-----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, VNrPHEUsfsVp+DVyC9NCnJQobtv28xl5hORK1UF7Hi5vn5QIuH9RUG9XaL+xAvQh icMmUVYZLXjnnknYfyqSWw== 0001004522-97-000076.txt : 19970702 0001004522-97-000076.hdr.sgml : 19970702 ACCESSION NUMBER: 0001004522-97-000076 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONDOR WEST CORP CENTRAL INDEX KEY: 0000831378 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 760251547 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-20966 FILM NUMBER: 97633542 BUSINESS ADDRESS: STREET 1: 8547 ARAPAHO RD STREET 2: STE 416J CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80112 BUSINESS PHONE: 3037702313 MAIL ADDRESS: STREET 1: 909 FROSTWOOD #261 CITY: HOUSTON STATE: TX ZIP: 77024 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31,1996 ---------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from to ----------------------------------------------- Commission file number 33-27625 ---------------------------------------------------- CONDOR WEST CORPORATION -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada No. 76-0251547 - ----------------------------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer Identification No.) Of incorporation or organization) 8547 Arapaho Road, Suite 416J Greenwood Village, Colorado 80112 - ----------------------------------------------------------------------------- (Address of principal executive offices) Zip Code Registrant's telephone number, including area code (303) 770-2313 --------------------------- 909 Frostwood, Suite 261, Houston, Texas 77024 - ----------------------------------------------------------------------------- (Former name or former address, if changed since last report) Securities registered pursuant to Section 12(g) of the Act: Common Stock (Par Value $.001 Per Share) - ----------------------------------------------------------------------------- (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. Yes No X ------- --------- 14,939,468 Common Shares were outstanding as of May 31, 1996 with a market value of $0.00. CONDOR WEST CORPORATION TABLE OF CONTENTS PART I PAGE Item 1. Organization and Business 3 Item 2. Properties (not applicable) 3 Item 3. Legal Proceedings 3 Item 4. Submission of Matters to a Vote of Security-Holders 3 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters 4 Item 6. Selected Financial Data 4 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 4 Item 8. Financial Statements and Supplementary Data (Included in Item 14) 4 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 5 PART III Item 10. Directors and Executive Officers of the Registrant 6 Item 11. Management Remuneration 6 Item 12. Security Ownership of Certain Beneficial Owners and Management 8 Item 13. Certain Relationships and Related Transactions 9 PART IV Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K 9 2 PART I Item 1. Organization and Business Condor West Corporation ("The Company"), a Nevada corporation organized in October 1987 for the purpose of implementing an initial distribution of its stock and thereafter to seek operating businesses as potential candidates for acquisition or other forms of combination. The Company has no operating history. No representation is made, nor is any intended, that the Company will be able to acquire one or more operating businesses or, if any acquisitions are made, that any operations will be profitable. On May 7, 1990, 650,000 shares, constituting 52% of the Company's 1,250,000 outstanding shares of Common Stock, were acquired by Dr. Everett Renger and Carl D. Nation. Concurrent therewith, the Company's existing officers and directors resigned and were replaced by: Dr. Everett Renger, Chairman of the Board Carl D. Nation, President and Director Steven R. Paige, Director Terrance Rasmussen, Vice President, Treasurer and Director Patrick D. West, Executive Vice President David A. Christman, Secretary (See Item 10, Directors and Executive Officers of the Registrant.) The newly-elected Board of Directors, in 1994, authorized the issuance of 541,766 shares of the Company's previously unissued Common Stock in exchange for all of the outstanding shares of Super Brakes, Inc., a corporation owned 50/50 by Messrs. Renger and Nation. Super Brakes, Inc. is a company in the organizational stage and its activities to date have consisted solely of the development of a business plan for the financing and establishment of a chain of Company owned retail brake and installation outlets. As Super Brakes, Inc. had no significant assets or operations at that time, the shares issued to Messrs. Renger and Nation were recorded at a nominal amount representing their aggregate par value of $542, of which $10 was capitalized as the cost of the investment, and the remaining $532 was deemed to be for services rendered and was expensed. Item 2. Properties None Item 3. Legal Proceedings There are no material legal proceedings pending in which Registrant is named a party. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of the Registrant's security holders during the fourth quarter of the fiscal period covered by this report. 3 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters There is no active market for the Company's shares. Item 6. Selected Financial Data Fiscal Years Ended May 31, 1996 1995 1994 1993 1992 ---------- ---------- ---------- ------------ ---------- Total assets $889 $202,915 $ -0- $ -0- $8,903 Long term debt -0- 200,000 -0- -0- -0- Preferred stock -0- -0- -0- -0- -0- Net revenue -0- -0- -0- -0- -0- Net loss (290,063) (26,266) -0- (8,903) (8,904) Loss per share (.02) (.01) (.00) (.01) (.01) During the five year period ended May 31, 1996 there were no changes in accounting methods. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations During the current fiscal year, the Company began activities aimed at entering the retail automotive repair business, to be known as Super Brakes. To implement this plan, three officers of the Company, Messrs. Althen, Nation, and Paige became full time employees beginning in June, 1995. During this period of time, a business plan was developed, and active negotiations were held in an effort to acquire an existing chain of brake repair stores. The Company also explored various sources of financing to complete the proposed acquisition. To finance the additional operating expenses, the Company borrowed $300,000 from a Director/Stockholder (see item 13). After several months of negotiations, the Company's efforts to complete the acquisition were unsuccessful and the efforts were abandoned. In addition, the funds provided by the loans were depleted. Therefore, salaries to the three officers were discontinued in December, 1995, and the Company reverted to an entity without active business operations. The $300,000 loan, plus accrued interest of $4,068, was repaid on June 30, 1995 by the issuance of 540,000 shares of common stock at the rate of $0.563 per share. At May 31, 1996, the Company remains a development stage enterprise without any business operations. The Company's officers and directors will continue to seek investment capital and possible merger or acquisition candidates. As the Company has no source of funds and no working capital, it plans to finance expenses incident to maintenance of its corporate status, including legal, accounting, filing fees, and other similar costs, primarily through advances from its officers and directors, or from the sale of additional shares. RESULTS OF OPERATIONS As a result of the additional activity described above, development stage loss increased from $26,266 for fiscal 1995 to $290,063 for fiscal 1996, primarily attributable to salaries (which in-creased approximately $171,000) and other general and administrative expenses (which increased 4 approximately ($91,000). Prior to the current fiscal year, the Company has had no operations. See the discussion regarding changes in amounts previously reported for the year ended May 31, 1995, below under Item 9. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Effective January 1, 1995, the Company's prior auditors, O'Neal and White, P.C., merged their audit practice into the firm of C. Williams & Associates, P.C. of Houston, Texas. During the preceding two fiscal years ending May 31, 1994 and through January 1, 1995, the Company had no disagreements with O'Neal and White, P.C. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. In February, 1996, the Texas State Board of Public Accountancy revoked the license of Charles R. Williams, the principal of C. Williams & Associates, and the SEC required the Company to have its May 31, 1995 financial statements re-audited. As a result, it retained the firm of Bateman, Blomstrom & Co. as auditors, who conducted the re-audit as of May 31, 1995. As a result of the re-audit, the Company restated certain accounting items, including the following: (1) the investment in Super Brakes, Inc. was restated at a value of $10, from the previous $542; (2) shares issued to officers and directors for services in creating a business plan for Super Brakes were originally capitalized as organization expenses of $18,192, but were charged to expense as a result of the re-audit; (3) 7,541,680 shares of the Company's stock, originally issued to two of its officers in connection with the Super Brakes business plan development, were re-contributed back to the Company in October, 1995, and the return was retroactively recorded at May 31, 1995. As a result of the adjustments from the re-audit, the Company's stockholders' equity was decreased from $20,242 to ($13,516), and net loss was restated from ($3,935) to ($26,266). PART III Item 10. Directors and Executive Officers of the Registrant The following person are the directors and (where indicated) executive officers of the Company and have served in their respective positions since the indicated dates: Dr. Everett Renger (1) 53 Co-Chairman Carl D. Nation (1) 61 Co-Chairman Wade D. Althen (2) 53 President, CEO David A. Christman (2) 53 Vice President of Finance, Treasurer, CFO Steven R. Paige (1) 34 Vice President of Operations, COO Terrance L. Rasmussen (1) 34 Vice President, Secretary Dennis L. Swenson (3) 44 Vice President, Human Resources John A. Murdock III (3) 51 Dr. Felix F. Banchs (3) 56 (1) Joined Company on May 7, 1990 (2) Joined Company on August 4, 1993 (3) Joined Company on May 12, 1995 5 Dr. Everett Renger has been a practicing orthodontist in Houston, Texas since 1973. He received both a Bachelor of Science and a Doctor of Dental Science degrees from Baylor University and a Master of Science (orthodontics) from the University of Texas Dental School. Dr. Renger is a member of the American Association of Orthodontists, Southwest Society of Orthodontists, American Dental Association, Texas Dental Association, Houston District Dental Society, Baylor Dental Alumni Association and the University of Texas orthodontic Alumni Association. He is currently serving on the Peer Review Committee of the Houston District Dental Society and is President of Wilson Radiographic Centers of Houston. Mr. Carl D. Nation founded Super Brakes, Inc. in 1981. He, along with Dr. Renger, acquired controlling interest in the Company in 1990 in order to provide a public vehicle to facilitate growth in the automotive after-market field. Mr. Nation has been a self-employed financial consultant in the Fort Worth, Texas area for the past fifteen years representing several major industries, including precious metals, banks municipalities and various government and private businesses. Effective June 1, 1995, Mr. Nation became a full time employee of the company. Mr. Nation