-----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, HIbQkDRw2d18rwdKyn9f7pqroblShSNiR5YOmz9M9D1wpsYMeGRsRoB9v0fa3kEu MD71oN+izGElJHJGzZHlOw== 0001016295-98-000128.txt : 19980916 0001016295-98-000128.hdr.sgml : 19980916 ACCESSION NUMBER: 0001016295-98-000128 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRANDEUR INC CENTRAL INDEX KEY: 0000894498 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 870434294 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: SEC FILE NUMBER: 033-55254-15 FILM NUMBER: 98709614 BUSINESS ADDRESS: STREET 1: 1800 E SAHARA STREET 2: STE 107 CITY: LAS VEGAS STATE: NV ZIP: 89104 BUSINESS PHONE: 8014857775 MAIL ADDRESS: STREET 1: 1800 E SAHARA STREET 2: SUITE 107 CITY: LAS VEGAS STATE: NV ZIP: 89104 10KSB 1 YEAR END FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10KSB [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 33-55254-15 GRANDEUR, INC. (Exact name of Small business issuer as specified in its charter) NEVADA 87-0438451 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1801 McGill College, Suite 1330 Montreal, Quebec, Canada H3A 2N4 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (514) 282-9000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the issuer (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. [X] Yes [ ] No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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. [X] As of September 15, 1998, the aggregate market value of the voting stock held by non-affiliates of the registrant was $8,803,993 based on a bid price of $1.625. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Class Outstanding as of May 31, 1998 - ------------------------------------ -------------------------------- $.001 PAR VALUE CLASS A COMMON STOCK 13,848,300 SHARES DOCUMENTS INCORPORATED BY REFERENCE Form 8-K filed March 10, 1998 1 ITEMS 1 through 12 Management is still finalizing the remainder of Form 10-KSB. An amendment will be filed as soon as possible and will include all items not included in this filing. It is expected that ITEMS 1 through 12 will not differ substantially from Form 10-K for the year ended December 31, 1997, but there are enough differences that management has chosen not to include the items with this filing. 2 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. GRANDEUR, INC. Date: September 15, 1998 By: Pierre de Lanauze, President, Chairman Of the Board of Directors Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: September 15, 1998 By: Pierre de Lanauze, President, Chairman Of the Board of Directors Date: September 15, 1998 By: J. Randall McCormick Vice President, Director Date: September 15, 1998 By: Suzanne de Lanauze, Secretary/Treasurer and Director Date: September 15, 1998 By: Marc Descheneaux Executive Vice President, Director Date: September 15, 1998 By: Julie Gaucher, Director 3 August 21, 1998 INDEPENDENT AUDITORS' REPORT To the Stockholders of Grandeur, Inc. and Subsidiary (a development stage enterprise) We have audited the consolidated balance sheets of Grandeur, Inc. and Subsidiary (a development stage enterprise) as at May 31, 1998 and 1997 and the consolidated statements of loss, deficit and cash flows for each of the years in the three-year period ended May 31, 1998. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance 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. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at May 31, 1998 and 1997 and the results of its operations and its cash flows for each of the years in the three-year period ended May 31, 1998 in accordance with generally accepted accounting principles in the United States of America. PriceWaterhouseCoopers Chartered Accountants GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) CONSOLIDATED BALANCE SHEETS (expressed in Canadian dollars)
May 31 1997 1998 ------------ ------------ Assets Current assets Cash $ 80,661 $ 3,197 Sales taxes receivable 71,731 132,653 Prepaid expenses 62,020 6,820 Advances to a common control company, 228,722 137,649 without interest (Note 3) Shareholder loan, without interest 17,381 387,107 ------------ ------------ 460,515 667,426 Property and equipment (Note 4) 119,734 178,494 License (Note 5) - 1 ------------ ------------ $ 580,249 $ 845,921 ============ ============ Liabilities Current liabilities Trade accounts payable $ 43,585 $ 94,618 Accrued liabilities 17,747 98,200 Advances from a common control company, 101,912 146,207 without interest Due to a shareholder - 1,413,300 Loan, bearing interest at a monthly rate of 0.5% to 1% 239,350 265,123 ------------ ------------ 402,594 2,017,448 Loan from a shareholder, without interest or 1,000,000 - repayment terms (Note 7*) Stockholders' Deficit Common stock, $0.001 par value Authorized 100,000,000 shares Issued and outstanding (Note 6) 13,848,300 shares (1997 - 1,000,000) 1,424 19,715 Additional paid-up capital (Note 7) (1,324) 695,602 Deficit accumulated during the development stage (822,445) (1,886,844) ------------ ------------ (822,345) (1,171,527) ------------ ------------ $ 580,249 $ 845,921 ============ ============
Approved by the Board Director Director 1 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) CONSOLIDATED STATEMENTS OF LOSS (expressed in Canadian dollars)
From date of inception to Year ended May 31 May 31 1996 1997 1998 1998 --------------- --------------- --------------- ----------------- Revenue Interest $ 5,000 $ - $ - $ 5,000 Management income 3,000 - - 3,000 --------------- --------------- --------------- ----------------- 8,000 - - 8,000 Expenses Depreciation - 21,129 68,817 89,946 Interest expense 5,044 - 20,132 25,176 Research and development - 135,348 99,978 235,326 General and administrative 3,182 665,742 832,206 1,501,130 expenses --------------- --------------- --------------- ----------------- 8,226 822,219 1,021,133 1,851,578 --------------- --------------- --------------- ----------------- Net loss $ (226) $ (822,219) $ (1,021,133) $ (1,843,578) =============== =============== =============== ================= Net loss per weighted average share $ - $ (0.82) $ (0.24) =============== =============== =============== Weighted average number of common shares used to compute net loss per weighted average share 1,000,000 1,000,000 4,212,075 =============== =============== ===============
2 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) CONSOLIDATED STATEMENTS OF DEFICIT (expressed in Canadian dollars)
From date of inception to Year ended May 31, May 31, 1996 1997 1998 1998 --------------- --------------- --------------- ----------------- Deficit accumulated during the $ - $ (226) $ (822,445) $ - development stage, at beginning of year Net loss (226) (822,219) (1,021,133) (1,843,578) Amount from additional paid-up - - (43,266) (43,266) capital (Note 7) --------------- --------------- --------------- ----------------- Deficit accumulated during the $ (226) $ (822,445) $ (1,886,844) $ (1,886,844) development stage, at end of year =============== =============== =============== =================
3 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) CONSOLIDATED STATEMENTS OF CASH FLOWS (expressed in Canadian dollars)
From date of inception to Year ended May 31, May 31 1996 1997 1998 1998 --------------- --------------- --------------- ----------------- Operating activities Net loss $ (226) $ (822,219) $ (1,021,133) $ (1,843,578) Adjustments to reconcile loss to net cash provided by operating activities Depreciation of property and - 21,129 68,817 89,946 equipment Provision on common control - 290,402 - 290,402 company advances Changes in Sales taxes receivable - (71,731) (60,922) (132,653) Prepaid expenses - (62,020) 55,200 (6,820) Shareholder loan - (17,381) (369,726) (387,107) Trade accounts payable - 43,585 51,033 94,618 Accrued liabilities 3,000 14,747 80,453 98,200 Advances from a common - 101,912 44,295 146,207 control company --------------- --------------- --------------- ----------------- 2,774 (501,576) (1,151,983) (1,650,785) Financing activities Loan - 239,350 124,000 413,350 Repayment of loan - (50,000) (98,227) (148,227) Loan from a shareholder - 1,000,000 1,085,250 2,085,250 Share issues - - - 100 --------------- --------------- --------------- ----------------- - 1,189,350 1,111,023 2,350,473 Investing activities Advances from a common control (3,503) (466,332) 91,073 (428,051) company Additions to property and equipment - (140,863) (127,577) (268,440) --------------- --------------- --------------- ----------------- (3,503) (607,195) (36,504) (696,491) --------------- --------------- --------------- ----------------- Increase (decrease) in cash during (729) 80,579 (77,464) 3,197 the year Cash, beginning of year 811 82 80,661 - --------------- --------------- --------------- ----------------- Cash, end of year $ 82 $ 80,661 $ 3,197 $ 3,197 =============== =============== =============== ================= Cash paid for interest $ 5,044 $ - $ 8,200 $ 13,244 =============== =============== =============== ================= Non-cash financing and investing activities Repayment of a loan to a $ - $ - $ (2,085,250) $ (2,085,250) shareholder (Note 7) =============== =============== =============== ================= Acquisition of license (Note 5) $ - $ - $ (1,413,299) $ (1,413,299) =============== =============== =============== =================
4 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the three-year period ended May 31, 1998 (expressed in Canadian dollars) 1 Incorporation and nature of operations Grandeur, Inc. a development stage enterprise, was incorporated under the laws of the State of Utah on February 6, 1986 and subsequently incorporated under the laws of the State of Nevada on December 31, 1993. Through its subsidiary, 3127575 Canada Inc., operating under the name of Delsecur, it is involved in the research, development and commercialization of the "DEL ID" project. Pursuant to an agreement made and entered into on February 25, 1998, Grandeur, Inc. (the "company") issued and delivered on February 26, 1998 12,848,300 shares of its common stock bearing a restrictive legend to 3127575 Canada Inc., a Canadian corporation, in exchange for which issuance it acquired all of the outstanding shares of 3127575 Canada Inc. For accounting purposes, the transaction is treated as an issuance of shares by 3127575 Canada Inc. for the net monetary assets of the company (nil at February 26, 1998), accompanied by a recapitalization. The historical financial statements prior to February 28, 1998 are those of 3127575 Canada Inc. The company changed its fiscal year end to May 31 to coincide with the fiscal year end of its Canadian operating subsidiary. 