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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number
December 31, 1994 33-27042-NY
- ------------------------- ----------------------
FINANCIAL EXPRESS CORPORATION
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 93-0996537
- ---------------------------- -----------------------
(State of other jurisdiction (IRS Employer
of incorporation) Identification Number)
P. O. Box 974, Rancho Santa Fe, California 92067
- ------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (760) 632-0312
--------------
Securities registered pursuant to Section 12(b) of the Act:
NONE NONE
------ ------
(Title of Each Class) (Name of Each Exchange
on which Registered)
Securities registered pursuant to Section 12 (g) of the Act:
Common
--------------
(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.
(1) Yes No X ** (2) Yes X No
----- ----- ----- -----
The number of shares of the Common Stock of the registrant outstanding as of
December 31, 1994 was 3,704,900. The aggregate common stock held by
non-affiliates on December 31, 1994 was approximately 204,900 shares.
** Form 10-Q was not filed for 1999 and 2000 until June of 2000.
FORM 10-K INDEX
PART I
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matters to a Vote of Security
Holders 3
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholders Matters 4
Item 6. Selected Financial Data 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 7A. Quantitative and qualitative disclosures
about market risk
Item 8. Financial Statements and Supplementary Data 7
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 7
PART III
Item 10. Directors and Executive Officers of Registrant 7
Item 11. Executive Compensation 7
Item 12. Security Ownership of Certain Beneficial
Owners and Management 8
Item 13. Certain Relationships and Related Transactions 8
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 8
A-1 Financial statements at December 31, 1994 Financial statements at
December 31, 1993 Financial statements at December 31, 1992
A-2 Financial statement schedules (None)
A-3 Exhibits (None)
B Reports on Form 8-K
Item 1. Business
--------
GENERAL
Financial Express Corporation (the "Company") was originally
incorporated in the state of Nevada on January 5, 1989 as Harley Equities, Ltd.,
to purchase, merge with or acquire any business or assets which management
believed had the potential for being profitable. During May of 1991, through a
series of transactions, Harley acquired all of the outstanding stock of
Financial Express Corporation, a development stage enterprise organized to
develop and commercialize a distinctive nationwide service for processing and
clearing checks and related bank transactions. The only assets of the acquired
Company consisted of intangible assets comprised of intellectual properties,
vendor relationships and customer relationships established during the
development of the service.
Concurrent with the acquisition, the Company changed the Corporate name
to Financial Express, Corporation. The Company expended all of its liquidity
during 1991 in the search for financing in order to properly develop and market
its product. The Company is currently in the process of searching for financing
and/or potential merger candidates to carry on the Company's existing or other
business opportunities.
The Company currently has no employees.
Item 2. Properties
----------
The Company does not currently own or lease any properties. The
directors provide office space at no charge to the Company.
Item 3. Legal Proceedings
-----------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
3
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters
---------------------------
(a) Market Information
There is no market information established for the Company.
(b) Holders
The approximate number of shareholders of record of the Common Stock of the
Company as of December 31, 1994 was 35.
(c) Dividends
The Company has never paid a cash dividend and intends to retain
earnings, if any, for use in its business and does not presently intend to pay
any cash dividends on its Common Stock.
(d) Stock transactions
On May 1, 1991, the Registrant issued 3,500,000 shares of its Common
Stock in exchange for all of the issued and outstanding Common Stock of
Financial Express Corporation, Westlake, California, a business recently
organized to develop and commercialize a distinctive nationwide service of
processing the clearance of checks and related bank items. Prior to the
completion of such transaction, there was issued and outstanding 138,000 Common
Shares of the Registrant. The shareholders of Financial Express Corporation
acquiring the shares of the Registrant are Phil E. Pearce, Frank G. Baldwin and
D. Lee Falls, who acquired 1,166,667, 1,166,666 and 1,166,666 shares,
respectively of the Registrant. Simultaneously with the completion of the
transaction, Messrs. Pearce, Falls and Baldwin were elected directors of the
Company and following completion of the transaction Howard Bronson, Isidor
Friedenberg and Donald Weinberger resigned as officers and directors of the
Company. Such resignations did not involve any disagreement with the Registrant.
