court order, stipulation, and the board action terminated all further
issues in dispute regarding the litigation over the NAVA (Delaware)
transaction.
The present promoters of the Company obtained control between 1987 and
1988 by acquiring then-controlling shareholders' interests in the then-defunct
and inactive Felton Products, Inc., for purposes of the business acquisition
which failed in 1988. The promoters are the President of the Company, J.
Rockwell Smith, and three major shareholders, namely Edward F. Cowle, H.D.
Williams and David Williams.
Other than the rescinded acquisition transaction and related litigation
regarding NAVA (Delaware), the Company has remained inactive since before
1988, until just recently. On November 1, 1996, the directors determined that
the Company should become active in seeking potential operating businesses and
business opportunities with the intent to acquire or merge with such
businesses. The Company then began to consider and investigate potential
business opportunities.
4
The Company is considered a development stage company and, due to its
status as a "shell" corporation, its principal business purpose is to locate
and consummate a merger or acquisition with a private entity. Because of the
Company's current status having no assets and no recent operating history, in
the event the Company does successfully acquire or merge with an operating
business opportunity, it is likely that the Company's present shareholders
will experience substantial dilution and there will be a probable change in
control of the Company.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Company has only limited resources,
it may be difficult to find favorable opportunities. There can be no
assurance that the Company will be able to identify and acquire any business
opportunity which will ultimately prove to be beneficial to the Company and
its shareholders. The Company will select any potential business opportunity
based on management's business judgment.
The Company voluntarily filed a registration statement on Form 10-SB in
order to make information concerning itself more readily available to the
public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could
provide a prospective merger or acquisition candidate with additional
information concerning the Company. In addition, management believes that
this might make the Company more attractive to an operating business
opportunity as a potential business combination candidate. As a result of
filing its registration statement, the Company is obligated to file with the
Commission certain interim and periodic reports including an annual report
containing audited financial statements. The Company intends to continue to
voluntarily file these periodic reports under the Exchange Act even if its
obligation to file such reports is suspended under applicable provisions of
the Exchange Act. Any person reviewing this information is advised to refer
to the Company's Form 10-SB for additional information.
Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company
successfully completes an acquisition or merger with another operating
business, the resulting combined business must provide audited financial
statements for at least the two most recent fiscal years or, in the event that
the combined operating business has been in business less than two years,
audited financial statements will be required from the period of inception of
the target acquisition or merger candidate.
The Company has no recent operating history and no representation is
made, nor is any intended, that the Company will be able to carry on future
business activities successfully. Further, there can be no assurance that the
Company will have the ability to acquire or merge with an operating business,
business opportunity or property that will be of material value to the
Company.
Management plans to investigate, research and, if justified, potentially
acquire or merge with one or more businesses or business opportunities. The
Company currently has no commitment or arrangement, written or oral, to
participate in any business opportunity and management cannot predict the
nature of any potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and negotiations
with any potential business or business opportunity.
5
ITEM 2. DESCRIPTION OF PROPERTIES
The Company's administrative offices are located at 253 Ontario No. 1,
P.O. Box 3303, Park City, Utah, 84060, which are the offices of its president,
J. Rockwell Smith. Mr. Smith allows the Company to utilize these facilities
without charge. The Company does not own or control any material property.
The Company obtained one-hundred percent (100%) ownership and control of
a Delaware subsidiary also named NAVA LEISURE USA, INC., by stipulation and
judgment effective December 11, 1995 (i.e., NAVA (Delaware), as noted Supra,
at Part I, Item 1). Since NAVA (Delaware) is also an inactive corporation
which has never engaged in an active trade or business of any kind, the asset
(100% stock of NAVA (Delaware)) is valued at zero (-0-) in the auditor's
report, and is not a material asset to the Company. Similarly, a monetary
judgment associated with that proceeding in favor of the Company is considered
uncollectible and subject to a 100% valuation allowance in the auditor's
report, and is not a material asset to the Company.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings are pending at this time.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fiscal year ended June 30, 1997, nor since that time until the date of
this Form 10-KSB filing.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company is not aware of any quotations for its common stock, now or
at any time within the past nine years. The Company has made an application to
the NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
Company's application to the NASD consists of current corporate information,
financial statements and other documents as required by Rule 15c2-1-1 of the
Securities Exchange Act of 1934, as amended. Inclusion on the OTC Bulletin
Board, once obtained, permits price quotations for the Company's shares to be
published by such service. The Company is not aware of any established trading
market for its common stock nor is there any record of any reported trades in
the public market in recent years. The Company's common stock has not traded
in a public market since 1988. Since its inception, the Company has not paid
any dividends on its Common Stock, and the Company does not anticipate that it
will pay dividends in the foreseeable future. At June 30, 1997, the Company
had 387 shareholders.