2 Significant accounting policies The consolidated financial statements are expressed in Canadian dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America. Consolidation The consolidated financial statements include the accounts of the company and its subsidiary. Change in reporting currency As the majority of transactions occur in Canadian dollars further to the acquisition mentioned in Note 1 above, commencing with the current period, the consolidated financial statements have been expressed in Canadian dollars. Previously, the United States dollar was used as the unit of measure. This change has been applied retroactively. Accounting methods The company recognizes income and expenses based on the accrual method of accounting. Dividend policy The company has not yet adopted any policy regarding payment of dividends. Cash and cash equivalents For financial statement purposes, the company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Earnings (loss) per share Earnings or loss per common and common equivalent share is computed by dividing net earnings (loss) by the weighted average common shares outstanding during each year. 5 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...continued For the three-year period ended May 31, 1998 (expressed in Canadian dollars) 2 Significant accounting policies ...continued Property and equipment and depreciation Property and equipment are recorded at cost. Depreciation is calculated using the declining balance method at a rate of 30%. The carrying value of the property and equipment is evaluated whenever significant events or changes occur that might indicate an impairment through comparison of the carrying value to the net recoverable amount. Research and development costs Research costs, which include all costs incurred to establish technological feasibility, and development costs are charged to operations in the year in which they are incurred. License License is recorded at its carrying value. Income taxes The company records the income tax effect of transactions in the same year that the transactions enter into the determination of income, regardless of when the transactions are recognized for tax purposes. Tax credits are recorded in the year realized. Since the company has not yet realized income as of the date of this report, no provision for income taxes has been made. In February 1992, the Financial Accounting Standards Board adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which supersedes substantially all existing authoritative literature for accounting for income taxes and requires deferred tax balances to be adjusted to reflect the tax rates in effect when those amounts are expected to become payable or refundable. The Statement was applied in the company's financial statements for the fiscal year commencing January 1, 1993. Use of estimates The financial statements have been prepared in conformity with generally accepted accounting principles and, as such, include amounts based on informed estimates and judgements of management with consideration given to materiality. Actual results could differ from those estimates. Fair value of financial instruments Due to their short-term maturity, the carrying values of certain financial instruments were assumed to approximate their fair values. The financial instruments include: sales taxes receivable, advances to a common control company and shareholder loan included in current assets, trade accounts payable, accrued liabilities, advances from a common control company, due to a shareholder and loan included in current liabilities, and loan from a shareholder included in long-term liabilities. The fair value of these financial instruments is not significantly different than their carrying amounts. 6 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...continued For the three-year period ended May 31, 1998 (expressed in Canadian dollars) 2 Significant accounting policies ...continued Credit risk The company's exposure to credit risk is as indicated by the carrying amounts of the financial assets. The company may be exposed to losses in the future if the debtors fail to pay. Significant portions of the amounts receivable are from related parties. 3 Advances to a common control company
1997 1998 --------------- --------------- Balance, beginning of year $ 52,792 $ 519,124 Advances during the year 466,332 - Charges net of payments - (91,073) --------------- --------------- 519,124 428,051 Provision on common control company advances (290,402) (290,402) --------------- --------------- Balance, end of year $ 228,722 $ 137,649 =============== ===============
4 Property and equipment