has held a prior position as Vice President and General Manager of Insurers of America, representing Lloyds of America. Mr. Nation completed an executive management program that consisted of six months manufacturing, shipping and receiving, inventory control and sales management. Upon completion he served as marketing director for the Northeastern United States for Kelsey-Hayes Company, a major manufacturer of disc brakes. He managed sales personnel, opened new distribution channels, organized sales and product clinics through automotive, manufacturing, warehousing, national accounts, mass merchants, municipalities and state governments. He then became the district manager of the New England district for Monroe Auto Equipment Company, a manufacturer of shock absorbers. While with Monroe, he directed the sales force, marketing products through national accounts, mass merchants, automotive distribution centers, jobbers and dealers. He also organized and instructed approximately fifty product and sales clinics annually. His responsibilities included administration, sales training and new distribution and arranging credit through financial institutions for new customers. Before that, he was the marketing director of nine northeastern states for Belden Corporation, a manufacturer of electrical wire and cable. He held a prior position as the operations department manager for Hartford National Bank. Mr. Nation was honorably discharged from the United States Marine Corps. Mr. Wade D. Althen began functioning as the President/CEO of the Company on a full time basis effective June 1, 1995. During April and May of 1995 he served as Licensed Manager of Employment World, Inc. in North Little Rock, Arkansas. From May 1992 to March 1995 he was employed by National Education Centers, Inc. a subsidiary of National Education Corporation (a NYSE company). His positions with National Education Corporation included Business Instructor in Economics, Accounting and Computer Science and Co-Chair of the Business Department from May 1992 to June 1993. From July 1993 to June 1994 he was Education Director in charge of: curriculum; hiring, scheduling and training instructional staff; budgeting; attrition of student body; and filing Accreditation reports. These positions were all at the Little Rock, Arkansas campus. In June 1994 Mr. Althen was appointed Director and President of the Fort Worth, Texas campus until his resignation in March 1995. From February 1987 to May 1992 he was a self-employed Certified Public Accountant and financial consultant in North Little Rock, Arkansas. He has provided executive level management for eighteen of the last twenty-one years including four years as Chief Executive of a commercial bank, one year as Chief Executive Officer of a publicly traded petroleum company and two years as managing partner of a CPA firm. 6 Mr. Althen has prepared and provided oversight of preparation of budgets in many industries. In the banking industry, he planned for significant growth by utilizing financial and human resources to enable a seventy year old bank to double in size within four years. In the petroleum industry, he established and executed a plan that made a publicly traded company that was in reorganization viable as an acquisition candidate. He is experienced with preparation of initial registrations of public corporations and Securities and Exchange Commission reports. He has conducted audits for many types of industries and submitted financial statements to clients and regulatory agencies. He also has experience with statements required by the Federal Deposit Insurance Corporation and other banking agencies. In 1970, Mr. Althen obtained his Bachelor of Science Degree in Accounting from Arkansas State University and received one year of post graduate training from the Stonier Graduate School of Banking at Rutgers University. He has been a Certified Public Accountant since 1972. Mr. David A. Christman has been a Senior Financial Analyst with Intellicap Limited since November 1994 working with the Ministry of Finance of the State of Kuwait to develop and administer the government's Counter-Trade Offset Program. His duties include working with supply contractors. He contributed to the design of the program's guidelines and designed and implemented the Financial Performance Model of evaluating the feasibility and acceptability of business plans submitted by the contractors. He also developed a training program and teaches finance to the Kuwaiti staff. From January 1991 to November 1994 he was the principal in David A. Christman & Associates, an independent financial and management consulting firm in Dallas, Texas. He work consisted of installing management accounting systems, job cost reporting systems, standard cost accounting systems and other phases of financial management procedures and policies. He also helped with restructuring organizations, wrote job descriptions, designed and installed incentive plans and employee evaluation procedures. He provided management training, wrote employee handbooks and installed management by objectives (MBO) programs. From February 1988 to January 1991 he served as a management consultant with George S. May International Company where his duties included all aspects of financial and organizational management consulting as well as computer installation. Mr. Christman holds a Bachelor of Science in Business Administration Degree with a Major in Accounting from Rochester Institute of Technology in New York and has completed a post-graduate program in finance and statistics. Mr. Steven R. Paige graduated from the University of New York at Albany in 1984 with a Bachelor of Science degree in Business Administration which he achieved while enlisted in the U.S. Air Force. Upon completion of his enlistment and degree requirements, Mr. Paige worked for a major television station in Denver, Colorado as an account executive. In 1986 he joined one of Denver's most prominent advertising agencies. Within two years, Mr. Paige was personally responsible for doubling the firm's gross revenues by acquiring three national accounts, and was promoted to Executive Vice President. His new responsibilities included personnel development, full creative and buying authority, and future business development. In 1988 he left the agency and formed his own marketing company, The Paige Group, which pursued new areas of marketing, advertising and finance for clients. From March 1989 to June 1990, Mr. Paige was Sales Manager for Mike Naughton Ford Company with full responsibility for hiring and training of sales personnel as well as total responsibility for movement of inventory including advertising, marketing and promotional activities. Through his implementation of creative marketing and sales techniques, he was instrumental in bringing the dealership from a seventh place rating to a number one rating in a little over a year. From June 1990 to December 1991, Mr. Paige was General 7 Manager of Metro Toyota with overall responsibility of the dealership including inventory control, budgeting, sales performance, service and maintenance operations and total income performance. From January 1992 to May 1995, he was Sales Manager and General Manager of Don Massey Cadillac (a member of the largest Cadillac group in the world) with total responsibility as dealer- operator including procurement of all major inventory. Again, with his implementation of marketing and sales techniques, he brought the dealership from a number six rating to a number one rating in less than six months. Mr. Paige has been associated with Condor West Corporation and with Mr. Carl D. Nation, Co-Chairman for more than five years. Effective June 1, 1995 he became a full-time employee of the Company. Mr. Terrance L. Rasmussen has been employed in a management position with Hilti Corporation since 1990. His responsibilities include inventory control and internal auditing. Prior to that he was employed by A & A Plate Service, Inc. and Sears, Roebuck and Company in computerized accounting systems. Additional areas of experience accounts payable, accounts receivable, payroll and tax consulting. Mr. Rasmussen has also analyzed company operations for purposes of recommending changes for improvement, and potential companies for take-over based on profitability potential. Major projects included areas of real estate, manufacturing and agriculture. Mr. Rasmussen is licensed by NASD and was an account executive for a national brokerage firm where he developed corporate and individual accounts. He provided guidance to clients, determined investment objectives and developed solid portfolios according to the objectives using stocks, bonds, and mutual funds. He received a Bachelors degree in business, management and finance from Iowa State university in Ames, Iowa, and attended the Metropolitan State University in Minneapolis, Minnesota where he obtained a degree in accounting. Mr. Rasmussen is also a CPA. John A. Murdock III is the founder of JAM Consulting Service, Inc. and principal stockholder, chief executive officer and founder of Power By Nature, Inc. Mr. Murdock served more than 20 years in the United States Air Force where he obtained extensive training in management and operations. As Weapons Superintendent, he was responsible for more than 250 airmen and worked world wide in areas of Europe, Asia and the Middle East. Mr. Murdock's decorations include the Distinguished Flying Cross (with four oak leaf clusters), the Airman's Medal of Valor, the Air Medal (with 18 oak leaf clusters), the Vietnamese Cross of Gallantry (with Bronze Star, Palm Leaf and 3 oak leaf clusters), and the Good Conduct Medal (with 7 oak leaf clusters). After retiring from the United State Air Force, Mr. Murdock used his experience to be an advisor for the Armament and Mobility Officers for the Royal Saudi Air Force. He worked directly with foreign country representatives as a Logistics Engineer for Foreign Military Sales. This included the sale of aircraft and other defense systems. Currently, he is an agent for the leasing of Deeds of Assignments of United States Treasuries. These are used to aid in the funding of projects, and require highest contacts in banking and business. Mr. Murdock Obtained a B.S. Degree from Troy State Unviersity, a Masters in Business Administration in Personnel Administration from Chapman College, and a Doctor of Laws degree from Louisiana Baptist University. Dennis L. Swenson possesses more than 25 years of human resource and administrative management experience with Fortune 500 and smaller corporations. From January 1991 to present he has been Vice President Human Resources and Administration for PharmAssist, Inc. as well as owner of DLS Associates, a Human Resources consulting firm. From January 1987 to January 1991 he was Director of Compensation and Benefits for FoxMeyer Corporation and from 8 May 1969 to December 1986 he was Manager of Employee Benefits for Burlington Northern Railroad Company. While at FoxMeyer Corporation he established the Human Resource Department serving more than 4,500 employees as well as developing and staffing the Customer Service Department for a $45 billion wholly owned subsidiary. While employed with Burlington Norther, Inc., Mr. Swenson managed and administered all labor relations functions, including negotiation of the benefits program covering 48,000 employees. Through design and administrative modifications, he was responsible for cost reductions of nearly $5 million annually. !n 1990, he served as acquisition consultant to Computer Land Corporation when they acquired the $750 million Nynex Business Information Systems. He has extensive experience in conducting audits to assure sound and feasible business practices based upon corporate liability and profit margin. Dr. Felix F. Banchs has served as Mexico Project Manager/Nationally Certified Financial Counselor for the National Foundation for Consumer Credit, Fort Worth, Texas from 1992 to present where his responsibilities include the development, implementation and supervision of debt management and financial programs for the USA, Puerto Rico and Mexico. From 1990 to 1992 he was Director of Training for Centro de Amistad, Dallas, Texas where he developed and supervised vocational training programs. From 1977 to 1990, Dr. Banchs was Vice President for Administration and Dean of Business Administration for Boricua College in New York. His responsilbilities included the development of the business administration curriculum and management of three campuses. During his tenure, both faculty and student population increased by 500%. In addition, Dr. Banchs has held executive positions with Shell Oil Co., Baxter- Travenol Laboratories and Colgate-Palmolive. Dr. Banchs graduated Magna Cum Laude with a BBA in Management from Catholic University of Puerto Rico, Cum Laude with a Masters in Business Administration in Marketing Management from St. John's University, New York and earned a PhD in Business Administration and Economics from Columbia University, New York. Dr. Banchs is listed in AWho's Who in Finance and Industry in America and is a veteran of the United States Air Force. Item 11. Management remuneration Through May 31, 1995, the Company's officers received no compensation. Compensation paid to officers during the year ended May 31, 1996 aggregated $191,807, paid to three officers; no single officer received compensation in excess of $100,000. The Company has not adopted any stock option plans, long term compensation payouts, deferred compensation plans, incentive plans, pension plans, change-in-control arrangements, or other compensation plans. The Company's officers are reimbursed for reasonable business expenses incurred in connection with their activities on its behalf. Item 12. Security Ownership of Certain Beneficial Owners and Management Officers and Directors, and persons beneficially owning more than 5% of the 14,939,468 shares of common stock outstanding at May 31, 1996 were as follows: 9 Name Officer Director Shares Percent Dr. Everett Renger Yes Yes 5,325,000 (1) 35.6% Carl D. Nation Yes Yes 5,325,000 (1) 35.6 Wade D. Althen Yes Yes 1,000,000 6.7 Steven R. Paige Yes Yes 1,000,000 6.7 John A. Murdock, III No Yes 540,000 3.6 Terrance L. Rasmussen Yes Yes 300,000 2.0 David A. Christman Yes Yes 200,000 1.3 Dennis L. Swenson Yes Yes 200,000 1.3 All officers and directors as a group 13,890,000 93.0 (1) On October 10, 1995, Messrs Renger and Nation each returned 3,770,840 shares to the Company as an anti-dilutionary measure. Shares shown above are net of the returned shares. Item 13. Certain Relationships and Related Transactions See Item 1, _Organization and Business_, for discussion of the acquisition of all the outstanding stock of Super Brakes, Inc. from Dr. Renger and Mr. Nation. On April 28, 1995, May 30, 1995, and June 22, 1995, John A. Murdock, III, a Director, loaned the Company $100,000 on each occasion, or a total of $300,000. The notes bore interest at 15% and were due and payable two years after date. Under the terms of the notes, Mr. Murdock had the option to convert each note into 130,000 shares of common stock of the Company. However, on June 30, 1995, the notes and accrued interest of $4,068 were converted into 540,000 shares of stock at the rate of $0.563 per share. PART IV Item 14. Exhibits, Financial Statements, Schedules, and Reports of Form 8-K 10 CONDOR WEST CORPORATION (A development stage enterprise) Index To Financial Statements May 31, 1996 - ------------------------------------------------------------------------------- Description Page - ------------------------------------------------------ ----------- Reports of Independent Certified Public Accountants F-2 Balance sheets as of May 31, 1996 and 1995 F-4 Statements of loss for the periods ended May 31, 1996, 1995 and 1994 F-5 Statements of stockholders' equity for the years ended May 31, 1996, 1995 and 1994 F-6 Statements of cash flows for the periods ended May 31, 1996, 1995 and 1994 F-7 Notes to financial statements F-8 F-1 Bateman, Blomstrom & Co. Certified Public Accountants 9301 Southwest Freeway, Suite 100 Houston, Texas 7074-1593 (713) 552-9800 (713) 771-4385 FAX (713) 771-5553 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To The Board of Directors and Stockholders Condor West Corporation Greenwood Village, Colorado We have audited the accompanying balance sheet of Condor West Corporation (a development stage enterprise) as of May 31, 1996 and 1995, and the related statements of loss, stockholders' equity, and cash flows for the two years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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 the 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 Condor West Corporation (a development stage enterprise) as of May 31, 1996 and 1995, and the results of its operations and its cash flows for the two years then ended 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 7 to the financial statements, the Company has exhausted substantially all its cash and has no operations, employees, or significant assets. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. BATEMAN, BLOMSTROM & CO. Houston, Texas December 5, 1996 Member INTERNATIONAL ASSOCIATION OF PRACTISING ACCOUNTANTS Offices in Principal Cities Around The World F-2 O'NEAL AND WHITE, P.C. Certified Public Accountants 17350 Tomball Parkway, Suite 300 Houston, Texas 77064 (713) 890-2554 INDEPENDENT AUDITOR'S REPORT The firm of O'Neal and June 5, 1994 White, P.C. has discontinued the practice of public accounting and no Board of Directors and Shareholders longer provides audit and Condor West Corporation accounting services. This Houston, Texas document is a copy of the latest signed and dated audit report issued by O'Neal and White. We have audited the accompanying balance sheet of Condor West Corporation as of May 31, 1994 and 1993, and the related statements of operations, shareholders' equity, and cash flows for the three years ended May 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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 Condor West Corporation (a development stage enterprise) as of May 31, 1994 and 1993, and the results of its operations and its cash flows for the three years ended May 31, 1994 in conformity with generally accepted accounting principles. O'NEAL AND WHITE, P.C. CERTIFIED PUBLIC ACCOUNTANTS F-3 CONDOR WEST CORPORATION (A development stage enterprise) Balance Sheets May 31, 1996 and 1995 - ------------------------------------------------------------------------------- 1996 1995 ----------- ----------- ASSETS Current assets: Cash $53 $202,905 ----------- ----------- Total current assets 53 202,905 ----------- ----------- Office and computer equipment, net of accumulated depreciation of $140 836 - ----------- ----------- Other assets - 10 ----------- ----------- Total assets $ 889 $202,915 =========== =========== LIABILITIES Current liabilities: Accrued interest $ - $ 1,397 Accounts payable, related party - 15,034 ----------- ----------- Total current liabilities - 16,431 ----------- ----------- Noncurrent liabilities: Notes payable, related party - 200,000 ----------- ----------- Total liabilities - 216,431 ----------- ----------- Commitments and contingencies - - STOCKHOLDERS' EQUITY (DEFICIT) Common stock, par value $.001 per share, 35,000,000 shares authorized, 14,939,468 and 13,999,468 shares issued and outstanding 14,940 14,000 Capital in excess of par value 356,728 53,200 Deficit accumulated during the development stage (370,779) (80,716) ----------- ----------- Total stockholders' equity (deficit) 889 (13,516) ----------- ----------- Total liabilities and stockholders' equity $ 889 $202,915 =========== =========== The accompanying notes are an integral part of these statements. F-4 CONDOR WEST CORPORATION (A development stage enterprise) Statements of Loss For The Periods Ended May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- Cumulative October 8, 1987 Through May 31, Years ended May 31, 1996 1996 1995 1994 ---------- ----------- --------- --------- Revenues $191 $ - $ - $ - ---------- ----------- --------- --------- Expenses: Depreciation and amortization 40,326 140 - - Salaries and fees for services 210,696 191,107 19,589 - Other general and administrative 115,840 96,105 5,280 - ---------- ----------- --------- --------- Total expenses 366,862 287,352 24,869 - ---------- ----------- --------- --------- Income (loss) from operations (366,671) (287,352) (24,869) - Other income (expenses): Interest (4,108) (2,711) (1,397) - ---------- ----------- --------- --------- Net (loss) $(370,779) $(290,063) $(26,266) $ - ========== =========== ========= ========= Net loss per common share $(0.020) $(0.004) $ - =========== ========== ========= Weighted average number of shares outstanding 14,841,107 7,572,071 1,249,468 =========== ========== ========= The accompanying notes are an integral part of these statements. F-5
CONDOR WEST CORPORATION (A development stage enterprise) Statements of Stockholders' Equity For The Years Ended May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- Deficit Accumulated Total Additional During Stock- Paid the holders' Common Stock In Development Equity Shares Amount Capital Stage (Deficit) ----------- -------- ----------- ---------- ----------- Balances, May 31, 1993 and 1994 1,249,468 $1,250 $53,200 $(54,450) $ - Stock issued for services, net of shares subsequently 12,740,000 12,740 - - 12,740 returned Stock issued for other assests 10,000 10 - - 10 Net loss (26,266) (26,266) ----------- -------- ----------- ---------- ----------- Balances, May 31, 1995 13,999,468 14,000 53,200 (80,716) (13,516) Shares issued for debt 540,000 540 303,528 304,068 Stock issued for services 400,000 400 - 400 Net loss (290,063) (290,063) ----------- -------- ----------- ---------- ----------- Balances, May 31, 1996 14,939,468 $14,940 $356,728 $(370,779) $ 889 ----------- -------- ----------- ---------- -----------
The accompanying notes are an integral part of these statements. F-6
CONDOR WEST CORPORATION (A development stage enterprise) Statements of Cash Flows For The Periods Ended May 31, 1996, 1995 and 1994 - ---------------------------------------------------------------------------------------------------------------- Cumulative October 8, 1987 Through May 31, Years ended May 31, 1996 1996 1995 1994 ----------- ----------- ----------- ------------ Cash flows from operating activities: Net (loss) $(370,779) $(290,063) $(26,266) $ - Adjustments to reconcile net loss to net cash used in operating activities: Operating expenses incurred by issuance of stock 15,851 3,111 12,740 - Increase (decrease) in accounts payable, related party (19,475) (15,064) 12,129 - Increase (decrease) in accrued interest 1,397 - 1,397 - Depreciation and amortization 40,326 140 - - ----------- ----------- ----------- ------------ Net cash flows from operating activities (332,680) (301,876) - - ----------- ----------- ----------- ------------ Cash flows from investing activities: Acquisition of office and computer equipment (976) (976) Increase in deferred organization costs (23,646) - - - ----------- ----------- ----------- ------------ Net cash flows from investing activities (24,622) (976) - - Cash flows from financing activities: Proceeds from sale of common stock 20,625 - - - Proceeds from notes payable, related party 300,000 100,000 200,000 - Increase in account payable, related party 2,905 - 2,905 - Liability assumed by parent 33,825 - - - ----------- ----------- ----------- ------------ Net cash flows from financing activities 357,355 100,000 202,905 - ----------- ----------- ----------- ------------ Net increase in cash and cash equivalents 53 (202,852) 202,905 - Cash and cash equivalents, beginning of period - 202,905 - - ----------- ----------- ----------- ------------ Cash and cash equivalents, end of period $53 $53 $202,905 $ - =========== =========== =========== ============ Supplementary cash flow information: Non-cash investing and financing activities: Common stock issued for services $13,140 $400 $12,740 $ - Common stock issued for other assets 10 - 10 - Common stock issued for debt and accrued interest 304,068 304,068 - - Cash paid for interest - - - - Cash paid for income taxes - - - -
The accompanying notes are an integral part of these statements F-7 CONDOR WEST CORPORATION (A development stage enterprise) Notes To Financial Statements May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- Note 1 - Organization and summary of significant accounting policies: Following is a summary of the Company's organization and significant accounting policies: Organization and nature of business - Condor West Corporation (the Company) is a Nevada corporation, incorporated on October 8, 1987, engaged in organizational activities, raising capital, and investigating business opportunities. Accordingly, the Company has no business operations and does not intend to engage in an active business until it acquires or combines with an operating enterprise. To date, the Company's activities have been limited to its formation, the initial registration of its securities, and the identification and screening of potential business acquisitions. In its current development stage, management anticipates incurring substantial additional losses as it investigates business opportunities. Basis of presentation - The accounting and reporting policies of the Company conform to generally accepted accounting principles applicable to development stage enterprises. Uses of 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and concentrations in products and markets which could affect the financial statements and future operations of the Company. Cash and cash equivalents - For purposes of the statement of cash flows, the Company considers all cash in banks, money market funds, and certificates of deposit with a maturity of less than one year to be cash equivalents. Fair value of financial instruments and derivative financial instruments - The Company has adopted Statement of Financial Accounting Standards number 119, Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments. The carrying amounts of cash, accounts payable, and accrued expenses approximate fair value because of the short maturity of these items. The carrying amount of long term debt approximates fair value because the interest rate on this instrument approximates a market interest rate. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. At May 31, 1995 and 1996, the Company had no derivative financial instruments. F-8 CONDOR WEST CORPORATION (A development stage enterprise) Notes To Financial Statements May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- Office and computer equipment - Office and computer equipment is stated at cost less accumulated depreciation, computed principally on the straight- line method over the estimated useful lives of the assets. Depreciation is taken on the straight-line method for tax purposes also, using lives prescribed by the Internal Revenue Code, which are similar to book basis lives. Federal income taxes - Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with Statement of Financial Accounting Standards number 109 Accounting for Income Taxes, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides deferred taxes for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not. Net income per share of common stock - Net income per share of common stock is computed by dividing net income by the weighed average number of shares of common stock outstanding during the period, after giving retroactive effect to stock splits, if any. Note 2 - Issuance of stock: Since its inception, the Company has issued shares of its common stock as follows: Price Per Date Description Shares Share Amount - ------------------------------------------------------------------------------- Transactions prior to current year: 10/8/87 Shares issued for cash 750,000 $.0275 $20,625 5/31/90 Shares issued in exchange for 499,468 .0677 33,825 debt 12/1/94 Shares issued to officers and directors for services 20,281,680 .001 20,282 Less, shares subsequently .001 returned (7,541,680) (7,542) ------------ --------- Net shares issued for services 12,740,000 12,740 12/1/94 Shares issued to acquire all of the outstanding stock of Super Brakes, Inc. 10,000 .001 10 ------------ --------- Subtotal 13,999,468 67,200 Transactions during current year: 6/30/95 Shares issued for debt and accrued interest 540,000 .563 304,068 6/30/95 Shares issued for services 200,000 .001 200 8/08/95 Shares issued for services 200,000 .001 200 ------------ --------- Subtotal 940,000 304,468 ------------ --------- Cumulative total 14,939,468 $371,668 ============ ========= F-9 CONDOR WEST CORPORATION (A development stage enterprise) Notes To Financial Statements May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- During the year ended May 31, 1995, the Company began the formulation of a business plan to enter the retail automotive service field. In that connection, 20,281,680 shares of common