The Board of Directors has elected Mr. Pearce, Chairman, Mr. Falls, President,
and Mr. Baldwin, Executive Vice President and Secretary of the Company.
Following completion of the transaction, each of them own 31.6% of the issued
and outstanding Common Stock of the Registrant.
4
(d) Stock transactions (continued)
In connection with these transactions, the holders of Underwriter's Unit
Purchase Warrant Agreements and Certificates issued by the Registrant in
connection with the Registrant's initial public offering in June, 1990, agreed
to cancel their demand registration rights and limit their piggy-back
registration rights such that they not be exercisable after expiration of the
Registrant's Class A or Class B Redeemable Stock Purchase Warrants. In addition,
Westminster Securities Corporation, who acted as underwriter in connection with
the Registrant's firm commitment public offering, agreed to a modification of
Section 5 of the Registrant's Underwriting Agreement respecting the
underwriter's "first right of refusal" on future offerings to limit such right
to public offerings of the securities of the Registrant in amounts not to exceed
$5,000,000.
Item 6. Selected Financial Data
-----------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
Revenues -- -- -- 839 1,662
Net profit (loss) (72,890) (73,690) (70,820) (107,500) 577
Net profit (loss)
per share (.02) (.02) (.02) (.029) .0036
Total assets 93,823 164,213 234,603 306,031 56,273
Working Capital (5,800) (3,300) -- 430 55,823
5
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
-------------
The following results of operations for the fiscal years ended December
31, 1992, 1993 and 1994 should be read in conjunction with the financial
statements and notes pertaining thereto appearing elsewhere in this Form 10-K.
1994 1993 1992
---- ---- ----
Revenues $ -- $ -- $ --
Expenses 72,890 73,690 70,820
----------- ----------- -----------
Net loss (72,890) (73,690) $ (70,820)
=========== =========== ===========
Weighted average common
shares outstanding 3,704,900 3,704,900 3,704,900
=========== =========== ===========
Loss per common share $ (.020) $ (.020) $ (.019)
=========== =========== ===========
The Company's activity during the fiscal year ended December 31, 1994
consisted primarily of exploring various financing and investment opportunities.
As discussed in Note 1 to the Financial Statements, the Company's
continued existence is dependent upon its ability to resolve its liquidity
problems by the acquisition of additional equity financing, or the achievement
of profitable operations. Management believes that profitable operations will be
achieved within the next two years, based upon the Company's current planned
operating activities made possible by various possible equity and debt capital
options.
Liquidity. The Company currently has a short term liquidity problem, as
evidenced by its current working capital deficit of $(5,800). However,
management is confident that it will able to raise additional equity capital,
due to the prospects for success with the possible new businesses.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO DECEMBER 31, 1993
Operating expenses, exclusive of amortization, were insignificant due to
the company's inactivity.
YEAR ENDED DECEMBER 31, 1993 COMPARED TO DECEMBER 31, 1992
Operating expenses, exclusive of amortization, were insignificant due to
the company's lack of working capital. The Company has no fixed operational
financial commitments and management was able to avoid incurring any significant
expenses during the year.
6
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
Reference is made to the financial statements included later in this
report under Item 14.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
--------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Name Age Position
- ---- --- --------
Phil E. Pierce 65 Chairman, Treasurer and
Director
Frank G. Baldwin 64 President, Secretary, and
Director
The Directors will serve until the next annual meeting of shareholders
or until their successors have been elected.
The Officers are elected annually by the Directors and serve at the
discretion of the Board of Directors.
Item 11. Executive Compensation
----------------------
None.
7
Item 12. Security Ownership of Certain Beneficial
-----------------------------------------
Owners and Management
---------------------
Name and Address of Number of Shares of Percentage
Beneficial Owner Common Stock Owned of Ownership
- ---------------- ------------------ ------------
Phil E. Pearce 1,166,666 31.5%
6624 Greenleaf Court
Charlotte, NC 28270
D. Lee Falls 1,166,667 31.5%
633 W. Fifth Street, #3675
Los Angeles, CA 90071
Frank G. Baldwin 1,166,667 31.5%
P. O. Box 974
Rancho Santa Fe, CA 92067
--------- ----
All Officers and Directors
as a group 3,500,000 94.5%
========= ====
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
None.