1997 Accumulated Net book Cost depreciation value -------------- --------------- --------------- Computer equipment $ 140,863 $ 21,129 $ 119,734 ============== =============== ===============
1998 Accumulated Net book Cost depreciation value -------------- --------------- --------------- Computer equipment $ 268,440 $ 89,946 $ 178,494 ============== =============== ===============
7 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...continued For the three-year period ended May 31, 1998 (expressed in Canadian dollars) 5 License On November 12, 1997, the principal shareholder of the company and owner of an invention consisting of an apparatus and method, including related software, for scanning and storing an optical representation of a finger's capillary lines entered into an agreement with the company whereby he granted to the company the exclusive right to commercialize the invention which shall include, among other things, manufacturing and marketing the invention under the terms and conditions contained therein for the consideration of US$1,000,000 (CDN$1,413,300). This transaction was measured at its carrying value of $1. The excess of the consideration payable over the carrying value was recorded against additional paid-up capital and deficit. 6 Common stock
1996 1997 1998 From date of inception to May 31, 1998 Number $ Number $ Number $ Number $ ----------- ------- ----------- ------- ----------- ------- ----------- --------- Balance at beginning of year 1,000,000 $ 1,424 1,000,000 $ 1,424 1,000,000 $ 1,424 - $ - Issuances of common stock February 6, 1986 - - - - - - 1,000,000 1,424 February 26, 1998 (Note 1) - - - - 12,848,300 18,291 12,848,300 18,291 ----------- ------- ----------- ------- ----------- ------- ----------- --------- 1,000,000 $ 1,424 1,000,000 $ 1,424 13,848,300 $19,715 13,848,300 $ 19,715 =========== ======= =========== ======= =========== ======= =========== =========
7 Additional paid-up capital
From date of inception to 1996 1997 1998 May 31, 1998 -------------- -------------- -------------- ---------------- Balance, beginning of year $ (1,324) $ (1,324) $ (1,324) $ - Issuance of capital at inception - - - (1,324) Add: Shareholder loan * - - 2,085,250 2,085,250 Deduct: License (Note 5) - - (1,413,299) (1,413,299) -------------- -------------- -------------- ---------------- (1,324) (1,324) 670,627 670,627 Amount transferred to deficit - - 43,266 43,266 Recapitalization on February 26, 1998 (Note 1) - - (18,291) (18,291) -------------- -------------- -------------- ---------------- Balance, end of year $ (1,324) $ (1,324) $ 695,602 $ 695,602 ============== ============== ============== ================
* From June 1997 to May 31, 1998, further advances were made by the principal shareholder totalling $1,085,250. The principal shareholder contributed the full amount of the loan outstanding of $2,085,250 to capital. Accordingly, the amount has been accounted for as additional paid-up capital. 8 GRANDEUR, INC. AND SUBSIDIARY (a development stage enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ...continued For the three-year period ended May 31, 1998 (expressed in Canadian dollars) 8 Income tax The company has accumulated losses for income tax purposes totalling approximately $1,585,000 for which the benefits have not been recognized in the financial statements. These losses can be deducted from future years' taxable income and expire as follows: 2004 $ 566,000 2005 $1,019,000 The company recognized a deferred tax asset of $602,000 on net operating loss carryforwards. In addition, the company created a valuation allowance equal to this deferred tax asset to bring down its value to nil. 9 Related party transactions During the period, the company made some transactions with two companies owned by the same shareholder. 1996 1997 1998 ------------ ----------- ----------- Expenses $ - $ 458,300 $ 151,786 ============ =========== =========== These transactions occurred in the normal course of the company's activities and are measured at fair value, which represents the exchange value. 10 Contingency An application was filed by a shareholder of Delsynchro Inc., a common control company, who has requested authorization from the Court to institute proceedings on behalf of Delsynchro Inc. requesting the Court to declare Delsynchro Inc. owner of the invention known as "DEL ID" and the related rights. Management believes that the resolution of the litigations in which Delsynchro Inc. is involved would not have a material adverse effect on the financial condition or results of operations of the company. 9 EX-27 2 FDS - MAY 31, 1998
5 This schedule contains summary financial information extracted from Grandeur, Inc. and subsidiary May 31, 1998 financial statements and is qualified in its entirety by reference to such financial statements. 0000894498 Grandeur, Inc. Canadian Dollars YEAR MAY-31-1998 MAY-31-1998 .70241 3,197 0 657,409 0 0 667,426 268,440 (89,946) 845,921 2,017,448 0 0 0 19,715 (1,191,242) 845,921 0 0 0 0 1,021,133 0 20,132 (1,021,133) 0 (1,021,133) 0 0 0 (1,021,133) (.24) (.24)
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