stock (including 531,666 shares described in the following paragraph) were issued to 8 officers and directors for their services in connection with the proposed business, including the development of a business plan. Subsequently, on October 10, 1995, two of the officers returned 7,541,680 of these shares to the Company for cancellation as an adjustment in the value of the services rendered. The return of shares has been retroactively recorded as of December 1, 1994. Shares issued were recorded at par value, which approximates fair value of the services rendered, and were charged to expense as incurred. Also on December 1, 1994, the Company issued 541,666 shares to its Chairman and Co-chairman in exchange for all the outstanding stock of Super Brakes, Inc. Super Brakes was an inactive corporation with no assets, liabilities or operations that was formed to engage in the proposed retail automotive services business. Of the total shares issued, 10,000 shares (or $10) were capitalized as the investment cost, and the remaining 531,666 (or $532) were deemed to have been issued for services and were charged to expense. On May 18, 1996, the Super Brakes investment was sold back to the Co-chairman for $10. The investment is included among other assets on the accompanying balance sheet. At May 31, 1996, the Company had abandoned its plans to enter the retail automobile services field, and was engaged in seeking other business opportunities. Note 3 - Notes payable, related party: The Company borrowed a total of $300,000 from a Director and executed three promissory notes dated April 28, 1995, May 30, 1995, and June 22, 1995 in the amount of $100,000 each. The notes were originally due two years after date, bore interest at 15%, and were unsecured. On June 30, 1995, the three loans, plus accrued interest of $4,068, were exchanged for 540,000 shares of common stock at the rate of $0.563 per share. Note 4 - Federal income tax: No provision for currently refundable Federal income tax has been made in the accompanying statements of loss as no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not likely to be realized. At May 31, 1996, the Company had unused net operating loss carryovers which may be used to offset future taxable income and which expire as follows: F-10 CONDOR WEST CORPORATION (A development stage enterprise) Notes To Financial Statements May 31, 1996, 1995 and 1994 - ------------------------------------------------------------------------------- Expires May 31, Amount - ---------------------------------------- -------------- 2004 $16,233 2005 10,857 2006 9,553 2007 8,904 2008 8,903 2009 - 2010 26,266 2011 290,063 -------------- Total net operating loss carryover $370,779 ============== Note 5 - Commitments: The Company is obligated on two operating leases for automobiles requiring monthly payments of $1,342, and expiring in May 1998 and October 1998. Aggregate commitments under these leases at May 31, 1996 were as follows: Year ended May 31, Amount - ----------------------------------------- -------------- 1997 15,363 1998 3,625 In May, 1995, the Company also entered into a lease for office space on a month-to-month lease requiring monthly rentals of $1,250 per month. The total amount charged to operations under operating leases were $22,193 (1996) and $1,342 (1995). In December 1995, the auto lease obligations were assumed by two officers of the Company and the related vehicles were retained by them. Note 6 - Accounts payable, related party: An officer of the Company advanced funds to or paid expenses for the Company aggregating $15,035 at May 31, 1995. These amounts were repaid by the Company during the year ended May 31, 1996. Note 7 - Uncertainty, going concern: At May 31, 1996, the Company had exhausted substantially all its cash and had no operations, employees, or significant assets. Although management is currently seeking additional business opportunities and sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, the Company must rely on its officers and directors to perform essential functions and to provide funds to pay for essential expenses until a business operation can be commenced. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. F-11 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. CONDOR WEST CORPORATION Dated 2-6-97 By /s/Dr. Everett Renger ----------------- -------------------------- Dr. Everett Renger Co-Chairman of the Board Dated 2-14-97 By /s/Carl D. Nation ----------------- -------------------------- Carl D. Nation Co-Chairman of the Board Dated 2-7-97 By /s/Wade D. Althen ----------------- -------------------------- Wade D. Althen, President, CEO and Directorr Dated 2-10-97 By /s/Steven R. Paige ----------------- -------------------------- Steven R. Paige, Executive Vice President, COO, and Director Dated 2-11-97 By /s/David A. Christman ----------------- -------------------------- David A. Christman, Treasurer, CFO and Director Dated 2-11-97 By /s/Terrance Rasmussen ----------------- -------------------------- Terrance Rasmussen, Secretary and Director Dated 2-14-97 By /s/John A. Murdock ----------------- -------------------------- John A. Murdock, III, Director Dated 2-14-97 By /s/Felix F. Banchs ----------------- -------------------------- Dr. Felix F. Banchs, Director Dated 2-14-97 By /s/Dennis L. Swenson ----------------- -------------------------- Dennis L. Swenson, Vice President of Human Relations and Director 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: Dated 2-17-97 /s/Dr. Everett Renger ---------------- ----------------------------- Dr. Everett Renger Co-Chairman of the Board EX-27 2
5 YEAR MAY-31-1996 MAY-31-1996 53 0 0 0 0 53 976 140 889 0 0 0 0 14940 (14051) 889 0 0 0 0 287352 0 2711 (290063) 0 (290063) 0 0 0 (290063) (.02) (.02)
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