PAGE
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately 1988. The costs
and expenses associated with the preparation and filing of this registration
statement and other operations of the Company have been paid for by
shareholders of the Company, specifically H. D. Williams. It is anticipated
that the Company will require only nominal capital to maintain the corporate
viability of the Company and necessary funds will most likely be provided by
the Company's existing shareholders or its officers and directors in the
immediate future. However, unless the Company is able to facilitate an
acquisition of or merger with an operating business or is able to obtain
significant outside financing, there is substantial doubt about its ability to
continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the
Company successfully completes an acquisition or merger. At that time,
management will evaluate the possible effects of inflation on the Company as
it relates to its business and operations following a successful acquisition
or merger.
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or
merge with one or more business ventures. Because the Company lacks funds, it
may be necessary for the officers and directors to either advance funds to the
Company or to accrue expenses until such time as a successful business
consolidation can be made. Management intends to hold expenses to a minimum
and to obtain services on a contingency basis when possible. Further, the
Company's directors will forego any compensation until such time as an
acquisition or merger can be accomplished and will strive to have the business
opportunity provide their remuneration. However, if the Company engages
outside advisors or consultants in its search for business opportunities, it
may be necessary for the Company to attempt to raise additional funds. As of
the date hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any capital. In
the event the Company does need to raise capital most likely the only method
available to the Company would be the private sale of its securities. Because
of the nature of the Company as a development stage company, it is unlikely
that it could make a public sale of securities or be able to borrow any
significant sum from either a commercial or private lender. There can be no
assurance that the Company will be able to obtain additional funding when and
if needed, or that such funding, if available, can be obtained on terms
acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is confident that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately
following the signature page to this form 10-KSB.
PAGE
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has had no disagreements with its certified public
accountants with respect to accounting practices or procedures or financial
disclosure.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth as of June 30, 1997, the name, age, and
position of each executive officer and director of the Company.
Name Age Position
---- --- --------
J. Rockwell Smith 59 President and Director
Blake Morgan 44 Vice President and Director
James Kerr 43 Secretary-Treasurer and Director
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors.
Set forth below is certain biographical information regarding the
Company's executive officers and directors.
J. Rockwell Smith has been President and a director of the Company since
1987. From 1977 to 1989, Mr. Smith owned and operated his own construction
company in Park City, Utah, named Rocky Smith Construction, which supervised
construction projects in this resort community. From 1990 to the present, Mr.
Smith has been employed as a driver by the Park City Transportation Company.
Mr. Smith studied engineering at Seattle University and the University of
Washington.
Blake Morgan has been Vice President and a director of the Company since
1987. From 1993 through October of 1996, Mr. Morgan worked as an independent
agent and sales representative for both Gump & Ayers Real Estate of Park City,
Utah, and Regional Telephone Directory of Salt Lake City, Utah. Since October
of 1996, Mr. Morgan has been employed as a sales representative for Diamond
Glass Company of Salt Lake City, Utah, one of Utah's largest auto and home
glass distributors. Mr. Morgan attended the University of Utah from 1971
through 1973.
James Kerr has been Secretary-Treasurer and a director of the Company
since 1995. Since 1994, Mr. Kerr has worked as an independent production
manager and/or lighting technician for a number of companies situated in and
around Salt Lake City, Utah, including Great Day Ltd., Video West, Bonneville
Communications, Scopes, Garcia & Carlisle, Rutherford Productions, Stillson &
Stillson, and Advantage Video. In 1993, Mr. Kerr was employed in equipment
repair and maintenance for Redman Movies & Stories of Salt Lake City, Utah,
and as a ski test programmer for Great Day Ltd. of Utah. Previously, he has
operated his own business as a self-employed independent auto mechanic.