PART IV
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
----------------------------------------------------------------
A-1 Financial statements at December 31, 1994,
1993 and 1992
A-2 Financial statement schedules (None)
A-3 Exhibits (None)
B Reports on Form 8-K
May 1, 1991
8
Henson & Company, CPA's
87 North Raymond Avenue Sixth Floor
Pasadena, CA 91103
(626) 792-0666 Fax (626) 683-0099
Stephen Henson, CPA Elizabeth Henson, CPA
To the Board of Directors
Financial Express Corporation
We have audited the accompanying balance sheets of Financial Express Corporation
(a development stage enterprise) at December 31, 1994 and 1993 and the related
statements of operations, stockholders' equity, and cash flows for each of the
years ended December 31, 1994, 1993 and 1992. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Financial Express Corporation
at December 31, 1994 and 1993, and the results of operations, changes in
stockholders' equity and cash flows for each of the years ended December 31,
1994, 1993, and 1992 in conformity with generally accepted accounting
principles.
The accompanying 1994 financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 1, at December
31, 1994 the Company has no working capital and faces uncertainty with respect
to the prospects of acquiring and/or operating a successful business in the
future. These facts raise substantial doubt as to the Company's ability to
continue as a going concern. Management's plans as to these matters are
described in note 1. The 1994 financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Pasadena, California By:
------------------------------------
June 22, 2000 Stephen Henson, CPA
9
FINANCIAL EXPRESS CORPORATION
(a development stage enterprise)
Balance Sheets
December 31, 1994 and 1993
Assets
1994 1993
---- ----
Intangible assets,
net of accumulated
amortization of $258,127
and $187,737 $ 93,823 $ 164,213
--------- ---------
Total assets $ 93,823 $ 164,213
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accrued professional fees $ 3,650 $ 1,150
Due to officer 2,150 2,150
--------- ---------
Total current liabilities 5,800 3,300
Stockholders' equity:
Common stock $.001 par value;
25,000,000 shares
authorized; 3,704,900
issued and outstanding 3,705 3,705
Additional paid in-capital 408,641 408,641
Losses accumulated during the
development stage (324,323) (251,433)
--------- ---------
Total stockholders' equity 88,023 160,913
--------- ---------
Total liabilities
and stockholders' equity $ 93,823 $ 164,213
========= =========
See accompanying notes
10
FINANCIAL EXPRESS CORPORATION
(a development stage enterprise)
STATEMENTS OF OPERATIONS
For the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
---- ---- ----
Income $ -- $ -- $ --
Operating expenses:
Amortization 70,390 70,390 70,390
Bank charges -- -- 41
Legal and
professional fees 2,500 3,300 --
Travel and
marketing expenses -- -- 389
----------- ----------- -----------
Total operating expenses 72,890 73,690 70,820
----------- -----------
Net loss $ (72,890) $ (73,690) $ (70,820)
=========== =========== ===========
Loss per share $ (.02) $ (.02) $ (.02)
=========== =========== ===========
Weighted average
shares outstanding 3,704,900 3,704,900 3,704,900
=========== =========== ===========
See accompanying notes
11
FINANCIAL EXPRESS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1994, 1993, and 1992
Additional Total
Common Stock Paid In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------ ------ ------- ------- ------
Balances at December 31, 1991 3,704,900 $ 3,705 $ 408,641 $(106,923) $ 305,423
Net loss -- -- -- (70,820) (70,820)
--------- --------- --------- --------- ---------
Balances at December 31, 1992 3,704,900 3,705 408,641 (177,743) 234,603
Net loss -- -- -- (73,690) (73,690)
--------- --------- --------- --------- ---------
Balances at December 31, 1993 3,704,900 3,705 408,641 (251,433) 160,913
Net loss -- -- -- (72,890) (72,890)
--------- --------- --------- --------- ---------
Balances at December 31, 1993 3,704,900 $ 3,705 $ 408,641 $(324,323) $ 88,023
========= ========= ========= ========= =========
See accompanying notes
12
FINANCIAL EXPRESS CORPORATION
(a development stage enterprise)
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(72,890) $(73,690) $(70,820)
Adjustments to reconcile
net loss to net cash
used by operating
activities:
Amortization 70,390 70,390 70,390
(Increase) decrease in:
Accounts
receivable - officer -- -- 1,038
Increase (decrease) in:
Bank overdraft -- (608)
Accrued liabilities 2,500 3,300 --
-------- -------- --------
Net cash used
by operating activities -- -- --
-------- -------- --------
NET INCREASE IN CASH -- -- --
CASH - BEGINNING OF PERIOD -- -- --
-------- -------- --------
