ITEM 1. DESCRIPTION OF BUSINESS
Systems Assurance Corporation, ("the Company") was formed as a corporation in the State of Delaware in July, 1982. The Company has been inactive since October 1991 and has had no operating revenues since that time.
The Company is currently seeking a business opportunity to merge with or acquire, but to date has not located any such business opportunities. There is no assurance that the Company will be successful in finding any business opportunity to merge with or acquire. (See "Management's Discussion and Analysis of Financial Condition")
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently operates from the office of its president Dean Becker and pays no rent or expenses.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
On December 19, 1997 the Company held a Special Meeting of the shareholders. At the meeting, the shareholders voted in favor of changing the par value of the common stock from $.01 to $.001; the creation of three classed of preferred stock (50 million shares each class), par value $.001, with other terms to be set by the Board; a reverse split of the common stock on a 5 - 1 basis, with no shareholder being reversed below 100 shares.
PART II
ITEM 5.
ITEM 5. MARKET PRICE FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
During the year ended October 31, 1997 there appeared to be little or no trading in the stock of the Company. As of February 23, 1998, the Company had 1435 shareholders of record.
The Company has not declared any cash dividends on its Common Stock since inception and its Board of Directors has no present intention of declaring any dividends. For the foreseeable future, the Company intends to retain all earnings, if any, for use in the development and expansion of its business.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Summary of Selected Financial Data
Year Ended October 31, 1997 1996 1995 Income Statement Data:
Revenues - 0- -0- -0- Operating Profit (Loss) (11,244) (20,790) (77,428) Extraordinary Income -0- -0- 42,184 Net (Loss) (11,244) (20,790) (33,801)
Income (Loss) Per Share: Extraordinary Income - 0- -0- -0- Net Income (Loss) - 0- -0- -0- Cash Dividends on Common Stock - 0- -0- -0-
Balance Sheet Data:
Working Capital (deficiency) (9,374) (50,959) (81,136) Total Assets 2,045 2,140 1,824 Shareholders' Deficit (9,374) (50,959) (81,136) Weighted Average Number of Common and Common Equivalent Shares* 159,073 95,977 87,011
* All periods restated for a one-for-seventy (1:70) reverse common stock split in January 1997 and a one-for-five (1:5) reverse common stock split in December 1997. ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company had no material revenue during the year ended October 31, 1997. Total stockholders' equity (deficit) was $(9,374), as compared to $(50,959) at October 31, 1996. The decrease was principally due to professional fees paid during the year with no income.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no significant assets and is in the process of looking for business opportunities to merge with or acquire. At minimum, the Company will need to raise additional capital through private funding to meet the financial needs of being a reporting company. There is no guarantee that the Company will be successful in obtaining necessary funding to develop any business opportunities.
RESULTS OF OPERATIONS
The Company sustained losses of $(11,244) and $(20,790) for the years ended October 31,1997 and October 31, 1996 respectively. Expenses of $11,244 and $20,790 for the periods consisted of professional services, interest expense and other administrative expenses incurred while the Company was seeking business ventures to acquire or merge with.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS
The financial statements and notes thereto as listed in the accompanying index to financial statements (Item 14) are filed as part of this Annual Report.
(2) Schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to the Company's Board of Directors and executive officers. There are no family relationships between or among any of the Company's directors or executive officers.
DIRECTORS AND EXECUTIVE OFFICERS
Director Name Age Since Position with the Company
Dean Becker 45 1997 President, CEO and Director 50 W. Broadway Suite 1130 Salt Lake City, Utah 84101
Paul Adams 36 1997 Vice President, Director 1340 East Harrison Avenue Salt Lake City, Utah 8105
Chris Turner 39 1997 Secretary, Director
DEAN BECKER, President and a Director since 1997. Practiced law in Salt Lake City, Utah since 1979. He graduated from Brigham Young University in 1976 with a Bachelors of Arts in English with University Scholar designation. He then attended law school at the J. Reuben Clark School of Law at Brigham Young University where he served as associate editor on the law review staff. He has a general law practice with emphasis on corporate and business law, and is involved in a number of community activities.
PAUL ADAMS, Vice President since March 1997. Since 1994 he has been the President of Big Water Tackle. He currently is the President of Tubes and Tails, since 1997.
CHRIS TURNER, Secretary since March 1994. Currently he is a Customer Service Representative for United Health Care. From 1995 to 1996, he was the Manager for Master Tech. From 1994 to 1995 he was the Manager for Summer Breeze. From 1993 to 1994 he was a Customer Service representative for San Segal.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
No executives officers received any compensation from the Company during the fiscal year ended October 31,1997.