8
To the knowledge of management, during the past five years, no present or
former director or executive officer of the Company: (1)filed a petition
under the federal bankruptcy laws or any state insolvency law, nor had a
receiver, fiscal agent or similar officer appointed by a court for the
business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing; (2) was convicted in a
criminal proceeding or named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses); (3) was the subject
of any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from or otherwise limiting, the following activities: (i) acting
as a futures commission merchant, introducing broker, commodity trading
advisor, commodity pool operator, floor broker, leverage transaction
merchant, associated person of any of the foregoing, or as an investment
advisor, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, or engaging in or
continuing any conduct or practice in connection with such activity; (ii)
engaging in any type of business practice; or (iii) engaging in any activity
in connection with the purchase or sale of any security or commodity or in
connection with any violation of federal or state securities laws or federal
commodities laws; (4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60 days the
right of such person to engage in any activity described above under this
Item, or to be associated with persons engaged in any such activity; (5) was
found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacate; (6) was found by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding
by the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company's Common Stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
connection therewith, directors, officers, and beneficial owners of more than
10% of the Company's Common Stock are required to file on a timely basis
certain reports under Section 16 of the Exchange Act as to their beneficial
ownership of the Company's Common Stock. The following table sets forth, as
of the date of this report, the name and relationship of each person who
failed to file on a timely basis any reports required pursuant to Section 16
of the Exchange Act:
PAGE
9
Name Position Report to be filed*
- ---- -------- ------------------
J. Rockwell Smith President and Director Form 3
Blake Morgan Vice President and Director Form 3
James Kerr Secretary-Treasurer and Director Form 3
Edward F. Cowle 10% or greater beneficial owner Form 3
David Williams 10% or greater beneficial owner Form 3
H.D. Williams 10% or greater beneficial owner Form 3
ITEM 10. EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred compensation
plan for the benefit of its employees, officers or directors. The Company has
not paid any salaries or other compensation to its officers, directors or
employees for the years ended June 30, 1995 and 1996, nor at any time during
1997. Further, the Company has not entered into an employment agreement with
any of its officers, directors or any other persons and no such agreements are
anticipated in the immediate future. It is intended that the Company's
directors will forego any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business opportunity
provide their remuneration. As of the date hereof, no person has accrued any
compensation from the Company.
COMPENSATION TABLE: None; no form of compensation was paid to any officer or
director at any time during the last three fiscal years.
CASH COMPENSATION
There was no cash compensation paid to any director or executive officer
of the Company during the fiscal years ended June 30 1997, 1996, or 1995.
BONUSES AND DEFERRED COMPENSATION: None.
COMPENSATION PURSUANT TO PLANS: None.
PENSION TABLE: None.
OTHER COMPENSATION: None.
COMPENSATION OF DIRECTORS: None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT: There are no
compensatory plans or arrangements of any kind, including payments to be
received from the Company, with respect to any person 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 a change in
the person's responsibilities following a change in control of the Company.
PAGE
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
The following table sets forth information, to the best knowledge of the
Company as of September 23, 1997, with respect to each person known by the
Company to own beneficially more than 5% of the Company's outstanding common
stock, each director of the Company and all directors and officers of the
Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
Edward F. Cowle 682,680 22.8%
201 East 87th Street,
Suite 6C
New York, NY 10128
David Williams 418,608 14.0%
62 West 400 South
Salt Lake City, Utah 84101
H. D. Williams 372,096 12.4%
62 West 400 South
Salt Lake City, Utah 84101
Mark William McWhirter 198,452 6.6%
3629 Steven White Drive
San Pedro, CA 90731
Dr. M.R. Moeen-Ziai 198,450 6.6%
5024 Abuela Drive
San Diego, CA 92124
Jim Ruzicka 174,404 5.8%
P.O. Box 3813
Park City, UT 84060
Sarasanan Blaendra 173,795 5.8%
439 West 233rd Street
Carson, CA 90745
Assieh Sedaghati 173,646 5.8%
5011 Abuela Drive
San Diego, CA 92124
Management:
J. Rockwell Smith, President 8,636 0.3%
P.O. Box 3303
Park City, UT 84060
All Directors and Executive 8,636 0.3%
Officers as a Group
(3 persons in group)
- --------------------------------
Note: The Company has been advised that each of the persons listed above has
sole voting, investment, and dispositive power over the shares indicated
above. Percent of Class (third column above) is based on 3,000,025 shares of
common stock outstanding on June 30, 1997.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
To the best of Management's knowledge, during the fiscal year ended June
30, 1997, there were no material transactions, or series of similar
transactions, since the beginning of the Company's last fiscal year, or any
currently proposed transactions, or series of similar transactions, to which
the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any director or executive officer, or any security
holder who is known by the Company to own of record or beneficially more than
5% of any class of the Company's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest. H.D. Williams has
advanced funds to pay for attorney's fees and accounting fees for the
preparation of the Form 10-SB and Form 10-KSB, and will continue to advance
such funds as needed for future reporting and compliance, for which he will be
reimbursed by the Company when, or if, funds become available to the Company.
These shareholder advances totaled $7,403 in the fiscal year ended June 30,
1997, and $11,988 since inception.
CERTAIN BUSINESS RELATIONSHIPS:
During the fiscal year ended June 30, 1997, there were no material
transactions between the Company and its management.
INDEBTEDNESS OF MANAGEMENT:
To the best of Management's knowledge, during the fiscal year ended June
30, 1997, there were no material transactions, or series of similar
transactions, since the beginning of the Company's last fiscal year, or any
currently proposed transactions, or series of similar transactions, to which
the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any director or executive officer, or any security
holder who is known by the Company to own of record or beneficially more than
5% of any class of the Company's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS:
The Company was organized more than thirty-three years ago; hence
transactions between the Company and its promoters or founders are long since
expired by their terms or by operation of law, and therefore are not deemed to
be material. Furthermore, to the best knowledge of management, no such
transactions exist.
PAGE
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K:
(a)(1)FINANCIAL STATEMENTS. The following financial statements are
included in this report:
Title of Document Page
Report of Jones, Jensen & Company, Certified Public
Accountants...................................................... 14
Balance Sheet as of June 30, 1997 .......................... 15
Statements of Operations for the fiscal years ended
June 30, 1997 and 1996 and from inception on April 1, 1964
through June 30,
1997............................................................. 16
Statements of Stockholders' Equity from inception on
April 1, 1964 to June 30, 1997.................................. 17
Statements of Cash Flows for the fiscal years ended
June 30, 1997 and 1996 and from inception on April 1, 1964
through June 30, 1997........................................... 18
Notes to Financial Statements.................................... 19
(a)(2)FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules are included as part of this report: None.
(a)(3)EXHIBITS. The following exhibits are included as part of this
report:
Exhibit No. SEC Ref. No. Title of Document Location
- ----------- ------------ ----------------- --------
Item 3 Articles of Incorporation and Bylaws
------ ------------------------------------
3.01 Articles of Incorporation and all amendments *
pertaining thereto
3.02 By-laws *
Item 4 Instruments Defining the Rights of Shareholders
------ -----------------------------------------------
4.01 Specimen Stock Certificate *
Item 21 Subsidiaries of the Small Business Issuer
------- -----------------------------------------
21.01 Subsidiary Schedule - Nava Leisure USA, Inc.
(Delaware) *
Item 29 Financial Date Schedule
------- -----------------------
29.01 Financial Data Schedule This
Filing
* Incorporated by reference from the Company's registration statement on
Form 10-SB filed with the Commission, SEC file No. 022307.
PAGE
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
NAVA LEISURE USA, INC.
(Registrant)
By:/S/J. Rockwell Smith
Date: September 23, 1997 J. ROCKWELL SMITH, President and
Director, Principal Executive
Officer
By:/S/J. Rockwell Smith
Date: September 23, 1997 J. ROCKWELL SMITH, President and
President and Director
By:/S/Blake Morgan
Date: September 23, 1997 J. ROCKWELL SMITH, Vice-president
and Director
By:/S/James Kerr
Date: September 23, 1997 JAMES KERR, Secretary/Treasurer
PAGE
14
INDEPENDENT AUDITORS' REPORT
Board of Directors
Nava Leisure USA, Inc.
We have audited the balance sheet of Nava Leisure USA, Inc. (a development
stage company) as of June 30, 1997 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the years ended June 30,
1997 and 1996 and from inception on April 1, 1964 through June 30, 1997.
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 audits.
We conducted our audits 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 audits provide 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 Nava Leisure USA, Inc. as of
June 30, 1997 and the results of its operations and its cash flows for the
years ended June 30, 1997 and 1996 and from inception on April 1, 1964 through
June 30, 1997 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
established source of revenues. These conditions raise substantial doubt
about its ability to continue as a going concern. Management's plans
concerning these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
July 31, 1997PAGE
15
NAVA LEISURE USA, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
June 30,
1997
------------
CURRENT ASSETS
Cash -
------------
Total Current Assets -
------------
TOTAL ASSETS -
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable 3,507
------------
Total Current Liabilities 3,507
------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 5,000,000 shares
authorized at $0.001 par value:
Series A preferred stock, 1,100,000
shares authorized, -0- shares issued
and outstanding -
Series B preferred stock, 100,000
shares authorized at $1.00 par value;
-0- shares issued and outstanding -
Common stock, 50,000,000 shares
authorized at $0.0005 par value;
3,000,025 shares issued and
outstanding 1,500
Capital in excess of par value 21,238
Deficit accumulated during the
development stage (26,245)
Total Stockholders' Equity (Deficit) (3,507)
------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -
============
The accompanying notes are an integral part of these financial statements
PAGE
16
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Operations
From Inception
On April 1,
For the Years Ended 1964 Through
June 30, June 30,
1997 1996 1997
---------- ---------- -----------
REVENUE $ - $ - -
---------- ---------- -----------
EXPENSES - - -
---------- ---------- -----------
OPERATING LOSS - - -
---------- ---------- -----------
LOSS ON DISCONTINUED
OPERATIONS (7,810) (1,554) (26,245)
---------- ---------- -----------
NET LOSS $ (7,810) $ (1,554) $ (26,245)
========== ========== ===========
NET LOSS PER SHARE $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 3,000,024 3,000,024
========== ==========
The accompanying notes are an integral part of these financial statements.
PAGE
17
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
-------- -------- ---------- -----------
Balance, April 1, 1965 - $ - $ - $ -
Issuance of common stock
for cash from inception on
June 30, 1993 at approxi-
mately $0.0036 per share 3,000,024 1,500 9,250 -
Contribution of capital
through payment of
expenses by shareholder - - 500 -
Net loss from inception
on April 1, 1964 through
June 30, 1933 - - - (13,110)
--------- ------- --------- ----------
Balance, June 30, 1993 3,000,024 1,500 9,750 (13,110)
Contribution of capital
through payment of
expenses by shareholder - - 1,405 -
Net loss for the year
ended June 30, 1994 - - - (2,169)
--------- ------- --------- ----------
Balance, June 30, 1994 3,000,024 1,500 11,155 (15,279)
Contribution of capital
through payment of
expenses by shareholder - - 2,027 -
Net loss for the year
ended June 30, 1995 - - - (1,602)
--------- ------- --------- ----------
Balance, June 30, 1995 3,000,024 $ 1,500 $ 13,182 $ (16,881)
--------- ------- --------- -----------
The accompanying notes are an integral part of these financial statements.
19
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)(Continued)
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
-------- -------- ---------- -----------
Balance, June 30, 1995 3,000,024 $ 1,500 $ 13,182 $ (16,881)
Contribution of capital
through payment of
expenses by shareholder - - 653 -
Net loss for the year
ended June 30, 1996 - - - (1,554)
--------- -------- ---------- -----------
Balance, June 30, 1996 3,000,024 1,500 13,835 (18,435)
Contribution of capital
through payment of
expenses by shareholder - - 7,403 -
Net loss for the year
ended June 30, 1997 - - - (7,810)
--------- -------- ---------- -----------
Balance, June 30, 1997 3,000,024 $ 1,500 $ 21,238 $ (26,245)
========= ======== ========== ===========
The accompanying notes are an integral part of these financial statements.
PAGE
19
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Cash Flows
From Inception
On April 1,
For the Years Ended 1964 Through
June 30, June 30,
1997 1996 1997
---------- ---------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (7,810) $ (1,554) $ (26,245)
Adjustments to reconcile
net loss to cash used by
operating activities:
Expenses paid by shareholder 7,403 653 11,988
Increase (decrease)
in accounts payable 407 901 3,507
---------- ---------- -----------
Net Cash Provided (Used)
by Operating Activities - - (10,750)
---------- ---------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES - -
- - ---------- ----------
- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance
of common stock - - 10,750
---------- ---------- -----------
Net Cash Provided (Used)
by Financing Activities - - 10,750
---------- ---------- -----------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
---------- ---------- -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ - $ - $ -
========== ========== ===========
The accompanying notes are an integral part of these financial statements.
PAGE
20
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
From Inception
On April 1,
For the Years Ended 1964 Through
June 30, June 30,
1997 1996 1997
---------- ---------- -----------
SUPPLEMENTAL
DISCLOSURES OF CASH
FLOW INFORMATION
Interest paid $ - $ - $
- -
Income taxes paid $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
PAGE
21
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1997
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Nava Leisure USA, Inc. (a
development stage company) (the Company). The Company was incorporated on
April 1, 1964 in the State of Idaho as Felton Products, Inc. for the purpose
of engaging in investing activities.
On October 13, 1987, the Company issued 12,000,000 of its previously unissued
authorized shares to acquire the assets of Copytex. In connection with this
agreement, the Company changed its name to Ink & Imagers, Inc. On October 3,
1988, the Company rescinded the agreement with Copytex. The shares issued
pursuant to the agreement were returned and cancelled.
On November 30, 1988, the Company entered into an agreement with Nava Leisure
USA, Inc. (Nava), whereby, it would acquire all of the issued and outstanding
stock of Nava in exchange for 18,730,900 shares of its common stock, 1,002,000
shares of its series A preferred stock and 89,670 shares of its series B
preferred stock. In connection with this agreement, the Company changed its
name to Nava Leisure USA, Inc. On December 15, 1995, the Company rescinded
the agreement due to non-performance by Nava. All shares issued per the
agreement were cancelled and the cancellation was shown retroactively. (Note
2)
The Company is currently inactive, and is seeking other business opportunities
through mergers and acquisitions.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a June 30 year end.
c. Net Loss Per Share
The computation of net loss per share of common stock is based on The weighted
average number of shares outstanding during the period.
d. Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly
liquid investments with an original maturity of three months or less to be
cash equivalents.
PAGE
22
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1997
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Provision for Taxes
The Company accounts for income taxes using Statement of Financial Accounting
Standards No. 109, "Accounting for "Income Taxes." Under Statement 109, the
liability method is used in accounting for income taxes.
As of June 30, 1997, the Company had net operating loss carryforwards of
$26,245 that may be offset against future taxable income through 2012. The
tax benefit of the net loss carryforwards is offset by a valuation allowance
of the same amount due to the uncertainty that the carryforwards will be used
before they expire.
f. Stock Split
On October 27, 1988, the Company effected a split of its common shares
outstanding on a 1.5-for-1 basis. The financial statements have been
retroactively restated to reflect the effects of this stock split.
g. Estimates
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.
NOTE 2 -LITIGATION
On September 26, 1994, a shareholder of the Company filed a lawsuit against
the Company and the shareholders (the Shareholders) that received shares of
the Company's stock per the exchange agreement between the Company and Nava
Leisure USA, Inc. (a Delaware corporation). The lawsuit alleged that the
terms of the agreement had not been fulfilled, and that the exchange agreement
should be unwound as a result of the non-performance. The lawsuit also sought
damages from the shareholders in the amount of $35,000 on behalf of the
Company.
On December 11, 1995, a default judgement was recorded in favor of the
shareholder who had filed the lawsuit. The judgement ordered that the
Exchange Agreement be rescinded, that the shares issued per the Exchange
Agreement be returned to the Company, and that the Company be awarded damages
of $35,000 and costs of $5,440. To date, the Company has not collected any of
the damages warded. Due to the uncertainty that the Company will collect any
of the damages, the amount has been offset in full by a valuation allowance.
PAGE
23
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1997
NOTE 3 -GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing, operating
company. Currently, the stockholders are committed to cover all operating and
other costs until sufficient revenues are generated.
NOTE 4 -RELATED PARTY TRANSACTIONS
During the years ended June 30, 1997 and 1996 a shareholder of the Company
paid expenses on its behalf in the amounts of $7,403 and $653, respectively.
These amounts were contributed by the shareholder to the capital of the
Company.
5
0001035354
NAVA LEISURE USA INC
12-MOS
JUN-30-1997
JUN-30-1997
0
0
0
0
0
0
0
0
0
3,507
0
0
0
22,738
(26,245)
0
0
0
0
0
0
0
0
0
0
0
(7,810)
0
0
(7,810)
(0.00)
(0.00)