CASH - END OF PERIOD $ -- $ -- $ --
======== ======== ========
See accompanying notes
13
FINANCIAL EXPRESS CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
1. Summary of significant accounting principles
--------------------------------------------
General
-------
Financial Express Corporation (the "Company") was originally
incorporated in the State of Nevada on January 5, 1989, as Harley
Equities, Inc. ("Harley"), and was formed to purchase, merge with or
acquire any business or assets which management believed had the
potential for being profitable. Through a series or transactions, Harley
acquired all of the stock of Financial Express Corporation, a Delaware
corporation and development stage enterprise organized to develop and
commercialize a distinctive nationwide service for processing and
clearing checks and other bank transactions. The only assets of the
acquired Company consisted of intangible assets comprised of
intellectual properties, vendor relationships and customer relationships
established during the development of the service. In connection with
the transaction, the Company changed its name to Financial Express
Corporation.
Presentation
------------
The Company's 1994 financial statements have been presented on the
basis that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. As shown in the financial statements, the Company has a
working capital deficit, and currently has not been able to bring its
product to the marketplace. While the Company expects profits over the
long term, the Company is currently seeking additional working capital
and equity capital to fund the marketing and further development of the
Company's product. The Company is continuing to pursue various
investment and merger opportunities in its efforts to reach its
investment and business objectives.
The Company's continued existence is dependent upon its ability to
finance continued product development and marketing programs by the
acquisition of additional equity or debt financing, or in the
procurement of a suitable merger candidate. While pursuing such
opportunities, the Company must continue to operate on the limited
resources by the Company's officers.
14
FINANCIAL EXPRESS CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
1. Summary of significant accounting principles (continued)
--------------------------------------------------------
Intangible assets
-----------------
Intangible assets are carried at cost, and are comprised of
intellectual properties and vendor and potential customer relationships.
Amortization is provided using the straight-line method over five years.
2. Capitalization
In June 1990 the Company sold on a firm commitment basis 16,000 units
at $6.00 per unit. Each unit consisted of one share of common stock par
value of $.001 and sixteen Redeemable Stock Purchase Warrants each
warrant capable of purchasing one share of common stock as follows:
Exercise
Warrants Total Price
Class Per Unit Warrants Expiration date Per Share
----- -------- -------- --------------- ---------
A 16 256,000 June 3, 1996 $5.50
B 16 256,000 June 3, 1996 $6.00
3. Stock Transactions
------------------
On March 26, 1991 the Company issued 15,000 shares of common stock to
certain officers of Westminster Securities Corporation holding
Underwriters Purchase Warrants in exchange for their agreement to
modifications (see May 1, 1991 stock transaction below) to the
Underwriting Agreement and Underwriters Purchase Warrant Agreements.
On May 1, 1991, The Company issued 3,500,000 shares of its common
stock in exchange for all the issued and outstanding common stock of
Financial Express Corporation, a development stage enterprise organized
to develop and commercialize a distinctive nationwide service of
processing the clearance of checks and related bank items.
During 1990, the Company retained Howard Bronson and Co. to act as its
financial public relations counsel. In 1991, in connection therewith and
for prior services rendered, the Company issued 51,500 shares of common
stock to Howard Bronson and Co.
15
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, hereunto duly authorized
FINANCIAL EXPRESS CORPORATION
By: /s/ Frank Baldwin Date: June 16, 2000
---------------------------- -------------
Frank Baldwin
President and director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following person on behalf of the Registrant
and in the capacity and on the date indicated.
NAME & POSITION DATE
/s/ Phil Pierce June 19, 2000
- ------------------------------- -----
Phil Pierce
Chairman, Treasurer,
and Director
/s/ Frank G. Baldwin June 16, 2000
- ------------------------------- -----
Frank G. Baldwin, Executive Vice
President, Secretary and Director
16