EMPLOYMENT AGREEMENTS AND OTHER COMPENSATION ARRANGEMENTS
There are currently no agreements with members of management as to employment or compensation.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
There is currently no compensation paid to non-employment directors.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 25, 1998, the number of shares of the Company's common stock owned by persons who owned of record, or was known to own beneficially, more than 5% of the outstanding shares of the Company's common stock, sets forth the number of shares of the Company's current directors and officers, and sets forth the number of shares owned by all of the Company's directors and officers as a group:
The beneficial owners listed have sole voting and investment power with respect to the shares unless otherwise indicated. Amount and Nature Name and Address of Beneficial Percent of of Beneficial Owner Ownership Class Dean Becker (1) 20,000,000 94.9
Paul Adams 0
Chris Turner 0
Officers and Directors as a Group (three) 20,000,000 94.9
(1) These shares were issued subsequent to the fiscal year-end.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the past year the Registrant has not entered into any transactions with management which are to be reported under this Item.
Dean Becker is both an officer of Exchange Place Capital Partners, LLC and an officer of the Company.
ITEM 14.
ITEM 14. EXHIBITS, AND REPORTS ON FORM 8-K
(A) Exhibits
EXHIBIT NO. DESCRIPTION
3.01 Certificate of Incorporation (Incorporated by reference to Registration Statement No. 2-78947 on Form S-1 and Exhibits 4.1 and 4.2 to the Company's report on Form 10Q for the Quarter ended April 30, 1984.)
3.02 Certificate of Incorporation, as amended, August 29, 1986. (Incorporated by reference to Exhibit 3.3 to the Company's annual report on Form 10K for fiscal 1986)
3.03 By-laws (Incorporated by reference to Registration Statement No. 33-2474- LA.)
23.01 Consent of BDO Seidman, LLP
27.01 Financial Data Schedule
(b) The Registrant filed no current reports on Form 8-K during the last quarter of the fiscal year ended October 31, 1997.
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.
Systems Assurance Corporation
By: /s/ Dean Becker
Dated: March 30, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons of behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Dean Becker President and Director March 30, 1998 (Principal Executive and Financial Officer)
/s/ Paul Adams Director March 30, 1998
/s/ Chris Turner Secretary, Treasurer and Director March 30, 1998
Report of Independent Certified Public Accountant. . . . . .F-1
Financial Statements:
Balance Sheets - October 31, 1997 and October 31, 1996 . .F-2
Statements of Operations - For the years ended October 31, 1997, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . .F-3
Statement of Stockholders' Equity - For the period from October 31, 1994 and October 31, 1997 . . . . . . . . . .F-4
Statement of Cash Flows - For the years ended October 31, 1997, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . .F-5
Notes to Financial Statements. . . . . . . . . . . . . . .F-6
SYSTEMS ASSURANCE CORPORATION
REPORT ON FINANCIAL STATEMENTS YEARS ENDED OCTOBER 31, 1997 AND 1996
SYSTEMS ASSURANCE CORPORATION
CONTENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS Balance sheets 4 Statements of operations 5 Statements of stockholders' (deficiency) 6 Statements of cash flows 7
NOTES TO FINANCIAL STATEMENTS 8-14
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Systems Assurance Corporation Malvern, Pennsylvania
We have audited the accompanying balance sheets of Systems Assurance Corporation as of October 31, 1997 and 1996 and the related statements of operations, stockholders' (deficiency) and cash flows for each of the three years in the period ended October 31, 1997. These financial statements are the responsibility of the management of Systems Assurance Corporation. Our responsibility is to express an opinion on these financial statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Systems Assurance Corporation as of October 31, 1997 and 1996 and the results of its operations and its cash flows for each of the three years in the period ended October 31, 1997 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has suffered recurring losses from operations and has a capital deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans, regarding these matters, are discussed in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
January 26, 1998
SYSTEMS ASSURANCE CORPORATION
BALANCE SHEETS
See accompanying report of independent certified public accountants and notes to financial statements. SYSTEMS ASSURANCE CORPORATION
STATEMENTS OF OPERATIONS
See accompanying report of independent certified public accountants and notes to financial statements. SYSTEMS ASSURANCE CORPORATION
STATEMENTS OF STOCKHOLDERS' (DEFICIENCY)
* Restated to reflect reverse common stock splits and change in par value as described in Note 8 to the financial statements.
See accompanying report of independent certified public accountants and notes to financial statements. SYSTEMS ASSURANCE CORPORATION
STATEMENTS OF CASH FLOWS
See accompanying report of independent certified public accountants and notes to financial statements. SYSTEMS ASSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS